**SECURITIES AND        EXCHANGE COMMISSION        Washington, D.C. 20549**

**FORM        10-QSB**

*(Mark        One)*

[**X**        ]     Quarterly report under Section 13 or 15(d) of the Securities        Exchange Act of 1934 for the quarterly period ended **September 30, 2007**.

[  ]             Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934 for the        transition period from                            to                    .

Commission file        number: **000-51763**

**COMCAM        INTERNATIONAL, INC.**        (Exact name of small business issuer as specified in its charter)

| **Delaware**                        (State or other jurisdiction of incorporation or organization) | **23-2976562**                        (IRS Employer Identification Number) |
|----------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------|

**1140 McDermott        Drive, Suite 200, West Chester, Pennsylvania 19380**        (Address of Principal Executive        Office)          (Postal Code)

**(610)        436-8089**(Issuer’s telephone number)

Check whether the registrant: (1)        filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during        the past 12 months (or for such shorter period that the registrant was required to file        such reports), and (2) has been subject to such filing requirements for the past 90        days.

Yes            **X**                     No                    

Indicate by check mark whether the        registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes                                 No            **X**        

The number of outstanding shares of        the registrant’s common stock, $0.0001 par value (the only class of voting stock), as        of November 13, 2007 was 2,010,795.

**            1        **

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**TABLE        OF CONTENTS**

 

**PART        I**

 

| ITEM 1. FINANCIAL STATEMENTS | 3 |
|------------------------------|---|

 

|   | Unaudited Balance Sheet as of September 30, 2007 | 4 |
|--------|--------------------------------------------------|---|

         

Unaudited Statement of Operations for the three and nine month periods        ended

|   | September 30, 2007 and 2006 and the period from inception to                        September 30, 2007 | 5 |
|--------|--------------------------------------------------------------------------------------------------------|---|

         

Unaudited Statement of Cash Flows for the nine months ended

|   | September 30, 2007 and 2006 and the period from inception to                        September 30, 2007 | 6 |
|--------|--------------------------------------------------------------------------------------------------------|---|

         

|   | Notes to the Unaudited Financial Statements | 7 |
|--------|---------------------------------------------|---|

 

| ITEM 2. Management’s Discussion and                        Analysis | 11 |
|---------------------------------------------------------------------------|----|

 

| ITEM 3. CONTROLS AND PROCEDURES | 25 |
|---------------------------------|----|

 

**PART        II**

 

| ITEM 1. LEGAL PROCEEDINGS | 26 |
|---------------------------|----|

 

| ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES | 26 |
|-------------------------------------------------|----|

 

| ITEM 3. DEFAULTS UPON SENIOR SECURITIES | 26 |
|-----------------------------------------|----|

 

| ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES                        HOLDERS | 26 |
|--------------------------------------------------------------------------------------|----|

 

| ITEM 5. OTHER INFORMATION | 26 |
|---------------------------|----|

 

| ITEM 6. EXHIBITS | 26 |
|------------------|----|

 

| SIGNATURES | 27 |
|------------|----|

 

| INDEX TO EXHIBITS | 28 |
|-------------------|----|

 

 

 

 

 

 

2

 

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**PART        I**

 

| **ITEM 1.** | **FINANCIAL STATEMENTS** |
|-------------|--------------------------|

 

As used        herein, the terms “Company,” “we,” “our,” and        “us” refer to ComCam International, Inc., a Delaware corporation, unless        otherwise indicated. In the opinion of management, the accompanying unaudited financial        statements included in this Form 10-QSB reflect all adjustments (consisting only of normal        recurring accruals) necessary for a fair presentation of the results of operations for the        periods presented. The results of operations for the periods presented are not necessarily        indicative of the results to be expected for the full year.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

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| COMCAM INTERNATIONAL, INC.                                                 |
|----------------------------------------------------------------------------|
| (A Development Stage Company)                                              |
| BALANCE SHEETS                                                             |
|                                                                       |   |   |   |   |
|                                                                       |   | September 30, |   | December 31, |
|                                                                       |   | 2007 |   | 2006 |
| ASSETS                                                                     |   | (Unaudited) |   | (Audited) |
|                                                                       |   |   |   |   |
| Current assets:                                                            |   |   |   |   |
| Cash and cash equivalents                                                  | $ | 28,932 |   | 5,697 |
| Accounts receivable, net                                                   |   | 6,023 |   | 6,861 |
| Inventories                                                                |   | 72,973 |   | 78,048 |
|                                                                       |   |   |   |   |
| Total current assets                                                       |   | 107,928 |   | 90,606 |
|                                                                       |   |   |   |   |
| Property and equipment, net                                                |   | 126,726 |   | 10,529 |
| Other assets                                                               |   | 2,106 |   | 4,106 |
|                                                                       |   |   |   |   |
| Total assets                                                               | $ | 236,760 |   | 105,241 |
|                                                                       |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’                        DEFICIT         |   |   |   |   |
|                                                                       |   |   |   |   |
| Current liabilities:                                                       |   |   |   |   |
| Accounts payable                                                           | $ | 347,327 |   | 318,538 |
| Accrued expenses                                                           |   | 277,143 |   | 147,187 |
| Embedded derivative liability                                              |   | 93,477 |   | - |
| Advances payable to ComCam, Inc.                                           |   | - |   | 1,448,036 |
| Notes payable                                                              |   | 1,744,163 |   | 1,335,000 |
|                                                                       |   |   |   |   |
| Total current liabilities                                                  |   | 2,462,110 |   | 3,248,761 |
|                                                                       |   |   |   |   |
| Commitments and contingencies                                              |   |   |   |   |
|                                                                       |   |   |   |   |
| Stockholders’ deficit:                                               |   |   |   |   |
| Preferred stock, $.0001 par value; 2,000,000                               |   |   |   |   |
| shares authorized, no shares issued and                        outstanding |   | - |   | - |
| Common stock, $.0001 par value; 100,000,000                                |   |   |   |   |
| shares authorized, 2,010,795 shares issued and                             |   |   |   |   |
| outstanding                                                                |   | 201 |   | 201 |
| Additional paid-in capital                                                 |   | 3,008,078 |   | 1,811,668 |
| Deficit accumulated during the development stage                           |   | (5,233,629) |   | (4,955,389) |
|                                                                       |   |   |   |   |
| Total stockholder’s deficit                                          |   | (2,225,350) |   | (3,143,520) |
|                                                                       |   |   |   |   |
| Total liabilities and stockholders’ deficit                          | $ | 236,760 |   | 105,241 |

 

 

 

The        accompanying notes are an integral part of these financial statements

 

4

 

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| COMCAM INTERNATIONAL, INC.                    |
|-----------------------------------------------|
| (A Development Stage Company)                 |
| UNAUDITED STATEMENTS OF OPERATIONS            |
|                                          |   |   |   |   |   |   |   |   |   |   |
|                                          |   | Three Months Ended |   | Nine Months Ended |   |   |
|                                          |   | September 30, |   | September 30, |   | Cumulative |
|                                          |   | 2007 |   | 2006 |   | 2007 |   | 2006 |   | Amounts |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Revenues, net                                 | $ | 8,412 |   | 16,975 |   | 44,138 |   | 41,440 |   | 653,368 |
| Cost of revenues                              |   | - |   | 3,159 |   | 5,131 |   | 8,277 |   | 256,880 |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Gross profit                                  |   | 8,412 |   | 13,816 |   | 39,007 |   | 33,163 |   | 396,488 |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Operating expenses:                           |   |   |   |   |   |   |   |   |   |   |
| General and administrative expenses           |   | 61,230 |   | 96,404 |   | 191,220 |   | 406,771 |   | 2,916,772 |
| Research and development expenses             |   | 5,763 |   | 508 |   | 10,725 |   | 12,951 |   | 2,399,545 |
| Gain on cancellation of debt                  |   | - |   | - |   | - |   | (400) |   | (99,405) |
|                                          |   |   |   |   |   |   |   |   |   |   |
|                                          |   | 66,993 |   | 96,912 |   | 201,945 |   | 419,322 |   | 5,216,912 |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Loss from operations                          |   | (58,581) |   | (83,096) |   | (162,938) |   | (386,159) |   | (4,820,424) |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                       |   |   |   |   |   |   |   |   |   |   |
| Interest income                               |   | 161 |   | 94 |   | 258 |   | 1,910 |   | 13,562 |
| Interest expense                              |   | (63,858) |   | (18,776) |   | (120,056) |   | (72,455) |   | (431,263) |
| Gain on embedded derivative liability         |   | 4,496 |   | - |   | 4,496 |   | - |   | 4,496 |
|                                          |   |   |   |   |   |   |   |   |   |   |
|                                          |   | (59,201) |   | (18,682) |   | (115,302) |   | (70,545) |   | (413,205) |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Loss before provision for income taxes        |   | (117,782) |   | (101,778) |   | (278,240) |   | (456,704) |   | (5,233,629) |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Provision for income taxes                    |   | - |   | - |   | - |   | - |   | - |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Net loss                                      | $ | (117,782) |   | (101,778) |   | (278,240) |   | (456,704) |   | (5,233,629) |
|                                          |   |   |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Net loss per common share - basic and diluted | $ | (0.06) |   | (0.05) |   | (0.14) |   | (0.23) |   |   |
|                                          |   |   |   |   |   |   |   |   |   |   |
| Weighted average common and common            |   |   |   |   |   |   |   |   |   |   |
| equivalent shares                             |   | 2,010,000 |   | 2,010,000 |   | 2,010,000 |   | 2,010,000 |   |   |

