UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2011. o TRANSITION REPORT PURSUANT TO 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 registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 23-2976562 (I.R.S. Employer Identification No.) 1140 McDermott Drive, West Chester, Pennsylvania 19380 (Address of principal executive offices) (Zip Code) (610) 436-8089 (Registrant’s telephone number, including area code) n/a (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 þ No o Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the issuer’s common stock, $0.0001 par value (the only class of voting stock), at August 19, 2011, was 16,530,697.

~~TABLE~~SECURITIES OFAND ~~CONTENTS~~EXCHANGE PART 1- FINANCIAL INFORMATION Item1. Financial Statements: 3 Consolidated Balance Sheets as of June 30, 2011(unaudited) and December 31, 2010 4 Unaudited Consolidated Statements of Operations for the Three and six month periods ended June 30, 2011 and June 30, 2010 5 Unaudited Consolidated Statements of Cash Flows for the six month periods ended June 30, 2011 and June 30, 2010 6 Notes to Unaudited Consolidated Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 12 Item 3. Quantitative and Qualitative Disclosures about Market Risk 20 Item 4. Controls and Procedures 20 PART II-OTHER INFORMATION Item 1. Legal Proceedings 20 Item 1A. Risk Factors 20 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 25 Item 3. Defaults Upon Senior Securities 25 Item 4. (Removed and Reserved) 25 Item 5. Other Information 25 Item 6. Exhibits 25 Signatures 26 Index to Exhibits 27 2COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011 .

o TRANSITION REPORT PURSUANT TO 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 registrant as specified in its charter)

Delaware

(State or other jurisdiction of

incorporation or organization)

23-2976562

(I.R.S. Employer

Identification No.)

1140 McDermott Drive, West Chester, Pennsylvania 19380

(Address of principal executive offices) (Zip Code)

(610) 436-8089

(Registrant’s telephone number, including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the issuer’s common stock, $0.0001 par value (the only class of voting stock), at November 18, 2011, was 17,350,697.

TABLE OF CONTENTS PART 1- FINANCIAL INFORMATION
Item1.	Financial Statements:	3
	Consolidated Balance Sheets as of September 30, 2011(Unaudited) and December 31, 2010	4
	Unaudited Consolidated Statements of Operations for the three and nine month periods ended September 30, 2011 and June 30, 2010	5
	Unaudited Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2011 and September 30, 2010	6
	Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	21
Item 4.	Controls and Procedures	22
	PART II-OTHER INFORMATION
Item 1.	Legal Proceedings	22
Item 1A.	Risk Factors	22
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	26
Item 3.	Defaults Upon Senior Securities	28
Item 4.	(Removed and Reserved)	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
	Signatures	29
	Index to Exhibits	30

PART I – FINANCIAL INFORMATION

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-Q 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.

COMCAM INTERNATIONAL, INC. CONSOLIDATED BALANCE SHEETS June 30, December 31, 2011 2010 ASSETS (Unaudited) (Audited) Current assets: Cash $ 558,616 517,493 Accounts receivable 767,395 836,342 Costs and estimated earnings in excess of billings on uncompleted contracts 155,668 114,827 Prepaid expenses 9,796 11,712 Total current assets 1,491,475 1,480,374 Property and equipment, net 132,677 157,263 Intangible assets, net 393,467 447,389 Other assets 174,186 23,926 Total assets $ 2,191,805 2,108,952 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 571,459 381,153 Accrued expenses 101,492 123,140 Billings in excess of costs and estimated earnings on uncompleted contracts 136,449 387,923 Line of credit 50,000 - Current portion of long-term debt 865,000 841,650 Total current liabilities 1,724,400 1,733,866 Accrued expenses 159,600 176,000 Long-term debt, net 221,018 641,568 Total liabilities 2,105,018 2,551,434 Commitments and contingencies Stockholders' equity (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, 16,288,312 and 13,684,312 shares issued and outstanding, respectively 1,629 1,368 Additional paid-in capital 8,738,110 7,194,492 Deferred stock compensation (15,030) - Accumulated deficit (8,637,922) (7,638,342) Total stockholders' equity (deficit) 86,787 (442,482) Total liabilities and stockholders' equity (deficit) $ 2,191,805 2,108,952 The accompanying notes are an integral part of these consolidated financial statements 4

COMCAM INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS

		September 30,		December 31,
		2011		2010
ASSETS		(Unaudited)		(Audited)

Current assets:
Cash	$	551,711		517,493
Accounts receivable		378,023		836,342
Costs and estimated earnings in excess of billings on uncompleted contracts		114,652		114,827
Prepaid expenses		5,711		11,712

Total current assets		1,050,097		1,480,374

Property and equipment, net		148,739		157,263
Intangible assets, net		345,138		447,389
Other assets		172,306		23,926

Total assets	$	1,716,280		2,108,952

LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
Accounts payable	$	310,068		381,153
Accrued expenses		172,749		123,140
Billings in excess of costs and estimated earnings on uncompleted contracts		208,937		387,923
Current portion of long-term debt		865,000		841,650

Total current liabilities		1,556,754		1,733,866

Accrued expenses		166,300		176,000
Long-term debt, net		222,128		641,568

Total liabilities		1,945,182		2,551,434

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,
16,530,697 and 13,684,312 shares issued and outstanding, respectively		1,653		1,368
Additional paid-in capital		8,887,576		7,194,492
Accumulated deficit		(9,118,131	)	(7,638,342	)

Total stockholders' deficit		(228,902	)	(442,482	)

Total liabilities and stockholders' deficit	$	1,716,280		2,108,952

COMCAM INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
		Three Months Ended		Six Months Ended
		June 30,		June 30,
		2011	2010	2011	2010
Revenues, net	$	993,570	550,984	2,375,101	1,498,524
Cost of revenues		681,168	375,499	1,731,498	966,728
Gross profit		312,402	175,485	643,603	531,796
Operating expenses:
General and administrative expenses		729,622	935,926	1,567,508	1,547,846
Research and development expenses		743	2,887	2,935	5,975
		730,365	938,813	1,570,443	1,553,821
Loss from operations		(417,963)	(763,328)	(926,840)	(1,022,025)
Other income (expense):
Interest income		251	151	606	570
Interest expense		(35,873)	(26,266)	(61,346)	(53,937)
Debt extinguishment income		-	13,725	-	13,725
		(35,622)	(12,390)	(60,740)	(39,642)
Loss before provision for income taxes		(453,585)	(775,718)	(987,580)	(1,061,667)
Provision (benefit) for income taxes		(8,000)	-	12,000	-
Net loss	$	(445,585)	(775,718)	(999,580)	(1,061,667)
Net loss per common share - basic and diluted	$	(0.03)	(0.08)	(0.06)	(0.12)
Weighted average common and common equivalent shares		16,242,817	9,309,403	15,455,351	8,500,097

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

COMCAM INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

		Three Months Ended				Nine Months Ended
		September 30,				September 30,
		2011		2010		2011		2010

Revenues, net	$	384,592		1,028,863		2,759,693		2,527,387
Cost of revenues		292,342		615,382		2,023,840		1,582,110

Gross profit		92,250		413,481		735,853		945,277

Operating expenses:
General and administrative expenses		501,183		408,250		2,068,691		1,956,096
Research and development expenses		2,285		1,862		5,220		7,837

		503,468		410,112		2,073,911		1,963,933

Income (loss) from operations		(411,218	)	3,369		(1,338,058	)	(1,018,656	)

Other income (expense):
Interest income		178		97		784		667
Interest expense		(37,169	)	(20,597	)	(98,515	)	(74,534	)
Debt extinguishment income		-		-		-		13,725

		(36,991	)	(20,500	)	(97,731	)	(60,142	)

Loss before provision for income taxes		(448,209	)	(17,131	)	(1,435,789	)	(1,078,798	)

Provision for income taxes		32,000		-		44,000		-

Net loss	$	(480,209	)	(17,131	)	(1,479,789	)	(1,078,798	)

Net loss per common share - basic and diluted	$	(0.03	)	(0.00	)	(0.09	)	(0.10	)

Weighted average common and common
equivalent shares		16,512,255		12,717,509		15,811,523		10,537,403

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

COMCAM INTERNATIONAL, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended June 30, 2011 and 2010
Nine Months Ended September 30, 2011 and 2010
		2011		~~2010~~	2010
Cash flows from operating activities:
Net loss	$	(~~999~~1,~~580)~~479,789	)	~~(1,061,667)~~	(1,078,798	)
Adjustments to reconcile net loss to net
Adjustments to reconcile net loss to net cash used in operating activities:
cash used in operating activities:
Common stock issued for services		118,390			390,000
Stock, options, and warrants compensation expense		~~603~~550,~~730~~830		~~375,000~~	-
Amortization of conversion rights on debt		1,110		-
Depreciation and amortization		185,578			321,741
Depreciation and amortization		121,571		210,925
Loss on disposal of assets		-			10,449
Loss on disposal of assets		-		10,449
Allowance for losses on receivables, net		13,600			-
(Increase) decrease in:
Accounts receivable		68444,~~947~~719		~~296,642~~	517,368
Prepaid expenses		16,~~916~~001		27	(5,930	)
Costs and estimated earnings in excess of
Costs and estimated earnings in excess of billings on
billings on uncompleted contracts		(40,841)		(27,093)
uncompleted contracts		175			(78,188	)
Other assets		(~~150~~148,~~260)~~380	)	~~(14,303)~~	(13,590	)
Increase (decrease) in:
Accounts payable		~~190~~(71,~~306~~086	)	~~(192,183)~~	(142,275	)
Accrued expenses		~~119~~212,~~511~~498		~~81,253~~	121,708
Billings in excess of costs and estimated
Billings in excess of costs and estimated earnings on
earnings on uncompleted contracts		(251,474)		(61,296)
uncompleted contracts		(178,986	)		(51,620	)
Net cash used in operating activities		(~~335~~346,~~064)~~450	)	~~(382,246)~~	(9,135	)
Cash flows from investing activities:
Payments received on note receivable		-		~~36,667~~	36,667
Purchase of intangible assets		(42,734)	)	-	-
Purchase of property and equipment		(~~329)~~29,849	)	~~(49,362)~~	(98,347	)
Net cash used in investing activities		(4372,~~063)~~583	)	~~(12,695)~~	(61,680	)
Cash flows from financing activities:
Payments on related party payable		-		~~(36,667)~~	(36,667	)
Payments on long-term debt		(415,000)	)	~~(138,730)~~	(158,350	)
Proceeds from line of credit		50,000		-
Proceeds from issuance of debt		500,000			-
Proceeds from issuance of debt		450,000		-
Issuance of common stock		368,251			776,500
Proceeds from issuance of common stock		334,250		674,500
Net cash provided by financing activities		453,251			581,483
Net cash provided by financing activities		419,250		499,103
Net increase in cash		34,218			510,668
Net increase in cash		41,123		104,162
Cash, beginning of period		517,493			217,783
Cash, beginning of period		517,493		217,783
Cash, end of period	$	551,711			728,451
Cash, end of period	$	558,616		321,945

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

COMCAM INTERNATIONAL, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2011

Note 1 – Organization and Summary of Significant Accounting Policies

Organization

The consolidated financial statements consist of Comcam International, Inc. (“Comcam”) and its wholly owned subsidiary, Pinnacle Integrated Systems, Inc. (“Pinnacle”). Collectively, these entities are referred to as “the “Company”.

Comcam International, Inc. was organized under the laws of the state of Delaware on September 19, 1998. ~~Its~~The Company’s operations consist primarily of the research and development of advanced compact video systems that utilize built-in digital compression technology. Pinnacle is a security systems integrator focused on correctional facilities across the United States, providing turnkey system design and installation, maintenance contracts, and field support technicians.

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared by management in accordance with the instructions in Form 10-Q 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-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission. These statements do include all normal recurring adjustments which the Company believes necessary for a fair presentation of the statements. The interim operations are not necessarily indicative of the results to be expected for the full year ended December 31, 2011.

Reclassifications

Certain amounts for 2010 have been reclassified to conform to the 2011 presentation.

Convertible Debts

In accordance with ASC 470-20, the Company ~~calculated~~calculates the value of any beneficial conversion features embedded in its convertible debts. If the debt is contingently convertible, the intrinsic value of the beneficial conversion feature is not recorded until the debt becomes convertible.

Convertible debts are split into two components: a debt component and a component representing the embedded derivatives in the debt. The debt component represents the Company’s liability for future interest coupon payments and the redemption amount. The embedded derivatives represent the value of the option that debt holders have to convert into ordinary shares of the Company. If the number of shares that may be required to be issued upon conversion of the convertible debt is indeterminate, the embedded conversion option of the convertible debt is accounted for as a derivative instrument liability rather than equity in accordance with ASC 815-40.

~~The~~This ~~debt component of the~~ convertible debt is ~~measured~~recorded at ~~amortized~~face ~~cost~~value and ~~therefore~~is ~~increases~~reduced as ~~the~~principal ~~present~~payments ~~value~~are ofmade. ~~the~~A ~~interest~~discount ~~coupon~~has ~~payments~~been ~~and~~recorded ~~redemption~~as ~~amount increases, with~~ a ~~corresponding~~contra ~~charge~~account to ~~finance~~the ~~cost~~convertible ~~– other than interest~~debt. The ~~debt~~discount ~~component~~(contra ~~decreases~~account) byis ~~the~~amortized ~~cash~~to ~~interest~~expense ~~coupon~~over ~~payments~~the ~~made.~~term ~~The~~of ~~embedded~~the ~~derivatives~~underlying ~~are~~contract ~~measured~~which atcreates ~~fair~~the ~~value~~discount. atFor ~~each~~presentation ~~balance sheet date~~purposes, ~~and~~ the ~~change~~convertible indebt ~~the~~is ~~fair~~presented ~~value~~as isnet ~~recognized~~of in the ~~income statement~~discount.

