UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): June 15, 2011 DECISIONPOINT SYSTEMS, INC. (Exact name of registrant as specified in its charter) Delaware 000-54200 Applied for (State or Other Jurisdictionof Incorporation) (Commission FileNumber) (I.R.S. Employer Identification Number) 19655 Descartes, Foothill Ranch California, 92610-2609 (Address of principal executive offices) (Zip code) 726-758-0910 (Registrant's telephone number, including area code) Copies to: Gregory Sichenzia, Esq. Thomas A. Rose, Esq. Sichenzia Ross Friedman Ference LLP 61 Broadway New York, New York 10006 Phone: 726-758-0910 Fax: 726-758-0910 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 1 Item 1.01. Entry into a Material Definitive Agreement On June 15, 2011, DecisionPoint Systems, Inc. formerly known as Comamtech, Inc. (the "Company”), entered into a Plan of Arrangement (the “Plan of Arrangement”) and Plan of Merger (the “Merger Agreement”) among the Company, 2259736 Ontario Inc., a wholly-owned subsidiary of Comamtech which wasincorporated under the laws of the Province of Ontario, Canada (the “Purchaser”) and DecisionPoint Systems, Inc., a Delaware corporation (“DecisionPoint”).Pursuant to the Merger Agreement and Plan of Arrangement under Section 182 of the Ontario Business Corporation Act, on June 15, 2011 (the “Effective Date”), DecisionPoint merged (the “Merger”) into the Purchaser becoming a wholly-owned subsidiary of the Company.In connection with the Merger, the Company changed its name to DecisionPoint Systems, Inc. and the Purchaser changed its name to DecisionPoint Systems International, Inc. (hereinafter referred to as “DecisionPoint Systems International”). The Company’s common stock is quoted on the OTC Pink Market under the symbol “COMT”. As of June 22, 2011, our symbol will be "DPSI". The Merger Agreement contains customary terms and conditions for a transaction of this type, including representations, warranties and covenants, as well as provisions describing the Merger consideration, the process of exchanging the consideration and the effect of the Merger. The Merger Agreement and the transactions set forth therein were approved by each of the respective Boards of Directors and the shareholders of both the Company and DecisionPoint and were also approved by the Ontario Superior Court of Justice. In accordance with the Merger, on the Effective Date, the Company and DecisionPoint Systems International each filed a Certificate of Continuance and Certificate of Incorporation with the State of Delaware and as a result, became Delaware corporations. Pursuant to the Plan of Arrangement and Merger Agreement, the Company acquired all of the issued and outstanding capital stock of DecisionPoint from its shareholders in exchange for 4,593,661 shares of the Company’s common stock.The Company also acquired all the issued and outstanding Series A Cumulative Convertible Preferred Shares and Series B Cumulative Convertible Preferred Shares in exchange for 243,750 and 118,750 Cumulative Convertible Preferred Shares, respectively.After the Merger, there are 6,934,412 shares of the Company’s common stock outstanding and 243,750 and 118,750 shares of the Company’s Series A Cumulative Convertible Preferred Shares and Series B Cumulative Convertible Preferred Shares outstanding, respectively.Pursuant to the terms of the Merger Agreement, the Company assumed all of DecisionPoint’s obligations under their outstanding stock options and warrants. In connection with and upon the Effective Date of the Merger, the Company issued 242,890 additional common shares to two parties as payment for finders’ fees. After the Merger, the Board of Directors of the Company is composed of Nicholas R. Toms, Donald W. Rowley, David M. Rifkin, Jay B. Sheehy, Robert M. Chaiken, Maydan Rothblum, Marc Ferland and Lawrence Yelin. The executive officers of the Company are as follows: Nicholas R. Toms Chief Executive Officer and President Donald W. Rowley Chief Financial Officer John E. Chis Senior Vice President, Sales Bryan Moss Senior Vice President, Professional Services Melinda Wohl Vice President, Finance – Controller and Treasury Roy A. Ceccato Vice President, Finance – SEC Reporting and Compliance The foregoing description of the Merger does not purport to be complete and is qualified in its entirety by reference to the Arrangement Agreement (as amended), the Plan of Arrangement (set forth as a schedule to the Arrangement Agreement, as amended), the Certificate of Corporate Domestication of DecisionPoint Systems, Inc., the Certificate of Incorporation of DecisionPoint Systems, Inc., the Certificate of Corporate Domestication of DecisionPoint Systems International, Inc., the Certificate of Incorporation of DecisionPoint Systems International, Inc. and the Ontario Superior Court of Justice Commercial List, copies of which are included as exhibits to this Current Report on 8-K and are incorporated into this Item by reference. The Company’s common stock, preferred stock, warrants and options to be issued to DecisionPoint’s security holders pursuant to the Merger Agreement will not be registered under theSecurities Act of 1933, as amended (the “1933 Act”), and are being issued in reliance upon the exemption from registration provided by Section3(a)(10) of the 1933 Act based on the final order of the Ontario Superior Court of Justice. 2 Item 2.01 Completion of Acquisition or Disposition of Assets Information in response to this Item 2.01 is keyed to the Item numbers of Form 10. Item 1. Description of Business As described in Item 1.01 above, on the Effective Date,pursuant to the Plan of Arrangement and Merger Agreement, the Company acquired all of the issued and outstanding capital stock of DecisionPoint from its shareholders in exchange for 4,593,661 shares of the Company's common stock. TheCompany alsoacquired all the issued and outstanding Series A cumulative Convertible Preferred Shares and Series B Cumulative Convertible Preferred Shares in exchange for 243,750 and 118,750 Cumulative Convertible Preferred Shares, respectively. After the Merger, there are 6,934,412 shares of the Company's common stock outstanding and 243,750 and 118,750 shares of the Company's Series ACumulative Convertible Preferred Shares and Series B Cumulative Convertible Preferred Shares outstanding, respectively. Pursuant to the terms of the Merger Agreement, the Company assumed all the of DecisionPoint's obligations under their outstanding stock options and warrants.As a result of the Merger, DecisionPoint merged into the Purchaser and became a wholly-owned