COPsync, Inc. Reports Third Quarter Financial Results

DALLAS--(BUSINESS WIRE)-- COPsync Inc. (OTCBB: COYN), a provider of a field-based reporting and information-sharing network to law enforcement, has reported financial results for the third quarter ended September 30, 2010.

The Company reported total revenues for the three month and nine month periods ended September 30, 2010 of $678,000 and $1,614,000, respectively, compared to $43,000 and $70,000, for the comparable periods in 2009, a percentage increase of 1476% and 2205% respectively.

The respective increases in revenues were primarily due to increases in sales velocity. The company signed new contracts valued at approximately $500,000 during the third quarter with nineteen agencies. Four of these contracts, valued of approximately $47,000 were installed in Q3. The Company expects to install the resulting backlog of contracts in Q4 of 2010 and Q1 of 2011. Currently, 136 law enforcement agencies have subscribed to use the COPsync service.

Total gross profits for the three month and nine month periods ended September 30, 2010 were $200,000 and $479,000, respectively, or 29% of total revenues for the respective periods, compared to gross losses of $32,000 and $100,000 for the comparable periods in 2009. The company expects its gross profit to increase naturally over time as its subscription contracts renew because the service fee revenue component, which yields higher margins than the hardware revenue component, of the company’s contracts comprises the predominant portion of total revenue during the renewal years and its cost of sales for contract renewals is lower.

Total operating expenses for the three month and nine month periods ended September 30, 2010 totaled $869,000 and $2,021,000, respectively, compared to $449,000 and $1,183,000 for the comparable periods in 2009, a percentage increase of 93% and 70% respectively. The respective increases were due primarily to increases in salaries and wages and professional and consulting fees. Salaries and wages increased due to the hiring of additional sales staff and a difference in the amount of software development costs being expensed, rather than capitalized. Increases in professional and consulting fees included accounting services, legal fees, fees to an advisory firm and consulting fees, and a $131,000 one-time, non-cash expense related to a potential grant to another advisory firm of 1,500,000 warrants. For Q4 2010, the company believes its focus on expense reduction will result in professional/consulting fees being less than 40% of the professional/consulting fee expense incurred during Q3.

The Company’s net loss applicable to common shareholders totaled $649,000 and $1,375,000 for the three month and nine month periods ended September 30, 2010, or $0.01 loss per common share on a basic and fully diluted basis, respectively. For the comparable periods in 2009, the net loss applicable to common shareholders totaled $579,000 and $1,418,000, or a loss per common share on a basic and fully diluted basis of $0.00 and $0.01, respectively.

Cash and cash equivalents totaled $208,000 and deferred revenue totaled $311,000 at September 30, 2010. Deferred revenue represents payments received from customers under contract for future services to be rendered and will be recognized ratably over the life of the contracted service period.

COPsync CEO Ronald A. Woessner said, “The Company is building the foundation for increasing the number of COPsync subscribers by focusing its sales efforts in Texas, which has 99,000 of the 1.3 million law enforcement officers in the United States, particularly in the North Texas area and in the region bordering Mexico. Additionally, the Company is working to expand its geographical footprint throughout the United States by developing a distribution network of leading law enforcement technology vendors, the first of which the Company announced in Q3. Company management is also developing foundational processes for operating the business and is scrutinizing its cost structure and fine-tuning its pricing models, all for the purpose of increasing company scalability, operational efficiency and profitability. We believe these efforts will begin to yield meaningful positive revenue and operational results in Q1 and Q2 of 2011.”

The complete third quarter report, including management's discussion and analysis, financial statements, and notes can be found on the Securities Exchange Commission's website at www.sec.gov.

Conference Call Information:

The Company will discuss its financial results and outlook on a conference call on Tuesday, November, 30, 2010, at 5 p.m. ET. A live webcast of the conference call will be available on our investor relations web site http://www.investorcalendar.com/IC/CEPage.asp?ID=162644. Alternatively, participants can access the conference call by dialing 1-877-407-0778 (U.S. toll-free) or 1-201-689-8565 (international) at least 15 minutes before the call. An audio replay of the conference will be available until December 20, 2010, by dialing 1-877-660-6853 (U.S. toll-free) or 1-201-612-7415 (international) and entering account # 286 and conference ID # 361586.

About COPsync, Inc.

COPsync, Inc. (OTCBB: COYN) markets and licenses a field-based reporting and information-sharing network that enables officers to collect, report and share critical data in real-time at the point of incident and obtain instant access to various local, state and federal law enforcement databases. The COPsync service increases officer productivity by reducing or eliminating manual processes. It also saves lives, reduces unsolved crimes and assists in apprehending criminals -- through such features as a nationwide officer safety alert system, GPS/auto vehicle location and distance-based alerts for crimes in progress, such as child abductions, bank robberies and police pursuits. The service provides law enforcement agencies the means to be proactive instead of reactive in nature. For more information, please visit www.copsync.com.

FORWARD-LOOKING STATEMENTS

Statements in this release that are not purely historical facts or that necessarily depend upon future events, including forecasts of revenue or earnings, or other statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future may be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. Examples of these forward-looking statements include the statements, “The Company expects to install the resulting backlog of contracts in Q4 of 2010 and Q1 of 2011…. For Q4 2010, the company believes its focus on expense reduction will result in professional/consulting fees being less than 40% of the professional/consulting fee expense incurred during Q3…. We believe these efforts will begin to yield meaningful revenue and operational results in Q1 and Q2 of 2011.” Readers are cautioned not to place undue reliance on forward-looking statements. All forward-looking statements are based upon information available to COPsync on the date this release was issued. COPsync undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to COPsync's ability to raise capital to sustain operations, to obtain market acceptance for our service offering and to establish and maintain strategic and distribution relationships to gain customers and grow revenues; COPsync customers’ ability to obtain government grants to acquire the company’s services; and risks associated with the effect of changing economic conditions, product market trends, variations in the company's cash flow, market acceptance risks, technical development risks, and seasonality. COPsync may not succeed in addressing these and other risks. Further information regarding factors that could affect COPsync’s financial and other results can be found in the risk factors section of COPsync’s most recent filings on Forms 10-K and 10-Q with the Securities and Exchange Commission.

CONTACT:

David Renken
COPsync, Inc.
Investor Relations Department
830-899-SYNC (7962)
invest@copsync.com

KEYWORDS:   United States  North America  Texas

INDUSTRY KEYWORDS:   Technology  Data Management  Hardware  Networks  Mobile/Wireless  Professional Services  Legal

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