COMCAM INTERNATIONAL, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2011

Note 1 – Organization and Summary of Significant Accounting Policies - continued Additional Footnotes Included By Reference Except as indicated in the following Notes, 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-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission. Therefore, those footnotes are included herein by reference. Note 2 – Going Concern As of June 30, 2011, the Company has negative working capital and has incurred losses since inception. These factors taken alone raise substantial doubt about the Company’s ability to continue as a going concern. However, management is in the process of procuring additional financing to expand marketing efforts and product development which actions, if successful, will enable the Company to continue as a going concern. Nevertheless, there can be no assurance that sufficient financing will be available to the Company to successfully pursue its marketing and product development efforts. Note 3 – Line of Credit The Company maintains a revolving line of credit with a bank which allows the Company to borrow up to $100,000. The line of credit bears interest at prime (3.25% at June 30, 2011continued) plus 1.25%, but not less than 4.75%; thus the line of credit’s rate at June 30, 2011 is 4.75%. Interest accrues monthly and must be paid by the end of the following month. The line of credit is secured by a money market account with the same bank which has a June 30, 2011 balance of $100,000. The line of credit matures on November 1, 2011 and the balance outstanding as of June 30, 2011 is $50,000. 8 8

COMCAMAdditional INTERNATIONAL,Footnotes INC.Included By Reference

~~NOTES~~Except TOas ~~UNAUDITED~~indicated ~~CONSOLIDATED~~in ~~FINANCIAL~~the ~~STATEMENTS~~following Notes, 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-K for the year ended December 31, 2010, filed with the Securities and Exchange Commission. Therefore, those footnotes are included herein by reference.

~~June~~Note ~~30,~~2 ~~2011~~– Going Concern

~~Note~~As ~~4 – Long-Term Debt Long-term debt consists~~ of ~~the~~September ~~following: June~~ 30, ~~December~~ ~~31,~~ 2011 ~~2010 (Unaudited) (Audited) Note payable to Robert Betty~~, ~~bearing interest at 3%, secured by~~ the ~~common~~Company ~~stock~~has ~~and assets~~negative ofworking ~~Pinnacle,~~capital and ~~due~~has inincurred ~~five~~losses ~~monthly~~since ~~installments of $200,000, beginning February 2010~~inception. ~~$ - 841,650 Notes~~ ~~payable~~These tofactors ~~Paul~~taken ~~Higbee,~~alone ~~bearing~~raise ~~interest~~substantial atdoubt ~~8%,~~about ~~due March 2012, secured by~~ the ~~intellectual property of the~~ Company~~. 465,000 465,000 Notes~~’s ~~payable~~ability to ~~Doug~~continue ~~Bartek,~~as ~~bearing~~a ~~interest~~going atconcern. ~~18%~~However, ~~secured~~management byis in the ~~common~~process ~~stock and assets~~ of ~~Pinnacle,~~procuring ~~and~~additional ~~due~~financing ~~February 2012. 400,000 - Unsecured note payable~~ to ~~Global~~expand ~~Megatrend,~~marketing ~~bearing~~efforts ~~interest at 7.5%~~ and ~~due~~product ~~December~~development, ~~2012.~~which ~~The~~actions, ~~note~~if ~~may~~successful, bewill ~~converted~~enable ~~to common shares of~~ the Company, ~~at the option of the holder, based on certain terms related~~ to ~~outstanding~~continue ~~shares~~as ~~and~~a ~~per~~going ~~share prices~~concern. ~~176,568 176,568 Unsecured~~ ~~note payable to Bayberry Capital~~Nevertheless, ~~Inc.,~~there ~~bearing~~can ~~interest~~be atno ~~12%~~assurance ~~and~~that ~~due~~sufficient ~~October~~financing ~~2012.The~~will ~~note may~~ be ~~converted~~ available to ~~common shares of~~ the Company, ~~at the option of the holder, based on certain terms related~~ to ~~outstanding~~successfully ~~shares~~pursue ~~and~~its ~~per~~marketing share prices. 50,000 - 1,091,568 1,483,218 Less unamortized discount (5,550) - 1,086,018 1,483,218 Less current portion (865,000) (841,650) $ 221,018 641,568 The fair values of the conversion options are recorded as discounts on the face values of the notes and ~~are~~product ~~$5,550~~development ~~and $0 at June 30, 2011 and December 31, 2010, respectively~~efforts. These amounts are amortized using the straight-line method over the term of the notes. During the six months ended June 30, 2011 and 2010, the Company recorded $1,110 and $0, respectively, as interest expense due to amortization of the discounts. 9

~~COMCAM~~Note ~~INTERNATIONAL,~~3 ~~INC.~~– Line of Credit

~~NOTES~~The TOline ~~UNAUDITED~~of ~~CONSOLIDATED~~credit ~~FINANCIAL~~disclosed ~~STATEMENTS~~in the Company’s June 30, 2011 financial statements with a balance outstanding of $50,000 was paid in full and cancelled during the three months ended September 30, 2011.

~~June 30, 2011~~8

~~Note~~COMCAM 5INTERNATIONAL, ~~– Supplemental Cash Flow Information~~INC.

~~During~~NOTES ~~the~~TO ~~six~~UNAUDITED ~~months~~CONSOLIDATED ~~ended~~FINANCIAL ~~June 30, 2011, the Company:~~STATEMENTS

~~· Issued~~September ~~352~~30,~~000~~ ~~shares of common stock in satisfaction of $110,475 of accrued expenses and $47,925 of deferred stock compensation.~~2011

· IssuedNote 800,0004 shares– of common stock in exchange for $426,650 of longLong-termTerm debt, $14,189 of accrued expenses, and recognized debt extinguishment income of $88,839. The debt extinguishment income was recorded as an increase to additional paid-in capital due to the related party nature of the transaction.Debt

~~During~~Long-term ~~the~~debt ~~six~~consists ~~months~~of ~~ended June 30, 2010,~~ the ~~Company~~following:

· Issued 1,363,930 shares of common stock in exchange for $438,405 of long-term debt, accounts payable, and accrued expenses.

		September 30,		December 31,
		2011		2010
		(Unaudited)		(Audited)

Note payable to Robert Betty, bearing interest at
3%, secured by the common stock and assets of
Pinnacle, and due in five monthly installments of
$200,000, beginning February 2010.	$	-		841,650

Notes payable to Paul Higbee, bearing interest
at 8%, due March 2012, secured by the intellectual
property of the Company.		465,000		465,000

Notes payable to Bartek Investments -1, Ltd. bearing interest at 18%, secured by the common stock and
assets of Pinnacle, and due February 2012.		400,000		-

Unsecured note payable to Global Megatrend,
bearing interest at 7.5% and due December 2012.
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

Unsecured note payable to Bayberry Capital, Inc.,
bearing interest at 12% and due October 2012.
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.		50,000		-

Unsecured note payable to La Jolla Cove Investors, Inc.
bearing interest at 4.75% and due September 2015.
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.		50,000		-

		1,141,568		1,483,218
Less unamortized discount		(54,440	)	-

		1,087,128		1,483,218
Less current portion		(865,000	)	(841,650	)

	$	222,128		641,568

~~· Issued~~The 1fair values of the conversion options are recorded as discounts on the face values of the notes and are $54,~~500~~440 and $0 at September 30,~~000~~ ~~shares~~2011 ofand ~~common~~December ~~stock~~31, ~~for~~2010, ~~services~~respectively. ~~rendered~~These toamounts are amortized using the ~~Company~~straight-line inmethod over the ~~amount~~term of the notes. During the nine months ended September 30, 2011 and 2010, the Company recorded $~~375~~2,~~000~~220 and $0, respectively, as interest expense due to amortization of the discounts.

~~· Issued 2,698,000 shares of common stock in exchange for $674,500 in cash.~~9

~~· Recognized~~COMCAM ~~debt extinguishment income of $13~~INTERNATIONAL,~~725~~ ~~from the discharge of certain accounts payable~~INC.

~~During~~NOTES ~~the~~TO ~~six~~UNAUDITED ~~months~~CONSOLIDATED ~~ended~~FINANCIAL ~~June 30, 2011 and 2010, cash paid for interest was $0 and $11,105 respectively, and cash paid for income taxes was $7,072 and $0, respectively.~~STATEMENTS

~~Note~~September 630, ~~– Common Stock Options and Warrants~~2011

~~Common~~Note ~~stock~~5 ~~options~~– ~~and~~Supplemental ~~warrants~~Cash ~~consist~~Flow ~~of:~~Information

	Number of			Price
	Options	Warrants		Per Share
Outstanding at January 1, 2011	-	-	$	-
Granted, vested, and excercisable	885,000	320,000		.50 - .75
Outstanding at June 30, 2011	885,000	320,000	$	.50 - .75

During the nine months ended September 30, 2011, the Company:

10· Issued 352,000 shares of common stock in satisfaction of $110,475 of accrued expenses and $47,925 of deferred stock compensation.

~~COMCAM~~· Issued ~~INTERNATIONAL~~800, INC. NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS June 30, 2011 Note 7 – Distribution Rights Acquisition In April 2011, the Company entered into a letter of intent to acquire the distribution rights of 1st Choice Security Solutions (“1st Choice”) of Georgia for cash and common stock. The distribution rights will allow the Company to distribute products of Protrac iD in North and South America. As of June 30, 2011, the Company had paid $42,734 to 1st Choice and expects to finalize the purchase of this intangible asset by September 30, 2011. As of the date of these financial statements, the Company expects to spend $70,000 ~~more and issue 200,000~~ shares of common stock to finalize this intangible asset purchase. Note 8 – Subsequent Events The Company has evaluated subsequent events from the balance sheet date through the date the financial statements were issued. Except for the matter discussed below, the Company is not aware of any subsequent events which would require recognition or disclosure in ~~the financial statements. In July 2011, the Company issued 242,385 shares of stock in~~ exchange for $~~126~~426,~~040. Note~~650 ~~9 – Recent Accounting Pronouncements In June 2011, the Financial Accounting Standards Board (the“FASB”) issued Accounting Standards Update (“ASU”) No. 2011-05, “Presentation~~ of ~~Comprehensive Income” (“ASU 2011~~long-~~05”). ASU~~term 2011-05 requires entities to report components of comprehensive income in either a continuous statement of comprehensive income or two separate but consecutive statements. Under the continuous statement approachdebt, ~~the statement would include the components and total of net income~~$14,189 ~~the components and total~~ of ~~other~~accrued ~~comprehensive income and the total of comprehensive income. Under the two statement approach~~expenses, ~~the first statement would include the components~~ and ~~total~~recognized ofdebt ~~net~~extinguishment income ~~and the second statement would include the components and total~~ of ~~other comprehensive income and the total of comprehensive income~~$88,839. ~~ASU~~ ~~2011-05~~The ~~does~~debt ~~not~~extinguishment ~~change the items that must be reported in other comprehensive~~ income~~. ASU~~ ~~2011-05~~was isrecorded ~~effective~~as ~~retrospectively~~an ~~for~~increase interim and annual periods beginning after December 15, 2011, with early adoption permitted. The Company is currently evaluating the impact of the adoption of ASU 2011-05 on its financial statements. In May 2011, the FASB issued ASU No. 2011-04, “Amendments to ~~Achieve~~additional ~~Common Fair Value Measurement and Disclosure Requirement~~ paid-in ~~U.S.~~capital ~~GAAP~~due and IFRSs” (“ASU 2011-04”). ASU 2011-04 does not extend the use of fair value but, rather, provides guidance about how fair value should be applied where it already is required and permitted under IFRS or U.S. GAAP. For U.S. GAAP, most of the changes are clarifications of existing guidance or wording changes to ~~align with IFRS 13. ASU 2011-04 is effective on a prospective basis for interim and annual periods beginning after December 15, 2011, with early adoption not permitted. In~~ the ~~period of adoption, a reporting entity will be required to disclose a change, if any, in valuation technique and~~ related ~~inputs~~party ~~that~~nature ~~result from applying ASU 2011-04 and to quantify the total effect, if practicable. The Company is currently evaluating the impact~~ of the ~~adoption of ASU 2011-04 on its financial position, results of operations and disclosures~~transaction. Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or are not expected to be significant to the financial statements of the Company. 11

~~Item~~· Issued 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Management’s Discussion and Analysis of Financial Condition and Results of Operations and other parts of this quarterly report contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can be identified by words such as “anticipates292,”000 ~~“expects,”~~shares ~~“believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees~~ of ~~future~~common ~~performance~~stock ~~and~~for 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 subsection 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. Our fiscal year end is December 31. All information presented herein is based on the six month period ended June 30, 2011. Discussion and Analysis Our financial condition and results of operations depend primarily on revenue generated from the sale of our products and specialized services inrendered ~~addition~~ to our ability to realize additional debt or equity financing. We can provide no assurance that revenue going forward will provide sufficient cash flows to sustain our operations though revenue approximating that required to sustain operations is anticipated in fiscal year 2011. Further, although we have no commitments for financing we remain in the ~~process~~Company ~~of procuring additional equity financing as we seek to redress any shortfall~~ in ~~cash flows to sustain operations while seeking to expand our business. Business We have two operating divisions. One focuses on product development, manufacturing and sales world-wide while~~ the ~~other~~amount ~~focuses on the integration~~ of ~~command and control systems for correctional facilities across the United States. Our product division has developed a video fusion platform that adds next generation~~$118, ~~real-time interactive command-and-control capabilities to legacy security systems for greater performance at lower cost~~390. The platform seamlessly integrates a suite of analytics, including third-party security solutions – access control, biometrics, radio frequency identification (RFID), chemical detection and seismic detection – to improve real-time decision-making for critical events over any wireless network. Our products have been deployed with the Department of Defense, Immigration & Customs Enforcement, and many other law enforcement and intelligence agencies in addition to businesses across a wide range of industries. On our own, or working with prime government contractors like DRS, Motorola, and Siemens, our products are deployed in such diverse locales as the John F. Kennedy International Airport, isolated sections of the Texas-Mexico border, and remote mountain passes in Afghanistan. Our systems division acts as the general contractor or plays a key support role to leading government integrators. Our focus to date has been on installing and integrating security systems in juvenile to super-maximum security correctional facilities. We enable our clients to reach further operational excellence by providing a complete range of security integration services. In the past three years we have completed more than 15 security integration projects, with the largest topping $4.2M. We have the skill set and the resources to successfully complete projects in the $10M-$15M range. 12

~~Business~~· Issued ~~Development~~1,402,385 ~~Strategy~~ shares of common stock in exchange for $368,251 in cash.