subsidiary of the Company.Additionally, as a result of the Merger, DecisionPoint’s current management became the management of the Company. Prior to the Merger, the Company was a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended.)The acquisition of DecisionPoint is treated as a reverse merger recapitalization and the business of DecisionPoint became the business of the Company.At the time of the Merger, the Company was not engaged in any active business. References to “we,” “us,” “our” and similar words refer to DecisionPoint and the Company after the Merger. Summary DecisionPoint is an enterprise mobility systems integrator that sells and installs mobile computing and wireless systems that are used both within a company’s facilities in conjunction with wireless networks and in the field using carrier-based wireless networks.These systems generally include mobile computers, mobile application software, and related data capture equipment including bar code scanners and radio frequency identification (“RFID”) readers. We also provide professional services including consulting, proprietary and third party software and software customization as an integral part of our customized solutions for our customers. Our executive officers are located at 19655 Descartes, Foothill Ranch, CA 92610-2609 and our telephone number is 726-758-0910. 3 RISK FACTORS An investment in our common stock involves a high degree of risk. In determining whether to purchase our common stock, an investor should carefully consider all of the material risks described below, together with the other information contained in this report.An investor should only purchase our securities if he or she can afford to suffer the loss of his or her entire investment. RISKS RELATED TO OUR BUSINESS The RFID industry is characterized by rapid technological change, and our success depends upon the frequent enhancement of existing products and timely introduction of new products that meet our customers’ needs. Customer requirements for RFID products are rapidly evolving and technological changes in our industry occur rapidly.To keep up with new customer requirements and distinguish us from our competitors, we must frequently introduce new products and enhancements of existing products.Enhancing existing products and developing new products is a complex and uncertain process.It often requires significant investments in research and development (“R&D”). We may not have adequate resources to invest in R&D that will keep pace with technological changes in our industry.Even if we made adequate investments in R&D, they may not result in products attractive or acceptable to our customers.Furthermore, we may not be able to launch new or improved products before our competition launches comparable products. Any of these factors could cause our business or financial resultsto suffer. Our recent acquisition of CMAC Inc., and other future business combinations and acquisition transactions may not succeed in generating the intended benefits and may, therefore, adversely affect shareholder value or our financial results. Integration of new businesses or technologies into our business may have any of the following adverse effects: ● we may have difficulty transitioning customers and other business relationships. ● we may have problems unifying management following a transaction. ● we may lose key employees from our existing or acquired businesses. ● we may experience intensified competition from other companies seeking to expand sales and market share during the integration period. ● our management’s attention may be diverted to the assimilation of the technology and personnel of acquired businesses or new product or service lines. ● we may experience difficulties in coordinating geographically disparate organizations and corporate cultures and integrating management personnel with different business backgrounds. The inability of our management to successfully integrate acquired businesses, and any related diversion of management’s attention, could have a material adverse effect on our business, operating results and financial condition. Business combinations and other acquisition transactions may have a direct adverse effect on our financial condition, results of operations or liquidity, or on our stock price. To complete acquisitions or other business combinations, we may have to use cash, issue new equity securities with dilutive effects on existing stockholders, take on new debt, assume contingent liabilities or amortize assets or expenses in a manner that might have a material adverse effect on our balance sheet, results of operations or liquidity. We are required to record certain financing and acquisition-related costs and other items as current period expenses, which would have the effect of reducing our reported earnings in the period in which an acquisition is consummated.These and other potential negative effects of an acquisition transaction could prevent us from realizing the benefits of such transactions and have a material adverse impact on our stock price, revenues, revenue growth, balance sheet, results of operations and liquidity. We expect that we will need to raise additional funds, and these funds may not be available when we need them or the additional funds may not be obtained on favorable terms. We believe that we will need to raise additional monies in order to fund our growth strategy and implement our business plan.Specifically, we expect that we will need to raise additional funds in order to pursue rapid expansion, develop new or enhanced services and products, and acquire complementary businesses or assets.Additionally, we may need funds to respond to unanticipated events that require us to make additional investments in our business.There can be no assurance that additional financing will be available when needed, on favorable terms, jonathanwarren@example.com these funds are not available when we need them, then we may need to change our business strategy and reduce our rate of growth. 