 

 

The        accompanying notes are an integral part of these financial statements

 

5

 

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| COMCAM INTERNATIONAL, INC.                  |
|---------------------------------------------|
| (A Development Stage Company)               |
| UNAUDITED STATEMENTS OF CASH FLOWS          |
|                                        |   |   |   |   |   |   |
|                                        |   | Nine Months Ended |   |   |
|                                        |   | September 30, |   | Cumulative |
|                                        |   | 2007 |   | 2006 |   | Amounts |
| Cash Flows from operating activities:       |   |   |   |   |   |   |
| Net loss                                    | $ | (278,240) |   | (456,704) |   | (5,233,629) |
| Adjustments to reconcile net loss to net    |   |   |   |   |   |   |
| cash used in operating activities:          |   |   |   |   |   |   |
| Depreciation                                |   | 2,527 |   | 3,706 |   | 51,615 |
| Accretion - debenture interest expense      |   | 28,270 |   | - |   | 28,270 |
| Stock and warrant compensation expense      |   | - |   | - |   | 267,346 |
| Gain on embedded derivative                 |   | (4,496) |   | - |   | (4,496) |
| Gain on cancellation of debt                |   | - |   | (400) |   | (99,405) |
| Provision for losses on accounts receivable |   | 2,000 |   | 7,800 |   | 9,000 |
| Inventories reserve                         |   | - |   | 25,000 |   | - |
| (Increase) decrease in:                     |   |   |   |   |   |   |
| Accounts receivable                         |   | (1,162) |   | 6,351 |   | (15,023) |
| Inventories                                 |   | 5,075 |   | (164,217) |   | (72,973) |
| Other assets                                |   | 2,000 |   | - |   | (2,106) |
| Increase (decrease) in:                     |   |   |   |   |   |   |
| Accounts payable                            |   | 28,789 |   | 104,082 |   | 708,605 |
| Accrued expenses                            |   | 88,472 |   | 61,253 |   | 235,659 |
|                                        |   |   |   |   |   |   |
| Net cash used in operating activities       |   | (126,765) |   | (413,129) |   | (4,127,137) |
|                                        |   |   |   |   |   |   |
| Cash flows from investing activities:       |   |   |   |   |   |   |
| Purchase of property and equipment          |   | - |   | - |   | (59,617) |
|                                        |   |   |   |   |   |   |
| Net cash used in investing activities       |   | - |   | - |   | (59,617) |
|                                        |   |   |   |   |   |   |
| Cash flows from financing activities:       |   |   |   |   |   |   |
| Increase in notes payable                   |   | 150,000 |   | 170,000 |   | 1,485,000 |
| Proceeds from issuance of common stock      |   | - |   | - |   | 1,544,523 |
| Change in advances from ComCam, Inc.        |   | - |   | - |   | 1,186,163 |
|                                        |   |   |   |   |   |   |
| Net cash provided by financing activities   |   | 150,000 |   | 170,000 |   | 4,215,686 |
|                                        |   |   |   |   |   |   |
| Net increase (decrease) in cash             |   | 23,235 |   | (243,129) |   | 28,932 |
|                                        |   |   |   |   |   |   |
| Cash, beginning of period                   |   | 5,697 |   | 255,937 |   | - |
|                                        |   |   |   |   |   |   |
| Cash, end of period                         | $ | 28,932 |   | 12,808 |   | 28,932 |

 

 

The        accompanying notes are an integral part of these financial statements.

6

 

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COMCAM        INTERNATIONAL, INC.

(A        Development Stage Company)

NOTES TO        UNAUDITED FINANCIAL STATEMENTS

September        30, 2007

 

Note 1 -        Basis of Presentation

 

The        accompanying unaudited financial statements have been prepared by management in accordance        with the instructions in Form 10-QSB and, therefore, do not include all information and        footnotes required by generally accepted accounting principles and should, therefore, be        read in conjunction with the Company’s Form 10-KSB for the year ended December 31,        2006. These statements do include all normal recurring adjustments which the Company        believes necessary for a fair presentation of the statements. The interim results of        operations are not necessarily indicative of the results to be expected for the full year        ended December 31, 2007.

 

Note 2 -        Additional Footnotes Included By Reference

 

Except as        indicated in the notes above, there have been no other material changes in the information        disclosed in the notes to the financial statements included in the Company’s Form        10-KSB for the year ended December 31, 2006. Therefore, those footnotes are included herein        by reference.

 

Note 3 -        Going Concern

 

As of        September 30, 2007, the Company has limited revenue generating activities in place and the        Company has incurred losses since inception. These factors raise substantial doubt about        the Company’s ability to continue as a going concern.

 

Management        intends to seek additional equity and debt funding to expand marketing efforts and product        development. There can be no assurance that such funds will be available to the Company nor        that the marketing and product development efforts will be successful.

 

 

 

 

 

 

 

 

 

 

 

7

 

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COMCAM        INTERNATIONAL, INC.

(A        Development Stage Company)

NOTES TO        UNAUDITED FINANCIAL STATEMENTS

September        30, 2007

 

Note 4        – Notes Payable

 

Notes        payable consist of the following:

|   | September 30, | December 31, |
|--------|---------------|--------------|

|   | 2007 | 2006 |
|--------|------|------|

|   | Convertible unsecured note payable to ACC |
|--------|-------------------------------------------|

|   | Investors, LLC, bearing interest at 8% and due on |
|--------|---------------------------------------------------|

|   | demand. The note may be converted to common |
|--------|---------------------------------------------|

|   | shares of the Company, at the option of the                        holder, |
|--------|----------------------------------------------------------------------------|

|   | based on certain terms related to outstanding                        shares |
|--------|-----------------------------------------------------------------------------|

|   | and per share prices. The note also includes                        warrants |
|--------|------------------------------------------------------------------------------|

|   | to purchase common stock of the Company, based |
|--------|------------------------------------------------|

|   | on certain terms related to the total number of                        shares |
|--------|-------------------------------------------------------------------------------|

|   | outstanding at the time the warrants are                        exercised. | $ | 1,100,000 | 1,100,000 |
|--------|----------------------------------------------------------------------------|---|-----------|-----------|

 

|   | Notes payable to Paul Higbee, bearing interest |
|--------|------------------------------------------------|

|   | at 8%, due on demand, secured by the intellectual |
|--------|---------------------------------------------------|

|   | property of the Company. | 360,000 | 210,000 |
|--------|--------------------------|---------|---------|

 

|   | Unsecured note payable to Global Megatrend, |
|--------|---------------------------------------------|

|   | bearing interest at 7.5% and due on demand. |
|--------|---------------------------------------------|

|   | The note may be converted to common shares of |
|--------|-----------------------------------------------|

|   | the Company, at the option of the holder, based |
|--------|-------------------------------------------------|

|   | on certain terms related to outstanding shares |
|--------|------------------------------------------------|

|   | and per share prices. | 176,568 | 176,568 |
|--------|-----------------------|---------|---------|

 

|   | Convertible debenture to HNI, LLC of $125,000, |
|--------|------------------------------------------------|

|   | bearing interest at 7%, due on February 14, 2008, |
|--------|---------------------------------------------------|

|   | net of embedded derivative discount of $42,405 |
|--------|------------------------------------------------|

|   | (see Note 5). | 82,595 | - |
|--------|---------------|--------|---|

 

|   | Convertible unsecured note payable to Robert |
|--------|----------------------------------------------|

|   | Emmet, bearing interest at 6%, and due on demand |
|--------|--------------------------------------------------|

|   | The note may be converted into common shares of |
|--------|-------------------------------------------------|

|   | the Company at $.35 per share and contains a |
|--------|----------------------------------------------|

|   | provision which allows the Company to call for                        the |
|--------|---------------------------------------------------------------------------|

|   | conversion at anytime. | 25,000 | 25,000 |
|--------|------------------------|--------|--------|

 

|   | $ | 1,744,163 | 1,335,000 |
|--------|---|-----------|-----------|

 

 

8

 

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COMCAM        INTERNATIONAL, INC.

(A        Development Stage Company)

NOTES TO        UNAUDITED FINANCIAL STATEMENTS

September        30, 2007

 

Note 5        – Convertible Debenture and Embedded Derivative to HNI, LLC

 

During the        quarter ended September 30, 2007, a convertible debenture was transferred to the Company        from ComCam, Inc., of which the Company is a wholly-owned subsidiary. Details related to        the convertible debenture are discussed below as they were when initiated by ComCam,        Inc.