We· Issued ~~are~~320,000 ~~pursuing~~warrants ~~numerous new domestic and international sales opportunities intended~~ to ~~increase~~purchase ~~revenue~~shares ~~by leveraging our product and systems divisions to provide turn-key solutions across a spectrum~~ of ~~applications~~common ~~within~~stock ~~the security industry. While expanding marketing efforts to reach new customers we continue to focus on offering our services as an original equipment manufacturer (OEM) for strategic resellers,~~ in ~~order~~conjunction towith ~~serve~~the asissuance ~~a research and development partner, and to develop a network~~ of ~~dealers,~~certain ~~resellers~~notes ~~and~~payable ~~system~~valued ~~integrators~~at ~~with differing targeted market expertise~~$166,786. ~~Meanwhile we continue to service existing customers with our products and services.~~

~~Product~~· Granted ~~Division~~885,000 stock options to purchase shares of common stock for services valued at $384,043.

WeDuring ~~intend to leverage pilot installations on~~ the ~~US/Mexico~~nine ~~border,~~months ~~the~~ended ~~Port~~September ~~of Philadelphia~~30, and with Immigration and Customs Enforcement to focus on closing new proposals and contracts with the Department of Homeland Security. The key to this line of business is a value added reseller (VAR) agreement signed with DRS in 2010, ~~offering an off-~~the~~-shelf~~ ~~advanced thermal tracking solution to be bundled with our microserver and software algorithms which addresses a major US initiative to fight border drug trafficking.~~ Company:

We· Issued ~~are~~1,363,930 ~~also~~shares ~~focused~~of oncommon ~~transforming~~stock ~~non-recurring~~in ~~engineering~~exchange ~~contracts~~for ~~that~~$438,405 ~~utilize~~of ~~our hardware and software designs into opportunities to develop a recurring royalty model. Our near~~ long-term ~~intention~~debt, isaccounts topayable ~~take advantage of certain installations that utilize our cloud computing platform which allows franchise operators~~ and ~~large~~accrued ~~retail chains to improve remote operations management~~expenses.

We· Issued ~~also~~1,530,000 ~~intend~~shares toof ~~develop~~common astock ~~program~~for toservices ~~monetize~~rendered ~~our~~to ~~patents~~the ~~related~~Company toin the ~~integration~~amount of ~~live video and analytics through a web portal used to make real time command and control decisions~~$390,000.

~~Systems~~· Issued ~~Division~~3,106,000 shares of common stock in exchange for $776,500 in cash.

We· Recognized ~~are~~debt ~~focused~~extinguishment onincome ~~pursuing new contracts related to the incremental integration~~ of ~~security~~$13,725 ~~measures~~from ~~utilized by correctional facilities. Our business has been limited in~~ the ~~past~~discharge by an inability to secure performance bonds at a reasonable cost. We have recently overcome this limitation and going forward we are confident in our ability to procure new contracts. In addition, we have expanded our highly profitable long-term maintenance agreement program to existing and future integration customers with a goal of ~~establishing~~certain aaccounts ~~recurring revenue stream from this business unit~~payable.

~~Mergers~~· Cancelled ~~and~~the ~~Acquisitions~~stock subscription receivable of $1,000.

WeDuring ~~intend~~the tonine ~~continue~~months toended ~~seek~~September ~~out~~30, ~~the~~2011 ~~acquisition of companies~~ and ~~products~~2010, ~~that~~cash ~~add~~paid ~~synergistic~~for ~~distribution~~interest ~~partners~~was $0 and ~~broader~~$23,300 ~~application~~respectively, ~~integration.~~and ~~Our~~cash ~~intention~~paid isfor toincome ~~target~~taxes ~~companies~~was ~~with~~approximately ~~intellectual properties in biometric algorithms~~$27,000 ~~RFID~~and ~~sensors~~$0, ~~and prison perimeter offerings~~respectively.

InNote ~~April~~6 ~~2011,~~– ~~the~~Common ~~Company~~Stock ~~entered~~Options into a letter of intent to acquire distribution rights from 1st Choice Security Solutions (“1st Choice”), an OEM supplier of ultra-long range RFID technology. The distribution rights will allow us to distribute Protrac iD products in North and South America. As of June 30, 2011, we had paid $42,734 to 1st Choice. We expect to finalize the distribution rights purchase by September 30, 2011, with an additional $70,000 cash outlay and the issuance 200,000 shares of common stock.Warrants

13Common stock options and warrants consist of:

Business Development Risks

				Exercise
	Number of			Price
	Options	Warrants		Per Share

Outstanding at January 1, 2011	-	-	$	-
Granted, vested, and excercisable	885,000	320,000		.50 - .75

Outstanding at September 30, 2011	885,000	320,000	$	.50 - .75

Our 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.10

~~Our~~COMCAM financial condition and results of operations going forward will continue to depend primarily on revenue generated from the sale of specialized services and our ability to realize additional debt or equity financing. We can provide no assurance that future revenue will provide sufficient cash flow to sustain operations although the achievement of this milestone is anticipated in the near term. FurtherINTERNATIONAL, ~~we have no immediate commitments for additional financing though management is committed to procuring the capital required to develop our business~~INC.

~~Results~~NOTES ofTO ~~Operations~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~During~~September ~~the six month period ended June~~ 30, 2011, we were engaged in (i) developing our Internet Protocol remote control platform cameras, micro servers, associated software, and unique end-to-end network solutions, (ii) providing turnkey system design and installation, maintenance contracts, and field support technicians to correctional facilities, (iii) completing debt financing arrangements, (iv) securing a performance bond, (v) performing due diligence and entering into a letter of intent with 1st Choice, and (vi) satisfying continuous public disclosure requirements.

~~Revenue~~Note 7 – Distribution Rights Acquisition

~~Revenue~~In ~~for~~April ~~the three months ended June 30,~~ 2011, ~~increased to $993,570 from $550,984 for~~ the ~~three~~Company ~~months~~entered ~~ended~~into ~~June~~a ~~30,~~letter ~~2010, an increase~~ of ~~80%.~~intent ~~Revenue~~to ~~for~~acquire the ~~six~~distribution ~~months~~rights ~~ended~~of ~~June~~1st ~~30,~~Choice ~~2011,~~Security ~~increased~~Solutions to(1st ~~$2,375,101~~Choice) ~~from~~of ~~$1,498,524~~Georgia for ~~the~~cash ~~six~~and ~~months~~common ~~ended June 30, 2010, an increase of 58%~~stock. The ~~increase~~distribution inrights ~~revenue~~will ~~over~~allow the ~~comparable~~Company ~~period is due~~ to ~~the~~distribute ~~procurement~~products of ~~new~~Protrac ~~contracts~~iD ~~by our systems division. We expect to continue to increase revenues~~ in ~~future~~North ~~periods through the sale of services to correction facilities~~ and ~~video~~South ~~products~~America.

~~Cost~~As of ~~revenue~~September ~~for the three months ended June~~ 30, 2011, ~~was~~the ~~$681,168~~Company ~~compared~~had topaid $~~375~~42,~~499~~734 ~~for~~to ~~the~~1st ~~three~~Choice ~~months~~and ~~ended~~expects ~~June~~to ~~30,~~finalize ~~2010,~~the anpurchase ~~increase~~ of ~~81%.~~this ~~Cost~~intangible ofasset ~~revenue~~by ~~for~~December ~~the six months ended June 30~~31, 2011,. ~~was~~As ~~$1,731,498~~of ~~compared to $966,728 for~~ the ~~six~~date ~~months~~of ~~ended~~these ~~June~~financial 30statements, ~~2010, an increase of 79%. The increase in~~ the ~~cost~~Company ofexpects ~~revenue in the current period can be attributed~~ to ~~the~~spend ~~increase~~$70,000 inmore ~~revenue over the comparative period~~ and ~~increasing~~issue ~~costs~~200,000 ~~for~~shares ~~materials. We expect the cost~~ of ~~revenue~~common stock to ~~increase~~finalize inthis ~~future~~intangible ~~periods~~asset ~~along with increases in revenue~~purchase.

~~Gross~~Note ~~profit~~8 ~~for~~– ~~the~~Subsequent three months ended June 30, 2011, increased to $312,402 from $175,485 for the three months ended June 30, 2010, an increase of 78%. Gross profit for the six months ended June 30, 2011, increased to $643,603 from $531,796 for the six months ended June 30, 2010, an increase of 21%. The increase in gross profit over the comparable periods is primarily attributable to the increase in revenue over the comparative periods, while opposed by increasing materials costs. We expect that gross profit will continue to increase in correlation with anticipated increases in revenue over future periods. Events

14The Company evaluated its September 30, 2011 financial statements for subsequent events through the date the financial statements were issued. Except as noted below, the Company is not aware of any subsequent events which would require recognition or disclosure in the financial statements.

~~Expenses~~In October 2011, the Company issued 620,000 shares of common stock in exchange for services.

~~Operating~~In ~~expenses~~November ~~for the three months ended June 30,~~ 2011, ~~decreased to $730,365 from $938,813 for~~ the ~~three~~Company ~~months~~issued ~~ended June 30~~200,000 ~~2010,~~shares ~~a decrease~~ of ~~22%.~~common ~~Operating~~stock ~~expenses~~in ~~for~~exchange ~~the six months ended June 30, 2011, increased to $1,570,443 from $1,553,821~~ for ~~the six months ended June 30, 2010, an increase of 1%~~services. The decrease in operating expenses over the comparative three month periods is primarily attributable to our implementation of cost-cutting activities and operational efficiencies. The increase in operating expenses over the comparative six month periods is primarily attributable to the increase in general and administrative expenses. We expect that operating expenses will remain relatively constant in the near term as management continues to evaluate prospective operating efficiencies.

Depreciation and amortization expenses for the six months ended June 30, 2011 and 2010 were $121,571 and $210,925, respectively. The decrease in depreciation and amortization expenses over the respective periods can be attributed to a decrease in the amortization of intangible assets.11

~~Other~~COMCAM ~~Income~~INTERNATIONAL, ~~(Expense)~~INC.

~~Interest~~NOTES ~~income~~TO ~~for~~UNAUDITED ~~the~~CONSOLIDATED ~~three~~FINANCIAL months ended June 30, 2011 was $251 as compared to $151 for the three months ended June 30, 2010. Interest income for the six months ended June 30, 2011 was $606 as compared to $570 for the six months ended June 30, 2010. Interest expense for the three months ended June 30, 2011 was $35,873 as compared to $26,266 for the three months ended June 30, 2010. Interest expense for the six months ended June 30, 2011 was $61,346 as compared to $53,937 for the six months ended June 30, 2010. The increase in interest expense over the comparable three and six month periods can be attributed to outstanding debt obligations. We expect that interest expense will continue to increase as debt obligations mature.STATEMENTS

~~Net~~September ~~Loss~~30, 2011

~~Net~~Note ~~loss~~9 ~~for~~– ~~the~~Recent ~~three~~Accounting months ended June 30, 2011, was $445,585 as compared to a net loss of $775,718 for the three months ended June 30, 2010, a decrease of 43%. Net loss for the six months ended June 30, 2011, was $999,580 as compared to a net loss of $1,061,667 for the six months ended June 30, 2010, a decrease of 6%. The decrease in net loss over the comparable periods can be primarily attributed to decreases in losses from operations during the current three and six month periods. We expect to transition to net income in the near term with anticipated increases in revenue and consistency in operating expenses.Pronouncements

~~Income~~In ~~Tax~~September ~~Expense~~2011, the Financial Accounting Standards Board (~~Benefit~~FASB) issued Accounting Standards Update (ASU) No. 2011-08, Testing Goodwill for Impairment. This ASU permits an entity to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If an entity concludes it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then there is no need to perform the two-step impairment test. This ASU is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The adoption of this ASU will not have a material impact on the Company’s consolidated financial statements, as it is intended to simplify the assessment for goodwill impairment.