4 Our competitors may be able to develop their business strategy and grow revenue at a faster pace than us, which could limit our results of operations and may force us to cease or curtail operations. The wireless mobile solutions marketplace, while highly fragmented, is very competitive and many of our competitors are more established and have greater resources.We expect that competition will intensify in the future.Some of these competitors also have greater market presence, marketing capabilities, technological and personnel resources than our company.As compared with our company therefore, such competitors may: - develop and expand their infrastructure and service/product offerings more efficiently or more quickly - adapt more swiftly to new or emerging technologies and changes in client requirements - take advantage of acquisition and other opportunities more effectively - devote greater resources to the marketing and sale of their products and services - leverage more effectively, existing relationships with customers and strategic partners or exploit better recognized brand names to market and sell their services. These current and prospective competitors include: - other wireless mobile solutions companies such as International Business Machines, Accenture, Sedlak, Peak Technologies, Agilysys, Acsis, Stratix, InfoLogix and Catalyst International - in certain areas our existing hardware suppliers, in particular Motorola but also Intermec, Zebra and others - the in-house IT departments of many of our customers. A significant portion of our revenue is dependent upon a small number of customers and the loss of any one of these customers would negatively impact our revenues and our results of operations. We derived approximately 26% of our revenues from our two largest customers in 2010.We derived approximately 25% of our revenues from two customers in 2009.Customer mix shifts significantly from year to year, but a concentration of the business with a few large customers is typical in any given year.A decline in our revenues could occur if a customer which has been a significant factor in one financial reporting period gives us significantly less business in the following period. Growth of and changes in our revenues and profits depend on the customer, productand geographic mix of our sales. Fluctuations in our sales mix could have an adverse impact on or increase the volatility of our revenues, gross margins and profits. Sales of our productsto large enterprises tend to have lower prices andgross margins than sales to smaller firms. In addition, ourgross marginsvarydepending on the product or service provided. Growth in our revenues and gross marginstherefore depends on thecustomer, geographic, product and professional services mix of our sales. If we are unable to execute a sales strategy that results in a favorable sales mix, our revenues, gross margins andearningsmaydecline. Further, changes inthe mix of our sales from quarter-to-quarter or year-to-year may make our revenues, gross margins andearnings more volatile and difficult to predict. Our sales and profitability may be affected by changes in economic, business or industry conditions. If the economic climate in the U.S. or abroad deteriorates, customers or potential customers could reduce or delay their technology investments.Reduced or delayed technology investments could decrease our sales and profitability.In this environment, our customers may experience financial difficulty, cease operations and fail to budget or reduce budgets for the purchase of our products and professional services.This may lead to longer sales cycles, delays in purchase decisions, payment and collection, and can also result in downward price pressures, causing our sales and profitability to decline.In addition, general economic uncertainty and general declines in capital spending in the information technology sector make it difficult to predict changes in the purchasing requirements of our customers and the markets we serve.There are many other factors which could affect our business, including: · the introduction and market acceptance of new technologies, products and services; · new competitors and new forms of competition; · the size and timing of customer orders; · the size and timing of capital expenditures by our customers; · adverse changes in the credit quality of our customers and suppliers; · changes in the pricing policies of, or the introduction of, new products and services by us or our competitors; · changes in the terms of our contracts with our customers or suppliers; · the availability of products from our suppliers; and · variations in product costs and the mix of products sold. 5 These trends and factors could adversely affect our business, profitability and financial condition and diminish our ability to achieve our strategic objectives. Use of third-party suppliers and service providers could adversely affect our product quality, delivery schedules or customer satisfaction, any of which could have an adverse effect on our financial results. We rely heavily on a number of privileged vendor relationships as a Tier-1, VAR and for the Motorola Solutions PartnerEmpower Program, a manufacturer of bar code scanners and portable data terminals; as an Honors Solutions Provider for Intermec, a manufacturer of bar code scanners and terminals; as a Premier Partner with Zebra, a printer manufacturer, and O’Neil, the leading provider of ‘ruggedized’ handheld mobile printers.The loss of VAR status with any of these manufacturers could have a substantial adverse effect on our business. We have not sought to protect our proprietary knowledge through patents and, as a result, our sales and profitability could be adversely affected to the extent that competing products/services were to capture a significant portion of our target markets. We have generally not sought patent protection for our products and services, relying instead on our technical know-how and ability to design solutions tailored to our customers’ needs.Our sales and profitability could be adversely affected to the extent that competing products/services were to capture a significant portion of our target markets.To remain competitive, we must continually improve our existing personnel skill sets and capabilities and the provision of the services related thereto.Our success will also depend, in part, on management’s ability to recognize new technologies and services and make arrangements to license in, or acquire such technologies so as to remain always at the leading edge. We must effectively manage the growth of our operations, or our company will suffer. Our ability to successfully implement our business plan requires an effective planning and management process.If funding is available, we intend to increase the scope of our operations and acquire complimentary businesses.Implementing our business plan will require significant additional funding and resources.If we grow our operations, we will need to hire additional employees and make significant capital investments.If we grow our operations, it will place a significant strain on