 

On February        14, 2007, the Company issued a Convertible Debenture (the Debenture) to HNI, LLC. The        Debenture accrues interest at 7%, is due on February 14, 2008, and is convertible into a        variable number of shares. The per share conversion rate is defined as 30% off the most        recent closing bid price on the date that the Company receives notice of conversion. At        September 30, 2007 the Debenture is convertible into approximately 19,841,270 common        shares.

 

The Company        analyzed the Debenture based on the provisions of EITF 00-19 and determined that the        conversion option of the Debenture qualifies as an embedded derivative. Information related        to the recognition of the embedded derivative is as follows:

 

Embedded        Derivative

 

The fair        value of the embedded derivative on February 14, 2007 was determined to be $113,080 and was        recorded as an embedded derivative liability. The embedded derivative is revalued at the        end of each reporting period and any resulting gain or loss is recognized as a current        period charge to the statement of operations. The fair value was calculated using the        Black-Scholes option pricing model with the following factors, assumptions and        methodologies:

 

|   | **•** | The fair value of the Company’s common stock was                        calculated to be $.017 per share on February 14, 2007. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | A volatility of 149% was calculated by using the                        Company’s closing stock prices since May 2006. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | The exercise price was $.0119. This amount was determined                        based on 30% off the most recent closing bid price immediately preceding                        February 14, 2007. |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | The estimated life was determined to be 1 year, which is                        equal to the contractual life of the embedded derivate. |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | The risk free interest rate was determined to be 5.06% based                        on the 1-year treasury rate. |
|--------|------------|------------------------------------------------------------------------------------------------------------------|

 

Since the        transfer of the convertible debenture, the Company has recorded accretion expense related        to the embedded derivative discount of $28,270.

 

At        September 30, 2007, the embedded derivative liability consists of the following:

 

|   | Fair value at inception | $ | 113,080 |
|--------|-------------------------|---|---------|

|   | Less gain | (19,603) |
|--------|-----------|----------|

 

|   | $ | 93,477 |
|--------|---|--------|

 

 

9

 

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COMCAM        INTERNATIONAL, INC.

(A        Development Stage Company)

NOTES TO        UNAUDITED FINANCIAL STATEMENTS

September        30, 2007

 

Note 6        – Supplemental Cash Flow Information

 

During the        nine months ended September 30, 2007, certain assets and liabilities were transferred to        the Company from ComCam, Inc. as follows:

 

|   | Patent | $ | 100,000 |
|--------|--------|---|---------|

|   | Accumulated amortization on patent | (4,776) |
|--------|------------------------------------|---------|

|   | Trademark | 15,000 |
|--------|-----------|--------|

|   | Office equipment | 10,000 |
|--------|------------------|--------|

|   | Accumulated depreciation on office equipment | (1,500) |
|--------|----------------------------------------------|---------|

|   | Note payable | (176,568) |
|--------|--------------|-----------|

|   | Convertible debenture | (125,000) |
|--------|-----------------------|-----------|

|   | Embedded derivative discount | 70,675 |
|--------|------------------------------|--------|

|   | Embedded derivative liability | (97,973) |
|--------|-------------------------------|----------|

|   | Accrued interest | (41,484) |
|--------|------------------|----------|

|   | Advances payable to ComCam, Inc. | 1,448,036 |
|--------|----------------------------------|-----------|

         

|   | 1,196,410 |
|--------|-----------|

|   | Capital contribution from ComCam, Inc. | (1,196,410) |
|--------|----------------------------------------|-------------|

         

|   | $ | - |
|--------|---|---|

 

 

Note 7        – Recent Accounting Pronouncements

 

In        June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation        No. 48, “Accounting for Uncertainty in Income Taxes—an interpretation of        FASB Statement No. 109.” This statement clarifies the accounting for uncertainty        in income tax positions. The Company has filed income tax returns in the U.S. federal        jurisdiction and in certain states. The Company is no longer subject to U.S. federal, state        and local income tax examinations by tax authorities for years before 2002.

 

The Company        adopted the provisions of FIN 48 on January 1, 2007. The Company did not make any        adjustment to opening retained earnings as a result of the implementation. The Company        recognizes interest accrued related to unrecognized tax benefits along with penalties in        operating expenses. During the nine month periods ended September 30, 2007 and 2006, the        Company did not recognize any interest and penalties relating to income taxes. The Company        did not have any accrual for the payment of interest and penalties at September 30,        2007.

 

Note 8        – Reverse Common Stock Split

 

Effective        November 7, 2007, the Company approved a 1-for-2.87 reverse common stock split. All common        share amounts and per share information have been retroactively adjusted to reflect this        reverse common stock split in the accompanying financial statements.

 

10

 

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**ITEM        2. MANAGEMENT'S DISCUSSION AND ANALYSIS**

 

This        discussion and analysis of our financial condition and results of operations and other        parts of this report contain forward-looking statements that involve risks and        uncertainties. Forward-looking statements can also be identified by words such as        “anticipates,” “expects,” “believes,”        “plans,” “predicts,” and similar terms. Forward-looking statements        are not guarantees of future performance and our actual results may differ significantly        from the results discussed in the forward-looking statements. Factors that might cause such        differences include, but are not limited to, those discussed in the subsections        entitled*Forward-Looking Statements and Factors That May Affect        Future Results and Financial Condition*below. The following        discussion should be read in conjunction with our financial statements and notes thereto        included in this report. All information presented herein is based on our period ended        September 30, 2007. Our fiscal year end is December 31.

 

**General**

 

The Company        is a wholly owned subsidiary of ComCam, Inc., engaged in the ongoing development and sale        of*Internet Protocol*wired and wireless        video products and solutions. Our mission is to become a leader in the digital video        network services and solutions industry.

 

Internet        Protocol (“IP”) is the procedure for regulating the transmission of data over a        network, be that a local area network, the Internet, or a wireless connection. The        Company’s IP video products are designed to work efficiently over any network by        breaking up data into small transmittable units or “packets” which are then        reassembled on the receiving end.

 

Our        principal network device, the ComCam MicroServer, supports the transmission of both analog        and digital data; an analog signal is converted to digital before network transmission. In        addition, our IP procedure supports the network distribution of video as well as other data        types of data, including biometric and sensor data.

 

**Discussion and Analysis**

 

Our        financial condition and results of operations depend primarily on revenue generated from        the sale of our products and by providing specialized services. In addition, our financial        condition is tied to our ability to realize additional debt or equity financing in        combination with stability in administrative expenses. There can be no assurance that an        increase in sales of our products or any other sources of revenue will provide sufficient        cash flows in the near term to sustain our operations and we have no commitments for        additional debt or equity financing. Since The Company does not expect to generate        sufficient cash flow in the short term, we are currently seeking financing as a means to        bridge the gap between operational losses and expenses. We can provide no assurance that        our efforts will be successful.

 

The        Company’s business development strategy is prone to significant risks and        uncertainties which can have an immediate impact on efforts to realize net cash flow and        deter future prospects of revenue growth. We have a limited history of generating revenue        which cannot be viewed as an indication of continued growth and a historical record of        incurring losses. Should we be unable to consistently generate revenue and reduce or        stabilize expenses on a consolidated basis to the point where we can realize net cash flow,        such failure will have an immediate impact on our ability to continue our business        operations.

 

**Strategy** 

 

The Company        remains focused on numerous domestic and international sales opportunities with businesses        and organizations that have purchased our products in the past, including the        following:

 

11

 

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|   | **•** | United States agencies: our products are currently being                        deployed with Immigration and Customs Enforcement (ICE) at the General                        Service Administration facility located in lower Manhattan, New York                        City. |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | United States agencies: products sold to U.S. agencies have                        been used for testing purposes, including: |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | the Coast Guard and Navy which funded the University of                        South Florida for remote underwater operating vehicles and purchased 10                        camera systems between 2002 and the present, |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Naval Undersea Warfare Center who purchased 16 camera                        systems for classified purposes in 2003, |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------|

|   | (c) | the FBI through Photech, Inc., who purchased 4 camera                        systems for undisclosed surveillance monitoring in 2004, |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | National Oceanic and Atmospheric Administration (Department                        of Commerce) and the Fish and Wildlife Service (Department of the Interior)                        who each purchased 1 camera system in October 2005, and |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (e) | Department of Interior who purchased several camera systems                        in 2001 to secure certain historic buildings in Independence Park,                        Philadelphia; and State agencies: the Washington Fish and Wildlife Service                        purchased 1 camera system in October 2005. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | United States corporations: units sold to private US                        companies for both research purposes and for implementation,                        including: |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (a) | DRS/Night Vision Systems for various purposes and purchased                        5 microserver systems between 2006 and the present, and provide engineering                        services; |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Henry Brothers for installation at JFK Airport and purchased                        3 microserver systems; |
|--------|-----|------------------------------------------------------------------------------------------------------------|

|   | (c) | IBM for loss-prevention purpose at its corporate facility in                        Raleigh, NC, purchased 3 microserver systems. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Various South America and North Africa integrators: port                        security and various wireless applications including two companies in                        Cartagena, Columbia, who purchased 11 professional lens camera systems                        since 2003 for testing in a port security project. |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

The Company        has significantly increased our intellectual property (IP) portfolio with the addition of        US Patent 6,975,220 to our portfolio. The technology embodied in the patent is expected to        enhance the command-and-control appliances and remote management services offered by our        products. Further, we intend to license the        ‘220’ patent directly to OEM partners, online service providers, software        developers, consumer electronics companies and other industry partners developing online        services with intelligent remote devices.The patent was        acquired from HNI, LLC (a Connecticut LLC.), a partnership that includes The Hartford,        Next Generation Ventures, LLC, and Connecticut Innovations.