WeIn ~~have~~June an2011, ~~income~~the ~~tax~~FASB ~~benefit~~issued ~~resulting~~ASU ~~from~~No. ~~net~~2011-05, ~~operating~~“Presentation ~~losses~~of Comprehensive Income”. ASU 2011-05 requires entities to ~~offset~~report ~~any~~components ~~future~~of ~~operating~~comprehensive ~~profit.~~income ~~The~~in ~~net~~either ~~operating~~a ~~loss~~continuous ~~carry~~statement ~~forwards~~of atcomprehensive ~~December~~income ~~31,~~or ~~2010,~~two ~~was~~separate ~~approximately~~but ~~$6,195,000~~consecutive statements. Under ~~These~~the ~~losses~~continuous ~~will~~statement ~~begin~~approach, tothe ~~expire~~statement inwould include the ~~year~~components ~~2019.~~and ~~The~~total ~~amount~~ of net ~~operating~~income, ~~loss~~the ~~carry~~components ~~forwards~~and ~~that~~total ~~can~~of beother ~~used~~comprehensive inincome ~~any~~and ~~one~~the ~~year~~total ~~can~~of becomprehensive ~~limited~~income. Under bythe ~~significant~~two ~~changes~~statement inapproach, the ~~ownership~~first ofstatement would include the ~~Company~~components and bytotal ~~the~~of ~~applicable~~net ~~tax~~income ~~laws~~and ~~which~~the ~~are~~second instatement ~~effect~~would atinclude the ~~time~~components ~~such~~and ~~carry~~total ~~forwards~~of ~~are~~other ~~utilized.~~comprehensive ~~Some~~income ~~states~~and dothe total of comprehensive income. ASU 2011-05 does not ~~allow~~change usthe toitems ~~file~~that ~~consolidated~~must be reported in other comprehensive income. ASU ~~tax~~2011-05 ~~returns~~is effective retrospectively for interim and ~~offset~~annual ~~our~~periods ~~net~~beginning ~~operating~~after ~~loss~~December ~~carryforwards~~15, ~~against~~2011, ~~Pinnacle’s~~with ~~taxable~~early ~~income~~adoption permitted. The ~~When~~Company ~~applicable,~~is wecurrently ~~record~~evaluating ~~income~~the ~~taxes~~impact ~~payable~~of ~~and~~the ~~income~~adoption ~~tax~~of ~~expense~~ASU ~~for~~2011-05 ~~these~~on ~~states~~its financial statements.

~~Impact~~In May 2011, the FASB issued ASU No. 2011-04, “Amendments to Achieve Common Fair Value Measurement and Disclosure Requirement in U.S. GAAP and IFRSs”. ASU 2011-04 does not extend the use of ~~Inflation~~fair value but, rather, provides guidance about how fair value should be applied where it already is required and permitted under IFRS or U.S. GAAP. For U.S. GAAP, most of the changes are clarifications of existing guidance or wording changes to align with IFRS 13. ASU 2011-04 is effective on a prospective basis for interim and annual periods beginning after December 15, 2011, with early adoption not permitted. In the period of adoption, a reporting entity will be required to disclose a change, if any, in valuation technique and related inputs that result from applying ASU 2011-04 and to quantify the total effect, if practicable. The Company is currently evaluating the impact of the adoption of ASU 2011-04 on its financial position, results of operations and disclosures.

WeOther ~~believe~~pronouncements ~~that~~issued ~~inflation~~by ~~has~~the ~~had~~FASB aor ~~negligible~~other ~~effect~~authoritative onaccounting ~~operations~~standards ~~over~~groups ~~the~~with ~~past~~future ~~three~~effective ~~years~~dates ~~and~~are ~~that~~either wenot ~~can~~applicable ~~offset~~or ~~any~~are ~~inflationary~~not ~~pressures~~expected byto ~~improving~~be ~~operating~~significant ~~efficiencies.~~to the financial statements of the Company.

1512

~~Capital~~Item Expenditures We made no significant capital expenditures on property or equipment for the six months ended June 30, 2011 or 2010. Liquidity and Capital Resources At June 30, 2011 we had a working capital deficit of $232,925. At June 30, 2011 we had current assets of $1,491,475 that consisted of cash totaling $558,616, accounts receivable of $767,395, estimated earnings in excess of billings on uncompleted contracts of $155,668 and prepaid expenses of $9,796. Our total assets of $2~~,191,805 included current assets as well as intangible assets of $393,467, property and equipment of $132,677 and other assets of $174,186~~. At June 30, 2011 we had current liabilities of $1,724,400 that consisted of accounts payable of $571,459, accrued expenses of $101,492, excess billings on uncompleted contracts of $136,449, a line of credit of $50,000 and the current portion of long-term debt of $865,000. Total liabilities of $2,105,018 include current liabilities as well as long-term debt of $221,018 and accrued expenses of $159,600. Total stockholdersMANAGEMENT’S ~~equity~~DISCUSSION ~~was~~AND ~~$86,787~~ANALYSIS asOF ofFINANCIAL ~~June~~CONDITION ~~30,~~AND ~~2011. Cash~~RESULTS ~~flows~~OF used in operations were $335,064 for the six months ended June 30, 2011 as compared to $382,246 for the six months ended June 30, 2010. The difference in cash flows used in operations over the comparative periods can be primarily attributed to a decrease in net losses, an adjustment to net losses from stock, option, and warrant compensation expenses, and an increase in accounts payable. We expect to realize cash flows provided by operating activities with an anticipated transition to net income in the near term. Cash flows used in investing activities were $43,063 for the six months ended June 30, 2011 as compared to $12,695 for the six months ended June 30, 2010. Cash flows used in investing activities in the current period are related to amounts paid to acquire the distribution rights of Protrac iD in addition to the purchase of property and equipment. We expect to continue to use cash flows in investing activities in future periods. Cash flows provided by financing activities were $419,250 for the six months ended June 30, 2011 as compared to $499,103 for the six months ended June 30, 2010. Cash flows provided by financing activities for the current period are attributable to the issuance of common stock for cash and debt instruments offset by payments on long-term debt. We expect to continue to have cash flow provided by financing activities. We had certain long-term debt obligations as of June 30, 2011: · Unsecured note payable to Global Convertible Megatrend, Ltd. (“Global Megatrend”) in the amount of $176,568 bearing interest at 7.5% and due in December 2012. The note may be converted to our common shares, at the option of the holder, based on certain terms related to outstanding shares and per share prices. Accrued interest at June 30, 2011 was $10,123. · Secured note payable to Paul Higbee in the amount of $465,000 bearing interest at 8%, due on March 31, 2012. Accrued interest at June 30, 2011 was $47,217. 16OPERATIONS

~~· Secured~~This ~~promissory~~Management’s ~~note~~Discussion ~~payable~~and toAnalysis ~~Doug~~of ~~Bartek~~Financial inCondition ~~the~~and ~~amount~~Results of ~~$400~~Operations and other parts of this quarterly report contain forward-looking statements that involve risks and uncertainties. Forward-looking statements can be identified by words such as “anticipates,~~000~~” ~~bearing~~“expects,” ~~interest~~“believes,” at“plans,” ~~18%~~“predicts,” ~~with~~and asimilar ~~final~~terms. ~~payment~~Forward-looking statements are not guarantees of ~~$472,000~~future onperformance ~~February~~and ~~25,~~our ~~2012~~actual results may differ significantly from the results discussed in the forward-looking statements. ~~The~~Factors ~~obligation~~that ismight ~~secured~~cause bysuch differences include but are not limited to those discussed in the ~~stock~~subsection ofentitled ~~our~~Forward-Looking ~~wholly~~Statements ~~owned~~and ~~subsidiary,~~Factors ~~Pinnacle~~That May Affect Future Results and Financial Condition below. ~~Accrued~~The ~~interest~~following atdiscussion ~~June~~should ~~30,~~be ~~2011~~read ~~was~~in ~~$24,658,~~conjunction with our financial statements and annotes ~~unamortized~~thereto ~~discount~~included ofin ~~$5,550~~this atreport. ~~June~~Our fiscal year end is December 31. All information presented herein is based on the three and nine month periods ended September 30, 2011.

~~· Unsecured~~Discussion ~~note payable to Bayberry Capital, Inc., in the amount of $50,000 bearing interest at 12%~~ and due in October 2012. The note may be converted to our common shares, at the option of the holder, based on certain terms related to outstanding shares and per share prices. Accrued interest at June 30, 2011 was $1,491.Analysis

WeOur ~~have~~financial acondition ~~2010~~and ~~Benefit~~results ~~Plan~~of ~~registered~~operations ~~under~~depend ~~Form~~primarily ~~S-8~~on ~~pursuant~~revenue generated from the sale of our products and specialized services in addition to ~~which~~our weability ~~can~~to ~~issue~~realize additional debt or ~~option~~equity ~~shares~~financing. ofWe ~~our~~can ~~common~~provide ~~stock~~no assurance that revenue going forward will provide sufficient cash flows to ~~employees,~~sustain ~~directors,~~our ~~officers,~~operations ~~consultants~~though orrevenue ~~advisors~~approximating onthat ~~the~~required ~~terms~~to ~~and~~sustain ~~conditions~~operations ~~set~~is ~~forth~~anticipated ~~therein.~~in Asfiscal ofyear ~~June~~2011. 30Further, ~~2011~~although we ~~had~~have ~~granted~~no ~~885,000~~commitments ~~stock~~for ~~options~~financing ~~for~~we aremain ~~two~~in ~~year~~the ~~term~~process atof anprocuring ~~exercise~~additional ~~price~~equity offinancing ~~$0.50~~as awe ~~share~~seek ~~under~~to ~~the~~redress ~~Benefit~~any ~~Plan~~shortfall in cash flows to sustain operations while seeking to expand our business.

Our current assets are sufficient to maintain operations but insufficient to return to product research, development or manufacture over the next twelve (12) months. We need a minimum of $3,000,000 in debt or equity financing to fund these product related activities, expand our marketing efforts or raise our performance bond capacity, all of which are integral to our business success. Unfortunately, we have no commitments or arrangements for this financing, though management is actively pursuing acceptable arrangements for prospective debt or equity placements. Our inability to obtain financing would have a material adverse affect on our business operations. Business

We have atwo ~~$100,000~~operating ~~line~~divisions. ofOne ~~credit~~focuses ~~with~~on aproduct ~~bank~~development, ~~which~~manufacturing ~~had~~and asales ~~balance~~world-wide ~~due~~while ofthe ~~$50,000~~other atfocuses ~~June~~on ~~30,~~the ~~2011.~~integration ~~Accrued~~of ~~interest~~command atand ~~June~~control ~~30,~~systems ~~2011~~for ~~was~~correctional ~~$13~~facilities across the United States.

WeOur ~~have~~product nodivision ~~commitments~~has ~~for~~developed ~~future~~a ~~capital~~video ~~expenditures~~fusion platform that ~~were~~adds ~~material~~next generation, real-time interactive command-and-control capabilities to legacy security systems for greater performance at ~~June~~lower 30cost. The platform seamlessly integrates a suite of analytics, ~~2011~~including third-party security solutions – access control, biometrics, radio frequency identification (RFID), chemical detection and seismic detection – to improve real-time decision-making for critical events over any wireless network. Our products have been deployed with the Department of Defense, Immigration & Customs Enforcement, and many other law enforcement and intelligence agencies in addition to businesses across a wide range of industries. On our own, or working with prime government contractors like DRS, Motorola, and Siemens, our products are deployed in such diverse locales as the John F. Kennedy International Airport, isolated sections of the Texas-Mexico border, and remote mountain passes in Afghanistan.

WeOur ~~have~~systems nodivision ~~defined~~acts ~~benefit~~as ~~plan~~the general contractor or ~~contractual~~plays ~~commitment~~a ~~with~~key ~~any~~support ofrole to leading government integrators. Our focus to date has been on installing and integrating security systems in juvenile to super-maximum security correctional facilities. We enable our ~~officers~~clients orto ~~directors~~reach further operational excellence by providing a complete range of security integration services. In the past three years we have completed more than 15 security integration projects, with the largest topping $4.2M. We have the skill set and the resources to successfully complete projects in the $10M-$15M range.

~~We have no current plans for the purchase or sale of any plant or equipment.~~ 13

WeBusiness ~~hired~~Development ~~several former employees of 1st Choice during July 2011.~~ Strategy

We doare ~~not~~pursuing ~~expect~~numerous new domestic and international sales opportunities intended to ~~pay~~increase ~~cash~~revenue ~~dividends~~by inleveraging our product and systems divisions to provide turn-key solutions across a spectrum of applications within the ~~foreseeable~~security ~~future~~industry. While expanding marketing efforts to reach new customers we continue to focus on offering our services as an original equipment manufacturer (OEM) for strategic resellers, in order to serve as a research and development partner, and to develop a network of dealers, resellers and system integrators with differing targeted market expertise. Meanwhile we continue to service existing customers with our products and services.