our existing management and resources.If we grow, we will need to improve our financial and managerial controls and reporting systems and procedures, and we will need to expand, train and manage our workforce.Any failure to manage any of the foregoing areas efficiently and effectively would cause our business to suffer. If we fail to continue to introduce new products that achieve broad market acceptance on a timely basis, we will not be able to compete effectively and we will be unable to increase or maintain sales and profitability. Our future success depends on our ability to develop and introduce new products and product enhancements that achieve broad market acceptance.If we are unable to develop and introduce new products that respond to emerging technological trends and customers’ mission critical needs, our profitability and market share may suffer.The process of developing new technology is complex and uncertain, and if we fail to accurately predict customers’ changing needs and emerging technological trends, our business could be harmed.We must commit significant resources to developing new products before knowing whether our investments will result in products the market will accept.We may encounter delays in deploying new or improved products. We are active in the identification and development of new products and technologies and in enhancing our current products.However, in the enterprise mobility solutions industry, such activities are complex and filled with uncertainty.If we expend a significant amount of resources and our efforts do not lead to the successful introduction of new or improved products, there could be a material adverse effect on our business, profitability, financial condition and market share. We may also encounter delays in the manufacturing and production of new products from our principal OEM vendors.Additionally, new products may not be commercially successful.Demand for existing products may decrease upon the announcement of new or improved products.Further, since products under development are often announced before introduction, these announcements may cause customers to delay purchases of any products, even if newly introduced, until the new or improved versions of those products are available.If customer orders decrease or are delayed during the product transition, we may experience a decline in revenue and have excess inventory on hand which could decrease gross profit margins.Our profitability might decrease if customers, who may otherwise choose to purchase existing products, instead choose to purchase lower priced models of new products.Delays or deficiencies in the development, manufacturing, and delivery of, or demand for, new or improved products could have a negative effect on our business or profitability. 6 We face competition from numerous sources and competition may increase, leading to a decline in revenues. We compete primarily with well-established companies, many of which we believe have greater resources than us.We believe that barriers to entry are not significant and start-up costs are relatively low, so our competition may increase in the future.New competitors may be able to launch new businesses similar to ours, and current competitors may replicate our business model, at a relatively low cost.If competitors with significantly greater resources than ours decide to replicate our business model, they may be able to quickly gain recognition and acceptance of their business methods and products through marketing and promotion.We may not have the resources to compete effectively with current or future competitors.If we are unable to effectively compete, we will lose sales to our competitors and our revenues will decline. We are heavily dependent on our senior management, and a loss of a member of our senior management team could cause our stock price to suffer. If we lose members of our senior management, we may not be able to find appropriate replacements on a timely basis, and our business could be adversely affected.Our existing operations and continued future development depend to a significant extent upon the performance and active participation of certain key individuals, including our Chief Executive Officer, Chief Financial Officer, Senior Vice Presidents and certain other senior management individuals.We cannot guarantee that we will be successful in retaining the services of these or other key personnel.If we were to lose any of these individuals, we may not be able to find appropriate replacements on a timely basis and our financial condition and results of operations could be materially adversely affected. Our inability to hire, train and retain qualified employees could cause our financial condition to suffer. The success of our business is highly dependent upon our ability to hire, train and retain qualified employees.We face competition from other employers for people, and the availability of qualified people is limited.We must offer a competitive employment package in order to hire and retain employees, and any increase in competition for people may require us to increase wages and/or benefits in order to maintain a sufficient work force, resulting in higher operation costs.Additionally, we must successfully train our employees in order to provide high quality services.In the event of high turnover or shortage of people, we may experience difficulty in providing consistent high-quality services.These factors could adversely affect our results of operations. If we do not generate sufficient future taxable income, we may be required to recognize additional deferred tax asset valuation allowances. The value of our deferred tax assets depends, in part, on our ability to use them to offset taxable income in future years.If we are unable to generate sufficient future taxable income or if there are significant changes in tax laws or the tax rates or the period within which the underlying temporary differences become taxable or deductible, we could be required to increase our valuation allowance against our deferred tax assets.Such an increase would result in an increase in our effective tax rate and have a negative impact on our operating results.If our estimated future taxable income is increased, the valuation allowances for deferred tax assets may be reduced.These changes may also contribute to the volatility of our financial results. 