 

Additionally, the Company intends to pursue numerous new domestic and        international sales opportunities to generate increased revenue, including the        following:

 

|   | **•** | DRS/Night Vision Systems has provided engineering services                        for their Perceptor camera line and it has incorporated our microservers                        and software to support trials for the military projects. |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Digi-Data Corporation has signed a letter of intent to                        pursue mutually advantageous business opportunities. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | DataWorks Plus is developing a wireless inmate tracking                        system in partnership with the Company to meet the needs of the Immigration                        and Customs Enforcement (ICE). |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | EG&G has included the Company in design bids for                        wireless configurations on military contracts. |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------|

|   | **•** | OLogic has included the Company in design of robotic based                        command-and-control system. |
|--------|------------|---------------------------------------------------------------------------------------------------------------|

         

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|   | **•** | Siemens Maintenance Services, LLC, has included the Company                        in design bids for wireless configurations to commercial airports,                        municipal transportation departments and other venues. |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Symbol/Motorola has made the Company a strategic sales                        partner for command-and-control and video display on mobile enterprise                        devices. |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

Marketing        overtures through DRS/Night Vision, Siemans Maintenance Services, LLC, and Symbol/Motorola        have not resulted in sales to date. All of the above are examples of potential future        customers that may contribute to an increase in the Company’s revenues. Additionally,        we plan to implement an aggressive marketing and sales campaign to reach a broader market        for our products.

 

While        maintaining direct sales relations with many of its historic customers (e.g., DRS), the        Company has also focused our sales efforts on serving as an Original Equipment Manufacturer        (OEM) for strategic resellers, to serve as a research and development partner, and to        develop a network of dealers, resellers and system integrators with differing targeted        market expertise.

 

As an        Original Equipment Manufacturer (OEM), the Company has established a strategic reseller        alliance with Symbol/Motorola for the development of integrated solutions to take advantage        of its MotoMESH network architecture.

 

The Company        is offering a series of specialized “solution” bundles to be sold into the        marketplace by select distributors, including:

 

|   | **•** | AAID Security Solutions, Peachtree City, GA -- for the                        distribution of the RFID Biometric Access System. |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | Remote Eyes, Laurel, MD – distribution of the CCTV                        Upgrade Kit (Limited System). |
|--------|------------|---------------------------------------------------------------------------------------------------------------|

|   | **•** | ScanSource, Greenville, SC – distributor of the CCTV                        Wireless Upgrade Kit (Full System). |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------|

|   | **•** | Susquehanna Computer Innovations, South Williamsport, PA                        – for distribution of the Integrated Command-&-Control                        Van. |
|--------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

Individual dealers, resellers and system integrators have begun to offer        company-based solutions to their respective sales channels.

 

The        Company’s marketing plan provides that we will:

 

|   | **•** | promote our products and services through our                        website; |
|--------|------------|-------------------------------------------------------------------------------|

|   | **•** | promote our accomplishments through regular press releases                        distributed by a PR Newswire that reaches both the financial press and the                        specialized industry-sector press. We maintain an online mailing list of                        three thousand names and each release is sent to contacts on the                        list; |
|--------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | attend leading industry events, including trade conferences                        and seminars, often with a strategic partner; two recent events include                        FenceTech 2007 with AAID, to introduce its “RFID Biometric Access                        System,” and CES 2007 with OLogic, to participate at “Robotics                        TechZone” to demonstrate a video command-and-control system;                        and |
|--------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | support our strategic partners by participating in planning                        sessions and other events. |
|--------|------------|---------------------------------------------------------------------------------------------------------------|

 

Further, we        intend to:

 

|   | **•** | retain a professional investor relations / public relations                        firm to launch an aggressive re-branding awareness campaign targeted to                        both our core sales channels (e.g., security surveillance, video                        networking) as well as the investor community (e.g., market makers and                        research analysts); and |
|--------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

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|   | **•** | revise our corporate identity (e.g., logo), website and                        print materials: in line with overall corporate repositioning, we will                        revise and refresh our core branding elements to maximize their positioning                        message as a technology leader not only in video surveillance but also                        toward wireless networking; through these efforts, we will be able to                        manage sales growth as well as take advantage of new opportunities                        including customized solutions that resellers bring to us. |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

 

**Results of Operations**

 

During the        nine month period ended September 30, 2007, we were engaged in the ongoing development and        sale of our*Internet Protocol*remote        control platform cameras, micro servers, associated software, and unique end-to-end network        solutions.

 

***Revenue***

 

Revenue for        the three month period ended September 30, 2007 decreased to $8,412 from $16,975 for the        three month period ended September 30, 2006, a decrease of 50%. Revenue for the nine month        period ended September 30, 2007 increased to $44,138 from $41,440 for the nine month period        ended September 30, 2006, an increase of 7%. The increase in revenue over the comparative        nine month periods can be attributed to marketing efforts. The Company expects revenue to        continue to increase over the next twelve months.

 

***Losses***

Net losses for the three month period ended September 30,        2007 increased to $117,782 from $101,778 for the three month period ended September 30,        2006, an increase of 16%. Net losses for the nine month period ended September 30, 2007        increased to $278,240 from $456,704 for the nine month period ended September 30, 2006, an        increase of 39%. The increase in losses over the comparative three and nine month periods        is primarily due to interest expense. The Company expects to continue to incur losses over        the next twelve months.

         

******

***Expenses***

Cost of revenue for the three month period ended September        30, 2007 decreased to $0 from        $3,159for the three month period ended September 30, 2006. Cost of        revenue for the nine month period ended September 30, 2007 decreased to        $5,131 from $8,277 for        the nine month period ended September 30, 2006, a decrease of 38%.The decrease in the cost of revenue over the comparative        three and nine month periods can be attributed to a decrease in costs associated with        revenue over the periods. The Company expects the cost of revenue to grow as sales increase        over the next twelve months.

 

General and        administrative expenses for the three month period ended September 30, 2007 decreased to        $61,230 from $96,404 for the three month period ended September 30, 2006, a decrease of        36%. General and administrative expenses for the nine month period ended September 30, 2007        decreased to $191,220 from $406,771 for the nine month period ended September 30, 2006, a        decrease of 53%. The decrease in general and administrative expenses over the comparative        nine month periods is attributable to a decrease in personnel costs, and costs attendant to        financing activities. The Company expects that general and administrative expenses will        remain relatively consistent over the next twelve months.

 

 

 

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Research        and development expenses for the three month period ended September 30, 2007 increased to        $5,763 from $508 for the three month period ended September 30, 2006, an increase of        1,034%. Research and development expenses for the nine month period ended September 30,        2007 decreased to $10,725 from $12,951 for the nine month period ended September 30, 2006,        a decrease of 17%. The decrease in research and development expenses over the comparative        nine month periods is due to limited financial resources. The Company expects that research        and development expenses will increase over the next twelve months subject to the        availability of financial resources dedicated for these purposes.

 

Depreciation and amortization expenses for the nine month periods ended        September 30, 2007 and 2006 were $2,527 and $3,706, respectively.

 

***Income Tax Expense (Benefit)***

 

The Company        has an income tax benefit resulting from net operating losses to offset any future        operating profit. The net operating losses carry forwards at December 31, 2006, consisted        of approximately $5,137,000 which will begin to expire in the year 2019. The amount of net        operating loss carry forwards that can be used in any one year can be limited by        significant changes in the ownership of the Company and by the applicable tax laws which        are in effect at the time such carry forwards are utilized.

 

***Impact of Inflation***

 

The Company        believes that inflation has had a negligible effect on operations over the past three        years. We believe that we can offset inflationary increases in the cost of materials and        labor by increasing sales and improving operating efficiencies.

 

***Capital Expenditures***

 

The Company        made no significant capital expenditures on property or equipment for the nine month        periods ended September 30, 2007 or 2006.

 

***Liquidity and Capital Resources***

 

Cash flow        used in operations was $126,765 for the nine month period ended September 30, 2007, as        compared to cash flow used in operations of $413,129 for the nine months ended September        30, 2006. The decrease in cash flows used in operating activities for the nine month period        ended September 30, 2007 can be primarily attributed to the reduction of losses incurred        from operations and an increase in accrued expenses and accounts payable. The Company        expects to continue to use cash flow in operating activities until such time as revenues        increase.

 

Cash flows        used in investing activities was $0 for the nine month periods ended September 30, 2007 and        September 30, 2006. The Company expects to use cash flow in investing activities in future        periods.