~~Off-Balance~~Product ~~Sheet Arrangements~~Division

AsWe ofintend ~~June~~to 30leverage pilot installations on the US/Mexico border, ~~2011~~the wePort ~~have~~of noPhiladelphia, ~~significant~~and ~~off-balance~~with ~~sheet~~Immigration ~~arrangements~~and ~~that~~Customs ~~have~~Enforcement orto ~~are~~focus ~~reasonably~~on ~~likely~~closing new proposals and contracts with the Department of Homeland Security. The key to ~~have~~this aline ~~current~~of orbusiness ~~future~~is ~~effect~~a onvalue ~~our~~added ~~financial~~reseller ~~condition,~~(VAR) ~~changes~~agreement signed with DRS in ~~financial~~2010 ~~condition,~~offering ~~revenues~~an oroff-the-shelf ~~expenses,~~advanced ~~results~~thermal oftracking ~~operations,~~solution ~~liquidity,~~to ~~capital~~be ~~expenditures,~~bundled orwith ~~capital~~our ~~resources~~microserver ~~that~~and ~~are~~software ~~material~~algorithms which addresses a major US initiative to ~~stockholders~~fight border drug trafficking.

17We are also focused on transforming non-recurring engineering contracts that utilize our hardware and software designs into opportunities to develop a recurring royalty model. Our near term intention is to take advantage of certain installations that utilize our cloud computing platform which allows franchise operators and large retail chains to improve remote operations management.

~~Going~~We ~~Concern~~also intend to develop a program to monetize our patents related to the integration of live video and analytics through a web portal used to make real time command and control decisions.

~~Our~~Systems auditors have expressed an opinion as to our ability to continue as a going concern as a result of an accumulated deficit of $7,638,342 as of December 31, 2010 and a working capital deficit. Our ability to continue as a going concern remains dependent on an ability to realize net income and/or obtaining financing from outside sources. Management’s plan to address our ability to continue as a going concern includes (i) increases in revenue; (ii) decreases in general and administrative costs; (iii) financing from private placement sources; and (iv) converting outstanding debt to equity. Although we believe that we will be able to remain a going concern, through the methods discussed above, there can be no assurances that such methods will prove successful.Division

~~Critical~~We ~~Accounting~~are ~~Policies~~focused on pursuing new contracts related to the incremental integration of security measures utilized by correctional facilities. Our business has been limited in the past by an inability to secure performance bonds at a reasonable cost. We have recently overcome this limitation and going forward we are confident in our ability to procure new contracts. In addition, we have expanded our highly profitable long-term maintenance agreement program to existing and future integration customers with a goal of establishing a recurring revenue stream from this business unit.

InMergers ~~Note 1 to the audited financial statements for the years ended December 31, 2010~~ and 2009, included in our Form 10-K, we discussed those accounting policies that are considered to be significant in determining the results of operations and our financial position. We believe that the accounting principles utilized by us conform to accounting principles generally accepted in the United States. The preparation of financial statements requires our 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 estimates. Our estimates are based 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. Acquisitions

~~Revenue~~We ~~Recognition~~intend to continue to seek out the acquisition of companies and products that add synergistic distribution partners and broader application integration. Our intention is to target companies with intellectual properties in biometric algorithms, RFID sensors, and prison perimeter offerings.

WeIn ~~generate~~April ~~revenues~~2011, the Company entered into a letter of intent to acquire distribution rights from ~~product~~1st ~~sales,~~Choice ~~consulting~~Security Solutions (“1st Choice”), ~~installation~~an OEM supplier of ~~security~~ultra-long ~~systems,~~range ~~and~~RFID ~~support~~technology. The distribution rights will allow us to distribute Protrac iD products in North and ~~maintenance~~South ~~contracts~~America. ~~Our~~As ~~revenue~~of ~~recognition~~September ~~policy~~30, is2011, aswe ~~follows:~~had paid $42,734 to 1st Choice. We expect to finalize the distribution rights purchase by December 31, 2011, with an additional $70,000 cash outlay and the issuance of 200,000 shares of common stock.

· Development and Delivery of Security Systems - Profits on long-term contracts are recorded primarily using the percentage of completion method for individual contracts. Estimated percentage of completion is determined on the basis of total costs expended as a percentage of total estimated costs. As our long-term contracts extend over one or more years, revisions in cost and profit estimates are reflected in the accounting period that the revisions become known. Due to the inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term.14

~~o Contract~~Business ~~costs~~Development include all direct materials, labor, and other costs. General and administrative costs are charged to expense as incurred. At the time a loss on a contract is expected, the entire amount of the estimated loss is recognized.Risks

~~o The~~Our ~~asset,~~business ~~"Costs~~development strategy is prone to significant risks and ~~estimated~~uncertainties ~~earnings~~which incan ~~excess~~have ofan ~~billings~~immediate impact on ~~uncompleted~~efforts ~~contracts,"~~to ~~represents~~realize ~~revenues~~net ~~earned~~cash inflow ~~excess~~and deter future prospects of ~~amounts~~revenue ~~billed~~growth. ~~The~~We ~~liability,~~have ~~"Billings~~a inlimited ~~excess~~history of ~~costs~~generating revenue which cannot be viewed as an indication of continued growth and ~~estimated~~a ~~earnings~~historical record of incurring losses. Should we be unable to consistently generate revenue and reduce or stabilize expenses on ~~uncompleted~~a ~~contracts~~consolidated basis to the point where we can realize net cash flow," ~~represents~~such ~~billings~~failure inwill ~~excess~~have ofan ~~revenues~~immediate ~~earned~~impact on our ability to continue our business operations.

~~Support~~ Our financial condition and ~~Maintenance~~results ~~Revenue~~of –operations ~~Revenue~~going forward will continue to depend primarily on revenue generated from ~~support~~the sale of specialized services and ~~maintenance~~our ~~agreements~~ability isto ~~recognized~~realize ~~ratably~~additional ~~over~~debt or equity financing. We can provide no assurance that future revenue will provide sufficient cash flow to sustain operations although the ~~term~~achievement of this milestone is anticipated in the ~~agreement~~near term. Further, ~~which~~we inhave ~~most~~no ~~instances~~immediate commitments for additional financing though management is ~~one~~committed ~~year.~~to procuring the capital required to develop our business.

~~Service~~Results ~~Revenue~~of ~~– Revenue from system upgrades is recognized as the services are performed. Revenue from training and development services is recognized as the services are performed.~~ Operations

~~Product~~During ~~Sales~~the ~~Revenue~~nine –month ~~Revenue~~period ~~from~~ended ~~product~~September ~~sales~~30, is2011, ~~recognized~~we atwere ~~the~~engaged ~~time~~in ~~the~~(i) ~~product~~developing isour ~~shipped~~Internet Protocol remote control platform cameras, micro servers, associated software, and ~~invoiced~~unique end-to-end network solutions, (ii) providing turnkey system design and ~~collectibility~~installation, ismaintenance ~~reasonably~~contracts, ~~assured.~~and Wefield ~~believe~~support ~~that~~technicians ~~revenue~~to ~~should~~correctional befacilities, ~~recognized~~(iii) atcompleting ~~the~~debt ~~time~~financing ofarrangements, ~~shipment~~(iv) assecuring ~~title~~a ~~passes~~performance tobond, ~~the~~(v) ~~customer~~performing atdue ~~the~~diligence ~~time~~and entering into a letter of ~~shipment.~~intent with 1st Choice, and (vi) satisfying continuous public disclosure requirements.

18Revenue

~~Consulting~~ Revenue –for ~~Revenues from consulting services are recognized when a consulting agreement is executed that establishes~~ the ~~amount~~three ~~and~~months ~~scope~~ended ofSeptember ~~service~~30, ~~to be provided~~2011, ~~the~~decreased ~~consulting~~to ~~services have been performed~~$384,592 ~~and~~from ~~we have no additional rescission~~$1, ~~refund~~028,863 orfor ~~customer satisfaction requirements, and collectibility of~~ the ~~amount~~three ~~billed~~months isended ~~reasonably~~September ~~assured. Forward-Looking~~30, Statements and Factors That May Affect Future Results and Financial Condition The statements contained in the section titled Management’s Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in this current report2010, ~~with~~a ~~the~~decrease ~~exception~~ of ~~historical facts, are forward-looking statements~~63%. ~~Forward-looking~~Revenue ~~statements~~for ~~reflect~~the ~~our~~nine ~~current~~months ~~expectations~~ended ~~and~~September ~~beliefs regarding our future results of operations~~30, ~~performance~~2011, ~~and~~increased ~~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~~$2,759,693 ~~but~~from ~~are not limited to~~$2,527,387 ~~statements~~for ~~concerning: · our anticipated financial performance; ·~~ the ~~sufficiency~~nine ofmonths ~~existing~~ended ~~capital~~September ~~resources;~~30, ~~· our~~2010, ~~ability~~an toincrease ~~raise additional capital to fund cash requirements; · uncertainties related to our business; · increases in revenues; · the volatility~~ of ~~the stock market and; · general economic conditions~~9%. We ~~wish~~Both tothe ~~caution~~decrease ~~readers that our operating results are subject to various risks~~ and ~~uncertainties~~increase ~~that~~in ~~could~~revenue ~~cause~~over ~~our actual results to differ materially from those discussed or anticipated including~~ the ~~factors~~comparable ~~set~~periods ~~forth~~are indue ~~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~~timing ~~statements contained in this report, which reflect our beliefs and expectations only as~~ of the ~~date~~procurement of ~~this report. We assume no obligation to update or revise these forward-looking statements to reflect~~ new ~~events~~contracts orby ~~circumstances or any changes in~~ our ~~beliefs~~systems ~~or expectations, other than as required by law~~division. ~~Stock-Based~~ ~~Compensation~~ We ~~have~~expect ~~adopted~~to ~~Accounting~~increase ~~Standards~~revenues ~~Codification Topic (“ASC”) 718, Share-Based-Payment, which addresses the accounting for stock-based payment transactions~~ in ~~which~~future anperiods ~~enterprise~~through ~~receives employee services in exchange for (a) equity instruments of~~ the ~~enterprise~~sale ~~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. We account for equity instruments issued in exchange for the receipt of goods or~~ services ~~from~~to ~~other~~correction ~~than~~facilities ~~employees~~and invideo ~~accordance with ASC 505~~products. 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. 19

~~Recent~~Cost ~~Accounting~~of ~~Pronouncements Please~~revenue ~~see Note 9 to our consolidated financial statements~~ for recent accounting pronouncements. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Not required. ITEM 4. CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures In connection with the ~~preparation~~three ofmonths ~~this~~ended ~~report~~September on30, ~~Form 10-Q~~2011, ~~an evaluation~~ was ~~carried~~$292,342 ~~out~~compared byto ~~our management~~$615,382 ~~with~~for the ~~participation~~three ofmonths ~~the~~ended ~~chief~~September ~~executive~~30, ~~officer and the chief financial officer~~2010, ofa ~~the~~decrease ~~effectiveness~~ of ~~our~~52%. ~~disclosure~~Cost ~~controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act~~ of ~~1934~~revenue ~~(“Exchange~~for ~~Act”)). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under~~ the ~~Exchange~~nine ~~Act~~months isended ~~recorded,~~September ~~processed~~30, ~~summarized~~2011, ~~and~~was ~~reported~~$2,023,840 ~~within~~compared ~~the time periods specified in the Commission’s rules and forms and that such information is accumulated and communicated~~ to ~~management~~$1,582,110 ~~including~~for the ~~chief~~nine ~~executive~~months ~~officer~~ended ~~and~~September ~~the~~30, ~~chief financial officer~~2010, toan ~~allow~~increase ~~timely~~of ~~decisions regarding required disclosures~~28%. ~~Based~~The ondecrease ~~that~~in ~~evaluation,~~cost ~~our management concluded, as~~ of ~~the~~revenue ~~end~~over of the ~~period~~comparable ~~covered~~three bymonth ~~this~~periods ~~report, that our disclosure controls~~ and ~~procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within~~ the ~~time~~increase ~~periods specified~~ in ~~the~~cost ~~Commission’s~~of ~~rules~~revenue ~~and~~over ~~forms, and that such information was accumulated and communicated to management, including~~ the ~~chief~~comparable ~~executive~~nine ~~officer~~month ~~and~~periods ~~the~~can ~~chief~~be ~~financial~~primarily ~~officer,~~attributed to ~~allow~~decreases ~~timely decisions regarding required disclosures. Changes~~ in ~~Internal~~revenue ~~Control over Financial Reporting There have been no changes~~ in ~~internal~~the ~~control~~current ~~over~~three ~~financial~~month ~~reporting~~and ~~(as~~increases ~~defined~~ in ~~Rule~~the ~~13a-15(f)~~cost of ~~the~~materials ~~Exchange~~in ~~Act) during~~ the ~~period~~current ~~ended~~nine ~~June~~month ~~30, 2011 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting~~period. ~~PART~~We IIexpect –the ~~OTHER~~cost ~~INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 1A. RISK FACTORS Our operations and securities are subject to a number~~ of ~~risks.~~revenue ~~Below we have identified and discussed the material risks that we are likely~~ to ~~face.~~increase ~~Should~~in ~~any~~line ofwith ~~the~~revenue ~~following~~growth ~~risks occur, they will adversely affect our business, financial condition,~~ and~~/or~~ ~~results~~inflationary ofpressure ~~operations~~on ~~as well as~~ the ~~future~~cost ~~trading price and/or the value~~ of ~~our securities~~materials. 20