7 SPECIFIC RISKS RELATING TO OUR COMMON STOCK We have not paid dividends on our common stock in the past and do not expect to pay dividends in the future.Any return on investment may be limited to the value of our common stock. We have never paid cash dividends on our common stock and do not anticipate paying cash dividends on our common stock in the foreseeable future.The payment of dividends on our common stock would depend on earnings, financial condition and other business and economic factors affecting it at such time as the Board of Directors may consider relevant.If we do not pay dividends, our common stock may be less valuable because a return on your investment will only occur if its stock price appreciates. There is a limited market for our common stock which may make it more difficult to dispose of your stock. Our common stock is currently quoted on the OTC Pink.There is a limited trading market for our common stock.Accordingly, there can be no assurance as to the liquidity of any markets that may develop for our common stock, the ability of holders of our common stock to sell our common stock, or the prices at which holders may be able to sell our common stock. A sale of a substantial number of shares of our common stock may cause the price of our common stock to decline. If our stockholders sell substantial amounts of our common stock in the public market, the market price of our common stock could fall.These sales also may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem reasonable or appropriate.Stockholders who have been issued shares in the Acquisition will be able to sell their shares pursuant to Rule 144 under the Securities Act of 1933, beginning one year after the stockholders acquired their shares. Our common stock is subject to the "Penny Stock" rules of the SEC and the trading market in our securities is limited, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock. The SEC has adopted Rule 3a51-1 which establishes the definition of a "penny stock", for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires: · that a broker or dealer approve a person's account for transactions in penny stocks; and · that the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased. In order to approve a person's account for transactions in penny stocks, the broker or dealer must: · obtain financial information and investment experience and objectives of the person; and · make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks. The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form: · sets forth the basis on which the broker or dealer made the suitability determination; and · that the broker or dealer received a signed, written agreement from the investor prior to the transaction. Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules.This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock. 8 BUSINESS Background DecisionPoint, formerly known as Canusa Capital Corp. was incorporated on December 27, 2006, under the laws of the State of Delaware.On June 17, 2009, we entered into an Agreement and Plan of Merger (“Merger Agreement”) among us, DecisionPoint Acquisition, Inc., a Delaware corporation which is a wholly-owned subsidiary of the Company (“Merger Sub”), and DecisionPoint Systems Holding, Inc., a California corporation (“Holding”).Holding merged with and into Merger Sub with Merger Sub surviving the Merger as a wholly-owned subsidiary of the Company under the name DecisionPoint Systems Group, Inc. (“DPS Group”).Prior to the Merger, the Canusa Capital Corp. was a “shell company” (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).Pursuant to the terms of the Merger Agreement, the Company acquired all of the issued and outstanding capital stock of DPS Group from its shareholders in exchange for 20,000,000 shares of the Company’s shares of common stock and assumed all of DPS Group’s obligations under its outstanding stock options and warrants. As set forth above, on June 15, 2011, DecisionPoint Systems, Inc. formerly known as Comamtech, Inc. (the "Company”), entered into a Plan of Arrangement (the “Plan of Arrangement”) and Plan of Merger (the “Merger Agreement”) among the Company, 2259736 Ontario Inc., a wholly-owned subsidiary of Comamtech incorporated under the laws of the Province of Ontario, Canada (the “Purchaser”) and DecisionPoint Systems, Inc., a Delaware corporation (“DecisionPoint”).Pursuant to the Merger Agreement and Plan of Arrangement under Section 182 of the Ontario Business Corporation Act, on June 15, 2011 (the “Effective Date”), DecisionPoint merged (the “Merger”) into the Purchaser becoming a wholly-owned subsidiary of the Company.In connection with the Merger, the Company changed its name to DecisionPoint Systems, Inc. and Purchaser changed its name to DecisionPoint Systems International, Inc. DecisionPoint has two wholly owned subsidiaries, DPS Group and CMAC, Inc. (“CMAC”).We acquired CMAC on December 31, 2010.CMAC was founded and incorporated on March 20, 1996.CMAC is a logistics consulting and systems integration provider focused on delivering operational and technical supply chain solutions,headquartered in Alpharetta, Georgia. DPS Group has two wholly owned subsidiaries.DecisionPoint Systems CA, Inc., formerly known as Creative Concepts Software, Inc. (“CCS”) was founded in 1995 and is a leading provider of Enterprise Mobility Solutions.Enterprise Mobility Solutions are those computer systems that give an enterprise the ability to connect to people, control assets, and transact business from any location by using mobile computers, tablet computers, and smartphones to securely connect the mobile worker to the back office software systems that run the enterprise.Technologies that support Enterprise Mobility Solutions include national wireless carrier networks, Wi-Fi, local area networks, mobile computers, smartphones and tablets, mobile software applications, middleware and device security and management software.DecisionPoint Systems CT, Inc. formerly known as Sentinel Business Systems, Inc. (“SBS”) was founded in 1976 and has developed over time a family of powerful enterprise data collection software solutions, products and services.The combined company is a data collection systems integrator that sells and installs mobile devices, software, and related bar coding equipment, radio frequency identification (“RFID”) systems technology and provides custom solutions and other professional services. Overview We deliver to our customers the ability to make better, faster and more accurate business decisions by implementing industry-specific, enterprise wireless and mobile computing systems for their front-line employees, inside and outside of the ‘four-walls’.It is these systems which provide the information to improve the hundreds