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Current Larry Oakley's Comment:

Date Posted: 09/22/11

ComCam International, Inc. (OTC BB: CMCJ)

Introductory Statement

John Myers, editor of Myers’ Energy & Gold Report, recently said: “Next year is shaping up to be a bad year for U.S. paper instruments. Anxious investors are already disrupting the markets. I would not be surprised to see U.S. stock indexes fall below their March 2009 lows (the Dow industrials hit 6440). Don’t be surprised by a 50 percent correction in blue chip stocks.”

I generally agree, & John’s statement brings up what I have found during past similar bad stock market times: While blue chip stocks will be hurt, the shares of many of the emerging growth companies that I have recommended have moved up during bad market climates. I expect ComCam International, Inc. shares to begin moving up during 2012 even if the overall market does badly as predicted.

Initial Comment

One of my readers told me about this emerging growth situation. I looked into it & interviewed President Pete Ianace last week. This situation is a real potential winner in my opinion – I am very impressed with management’s new plans. This company is at an early point in its history. It has invested a great deal of time & money in developing its technology, products, & software, & is now essentially at the very beginning of an important new marketing direction. It began serving the military, & management recently decided to apply its technology & software to the much wider commercial market. In my opinion, that was an excellent decision, & was exactly what was wanted & needed to propel a ten-fold growth in the company’s revenues & profits. That’s vitally important because the company does close to about $5 million per year now, & hopes to do as much as $50 million per year within as little as the next two to three years.

What CMCJ Does

CMCJ designs, manufactures, & sells video surveillance systems.

Management’s near-term intention is to take advantage of installations that utilize its cloud computing platform to allow franchise operators & large retail chains to improve remote operations management.

Its product division has developed a video fusion platform that adds next generation, real-time interactive command-&-control capabilities to legacy security systems for greater performance at lower cost. The platform seamlessly integrates a suite of analytics, including third-party security solutions - access control, biometrics, radio frequency identification (RFID), chemical detection, & seismic detection - to improve real-time decision-making for critical events over any wireless network. Its products have been deployed with the Department of Defense, Immigration & Customs Enforcement, & many other law enforcement & intelligence agencies in addition to businesses across a wide range of industries.

It is pursuing numerous new domestic & international sales opportunities intended to increase revenue by leveraging its product & systems divisions to provide turn-key solutions across a spectrum of applications within the security industry. While expanding marketing efforts to reach new customers, it continues to focus on offering its services as an original equipment manufacturer (OEM) for strategic resellers, in order to serve as an R&D partner, & to develop a network of dealers, resellers, & system integrators with differing targeted market expertise. Meanwhile it continues to service existing customers with its products & services.

It is also focused on transforming non-recurring engineering contracts that utilize its hardware & software designs into opportunities to develop a recurring royalty model. When it markets to large retail chains for example, it will provide its technology, utilize its customer’s video cameras & other input devices, make the customized installation, retain ownership of its equipment & software, & intends to be paid a recurring fee of about $200 per month per system.

A Brief Look at One of CMCJ’s Military Applications

Here’s a very brief look at one of CMCJ’s military applications.

Picture a system about twice the size of a breadbox buried a few feet below the surface in a military area. It is powered by a special battery designed to provide the power needed to operate the system for an entire year. It is dormant until it detects a particular type of movement or other programmed action which wakes it up. It then communicates wirelessly over a low speed network (broadband not available in that part of the world) to a command position, quickly provides live video & data to officers that is critical to their objective, & then immediately goes back to its dormant condition. This type of usage allows the system’s battery to have the long life without the need to charge the battery or replace it during the system’s intended period of service. The low power consumption & the ability to deliver high quality video even when bandwidth is extremely limited is the true uniqueness this system offers.

CMCJ’s Plan of Entering the Commercial Market

Each system planned for the commercial market is far less costly than those in military applications, but the number of systems needed in commercial applications is huge in comparison to military applications. Taking advantage of a much larger market opportunity is why management has sensibly decided to enter the commercial market.

Here’s how the company is beginning to describe its system to large restaurant chains:

“ComCam enhances your current video security system to provide 360° operational intelligence wherever you are. Now you can manage more locations & protect your quality, safety, & bottom line. ComCam's MicroServer & a system of sensors let you monitor the systems that are critical to your business. It integrates with your current systems to improve your real-time picture of your business.

“With the MicroServer installed you can remotely view, record, & control any of your video cameras on any computer & on many smart phones. Wireless sensors trigger real-time alerts to your cell phone with status information including:

• Cooler Temperatures
• Oven, Fryer, & Flattop Temperatures
• Scales
• Fountain Supplies
• Exit & Entry
• Alarm Status
• Reservation Flow
• Cash Drawer

“The MicroServer has facial recognition technologies which can identify individual employees in different zones, accessing the till, or entering supply rooms. It can even send an alert when an unknown individual enters a monitored area. Or trigger a call to the police if the facility is occupied during specified hours.”

CMCJ’s Additional Commercial Plans

President Pete Ianace gave me an example of how large a single commercial customer can leverage their existing infrastructure. He said a large retailer of household products, appliances, & building materials would be the type of example that could be a suitably large commercial operation. He pointed out that such a customer might own & operate more than several thousand retail locations, & that each one of them would need only a small numbert of CMCJ’s systems to interact with the 50-60 cameras already in place.

I leave it to you to do the math – even at a lower cost per system per month, the revenue potential if such a customer had CMCJ install its systems in all of its stores during a two-year period, it would require very few such customers to reach CMCJ’s $50 million per year revenue target.

My Opinion

My opinion is that the potential of reaching one or two of the largest customers, &/or a reasonable number of large restaurant & other chains is rather good.

The sales pitch to the commercial market, in my opinion, would be an easy one to use. The main advantage that customers would realize would be the generation of quite a bit more savings in their operations than the cost of the systems. Of course, the plan would have to consist of test installations in a small number of the chains’ stores for a period long enough for the customer to realize the resulting savings. If the plan is properly implemented, I believe that customers would quite quickly recognize the amount of savings the installations would generate. In the case of the franchise sector the company has had four pilot locations up & operational for some time now with excellent results & customer feed back.

I suggest that you do some homework on your own on this situation. Check out CMCJ’s website as a start. Please keep in mind that this editorial is based on my initial investigation of what I perceive to be an emerging growth company that has made a decision to add a valuable new direction to its business. As most of you know, I am not now, nor have ever been, paid to write & publish my editorials. I intend to carefully watch CMCJ’s progress, so look for my future coverage of this situation.

Contact

Comcam International Inc. is located at 1140 McDermott Drive, Suite 200, West Chester, PA 19380. Call 610-436-8089. Its website is http://www.comcam.net

My comments in this column are strictly my personal opinion. At times, I will include forward-looking information as that term is defined in the Private Security Reform Act of 1995. Such information & the related company are subject to many risks & uncertainties. There can be no assurance that actual results, business conditions, business developments, losses & contingencies, local & foreign factors, & other matters will not differ materially from those suggested in any of my forward-looking statements. Such differences are the result of all sorts of factors (some examples: market conditions, competition, advances in technology, acquisitions, mergers, potential litigation, personnel changes, market changes, capital availability, etc., etc.).

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