~~Risks~~Gross ~~Related~~profit ~~to our Business OUR ABILITY TO CONTINUE AS A GOING CONCERN IS IN QUESTION Our auditors included an explanatory statement in their report on our consolidated financial statements~~ for the ~~years~~three months ended ~~December~~September 3130, ~~2010 and 2009~~2011, ~~stating~~decreased ~~that there are certain factors which raise substantial doubt about our ability~~ to continue as a going concern. These factors include an accumulated deficit and working capital deficit. WE HAVE A HISTORY OF LOSSES AND MAY INCUR LOSSES FOR THE FORESEEABLE FUTURE We had an accumulated deficit of $892,~~637,922~~250 asfrom ~~of June 30~~$413,481 ~~2011~~for ~~and a net operating loss. We do expect net income in~~ the ~~next~~three ~~twelve~~ months ~~but~~ended ~~can~~September ~~provide~~30, no2010, ~~assurance~~a todecrease ~~this~~of ~~end~~78%. ~~Should~~Gross weprofit ~~realize~~for ~~net income in~~ the ~~near~~nine ~~term~~months weended ~~can~~September provide no assurance that we will be able to sustain net income over time. WE 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 limited production of our products30, 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 available2011, ~~our~~decreased ~~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 OUR PRODUCTS COULD BECOME OBSOLETE AT ANY TIME Evolving technology$735,853 ~~updated~~from ~~industry standards~~$945,277 ~~and~~for ~~frequent new product and service introductions characterize~~ the ~~video~~nine ~~surveillance~~months ~~systems~~ended ~~and~~September ~~security integration services markets; our products could become obsolete at any time. Competitors could develop products similar to or better than our own~~30, ~~finish development of new technologies in advance of our research and development~~2010, ora bedecrease ~~more successful at marketing new products, any~~ of ~~which factors may hurt our prospects for success~~22%. ~~THE~~ ~~MARKET~~The ~~ACCEPTANCE~~decrease OFin ~~OUR~~gross ~~PRODUCTS~~profit ISover ~~CRITICAL TO OUR GROWTH We generate revenue from~~ the ~~design~~comparable ~~and~~periods ~~sale of video surveillance systems and security integration services; therefore, market acceptance of our products~~ is ~~critical.~~primarily Ifattributable ~~our~~to ~~customers~~the dodecrease ~~not~~in ~~accept or purchase our products, then our~~ revenue, ~~cash~~in ~~flow and/or operating results will be negatively impacted. WE COMPETE WITH LARGER AND BETTER-FINANCED CORPORATIONS Competition within~~ the ~~international~~current ~~market~~three ~~for~~month ~~video~~period ~~surveillance systems~~ and ~~security~~increases ~~integration services is intense. While our products are distinguished by next-generation innovations that are more sophisticated, flexible and cost effective than many competitive products currently~~ in the ~~marketplace,~~cost ~~a number~~ of ~~entities~~materials ~~offer~~in ~~video surveillance systems, and new competitors may enter~~ the ~~market~~current innine ~~the~~month ~~future~~period. ~~Some~~We ofexpect ~~our~~that ~~existing~~gross ~~and~~profit ~~potential~~will ~~competitors~~continue ~~have~~to ~~longer~~increase ~~operating~~in ~~histories,~~correlation ~~greater~~with ~~name~~anticipated ~~recognition,~~revenue ~~larger~~growth ~~customer~~over ~~bases~~future ~~and significantly greater financial, technical and marketing resources than we do, including well known multi-national corporations~~periods. 21

WE ARE LARGELY DEPENDENT UPON FEW CUSTOMERSWe have in the past, and may in the future lose our customers or a substantial portion of our business with one or more major customers. If we do not sell products to our existing customers in the quantities anticipated, or if our customers reduce or terminate their relationships with us, market perception of our products and technology, growth prospects, and financial condition and results of operations could be harmed. Any termination of our relationship with our largest customers or any other customers could materially reduce our revenue.15

WEOperating ~~DEPEND ON ONE MANUFACTURER AND LIMITED SOURCE SUPPLIERS~~Expenses

~~Pennsylvania-based~~Operating ~~Strategic~~expenses ~~Manufacturing~~for ~~Technologies~~the three months ended September 30, ~~Inc.~~2011, ~~currently~~increased ~~procures~~to ~~our~~$503,468 ~~components~~from ~~and~~$410,112 ~~manufactures~~for ~~our~~the ~~video~~three ~~surveillance~~months ~~systems.~~ended ~~Our~~September ~~components~~30, ~~are~~2010, ~~purchased~~an increase of 23%. Operating expenses for usthe ~~from~~nine ~~such~~months ~~source~~ended ~~suppliers~~September as30, ~~Motorola~~2011, ~~Inc.~~increased to $2,073,911 ~~and~~from ~~Analog~~$1,963,933 ~~Devices~~for the nine months ended September 30, ~~Inc~~2010, an increase of 6%. WeThe ~~anticipate~~increase ~~that~~in weoperating ~~will~~expenses ~~continue~~over tothe ~~depend~~comparative ~~upon~~three ~~one~~month orperiods ~~few~~is ~~manufacturers,~~primarily asattributable ~~well~~to asthe aincrease ~~limited~~in ~~number~~general ofand ~~source~~administrative ~~suppliers~~expenses in the three months ended September 30, 2011 which ~~dependence~~includes ~~reduces~~non-cash expenses of $65,490 for the ~~level~~issuance of ~~control~~common westock ~~have~~for services and ~~exposes~~$62,897 usin depreciation and amortization charges. The increase in operating expenses over the comparative nine month periods is primarily attributable to ~~significant~~the ~~risks~~increase ~~such~~in asgeneral ~~inadequate~~and ~~capacity,~~administrative ~~late~~expenses ~~delivery~~in the nine months ended September 30, ~~substandard~~2011 ~~quality~~which ~~and~~includes ~~higher~~non-cash ~~prices~~expenses of $118,390 ~~all~~with the issuance of ~~which~~common ~~could~~stock ~~adversely~~for ~~affect~~services, ~~our~~$550,830 ~~business.~~in Wethe ~~currently~~grant ~~have~~of nostock ~~agreement~~options ~~with~~for ~~Strategic~~services ~~Manufacturing~~and ~~Technologies~~warrants compensation and $185,578 ~~Inc~~in depreciation and amortization charges. ~~for~~We ~~the~~expect ~~manufacture~~that ofoperating ~~our~~expenses ~~video~~will ~~surveillance~~decline ~~systems~~as management focuses on operating efficiencies.

IfDepreciation ~~our~~and ~~suppliers~~amortization ~~were~~expenses ~~unable~~for ~~to provide parts in~~ the ~~volumes~~nine ~~needed~~months orended atSeptember ~~an acceptable price~~30, ~~our~~2011 ~~manufacturer~~ and we2010 ~~would~~were ~~have~~$185,578 ~~to identify~~ and ~~qualify~~$321,741, ~~acceptable replacements from alternative sources of supply~~respectively. IfThe wedecrease ~~were~~in ~~unable~~depreciation toand ~~obtain~~amortization ~~these~~expenses ~~components~~over inthe arespective ~~timely~~periods ~~fashion,~~can ~~we would likely not~~ be ~~able~~attributed to ~~meet~~a ~~demand.~~decrease ~~Any~~in ~~disruption~~the ofamortization ~~either component procurement or manufacturing delays could adversely affect our results~~ of ~~operations~~intangible assets.

~~OUR~~Other ~~SUCCESS~~Income ~~DEPENDS ON THE ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL~~ (Expense)

~~Our~~Interest ~~future~~income ~~success~~for ~~will~~the ~~depend~~three ~~substantially~~months onended ~~the~~September ~~continued~~30, ~~service~~2011 ~~and~~was ~~performance~~$178 ofas ~~Don~~compared ~~Gilbreath,~~to ~~Robert~~$97 ~~Betty~~for ~~and~~the ~~other~~three ~~key~~months ~~personnel~~ended September 30, 2010. WeInterest ~~have~~income ~~relatively~~for ~~few~~the ~~senior~~nine ~~personnel~~months ended September 30, ~~and~~2011 sowas $784 as compared to $667 for the ~~loss~~nine ofmonths ~~Don~~ended ~~Gilbreath~~September 30, ~~Robert~~2010. ~~Betty~~Interest orexpense ~~any~~for ~~other~~the ~~key~~three ~~employees~~months ~~could~~ended ~~have~~September a30, ~~material~~2011 ~~adverse~~was ~~effect~~$37,169 onas ~~our~~compared ~~business~~to ~~prospects~~$20,597 ~~financial~~for ~~condition~~the ~~and~~three ~~results~~months ofended ~~operations.~~September ~~Our~~30, ~~future~~2010. ~~success~~Interest ~~also~~expense ~~depends~~for onthe ~~our~~nine ~~ability~~months toended ~~identify,~~September ~~attract~~30, ~~hire,~~2011 ~~train~~was $98,515 ~~retain~~as ~~and~~compared ~~motivate~~to ~~technical~~$74,534 ~~managerial~~for ~~and~~the ~~sales~~nine ~~personnel~~months ended September 30, 2010. ~~Competition~~The ~~for~~increase ~~such~~in ~~personnel~~interest isexpense ~~intense,~~over ~~and~~the wecomparable ~~cannot~~three ~~assure~~and ~~that~~nine wemonth ~~will~~periods ~~succeed~~can inbe ~~attracting~~attributed ~~and~~to ~~retaining~~outstanding ~~such~~debt ~~personnel~~obligations. ~~Our~~We ~~failure~~expect tothat ~~attract~~interest ~~and~~expense ~~retain~~will ~~the~~continue ~~necessary~~to ~~technical,~~increase ~~managerial~~as ~~and~~debt ~~sales~~obligations ~~personnel~~mature. ~~could~~During ~~have~~the anine ~~material~~month ~~adverse~~period ~~effect~~ended onSeptember ~~our~~30, ~~business~~2010 ~~prospects,~~we ~~financial~~recognized ~~condition~~debt ~~and~~extinguishment ~~results~~income of ~~operations~~$13,725.

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

~~Our~~Net ~~success~~loss ~~also~~for ~~depends~~the ~~significantly~~three onmonths ~~protecting~~ended ~~proprietary~~September ~~technology.~~30, ~~Despite~~2011, ~~our~~was ~~efforts~~$480,209 as compared to ~~protect~~a ~~our~~net ~~proprietary~~loss ~~rights~~of $17,131 ~~unauthorized~~for ~~parties~~the ~~may~~three ~~attempt~~months toended ~~copy~~September or30, ~~otherwise~~2010, ~~obtain~~an ~~and~~increase ~~use~~of ~~our~~2,703%. ~~technology~~Net orloss ~~products.~~for ~~Monitoring~~the ~~unauthorized~~nine ~~use~~months ofended ~~our~~September ~~technology~~30, is2011, ~~difficult~~was $1,479,789 ~~and~~as wecompared ~~cannot~~to bea ~~certain~~net ~~that~~loss of $1,078,798 for the ~~steps~~nine wemonths ~~have~~ended ~~taken~~September ~~will~~30, ~~prevent~~2010, ~~misappropriation~~an increase of ~~our~~37%. ~~technology,~~The ~~particularly~~increases in ~~foreign~~net ~~countries~~loss ~~where~~over the ~~laws~~comparable ~~may~~three ~~not~~month ~~protect~~period ~~our~~periods ~~proprietary~~can ~~rights~~be asattributed ~~fully~~to asthe decrease in ~~the~~revenue ~~United~~and ~~States.~~the Inincrease ~~addition,~~in ~~from~~general ~~time~~and toadministrative ~~time,~~expenses ~~third~~due ~~parties~~in ~~may~~part ~~assert~~to ~~patent,~~non-cash ~~copyright,~~expenses ~~trademark~~in ~~and~~the ~~other~~three ~~intellectual~~month ~~property~~ended ~~rights~~September ~~claims~~30, ~~against~~2011. usThe ~~with~~increase ~~respect~~in tonet ~~existing~~loss orover ~~future~~the ~~products~~nine ormonth ~~technology.~~periods Ifcan ~~there~~be isprimarily aattributed ~~successful~~to ~~claim~~the ofincrease ~~infringement~~in general and weadministrative ~~fail~~expenses ordue ~~are~~in ~~unable~~part to ~~develop~~ non-~~infringing~~cash ~~technology~~expenses orand ~~license~~the increase in the ~~infringed~~cost orof ~~similar~~revenue ~~technology~~due to inflationary pressure on athe ~~timely~~cost ~~basis,~~of ~~our~~materials. ~~business~~We ~~and~~expect ~~results~~to ofcontinue ~~operations~~to ~~could~~realize benet ~~seriously~~losses ~~harmed.~~until such time as revenue increases and cost of materials stabilizes.