 

Cash flow        provided by financing activities was $150,000 for the nine month period ended September 30,        2007, as compared to $170,000 for the nine months ended September 30, 2006. Cash flow        provided by financing activities for the nine month period ended September 30, 2007 can be        attributed to a loan. The Company expects to generate additional cash flow from financing        activities in future periods.

 

 

 

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The Company        received a loan from ACC Investors as part of a Securities Purchase Agreement        (“Agreement”) dated June 22, 2005 between ComCam, Inc., the Company and ACC        Investors. In addition to the loan, the Agreement provides for a 100% distribution of the        Company’s common stock to our shareholders on a pro rata basis. The loan is        documented as a secured convertible promissory note, with warrants attached, that bears        interest at 8% per annum. The terms of the promissory note will cause ACC Investors to        convert the principal amount and 55% of the interest accrued over the term in addition with        warrants into approximately 45% of our common shares on a fully diluted basis after the        completion of the share distribution. The conversion of the promissory note into our common        shares will entitle the holders to certain registration rights defined in a registration        rights agreement.

 

The        Agreement also requires that we file a registration statement with the Commission in        anticipation of the share distribution and the conversion of the promissory note. The share        distribution will be affected after the Company’s registration statement is        considered “effective” by the Commission. The conversion of the promissory note        will be affected after the share distribution of our common shares to ComCam, Inc.’s        shareholders. The parties to the Agreement anticipate the completion of the share        distribution by December 31, 2007.

 

The Company        has funded our cash needs from inception through September 30, 2007 through revenues and a        series of debt and equity transactions, including several private placements. Until such        time as we can increase revenues and decrease expenses, we expect that we will require new        debt or equity transactions to satisfy cash needs over the next twelve months.

 

The Company        had no formal long term lines or credit or other bank financing arrangements as of        September 30, 2007.

 

Since        earnings, if any, will be reinvested in operations, the Company does not expect to pay cash        dividends in the foreseeable future.

 

The Company        has no current plans for the purchase or sale of any plant or equipment.

 

The Company        has no current plans to make any changes in the number of employees.

 

***Off        Balance Sheet Arrangements***

 

As of        September 30, 2007, the Company has no significant off-balance sheet arrangements that have        or are reasonably likely to have a current or future effect on our financial condition,        changes in financial condition, revenues or expenses, results of operations, liquidity,        capital expenditures, or capital resources that is material to stockholders.

 

***Going        Concern***

 

The        Company’s auditors have expressed an opinion as to our ability to continue as a going        concern as a result of an accumulated deficit of $4,995,389 as of December 31, 2006 which        increased to $5,233,629 as of September 30, 2007. Our ability to continue as a going        concern is subject to the ability of the Company to obtain a profit and/or obtaining the        necessary funding from outside sources. Management’s plan to address the        Company’s ability to continue as a going concern, includes (i) realization of        increased revenues from the Company’s sales (ii) obtaining funding from private        placement sources; (iii) obtaining additional funding from the sale of the Company’s        securities; (iv) obtaining loans from shareholders as necessary, and (v) converting        outstanding debt to equity. Although management believes that it will be able to obtain the        necessary funding to allow the Company to remain a going concern through the methods        discussed above, there can be no assurances that such methods will prove        successful.

 

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***Forward Looking Statements and Factors That May Affect Future Results        and Financial Condition***

 

The        statements contained in the section titled*Management’s        Discussion and Analysis*, with the exception of historical facts,        are forward looking statements within the meaning of Section 27A of the Securities Act. A        safe-harbor provision may not be applicable to the forward looking statements made in this        prospectus because of certain exclusions under Section 27A (b). Forward looking statements        reflect our current expectations and beliefs regarding our future results of operations,        performance, and achievements. These statements are subject to risks and uncertainties and        are based upon assumptions and beliefs that may or may not materialize. These statements        include, but are not limited to, statements concerning:

 

|   | **•** | the sufficiency of existing capital resources; |
|--------|------------|------------------------------------------------|

|   | **•** | our ability to raise additional capital to fund cash                        requirements for future operations; |
|--------|------------|-----------------------------------------------------------------------------------------------------------------|

|   | **•** | uncertainties involved in the rate of growth of the                        Company’s business and acceptance of products and                        services; |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | the ability of the Company to achieve and maintain an                        adequate customer base to have sufficient revenues to fund and maintain                        operations; and |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | **•** | general economic conditions. |
|--------|------------|------------------------------|

         

We wish to        caution readers that the Company’s operating results are subject to various risks and        uncertainties that could cause our actual results to differ materially from those discussed        or anticipated, including the factors set forth in the section entitled        “*Risk Factors*” included        elsewhere in this report. We also wish to advise readers not to place any undue reliance on        the forward looking statements contained in this report, which reflect our beliefs and        expectations only as of the date of this report. We assume no obligation to update or        revise these forward looking statements to reflect new events or circumstances or any        changes in our beliefs or expectations, other that is required by law.

 

***Critical Accounting Policies***

 

In Note 1        to the audited consolidated financial statements for the years ended December 31, 2006 and        2005, the Company discusses those accounting policies that are considered to be significant        in determining the results of operations and its financial position. The Company believes        that the accounting principles utilized by us conform to accounting principles generally        accepted in the United States of America.

 

The        preparation of financial statements requires management to make significant estimates and        judgments that affect the reported amounts of assets, liabilities, revenues and expenses.        By their nature, these judgments are subject to an inherent degree of uncertainty. On an        on-going basis, we evaluate our estimates, including those related to bad debts,        inventories, intangible assets, warranty obligations, product liability, revenue, and        income taxes. The Company bases our estimates on historical experience and other facts and        circumstances that are believed to be reasonable, and the results form the basis for making        judgments about the carrying value of assets and liabilities. The actual results may differ        from these estimates under different assumptions or conditions. With respect to revenue        recognition, the Company applies the following critical accounting policies in the        preparation of its financial statements.

 

 

 

 

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***Revenue Recognition***

 

We generate        revenue through the sale of our products to the private, commercial, industrial and        governmental sectors of the security industry. Revenue from product sales is recognized at        the time the product is shipped and invoiced and collectibility is reasonably assured. The        Company believes that revenue should be recognized at the time of shipment as title passes        to the customer at the time of shipment.

 

***Stock-Based Compensation***

 

On January        1, 2006, we adopted SFAS No. 123 (revised 2004) (SFAS No. 123R), Share-Based Payment, which        addresses the accounting for stock-based payment transactions in which an enterprise        receives employee services in exchange for (a) equity instruments of the enterprise or (b)        liabilities that are based on the fair value of the enterprise’s equity instruments        or that may be settled by the issuance of such equity instruments. In January 2005, the        Securities and Exchange Commission (SEC) issued Staff Accounting Bulletin (SAB) No. 107,        which provides supplemental implementation guidance for SFAS No. 123R. SFAS No. 123R        eliminates the ability to account for stock-based compensation transactions using the        intrinsic value method under Accounting Principles Board (APB) Opinion No. 25, Accounting        for Stock Issued to Employees, and instead generally requires that such transactions be        accounted for using a fair-value-based method. We use the Black-Scholes (“BS”)        option-pricing model to determine the fair-value of stock-based awards under SFAS No. 123R,        consistent with that used for pro forma disclosures under SFAS No. 123, Accounting for        Stock-Based Compensation. We have elected the modified prospective transition method as        permitted by SFAS No. 123R and accordingly prior periods have not been restated to reflect        the impact of SFAS No. 123R. The modified prospective transition method requires that        stock-based compensation expense be recorded for all new and unvested stock options,        restricted stock, restricted stock units, and employee stock purchase plan shares that are        ultimately expected to vest as the requisite service is rendered beginning on January 1,        2006, the first day of our fiscal year 2006. Stock-based compensation expense for awards        granted prior to January 1, 2006 is based on the grant date fair-value as determined under        the pro forma provisions of SFAS No. 123. Prior to the adoption of SFAS No. 123R, we        measured compensation expense for our employee stock-based compensation plans using the        intrinsic value method prescribed by APB Opinion No. 25. We applied the disclosure        provisions of SFAS No. 123 as amended by SFAS No. 148, Accounting for Stock-Based        Compensation – Transition and Disclosure, as if the fair-value-based method had been        applied in measuring compensation expense. Under APB Opinion No. 25, when the exercise        price of the Company’s employee stock options was equal to the market price of the        underlying stock on the date of the grant, no compensation expense was recognized. We        account for equity instruments issued in exchange for the receipt of goods or services from        other than employees in accordance with SFAS No. 123 and the conclusions reached by the        Emerging Issues Task Force (“EITF”) in Issue No. 96-18. Costs are measured at        the estimated fair market value of the consideration received or the estimated fair value        of the equity instruments issued, whichever is more reliably measurable. The value of        equity instruments issued for consideration other than employee services is determined on        the earliest of a performance commitment or completion of performance by the provider of        goods or services as defined by EITF 96-18.