of individual business decisions made each day.The “productivity paradox” is that the information remains locked away in their organization’s enterprise computing system, accessible only when employees are at their desk.Our solutions solve this productivity issue.As a result our customers are able to move their business decision points closer to their own customers who in turn, drive their own improved productivity and operational efficiencies. We accomplish this by providing our customers with everything they need through the process of achieving their enterprise mobility goals, starting with the planning of their systems, to the design and build stage, to the deployment and support stage, and finally to achieving their projected Return On Investment (“ROI”).Our business designs, sells, installs and services voice and data communications products and systems for private networks and wireless broadband systems for a wide range of enterprise markets, including retail, transportation and logistics, manufacturing, wholesale and distribution, as well as other commercial customers (which, collectively, are referred to as the “commercial enterprise market”). 9 A graphical view of our business process is presented below: We deliver a solution that typically consists of a combination of the following: ● specialized mobile computers ● a wireless network infrastructure (or the use of a national wireless carrier) ● specialized mobile application software ● integration software to our customer’s existing enterprise systems, and ● a range of professional services needed to make it all ‘work’ ● industry and/or software specific consulting and integration services. We employ a highly talented and experienced staff of consultants (both in-house and on a contract basis), architects, engineers, and support personnel to guide our customers through this process to success. During the business cycle our highly experienced professionals will: ● consult with customers about their business needs ● design the overall enterprise mobile solution to fit the needs ● build or acquire the software needed for the solution ● acquire the wireless and mobile computers needed ● deliver the services to deploy it all, and ● support the system after it has been installed. Bringing mobile computing to the front-line enterprise worker is orders of magnitude more challenging than delivering similar technology to the consumer.Unlike the individual consumer, a business enterprise has significant performance, reliability and security requirements.In addition, any system must be integrated with the complex enterprise systems already in place.Therefore, we must possess the required knowledge and be able to manage a myriad of technical details and nuances to achieve our customer’s desired outcome. We have developed an ‘ecosystem’ of partners which we bring to every customer situation.The standout partner in this ecosystem is Motorola Solutions, Inc. (“Motorola”) for which we consistently are one of the nation’s top Value Added Resellers (“VAR”) and member of their Partner Pinnacle Club program.We also partner with other top equipment and software suppliers such as Zebra Technologies Corporation (“Zebra”), Datamax - O’Neil (“O’Neil”), a unit of the Dover Corporation, as well as a host of specialized Independent Software Vendors (“ISV”) such as AirVersent, Inc., Antenna Software, GlobalBay Mobile Technologies, Inc., Syclo LLC and Wavelink Corporation. 10 Major vendors and other top partners have come to depend on the VAR channel in order to grow their own businesses.This is because they cannot cost-effectively penetrate their target markets alone given the number and variety of ways their product is applied and because of the myriad of complex integration requirements.They have come to view their role as providing the best-of-breed wireless and mobile computing technology to the market and partner with us to extend their business.This applies not only to Motorola with wireless and mobile computing technology, but also to other high tech manufacturers who produce printers, labels, RFID and other technology products. As our markets have grown and have become more sophisticated, we have grown both in size and in the nature and type of services offered.As our customers come to depend more and more on enterprise wireless and mobile computing to run their businesses, we continue to deliver and expand our services to keep those systems running.We are actively moving into the areas of enterprise managed services, consulting services and software-as-a-service (“SaaS”) to continue to deliver our value and build ongoing revenue streams for the Company. We have made several investments in SaaS offerings in response to what we believe will be a fundamental shift in our customers’ buying behavior.And we are monitoring the results closely.Customers are fundamentally beginning to realize that they do not have to own the entire end-to-end solution in order to reap its benefits.In fact, there can be major cost savings for them if they choose instead to receive part of the value of what we have to offer in a SaaS model.We are a believer in this theory ourselves, as we are an avid salesforce.com customer. Salesforce.com is one of the world’s largest SaaS companies. 11 Acquisition of CMAC On December 31, 2010, we acquired CMAC, a supply chain consulting and systems integration firm focused on delivering operational and technical solutions for enterprises.Both CMAC and DecisionPoint are in the same vertical markets, and the acquisition is intended to broaden our professional services and software integration. Our combined teams will work together to complement each other’s strengths.The acquisition of CMAC also expands our data base of professional services contractors who are available on an as needed basis, thereby enabling us to be more responsive and act more quickly to assist our customers. CMAC is committed to improving its clients’ competitive position by developing operational excellence strategies and implementing best-in-class supply chain planning, execution and automated technology solutions.Its focus is on providing integration and implementation services for customer supply chain management applications ranging from Warehouse Management Systems (“WMS”), Enterprise Resource Planning (“ERP”), to Transportation Management Systems (“TMS”) as well as others.CMAC provides highly skilled resources to manage or augment customer project teams during the design, development and/or deployment stages. CMAC’s professional services can be summarized as follows: For over 