2216

~~OUR~~Income ~~BUSINESS~~Tax ISExpense SUBJECT TO GOVERNMENTAL REGULATIONS International, national and local standards set by governmental regulatory authorities set the regulations by which communications are transmitted within and across respective territories. Our 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. Further, climate change legislation and greenhouse gas regulation is becoming increasingly ubiquitous. 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. OUR 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, we may need to change the components we use 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. Risks Related to our Stock WE WILL NEED TO RAISE ADDITIONAL CAPITAL TO FUND AN EXPANSION OF OPERATIONS WHICH COULD ADVERSELY AFFECT OUR SHAREHOLDERS We will need to raise additional capital to fund an expansion of operations up to $3,000,000. Capital realized would be used for research and development expenses, product manufacture, marketing costs and performance bonds. We have no commitment from any sources of financing to provide us with any needed capital requirements. Any equity financing will obligate us to issue additional shares of our common stock which would result in dilution to existing shareholders. We incur significant expenses as a result of being REGISTERED WITH THE COMMISSION, which EXPENSES negatively impact our financial performance. We incur significant legal, accounting and other expenses as a result of the Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission, which control the corporate governance practices of public companies. 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, has substantially increased our expenses, including legal and accounting costs, and made some activities more time-consuming and costly. 23(Benefit)

~~Our~~We ~~common~~have ~~stock~~an isincome ~~currently~~tax ~~deemed~~benefit toresulting befrom ~~“penny~~net ~~stock”,~~operating ~~which~~losses ~~makes it more difficult for investors~~ to ~~sell~~offset ~~their~~any ~~shares. Our~~future ~~common~~operating ~~stock is and will be subject to the “penny stock” rules adopted under section 15(g) of the Exchange Act~~profit. The ~~penny~~net ~~stock~~operating ~~rules~~loss ~~apply~~carry toforwards ~~companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades~~ at ~~less~~December ~~than~~31, ~~$5.00~~2010, ~~per~~was ~~share~~approximately ~~or that have tangible net worth of less than~~ $56,~~000~~195,000 ~~($2,000,000 if the company has been operating for three or more years)~~. These ~~rules~~losses ~~require,~~will ~~among~~begin ~~other things, that brokers who trade penny stock~~ to ~~persons~~expire ~~other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading~~ in the ~~security,~~year ~~including a risk disclosure document and quote information under certain circumstances~~2019. ~~Many~~The ~~brokers~~amount ~~have decided not to trade penny stocks because~~ of ~~the~~net ~~requirements~~operating ofloss ~~the~~carry ~~penny~~forwards ~~stock~~that ~~rules~~can ~~and,~~be asused ~~a result, the number of broker-dealers willing to act as market makers~~ in ~~such securities is limited. If we remain subject to the penny stock rules for~~ any ~~significant~~one ~~period,~~year itcan ~~could~~be ~~have~~limited anby adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of their securities. OUR STOCK PRICE IS VOLATILE The market price for our common stock is subject to significant ~~volatility~~changes ~~and trading volumes are low. Factors affecting our stock price could include: · our perceived prospects; · negative variances~~ in ~~our~~the ~~operating~~ownership ~~results, and achievement~~ of ~~key business targets; · limited trading volume in shares of our common stock in~~ the ~~public~~Company market; · sales or purchases of large blocks of our stock; · changes in, or 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 or our competitors; · announcements of legal claims against us; · market reaction to any acquisitions, joint ventures or strategic investments announced by us or our competitors; · developments in the ~~financial~~applicable ~~markets; · general~~tax ~~economic,~~laws ~~political~~which orare ~~stock market conditions. In addition, our stock price may fluctuate~~ in ~~ways~~effect ~~unrelated~~at ~~or disproportionate to our operating performance. The general economic, political and stock market conditions that may affect~~ the ~~market~~time ~~price~~such ofcarry ~~our~~forwards ~~common stock~~ are ~~beyond our control~~utilized. ~~The~~Some ~~market~~states ~~price~~do ~~of our common stock at any particular time may~~ not ~~remain~~allow ~~the~~us ~~market~~to ~~price~~file inconsolidated ~~the~~income ~~future.~~tax Inreturns ~~the~~and ~~past,~~offset ~~securities~~our ~~class~~net ~~action~~operating ~~litigation~~loss ~~has~~carryforwards ~~been instituted~~ against ~~companies~~Pinnacle’s ~~following~~taxable ~~periods of volatility in the market price of their securities~~income. ~~Any~~When ~~such litigation~~applicable, ifwe ~~instituted~~record ~~against~~income ~~us,~~taxes ~~could~~payable ~~result in substantial costs~~ and aincome ~~diversion~~tax ofexpense ~~management’s~~for ~~attention~~these ~~and resources~~states. ~~ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS Purchases of Equity Securities made by the Issuer and Affiliated Purchasers None. 24~~

~~Recent~~Impact ~~Sales~~ of ~~Unregistered Securities~~Inflation

OnWe ~~July~~believe 5,that ~~2011~~inflation wehas ~~issued~~had ~~242,385~~an ~~shares~~effect ofon ~~common~~operations ~~stock~~over inthe ~~exchange~~past ~~for~~three ~~$126,040~~years inas ~~cash~~our orcost ~~$0.52~~of ~~per~~materials ~~share,~~has risen in ~~reliance~~response onto ~~Section~~inflationary ~~4(2)~~pressures. ofNonetheless, ~~the~~we ~~Securities~~believe ~~Act,~~we can offset inflationary pressures to ~~the~~some ~~following~~extent ~~individuals:~~going forward by improving operating efficiencies.

Investor	Shares	Consideration
Louise Woods	177,000	$92,040
SeaFin Capital LLC	65,385	$34,000
Totals	242,385	$126,040

Capital Expenditures

We made ~~this~~no ~~offering~~significant ~~pursuant~~capital toexpenditures ~~Section 4(2) of the Securities Act based~~ on ~~the~~property ~~following~~or ~~factors:~~equipment ~~(1)~~for the ~~issuances~~nine ~~were~~months ~~isolated~~ended ~~private~~September ~~transactions~~30, ~~which~~2011 ~~did~~or ~~not involve a public offering; (2) the offerees have access to the kind of information which registration would disclose; and (3) the offerees are financially sophisticated~~2010.

OnLiquidity ~~June~~and 5,Capital 2011 we issued 120,000 shares of common stock in exchange for $30,000 in cash or $0.25 per share, pursuant to exemption provided by Rule 506 of Regulation D of the Securities Act, to the following individuals:Resources

Investor	Shares	Consideration
Dan Traxler	60,000	$15,000
William R. Bryan	40,000	$10,000
Ron E. Barker	20,000	$5,000
Totals	120,000	$30,000

At September 30, 2011 we had a working capital deficit of $506,657.

WeAt ~~complied~~September ~~with~~30, ~~the~~2011 ~~requirements~~we ofhad ~~Rule~~current ~~506~~assets of ~~Regulation~~$1,050,097 Dthat consisted of ~~the~~cash ~~Securities~~totaling ~~Act~~$551,711, ~~by:~~accounts ~~(i)~~receivable ~~foregoing~~of ~~any~~$378,023, ~~general~~estimated ~~solicitation~~earnings orin ~~advertising~~excess toof ~~market~~billings ~~the~~on ~~securities;~~uncompleted ~~(ii)~~contracts ~~selling~~of ~~only~~$114,652 toand ~~accredited~~prepaid ~~investors;~~expenses ~~(iii)~~of ~~having~~$5,711. ~~not~~Our ~~violated~~total ~~antifraud~~assets ~~prohibitions~~of ~~with~~$1,716,280 ~~the~~included ~~information~~current ~~provided~~assets toas ~~the~~well ~~investors;~~as ~~(iv)~~intangible ~~being~~assets ~~available~~of to$345,138, ~~answer~~property ~~questions~~and byequipment ~~the~~of ~~investors;~~$148,739 and ~~(v)~~other ~~issuing~~assets ~~restricted~~of ~~securities to the investors~~$172,306.

~~ITEM~~At 3September 30, 2011 we had current liabilities of $1,556,754 that consisted of accounts payable of $310,068, accrued expenses of $172,749, excess billings on uncompleted contracts of $208,937, and the current portion of long-term debt of $865,000. ~~DEFAULTS~~Total ONliabilities ~~SENIOR~~of ~~SECURITIES~~$1,945,182 include current liabilities as well as long-term debt of $222,128 and accrued expenses of $166,300.

~~None~~Total stockholders’ deficit was $228,902 as of September 30, 2011.

~~ITEM~~Cash 4flows used in operations were $346,450 for the nine months ended September 30, 2011 as compared to $9,135 for the nine months ended September 30, 2010. ~~(REMOVED~~The ~~AND~~difference ~~RESERVED)~~in cash flows used in operations over the comparative periods can be primarily attributed to an increase in net losses, an increase in other assets, and a decrease in billings in excess of costs and estimated earnings on uncompleted contracts. We do not expect to realize cash flows provided by operating activities until our operations transition to net income.

~~Removed~~Cash flows used in investing activities were $72,583 for the nine months ended September 30, 2011 as compared to $61,680 for the nine months ended September 30, 2010. Cash flows used in investing activities in the current period are related to amounts paid to acquire the distribution rights of Protrac iD in addition to the purchase of property and ~~reserved~~equipment. We expect to continue to use cash flows in investing activities in future periods.

~~ITEM 5. OTHER INFORMATION~~17

~~None~~Cash flows provided by financing activities were $453,251 for the nine months ended September 30, 2011 as compared to $581,483 for the nine months ended September 30, 2010. Cash flows provided by financing activities for the current period are attributable to the issuance of common stock for cash and debt instruments offset by payments on long-term debt. We expect to continue to have cash flow provided by financing activities.

~~ITEM~~On 6September 21, 2011 we entered into certain agreements for funding up to $3,300,000 through a series of convertible debentures and common stock issuances pursuant to the terms and conditions of a securities purchase agreement and equity investment agreement. ~~EXHIBITS~~The initial convertible debenture was for $50,000 that incurs 4 ¾ % interest per annum and matures on September 21, 2015. The principal and interest is convertible at the option of the holder at $0.75 per share or 80% of the average of the three lowest volume weighted average prices during the twenty one days prior to a conversion notice to a minimum conversion price of $0.45 at which time we have the right to prepay the amount of the debenture that the holder has chosen to convert.

~~Exhibits~~We ~~required~~had tocertain ~~be attached by Item 601 of Regulation S~~long-Kterm ~~are~~debt ~~listed~~obligations inas ~~the Index to Exhibits on page 27~~ of ~~this~~September ~~Form 10‑Q~~30, ~~and are incorporated herein by this reference.~~2011:

25· Unsecured note payable to Global Convertible Megatrend, Ltd. (“Global Megatrend”) in the amount of $176,568 bearing interest at 7.5% and due in December 2012. The note may be converted to our common shares, at the option of the holder, based on certain terms related to outstanding shares and per share prices. Accrued interest at September 30, 2011 was $15,274.

~~SIGNATURES~~· Secured note payable to Paul Higbee in the amount of $465,000 bearing interest at 8%, due on March 31, 2012. Accrued interest at September 30, 2011 was $57,343.

~~Pursuant~~· Secured promissory note payable to ~~the~~Bartek ~~requirements~~Investments of-1, ~~the~~Ltd. ~~Securities~~in ~~Exchange~~the ~~Act~~amount of ~~1934~~$400,000 ~~the~~bearing ~~registrant~~interest ~~has~~at ~~duly~~18%, ~~caused~~with ~~this~~a ~~report~~final topayment beof ~~signed~~$472,000 on ~~its~~February ~~behalf~~25, 2012. The obligation is secured by the ~~undersigned~~stock ~~thereunto~~of ~~duly~~our ~~authorized~~wholly owned subsidiary, Pinnacle. Accrued interest at September 30, 2011 was $42,805.

ComCam International, Inc.	Date
/s/ Don Gilbreath By: Don Gilbreath Chief Executive Officer, Chief Financial Officer, Principal Accounting Officer and Director	August 19, 2011

· Unsecured note payable to Bayberry Capital, Inc., in the amount of $50,000 bearing interest at 12% and due in October 2012. The note may be converted to our common shares, at the option of the holder, based on certain terms related to outstanding shares and per share prices. Accrued interest at September 30, 2011 was $3,051 and an unamortized discount of $4,440 at September 30, 2011.

26· Unsecured note payable to La Jolla Cove Investors, Inc, in the amount of $50,000 bearing interest at 4.75% and due in September 2015. The note may be converted to our common shares, at the option of the holder, based on certain terms related to outstanding shares and per share prices. Accrued interest at September 30, 2011 was $0 and an unamortized discount of $50,000 at September 30, 2011.

~~EXHIBITS~~We have a 2010 Benefit Plan registered under Form S-8 pursuant to which we can issue or option shares of our common stock to employees, directors, officers, consultants or advisors on the terms and conditions set forth therein. As of September 30, 2011 we had granted 885,000 stock options for a two year term at an exercise price of $0.50 a share under the Benefit Plan. Subsequent to September 2011 we issued 200,000 shares under the Benefit Plan for services rendered.

~~Exhibit Description~~18

3Our current assets are sufficient to maintain operations but insufficient to return to product research and development or manufacture over the next twelve (i12)* Amended ~~and~~months. ~~Restated~~We ~~Certificate~~need a minimum of ~~Incorporation~~$3,000,000 in debt or equity financing to fund these product related activities, expand our marketing efforts or raise our performance bond capacity, all of ~~the~~which ~~Company~~are ~~(incorporated~~integral byto ~~reference~~our business success. Although we do have an agreement to issue debentures up to an additional $250,000 and to sell equity up to $3,000,000, such agreement is dependent on the ~~Form~~holder’s ~~10-SB/A~~option ~~filed~~to ~~with~~provide the ~~Commission~~agreed onfinancing. ~~June~~Otherwise, 26we have no other commitments or arrangements for financing, ~~2006)~~though management is actively pursuing alternative arrangements for debt or equity placements. Our inability to obtain sufficient financing would have a material adverse affect on our business operations.