 

 

 

 

 

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***Recent Accounting Pronouncements***

 

In February        2006, the FASB issued SFAS No. 155, “Accounting for Certain Hybrid Financial        Instruments-an amendment of FASB Statements No. 133 and 140”, to simplify and make        more consistent the accounting for certain financial instruments. SFAS No. 155 amends SFAS        No. 133, “Accounting for Derivative Instruments and Hedging Activities”, to        permit fair value re-measurement for any hybrid financial instrument with an embedded        derivative that otherwise would require bifurcation, provided that the whole instrument is        accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, “Accounting        for the Impairment or Disposal of Long-Lived Assets”, to allow a qualifying        special-purpose entity to hold a derivative financial instrument that pertains to a        beneficial interest other than another derivative financial instrument. SFAS No. 155        applies to all financial instruments acquired or issued after the beginning of an        entity’s first fiscal year that begins after September 15, 2006, with earlier        application allowed. The adoption of this statement is not expected to have a material        effect on the Company’s future reported financial position or results of        operations.

 

In March        2006, the FASB issued SFAS No. 156, “*Accounting for        Servicing of Financial Assets, an amendment of FASB Statement No. 140, Accounting for        Transfers and Servicing of Financial Assets and Extinguishments of        Liabilities*”. This statement requires all separately        recognized servicing assets and servicing liabilities be initially measured at fair value,        if practicable, and permits for subsequent measurement using either fair value measurement        with changes in fair value reflected in earnings or the amortization and impairment        requirements of Statement No. 140. The subsequent measurement of separately recognized        servicing assets and servicing liabilities at fair value eliminates the necessity for        entities that manage the risks inherent in servicing assets and servicing liabilities with        derivatives to qualify for hedge accounting treatment and eliminates the characterization        of declines in fair value as impairments or direct write-downs. SFAS No. 156 is effective        for an entity’s first fiscal year beginning after September 15, 2006. The adoption of        this statement is not expected to have a material effect on the Company’s future        reported financial position or results of operations.

 

In June        2006, the Financial Accounting Standards Board (FSAB) issued FASB Interpretation No. 48,        “Accounting for Uncertainty in Income Taxes – an interpretation of FASB        Statement No. 109.” This statement clarifies the accounting for uncertainty in income        tax positions. The Company has filed income tax returns in the U.S. federal jurisdiction        and in certain states. The Company is no longer subject to U.S. federal, state and local        income tax examinations by tax authorities for years before 2002. The Company adopted the        provisions of FIN 48 on January 1, 2007.

 

In        September 2006, the FASB issued SFAS No. 157, “*Fair Value        Measurements*”. The objective of SFAS 157 is to increase        consistency and comparability in fair value measurements and to expand disclosures about        fair value measurements. SFAS 157 defines fair value, establishes a framework for measuring        fair value in generally accepted accounting principles, and expands disclosures about fair        value measurements. SFAS 157 applies under other accounting pronouncements that require or        permit fair value measurements and does not require any new fair value measurements. The        provisions of SFAS No. 157 are effective for fair value measurements made in fiscal years        beginning after November 15, 2007. The adoption of this statement is not expected to have a        material effect on the Company’s future reported financial position or results of        operations.

 

 

 

 

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In        September 2006, the FASB issued SFAS No. 158,        “*Employers’ Accounting for Defined Benefit Pension and        Other Postretirement Plans – an amendment of FASB Statements No. 87, 88, 106, and        132(R)*”. This statement requires employers to recognize the        overfunded or underfunded status of a defined benefit postretirement plan (other than a        multiemployer plan) as an asset or liability in its statement of financial position and to        recognize changes in that funded status in the year in which the changes occur through        comprehensive income of a business entity or changes in unrestricted net assets of a        not-for-profit organization. This statement also requires an employer to measure the funded        status of a plan as of the date of its year-end statement of financial position, with        limited exceptions. The provisions of SFAS No. 158 are effective for employers with        publicly traded equity securities as of the end of the fiscal year ending after December        15, 2006. The adoption of this statement is not expected to have a material effect on the        Company’s future reported financial position or results of operations.

 

In        September 2006, the Commission issued Staff Accounting Bulletin        (“SAB”) No. 108, “Considering the Effects of Prior Year        Misstatements when Quantifying Misstatements in Current Year Financial Statements.”        SAB No. 108 addresses how the effects of prior year uncorrected misstatements should        be considered when quantifying misstatements in current year financial statements. SAB        No. 108 requires companies to quantify misstatements using a balance sheet and income        statement approach and to evaluate whether either approach results in quantifying an error        that is material in light of relevant quantitative and qualitative factors. SAB No. 108 is        effective for periods ending after November 15, 2006. The Company is currently        evaluating the impact of adopting SAB No. 108 but does not expect that it will have a        material effect on its financial position and results of operations.

 

In February        2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and        Financial Liabilities”. This Statement permits entities to choose to measure many        financial assets and financial liabilities at fair value. Unrealized gains and losses on        items for which the fair value option has been elected are reported in earnings. SFAS No.        159 is effective for fiscal years beginning after November 15, 2007. The Company is        currently assessing the impact of SFAS No. 159 on its financial position and results of        operations.

 

**Risks        Factors**

 

The        Company’s operations and securities are subject to a number of risks. Below we have        identified and discussed the material risks that we are likely to face. Should any of the        following risks occur, they will adversely affect our operations, business, financial        condition and/or operating results as well as the future trading price and/or the value of        our securities.

 

***Risks        Related to the Company’s Business***

 

*THE        COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN IS IN QUESTION*

 

The        Company’s auditors included an explanatory statement in Note 2 of their report of        financial statements for the years ended December 31, 2006 and 2005, stating that there are        certain factors which raise substantial doubt about our ability to continue as a going        concern. These factors include limited revenue generating activities in place, and losses        since inception.

 

*THE        COMPANY HAS A HISTORY OF LOSSES*

 

The Company        had an accumulated deficit of $4,955,389 as of December 31, 2006, which increased to        $5,233,629 as of September 30, 2007. We do not expect to achieve profitability in the next        twelve months and can provide no assurances that we will ever achieve profitability or in        the event that we do achieve profitability that we will be able to sustain that        profitability over time.

 

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*IF THE        COMPANY DOES NOT GENERATE SUFFICIENT CASH FLOW FROM OPERATIONS AND IS UNABLE TO OBTAIN        ADDITIONAL CAPITAL TO OPERATE ITS BUSINESS, WE MAY NOT BE ABLE TO CONTINUE        OPERATIONS*

 

The Company        currently had a working capital deficit of $2,354,182 at September 30, 2007 which deficit        is primarily attributable the note payable to ACC Investors. Although we intend to expand        operations through the calendar year ending December 31, 2007, the funding of such        operations and beyond cannot be assured. Our revenues are insufficient to sustain        operations and our working capital deficit remains significant. Should we be unable to        generate sufficient cash flow from revenues to sustain our business and fail to obtain        additional funds through additional debt or equity funding, we may be forced to curtail or        cease operations.

 

*THE        COMPANY MAY NOT BE ABLE TO DEVELOP NEW PRODUCTS*

 

We have        historically had difficulty producing our products because of cash flow shortages. Though        we have recently resumed the production of our products, our future success depends in a        significant part on our ability to evolve our hardware and software and to develop and        introduce new products and technologies in response to market demands. If adequate funds        are not available, the Company’s ability to develop or enhance products and services        or otherwise respond to competitive pressures would be significantly limited.

 

*THE        VIDEO MONITORING SURVEILLANCE INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE AND THE        COMPANY’S PRODUCTS COULD BECOME OBSOLETE AT ANY TIME*

 

Evolving        technology, updated industry standards, and frequent new product and service introductions        characterize the video surveillance market; our products could become obsolete at any time.        Competitors could develop products similar to or better than our own, finish development of        new technologies in advance of the Company’s research and development, or be more        successful at marketing new products, any of which factors may hurt our prospects for        success.

 

*THE        MARKET ACCEPTANCE OF THE COMPANY’S PRODUCTS IS CRITICAL TO ITS GROWTH*

 

The Company        generates revenue from the design and sale of video surveillance systems; therefore, market        acceptance of our products is critical. If our customers do not accept or purchase our        products, then our revenue, cash flow and/or operating results will be negatively        impacted.

 

*THE        COMPANY COMPETES WITH LARGER AND BETTER-FINANCED CORPORATIONS*

 

Competition        within the international market for fixed and mobile commercial video cameras and other        equipment communication systems is intense. While the Company’s products are        distinguished by next-generation innovations that are more sophisticated, flexible and cost        effective than many competitive products currently in the market place, a number of        entities offer video surveillance systems, and new competitors may enter the market in the        future. Some of our existing and potential competitors have longer operating histories,        greater name recognition, larger customer bases and significantly greater financial,        technical and marketing resources than we do, including well known multi-national        corporations like Sony and JVC.