15 years, CMAC’s experienced team has provided cost effective solutions to organizations in various industries and has evolved into a proven market leader. CMAC has standardized processes and procedures that allow for rapid deployment of integration and implementation solutions. This methodology is designed for success and will aid us in managing our customer deployments from the software selection process through the implementation and launch support phases.Together our combined team aims to provide our clients with highly experienced and affordable professionals using proven methodologies designed to achieve a quicker value realization. CMAC has a Technology Center, located in Alpharetta, Georgia, that will provide our partners and customers with an avenue to perform software solution demos and evaluations, end user training, conference room pilots, hardware and software validation, and device management services.In addition, the Technology Center is equipped with all of the latest wireless network technologies to perform real-time testing and validation of network functionality and infrastructure. 12 Marketplace Industry Over the past five years, the Enterprise Mobile Computing industry has standardized several key technologies.This standardization has enabled the market to grow.Examples of this include the WindowsMobile, Android, RIM and iPhone operating system for mobile devices, 802.11 a/b/g “Wi-Fi” wireless local area networks, and robust nationwide wireless carrier data networks such as AT&T and T-Mobile (HSDPA technology), and Verizon and Sprint (EVDO technology). This standardization has allowed mobile computing manufacturers to build product to these widely adopted standards, creating the opportunity to automate workers using these standards.These developments have created many opportunities for us to build enterprise wireless and mobile computing solutions for our customers’ needs. Determining which enterprise wireless and mobile solutions we deliver to our customers highly depends on several key factors including the customer’s industry.It requires that we possess domain expertise in our customers’ industries.It also requires business application software expertise, general industry and software specific knowledge and mobile computing and wireless networking technical acumen. The customer’s industry is very important because unlike generic wireless business applications such as email, the applications that we provide involve business processes which are very specific to a vertical market.An example is Proof-of-Delivery (“POD”).In order for a POD application to deliver value it must not only be tailored to a specific industry such as couriers, but it must also be tailored to each specific courier company depending on how they run their business process. The key to delivering customer solutions profitably is for us to know where standardized system hardware and software components will deliver the required result and where they cannot and therefore, more custom components need to be utilized.This capability comes from our years of experience, our talented professionals and our highly developed ecosystem of partners. We provide a complete line of consulting, deployment and integration services, including site surveys, equipment configuration and staging, system installation, depot services, software support, training programs and project management. Current Market Environment Over the last several years, we have been repositioning ourselves to focus more on providing higher margin consulting services along with customer-driven, mobile wireless and RFID solutions rather than providing simply hardware and customized software as a reseller.This is the key to increasing our profitability and is also a major point of differentiation.The acquisition of CMAC is expected to be instrumental in this repositioning. Small resellers and large catalog resellers simply do not want to, or cannot, provide the types of custom, hands-on services needed to make these systems a success.Our major ecosystem partners, such as Motorola, recognize this and have come to depend more and more on us to deliver the business value that their products enable. By referring more end-user demand to DecisionPoint, manufacturers can leverage our personnel and skills to provide customers with enhanced personal service.With deep expertise about specific customers’ operations and industry, resellers are very effective in promoting sales of key vendor’s products.Today, a majority of Motorola’s sales of mobile computers are through the sales channel in which we participate. We benefit from other advantages by participating in this sales channel.The industry leaders have established program rewards, such as favorable pricing structure incentives, for those top-tier VARs, such as DecisionPoint, who invest in their programs and technologies.As a result, we train our personnel, which differentiate us from other potential competitors who may not have the same training as our personnel. Within our commercial enterprise market, we believe there continues to be long-term opportunity for growth as the global workforce continues to become more mobile and the industries and markets that purchase our products and services continue to expand.The markets in which we compete include mobile computing products and services, enterprise wireless services, bar code scanning, RFID products and services and mobile network management platforms.Organizations looking to increase productivity and derive benefits from mobilizing their applications and workforces are driving adoption in this market. Our strategy in our target market is to enable our customers to focus on their missions, not the technology.This is accomplished by providing mission-critical systems, seamless connectivity through highly reliable voice and data networks and a suite of advanced and/or custom applications that provide real-time information to end users. 13 DecisionPoint Target Market(s) The markets for enterprise wireless and mobile computing are very fragmented while also being extremely complex in nature.But generally they can be characterized by the following attributes: 1. Vertical market industries which require specific domain expertise. 2. Industries which track goods or deliver a service in the field (or both). 3. Industries which have a significant group of mobile workers, whether they operate primarily in one place or in the field. 4. Manufacturing operations where there’s real-time interaction between the shop floor employees and the management decision makers. 