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Monday, 08/24/2009 8:53:02 PM

Monday, August 24, 2009 8:53:02 PM

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Hot Stock DNPI: CEO Interview part two
August 24, 4:01 PMBoston Investing ExaminerHeather White

8/25/09: Maybe it was the posh British Accent or the depth of the knowledge that is is part of Nicolas Toms charm but honestly he could have kept me as a captive audience simply based on talent and passion for his company and I believe his potential investors, be it Institutions, Investment Funds, Banks, or High Net Worth individuals would all feel the same way.

You see there is a strategy here. As mentioned before he took a little company like PEAK at $0.23 and sold it for $18 per share. And at the time the bar code technology wasn't even close to being where the mobile community industry is right now.

All great companies are able to get to know there client well enough to identify there pain and address it in a cost effective and productive matter. Providing high-end solutions while staying with in a budget, and at the same time following up with constant support and customer servic, this is what makes DNPI simply invaluable to there customers.

Clearly all of these things not only lead to new business but to that reoccurring business that is such an integral part of DNPI's growth strategy.

Let's take a company like Mobile MINI for example who provides temporary office parts and equipment is office containers or pods if you will, in case a business has to relocate or expand quickly. Because Mobile MINI was unable to efficiently track when these items were being delivered or even picked up , or in some cases they were even unable to identify if the pods were picked up at all,after many case studies and research, DNPI found their pain. Mobile MINI's pain was sung to the tune of over $5 million in missing receivables and inventory. All because there was no efficient way to track or bill their products and services.

DNPI not only has containers with a 500 year half life ensuring items don't get damaged, they have more importanty installed bar codes and GPS tracking devices that are all read by hand held mobile computing systems and Mobile MINI is now not only able to recover the $5 million in lost receivables but continue to grow their business because they don't have to waste time trying to track down their inventory

Another huge success story for DNPI was there contract with Celgene. Originally they put in an RFP for what they believed was a $150,000 pilot program. they were even up again one of their biggest competitors, IBM Global Services.

Not only did RFID win the bid but they were informed that Celgene was so impressed that the contract was not going to be a pilot, they were in fact going live wish a $1 million contract. After 30 days of showing DNPI's sterling performance, Celgene then informed that the contract would be extend for several million dollars and cover Celgene worldwide and they have recently asked for another upgrade in services.

Clearly in order to sustain the level of growth that DNPI is achieving at a rapid pace, they want to make sure that when these key contracts come into play they not only want a solid balance sheet to continue to land these contrctas but enough cash to be able to deliver the products and services to their client base. Their clients are big players with deep pockets and DNPI needs to continue there track record of proven success.

There is a few ways for them to continue to do this.They are currently focusing on producing there own proprietary like of services and software that will continue to increase margins and as well as to their bottom line. Eventually they want their mix to be 60% of the services and software and 40% of the resale portion of their business. This will continue to improve and increase profit margins and but also cash at hand.

Also during a time when there was a tremendous crunch in the credit market, they were able to maintain a $6.5 million line of credit and in March 2009, not only was that line of credit renewed but it was increased to $8.5 million and nearly half of that money is still available to them if needed for working capital.

I asked Toms what his opinion was in the event that DNPI was unable to obtain additional financing from the Wall Street, and if he thought that DNPI could continue its production levels for its growing client base and sustain productivity. His answer was without h a definitive was "yes".

If you look through the balance sheet this little company DNPI has set it self up to have the reserves in the event of any economic crisis and has proven so by continuing to deliver its value statements and make a mark in the industry as you will see when new and exciting contracts are announced and renewed contracts with heavy hitters finally hit the news wires.

And as far as additional financing is concerned, all business mid-caps, small-caps and even the bid board stocks rely on the ability to raise capital to continue future success and growth and this stock will be no different. Currently they are working with 2 potential targets that find value in this situation and not only do I feel confident that they will obtain future financing to make their balance sheet even stronger, but you have to remember that this company has the strength to grow organically as well as through external acquisitions.

I did follow up with one last question for Toms:

"How confident are you that DNPI is your next PEAK"

He had a charming and insightful chuckle that any of you Roger Moore fans would appreciate and replied: "More confident than I was a this stage with PEAK. We happen to be a a sweet spot of this wireless technology riding the wave of mobile commuting. Riding a wave that is proven with a technology that is pervasive and has an seemingly endless number of applications."

Toms went on to say "'You can even look at our partners in the mobile space out tight knit relations to Motorola, AT&T, Verizon, Sprint, Nextell. In fact AT&T brought us to Wackenhut and there are big things on the horizon there."

Furthering the strength of DNPI Toms made it very clear that in order to bring peak to a highly profitable $300million it relied mainly on the 26 acquisitions that it had to make. Toms believes that DNPI can be even "bigger than PEAK in only 3-4 acquisitions."

After talking to many different CEO's in my day, I was most impressed by Nicolas Toms. He knows how to run a company and he not only knows what it takes to make and sustain shareholder awareness and growth but he is able to deliver the goods at the end of the day. He is a highly poised business man that understands that he is not the tech guy, he is is the financial guru, that will drive DNPI to the forefront of Wall Street visibility and be responsible for making this stock soar.
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