 

 

 

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*WE        DEPEND ON ONE MANUFACTURER AND LIMITED SOURCE SUPPLIERS*

 

The Company        relies on Pennsylvania-based Strategic Manufacturing Technologies, Inc., to procure        components and to manufacture our video surveillance systems. Our components are purchased        for us from such source suppliers as Motorola, Inc., and Analog Devices, Inc. We anticipate        that we will continue to depend upon one or few manufacturers as well as a limited number        of source suppliers which reliance reduces the level of control we have and exposes us to        significant risks such as inadequate capacity, late delivery, substandard quality and        higher prices, all of which could adversely affect our business. We currently have no        agreement with Strategic Manufacturing Technologies, Inc. for the manufacture of our video        surveillance systems.

 

If our        suppliers were unable to provide parts in the volumes needed or at an acceptable price, our        manufacturer and the Company would have to identify and qualify acceptable replacements        from alternative sources of supply. If we are unable to obtain these components in a timely        fashion, it would likely not be able to meet demand. Any disruption of either component        procurement or manufacturing delays could adversely affect our results of        operations.

 

*OUR        CHIEF EXECUTIVE OFFICER MAY NOT BE ABLE TO OFFER HIS UNDIVIDED ATTENTION TO THE COMPANY        FOLLOWING THE ANTICIPATED DISTRIBUTION*

 

We        anticipate the distribution of our shares to the shareholders of ComCam, Inc., at which        time Don Gilbreath will continue to serve as our the chief executive officer and as the        chief executive officer of ComCam, Inc. Mr. Gilbreath’s dual responsibilities will        cause him to divide his time between two corporations with disparate interests. Currently,        Mr. Gilbreath devotes significant time to the marketing of our products and services.        However, subsequent to the distribution ComCam, Inc. will seek out unrelated business        opportunities in the technology sector, which pursuit will reduce the amount of time Mr.        Gilbreath currently spends on the development of our business.

 

*THE        COMPANY’S SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT AND RETAIN KEY        PERSONNEL*

 

The        Company’s future success will depend substantially on the continued services and        performance of Don Gilbreath and other key personnel. We have relatively few senior        personnel, and so the loss of the services of Don Gilbreath or any other key employees        could have a material adverse effect on our business prospects, financial condition and        results of operations. Our future success also depends on the Company’s ability to        identify, attract, hire, train, retain and motivate technical, managerial and sales        personnel. Competition for such personnel is intense, and we cannot assure that we will        succeed in attracting and retaining such personnel. Our failure to attract and retain the        necessary technical, managerial and sales personnel could have a material adverse effect on        our business prospects, financial condition and results of operations.

 

*MISAPPROPRIATION OF PROPRIETARY RIGHTS OR CLAIMS OF INFRINGEMENT OR LEGAL        ACTIONS RELATED TO INTELLECTUAL PROPERTY COULD ADVERSELY IMPACT OUR FINANCIAL        CONDITION*

 

Our success        depends significantly on protecting proprietary technology. Despite the Company’s        efforts to protect its proprietary rights, unauthorized parties may attempt to copy or        otherwise obtain and use our technology or products. Monitoring unauthorized use of our        technology is difficult, and we cannot be certain that the steps we have taken will prevent        misappropriation of our technology, particularly in foreign countries where the laws may        not protect our proprietary rights as fully as in the United States.

 

22

 

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In        addition, from time to time, third parties may assert patent, copyright, trademark and        other intellectual property rights claims against us with respect to existing or future        products or technology. If there is a successful claim of infringement and the Company        fails or is unable to develop non-infringing technology or license the infringed or similar        technology on a timely basis, our business and results of operations could be seriously        harmed.

 

*THE        COMPANY’S BUSINESS IS SUBJECT TO GOVERNMENTAL REGULATIONS*

 

The        Company, national and local standards set by governmental regulatory authorities set the        regulations by which communications are transmitted within and across respective        territories. The Company’s fixed and mobile digital video cameras and communication        systems are subject to such regulation in addition to national, state and local taxation.        Our products may be required to meet Federal Communications Commission approval,        specifically for Classes A & B of Part 15 for the telephone related applications of our        hardware products. Although we successfully operate within current governmental        regulations, it is possible that regulatory changes could negatively impact our operations        and cause us to diminish or cease operations.

 

*THE        COMPANY’S PRODUCTS ARE SUBJECT TO ENVIRONMENTAL LAWS*

 

New        hazardous materials restrictions have been and are being sought in numerous jurisdictions        worldwide. As these restrictions take effect, the Company may need to change the components        it uses in certain key products. These components may be difficult to procure or more        expensive than the components we currently use. As such, current and future environmental        regulations could negatively impact our operations.

 

**Future        Risks Related to the Company’s Stock**

 

*THE        COMPANY WILL NEED TO RAISE ADDITIONAL CAPITAL TO FUND OPERATIONS WHICH COULD ADVERSELY        AFFECT OUR SHAREHOLDERS*

 

The Company        will need to raise additional capital to fund operations until such time as our revenues        match our expenditures.  Until the point at which cash flow from operations matches        expenditures, we will have to realize up to $3,000,000 in additional capital for        operations. Capital realized would be used for research and development expenses, marketing        costs and general and administrative expenses. However, we have no commitment from any        source of financing to provide us with this necessary additional capital. Should we secure        a commitment to provide us with capital, such commitment may obligate us to issue        additional shares of our common stock or warrants or other rights to acquire common stock        which will result in dilution to existing shareholders. Nonetheless, if we are unable to        obtain additional capital, then we will need to restrict or even cease operations, which        action would adversely affect our shareholders.

 

 

 

 

 

 

23

 

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*THE        COMPANY HAS SECURED FINANCING WHICH COULD NEGATIVELY IMPACT OUR SHAREHOLDERS*

         

In June of        2005, we procured a loan from ACC Investors. The loan was secured by a convertible        promissory note (“Note”) for a total of $1,100,000 at an interest rate of 8%        per annum. The terms of the Note allow ACC Investors to convert the principal amount into        33% of the common shares of the Company, taking into account the conversion and 55% of the        interest of the Note into the Company’s common shares after the completion of the        share distribution of our common stock. Additionally, the agreement with ACC Investors        includes warrants to purchase shares of common stock up to 22% of the shares outstanding        immediately prior to the conversion of the Note. If the Note is converted into shares, the        conversion will dilute existing shareholders. If the loan is paid in cash, the repayment        will deplete funds intended for our marketing plan and research and development        goals.

 

If ACC        Investors exercises all of its warrants and converts the principle of the Note into shares        of our stock, ACC Investors will own 1,650,653 or 45.08% of the issued and outstanding        shares, 442,375 of which are equal to 22% of the current 2,010,795 outstanding shares, and        1,208,278 of which are 33% of the post Note conversion shares. Additionally, ACC Investors        may convert up to 55% of the accrued interest into shares of our stock. This ownership        would give ACC Investors significant influence over the Company’s policies and        affairs and may put ACC Investors in a position to determine the outcome of corporate        actions requiring stockholder approval. These actions may include, for example, the        election of directors, the adoption of amendments to our corporate documents and the        approval of mergers and sales of our assets.

 

*THE        COMPANY MAY ATTEMPT TO QUOTE ITS STOCK ON THE OTCBB*

 

The Company        has no public trading market for its shares, and we cannot represent to you that a market        will ever develop. Nonetheless, we do intend to seek a quotation on the OTCBB. However,        there can be no assurance that we will obtain a quotation on the OTCBB or that obtaining a        quotation will generate a public trading market for our shares.

 

Further, if        we obtain a quotation on the OTCBB, this may limit our ability to raise money in an equity        financing since many institutional investors do not consider OTCBB stocks for their        portfolios. Therefore, an investor’s ability to trade our stock might be restricted        as only a limited number of market makers quote OTCBB stock. Trading volumes in OTCBB        stocks are historically lower, and stock prices for OTCBB stocks tend to be more volatile        than stocks traded on an exchange or the NASDAQ Stock Market. We may never qualify for        trading on an exchange or the NASDAQ Stock Market.

 

*OUR        STOCK PRICE COULD BE VOLATILE*

 

Should a        public market for our shares develop, the future market price could be subject to        significant volatility and trading volumes could be low. Factors affecting our market price        will include:

 

|   | **•** | the Company’s perceived prospects; |
|--------|------------|------------------------------------------|

|   | **•** | negative variances in our operating results, and achievement                        of key business targets; |
|--------|------------|--------------------------------------------------------------------------------------------------------------|

|   | **•** | limited trading volume in shares of our common stock in the                        public market; |
|--------|------------|---------------------------------------------------------------------------------------------------|

|   | **•** | sales or purchases of large blocks of our stock; |
|--------|------------|--------------------------------------------------|

|   | **•** | changes in, or the Company’s failure to meet, earnings                        estimates; |
|--------|------------|------------------------------------------------------------------------------------------------|

|   | **•** | changes in securities analysts’ buy/sell                        recommendations; |
|--------|------------|----------------------------------------------------------------------------------------|

|   | **•** | differences between our reported results and those expected                        by investors and securities analysts; |
|--------|------------|--------------------------------------------------------------------------------------------------------------------------|

|   | **•** | announcements of new contracts involving the Company or our                        competitors; |
|--------|------------|-------------------------------------------------------------------------------------------------|

 

24

 

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|   | **•** | announcements of legal claims against us; |
|--------|------------|-------------------------------------------|

|   | **•** | market reaction to acquisitions, joint ventures or                        investments announced by us or our competitors; |
|--------|------------|---------------------------------------------------------------------------------------------------------------------------|

|   | **•** | developments in the financial markets; |
|--------|------------|----------------------------------------|

|   | **•** | general economic, political or stock market                        conditions. |
|--------|------------|--------------------------------------------------------------------------------|

 

In        addition, our future stock price may fluctuate in ways unrelated or disproportionate to our        operating performance. The general economic, political and stock market conditions that may        affect the market price of our common stock are beyond our control. The market price of the        the Company’s common stock at any particular time may not remain the market price in        the future. In the past, securities class action litigation has been instituted against        companies following periods of volatility in the market price of their securities. Any such        litigation, if instituted against us, could result in substantial costs and a diversion of        management’s attention and resources.