5. Manufacturing and assembly operations that are moving more and more to a Just-in-Time (“JIT”) operation where accurate data is critical. In the commercial enterprise market, our approach is to deliver products and services that are designed to empower the mobile workforce to increase productivity, drive cost effectiveness and promote faster execution of critical business processes. Vertical Markets The attractiveness of any vertical market depends directly on the size and nature of the problems which that market faces that can be addressed by enterprise wireless and mobile computing.Historically, retail, warehousing, and manufacturing were the largest industries.Each typically had large amounts of goods in constant motion which needed to be tracked.In addition, each had a workforce which primarily operated in one place (i.e. a retail store, a distribution center or a factory). Although these markets are still attractive for us and comprise a significant portion of our business, new markets are emerging which hold as great or even greater promise than our historical markets. Transportation, logistics and field services such as repair and maintenance, delivery and inspections are now emerging as great new markets.This is primarily due to the arrival of robust, national wireless carrier networks that can reach a field-based mobile worker almost anywhere they are.The general term for this new group of markets is referred to as “Field Mobility”.Although it cuts across multiple industries and business applications, it has one common characteristic: goods are tracked or services are being performed by field-based workforces, not workers operating in a single location under one roof. Our Field Mobility Practice We believe that the growth of Field Mobility based markets will be so significant over the next several years, that we have created a dedicated specialty business practice to focus on it.This practice was established in 2008, with the express purpose of replicating our historical success with a new set of customers and challenges together with a new ecosystem of partners which includes the four major wireless carriers of AT&T, Sprint, T-Mobile and Verizon.The carriers not only bring potential new opportunities but also have attractive programs which allow us to earn additional revenue from them when we facilitate service of mobile computers and devices on their networks. We are not alone in our expectations of growth for Field Mobility.Motorola, and more specifically, the newly split entity, Motorola Solutions, has demonstrated through its strong on-going support, that it’s also counting on significant growth as well.They believe that as wireless carrier networks become ubiquitous, it will increase their market opportunity to put greater numbers of mobile computers into the hands of entire groups of field-based workers who may have never had a mobile computer before. 14 Products and Services Mobile Applications We deploy mobile applications for a wide variety of business processes, depending on the industry.Below is a brief overview of some of those applications by industry: Retail Store: Stock locator, shelf price marking, markdowns, inventory control, physical inventory, merchandising, customer service and mobile point-of-sale (“POS”). Warehousing and Distribution: Order shipping, order picking and packing, stock move and replenishments, product receipt and putaway, labeling, physical inventory and cycle counts. Manufacturing: Production count, work-in-process tracking, raw material consumption, Just-in-Time manufacturing requirements, quality control and assurance, lot/batch/serial number control and scrap reporting. Transportation and Logistics: Proof-of-delivery, turn-by-turn directions, route optimization, cross-docking, returns and driver logging. Field Mobility: Field service and repair, enterprise asset management, inspection, preventative maintenance, surveys, rounds and readings. Software Unlike the market for standardized business software such as email or accounting, the market for enterprise mobile software is more customized.One size does not fit all.Software for enterprise mobile systems must support the specialized business processes in an industry-specific and sometimes customer-specific way.For this reason, we utilize several avenues to provide the mobile software solutions to meet our customers’ needs depending on their situation and requirements. ● Software sourced from specialized ISV’s.The software produced by key ISVs is designed to fit a need in a particular vertical market and application.Even still, it must be tailored to meet the needs of each customer.Depending on the situation, this tailoring is done by us or by the ISV themselves under contract to us.We have built a network of ISVs in its ecosystem specializing in Field Mobility applications for this purpose. ● CASE Tools/Pathfinder™ is our own application development platform.Developed over the past 20 years, it is a stable and capable software platform for many typical application uses but generally not for Field Mobility applications. ● Custom software created in-house using standardized programming tools like Microsoft.NET® framework and Java™.These are used by customer demand or when there is simply no other “off-the-shelf” way to meet the customer’s requirements. We have multiple software options available which gives us the ability to meet the customer’s total need at the best value to them.We intentionally have made a point not to be “married” to any single vendor, product offering and/or solution in order to be focused on the customer’s ultimate needs. Professional Services Our professional services offerings fall into one of three categories: business consulting, technical consulting and technical development.Business consulting is where we engage with our customer to help them understand the potential ROI of implementing mobile computing, or supply chain services as examples, for a particular business process.Technical consulting services help determine the technology to be used and how it is to be implemented.We utilize our proven evaluation techniques, tools, and experience to recommend the optimal technology solution that provides organizational, operational and system improvements to our customers.We take advantage of our database and assessment methodology to quickly identify viable solutions for client operations.Once the solution is identified and selected, we apply our proven fast track “3D” (Define, Design, Deliver) implementation methodology to insure
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