 

*WE MAY        INCUR SIGNIFICANT EXPENSES AS A RESULT OF BEING REGISTERED WITH THE COMMISSION, WHICH MAY        NEGATIVELY IMPACT OUR FINANCIAL PERFORMANCE*

 

We incur        significant legal, accounting and other expenses as a result of being registered with the        Commission. The Sarbanes-Oxley Act of 2002, as well as related rules implemented by the        Commission has required changes in corporate governance practices of public companies. We        expect that compliance with these laws, rules and regulations, including compliance with        Section 404 of the Sarbanes-Oxley Act of 2002 as discussed in the following risk factor,        may substantially increase our expenses, including our legal and accounting costs, and make        some activities more time-consuming and costly. As a result, there may be a substantial        increase in legal, accounting and certain other expenses in the future, which would        negatively impact our financial performance and could have a material adverse effect on our        results of operations and financial condition.

 

*OUR        INTERNAL CONTROLS OVER FINANCIAL REPORTING MAY NOT BE CONSIDERED EFFECTIVE, WHICH COULD        RESULT IN A LOSS OF INVESTOR CONFIDENCE IN OUR FINANCIAL REPORTS AND IN TURN HAVE AN        ADVERSE EFFECT ON OUR STOCK PRICE*.

 

Pursuant to        Section 404 of the Sarbanes-Oxley Act of 2002, beginning with our annual report for the        year ending December 31, 2007, we may be required to furnish a report by our management on        our internal controls over financial reporting. Such report will contain, among other        matters, an assessment of the effectiveness of our internal controls over financial        reporting as of the end of the year, including a statement as to whether or not our        internal controls over financial reporting are effective. This assessment must include        disclosure of any material weaknesses in our internal controls over financial reporting        identified by management. If we are unable to assert that our internal controls are        effective as of December 31, 2007, investors could lose confidence in the accuracy and        completeness of our financial reports, which in turn could cause our stock price to        decline.

 

| **ITEM 3.** | **CONTROLS AND PROCEDURES** |
|-------------|-----------------------------|

 

The        Company’s president acts both as our chief executive officer and chief financial        officer and is responsible for establishing and maintaining disclosure controls and        procedures for us.

 

 

 

 

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***(a)        Evaluation of Disclosure Controls and Procedures***

 

Under the        supervision and with the participation of our management, including our principal executive        officer and principal financial officer, we evaluated the effectiveness of the design and        operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and        15d-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”), as of        September 30, 2007. Based on this evaluation, our principal executive officer and our        principal financial officer concluded that, as of the end of the period covered by this        report, our disclosure controls and procedures were effective and adequately designed to        ensure that the information required to be disclosed by us in the reports we submit under        the Exchange Act is recorded, processed, summarized and reported within the time periods        specified in the applicable rules and forms and that such information was accumulated and        communicated to our chief executive officer and chief financial officer, in a manner that        allowed for timely decisions regarding required disclosure.

 

***(b)        Changes in Internal Controls***

 

During the        period ended September 30, 2007, there has been no change in internal control over        financial reporting that has materially affected, or is reasonably likely to materially        affect our internal control over financial reporting.

 

**PART        II**

 

| **ITEM 1.** | **LEGAL PROCEEDINGS** |
|-------------|-----------------------|

 

None.

 

| **ITEM 2.** | **UNREGISTERED SALES OF EQUITY SECURITIES** |
|-------------|---------------------------------------------|

 

None.

 

| **ITEM 3.** | **DEFAULTS UPON SENIOR SECURITIES** |
|-------------|-------------------------------------|

 

None.

 

| **ITEM 4.** | **SUBMISSION OF MATTERS TO A VOTE OF SECURITY                        HOLDERS** |
|-------------|--------------------------------------------------------------------------------|

 

On        November 7, 2007 the Company’s sole shareholder, ComCam, Inc. in a written unanimous        consent of the shareholders action caused the Company’s board of directors to effect        a one for two point eight seven (1:2.87) reverse split consolidation of our common shares        without changing the number or par value of our authorized common shares.

 

| **ITEM 5.** | **OTHER INFORMATION** |
|-------------|-----------------------|

 

None.

 

| **ITEM 6.** | **EXHIBITS** |
|-------------|--------------|

 

Exhibits        required to be attached by Item 601 of Regulation S-B are listed in the Index to Exhibits        on page 28 this Form 10-QSB, and are incorporated herein by this reference.

         

 

26

 

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**SIGNATURES**

 

In        accordance with the requirements of the Securities Exchange Act, the registrant caused this        report to be signed on its behalf by the undersigned, hereunto duly authorized, this        13th day of November, 2007.

 

|   | **ComCam International, Inc.** |
|--------|--------------------------------|

         

         

|   | /s/ Don Gilbreath |
|--------|-------------------|

|   | Don Gilbreath |
|--------|---------------|

Chief Executive Officer, Chief Financial Officer, and Principal Accounting        Officer

 

 

 

 

27

 

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**INDEX        TO EXHIBITS**

 

| ***Exhibit*** | ***Page*** |
|---------------|------------|

| ***No.*** | ***No.*** | ***Description*** |
|-----------|-----------|-------------------|

         

| 3 (i) | *    Amended and Restated Certificate of                        Incorporation of the Company (incorporated by reference to the Form 10-SB/A                        filed with the Commission on June 26, 2006). |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3 (ii) | *    Bylaws of the Company (incorporated                        by reference to the Form 10-SB/A filed with the Commission on June 26,                        2006). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (i) | *  Stock Exchange Agreement between ComCam and the                        Company dated May 8, 2002 (incorporated by reference to the Form 10-SB/A                        filed with the Commission on June 6, 2006). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (ii)(a) | *  Securities Purchase Agreement between the                        Company, ComCam, Inc. and ACC Investors, LLC dated June 22, 2005                        (incorporated by reference to the Form 10-SB/A filed with the Commission on                        June 26, 2006). |
|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (ii)(b) | *  Convertible Secured Promissory Note between the                        Company, ComCam, Inc. and ACC Investors, LLC. dated June 22, 2005                        (incorporated by reference to the Form 10-SB/A filed with the Commission on                        June 26, 2006). |
|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (ii)(c) | *  Warrant to Purchase Common Stock between the                        Company and ACC Investors, LLC. dated June 22, 2005 (incorporated by                        reference to the Form 10-SB/A filed with the Commission on June 26,                        2006). |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (ii)(d) | *  Warrant to Purchase Common Stock between the                        Company and ACC Investors, LLC. dated June 22, 2005 (incorporated by                        reference to the Form 10-SB/A filed with the Commission on June 26,                        2006). |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (ii)(e) | *  Registration Rights Agreement between the                        Company and ACC Investors, LLC. dated June 22, 2005 (incorporated by                        reference to the Form 10-SB/A filed with the Commission on June 26,                        2006). |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (ii)(f) | *  Shareholders Agreement between Don Gilbreath                        and ACC Investors, LLC. Dated June 22, 2005. (incorporated by reference to                        the Form 10-SB/A2 filed with the Commission on October 31,                        2006). |
|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (ii)(g) | *  Employment Agreement between the Company,                        ComCam, Inc. and Don Gilbreath dated June 22, 2005 (incorporated by                        reference to the Form 10-SB/A filed with the Commission on June 26,                        2006). |
|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10 (iii) | Attached     Joinder,                        Amendment and Consent Agreement between ComCam, Inc., ComCam International,                        Inc. and HNI, LLC dated September 28, 2007. |
|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 31 | Attached     Certification                        of the Chief Executive Officer and Chief Financial Officer pursuant to                        Section 302 of the Sarbanes-Oxley Act of 2002. |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32 | Attached     Certification                        of the Chief Executive Officer and Chief Financial Officer pursuant to 18                        U.S.C. Section 1350 as adopted pursuant to Section 906 of the                        Sarbanes-Oxley Act of 2002. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

         

|   | * | Incorporated by reference to prior filings with the                        Commission. |
|--------|---|----------------------------------------------------------------------------------------|

 

28

 

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