~~3(ii)* Bylaws~~We ofhave ~~the~~no ~~Company~~lines ~~(incorporated~~of bycredit ~~reference~~or toother ~~the~~bank ~~Form~~financing ~~10-SB/A~~arrangements ~~filed~~as ~~with~~of ~~the~~September ~~Commission on June 26~~30, ~~2006)~~2011.

~~10(i)* Employment~~We ~~Agreement~~have ~~between~~no ~~the~~commitments ~~Company,~~for ~~ComCam,~~future ~~Inc.~~capital ~~and~~expenditures ~~Don~~that ~~Gilbreath~~were ~~dated~~material ~~June~~at ~~22,~~September ~~2005 (incorporated by reference to the Form 10-SB/A filed with the Commission on June 26~~30, ~~2006)~~2011.

~~10(ii)* Amendment~~We ~~and~~have ~~Assignment~~no ofdefined ~~Convertible~~benefit ~~Debenture~~plan ~~between~~or ~~the~~contractual ~~Company~~commitment ~~and Global Convertible Megatrend, LTD, dated June 30, 2007 (incorporated by reference to the Form 10-K/A filed~~ with ~~the~~any ~~Commission~~of onour ~~January~~officers ~~14,~~or ~~2011)~~directors.

~~10(iii)* Joinder,~~We ~~Amendment~~have ~~and~~no ~~Consent~~current ~~Agreement~~plans ~~between~~for ~~ComCam, Inc.,~~ the ~~Company~~purchase ~~and~~or ~~HNI,~~sale ~~LLC~~of ~~dated~~any ~~September~~plant ~~28,~~or ~~2007 (incorporated by reference to the Form 10-QSB filed with the Commission on November 14, 2007)~~equipment.

~~10(iv)* Amendment~~We ~~Agreement~~have ~~dated~~no ~~February~~current ~~14,~~plans ~~2008 (incorporated by reference~~ to ~~the~~make ~~Form~~any ~~10-K~~changes ~~filed~~in ~~with~~ the ~~Commission~~number onof ~~April 14, 2008)~~employees.

~~10(v)* Amended~~We ~~and~~do ~~Restated~~not ~~Debenture~~expect ~~between the Company and HNI dated July 10, 2009 (incorporated by reference~~ to ~~the~~pay ~~Form~~cash ~~10-Q~~dividends ~~filed~~in ~~with~~ the ~~Commission~~foreseeable ~~on January 27, 2010)~~future.

10(vi)* Share Purchase Agreement between the Company, Pinnacle Integrated Systems, Inc., Robert Betty and Feng Brown dated December 30, 2009 (incorporated by reference to the Form 8Off-KBalance ~~filed~~Sheet ~~with the Commission on December 31, 2009).~~Arrangements

~~10(vii)* Secured~~As ~~Promissory~~of ~~Note~~September ~~from~~30, ~~Paul~~2011 ~~Higbee~~we ~~dated~~have ~~March~~no ~~31,~~significant ~~2010~~off-balance ~~(incorporated~~sheet byarrangements ~~reference~~that tohave ~~the~~or ~~Form~~are ~~10-K/A~~reasonably ~~filed~~likely ~~with~~to ~~the~~have ~~Commission~~a current or future effect on ~~January~~our 14financial condition, ~~2011)~~changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to stockholders.

~~10(viii)* Debt~~Future ~~Settlement~~Financings ~~Agreement between the Company and Paul Higbee dated March 31, 2010 (incorporated by reference to the Form 10-K/A filed with the Commission on January 14, 2011).~~

~~10(ix)* Restated~~We ~~Accord~~anticipate ~~and~~continuing ~~Satisfaction~~to ~~Agreement~~rely ~~dated~~on ~~March~~debt 24or equity sales of our shares of common stock to fund our business operations. Unfortunately, ~~2011~~there ~~(incorporated~~is byno ~~reference~~assurance that we will be able to secure the ~~Form~~financing ~~8-K/A~~requisite ~~filed~~to ~~with~~fund ~~the~~our ~~Commission~~return onto ~~May~~product 16research, ~~2011~~development or manufacture over the next twelve (12) months.

~~14* Code~~Going ~~of Ethics adopted March 24, 2008 (incorporated by reference to the Form 10-K filed with the Commission on April 14, 2008).~~Concern

~~21* Subsidiaries~~Our ~~(incorporated~~auditors byhave ~~reference~~expressed an opinion as to ~~the~~our ~~Form~~ability ~~10-K~~to ~~filed~~continue ~~with~~as ~~the~~a ~~Commission~~going onconcern ~~April~~as 16a result of an accumulated deficit of $7,638,342 as of December 31, 2010 and a working capital deficit. Our ability to continue as a going concern remains dependent on an ability to realize net income and/or obtaining financing from outside sources. Management’s plan to address our ability to continue as a going concern includes (i) increases in revenue; (ii) decreases in general and administrative costs; (iii) financing from private placement sources; and (iv) converting outstanding debt to equity. Although we believe that we will be able to remain a going concern, through the methods discussed above, there can be no assurances that such methods will prove successful.

31 Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (attached).19

~~32 Certification~~Critical ofAccounting ~~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 (attached).~~Policies

~~99* Pinnacle~~In ~~Integrated~~Note ~~Systems,~~1 ~~Inc.~~to the audited financial statements for the ~~period~~years ended December 3031, 2010 and 2009, included in our Form 10-K, we discussed those accounting policies that are considered to be significant in determining the results of operations and its financial position. We believe that the ~~years~~accounting ~~ended~~principles ~~December~~utilized 31by us conform to accounting principles generally accepted in the United States. The preparation of financial statements requires our management to make significant estimates and judgments that affect the reported amounts of assets, ~~2008~~liabilities, revenues and ~~2007~~expenses. ~~(predecessor~~By their nature, these judgments are subject to ~~ComCam~~an ~~International~~inherent degree of uncertainty. On an on-going basis, ~~Inc~~we evaluate estimates.) ~~(incorporated~~Our byestimates ~~reference~~are based on historical experience and other facts and circumstances that are believed to be reasonable, and the ~~Form~~results ~~10-KA/2~~form ~~filed~~the ~~with~~basis for making judgments about the ~~Commission~~carrying onvalue ~~March~~of 9,assets ~~2011)~~and liabilities. The actual results may differ from these estimates under different assumptions or conditions.

~~101.~~Revenue ~~INS XBRL~~Recognition ~~Instance Document†~~

~~101~~We generate revenues from product sales, consulting, installation of security systems, and support and maintenance contracts. ~~PRE XBRL~~Our ~~Taxonomy~~revenue ~~Extension~~recognition ~~Presentation~~policy ~~Linkbase†~~is as follows:

~~101~~· Development and Delivery of Security Systems - Profits on long-term contracts are recorded primarily using the percentage of completion method for individual contracts. ~~LAB XBRL~~Estimated ~~Taxonomy~~percentage ~~Extension~~of ~~Label~~completion ~~Linkbase†~~is determined on the basis of total costs expended as a percentage of total estimated costs. As our long-term contracts extend over one or more years, revisions in cost and profit estimates are reflected in the accounting period that the revisions become known. Due to the inherent uncertainties in estimating costs, it is at least reasonably possible that the estimates used will change within the near term.

~~101~~o Contract costs include all direct materials, labor, and other costs. ~~DEF XBRL~~General ~~Taxonomy~~and ~~Extension~~administrative ~~Label~~costs ~~Linkbase†~~are charged to expense as incurred. At the time a loss on a contract is expected, the entire amount of the estimated loss is recognized.

~~101~~o The asset, "Costs and estimated earnings in excess of billings on uncompleted contracts," represents revenues earned in excess of amounts billed. ~~CAL XBRL~~The ~~Taxonomy~~liability, ~~Extension~~"Billings ~~Label~~in ~~Linkbase†~~excess of costs and estimated earnings on uncompleted contracts," represents billings in excess of revenues earned.

~~101.~~Support ~~SCH XBRL~~and ~~Taxonomy~~Maintenance ~~Extension~~Revenue ~~Schema†~~– Revenue from support and maintenance agreements is recognized ratably over the term of the agreement, which in most instances is one year.

* IncorporatedService byRevenue ~~reference~~– toRevenue ~~previous~~from ~~filings~~system ofupgrades ~~ComCam~~is ~~International~~recognized as the services are performed. Revenue from training and development services is recognized as the services are performed.

~~† Pursuant~~Product toSales ~~Rule~~Revenue ~~406T~~– ofRevenue ~~Regulation~~from ~~S-T,~~product ~~these~~sales ~~interactive~~is ~~data~~recognized ~~files~~at ~~are~~the ~~deemed~~time ~~“furnished”~~the ~~and~~product ~~not~~is ~~“filed”~~shipped orand ~~part~~invoiced ofand acollectibility ~~registration~~is ~~statement~~reasonably orassured. ~~prospectus~~We ~~for~~believe ~~purposes~~that ofrevenue ~~Section~~should 11be orrecognized 12at of the ~~Securities~~time ~~Act~~ of ~~1933,~~shipment oras ~~deemed~~title ~~“furnished”~~passes ~~and~~to ~~not~~the ~~“filed”~~customer ~~for~~at ~~purposes of Section 18 of~~ the ~~Securities~~time ~~and Exchange Act~~ of ~~1934, and otherwise is not subject to liability under these sections~~shipment.

27Consulting Revenue – Revenues from consulting services are recognized when a consulting agreement is executed that establishes the amount and scope of service to be provided, the consulting services have been performed, and we have no additional rescission, refund, or customer satisfaction requirements, and collectibility of the amount billed is reasonably assured.

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 of Financial Condition and Results of Operations, with the exception of historical facts, are forward looking statements within the meaning of Section 27A of the Securities Act. We are ineligible to rely on the safe-harbor provision of the Private Litigation Reform Act of 1995 for forward looking statements made in this current report. 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:

· our anticipated financial performance;

· the sufficiency of existing capital resources;

· our ability to raise additional capital to fund cash requirements;

· uncertainties related to our business;

· increases in revenues;

· the volatility of the stock market and;

· general economic conditions.

We wish to caution readers that our 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 than as required by law.

Stock-Based Compensation

We have adopted Accounting Standards Codification Topic (“ASC”) 718, 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.

We account for equity instruments issued in exchange for the receipt of goods or services from other than employees in accordance with ASC 505. 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.

Recent Accounting Pronouncements

Please see Note 9 to our consolidated financial statements for recent accounting pronouncements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not required.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this report on Form 10-Q, an evaluation was carried out by our management, with the participation of the chief executive officer and the chief financial officer, of the effectiveness 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”)). Disclosure controls and procedures are designed to ensure that information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Commission’s rules and forms and that such information is accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

Based on that evaluation, our management concluded, as of the end of the period covered by this report, that our disclosure controls and procedures were effective in recording, processing, summarizing, and reporting information required to be disclosed, within the time periods specified in the Commission’s rules and forms, and that such information was accumulated and communicated to management, including the chief executive officer and the chief financial officer, to allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

There have been no changes in internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the period ended September 30, 2011 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Our 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 business, financial condition, and/or results of operations as well as the future trading price and/or the value of our securities.

Risks Related to our Business

OUR ABILITY TO CONTINUE AS A GOING CONCERN IS IN QUESTION

Our auditors included an explanatory statement in their report on our consolidated financial statements for the years ended December 31, 2010 and 2009, stating that there are certain factors which raise substantial doubt about our ability to continue as a going concern. These factors include an accumulated deficit and working capital deficit.

WE HAVE A HISTORY OF LOSSES AND MAY INCUR LOSSES FOR THE FORESEEABLE FUTURE

We had an accumulated deficit of $9,118,131 as of September 30, 2011 and a net operating loss. We do expect net income in the next twelve months but can provide no assurance to this end. Should we realize net income in the near term we can provide no assurance that we will be able to sustain net income over time.

WE 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 limited 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, our 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 OUR PRODUCTS COULD BECOME OBSOLETE AT ANY TIME

Evolving technology, updated industry standards, and frequent new product and service introductions characterize the video surveillance systems and security integration services markets; 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 our 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 OUR PRODUCTS IS CRITICAL TO OUR GROWTH

We generate revenue from the design and sale of video surveillance systems and security integration services; 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.

WE COMPETE WITH LARGER AND BETTER-FINANCED CORPORATIONS

Competition within the international market for video surveillance systems and security integration services is intense. While our products are distinguished by next-generation innovations that are more sophisticated, flexible and cost effective than many competitive products currently in the marketplace, 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.

WE ARE LARGELY DEPENDENT UPON FEW CUSTOMERS

We have in the past, and may in the future lose our customers or a substantial portion of our business with one or more major customers. If we do not sell products to our existing customers in the quantities anticipated, or if our customers reduce or terminate their relationships with us, market perception of our products and technology, growth prospects, and financial condition and results of operations could be harmed. Any termination of our relationship with our largest customers or any other customers could materially reduce our revenue.

WE DEPEND ON ONE MANUFACTURER AND LIMITED SOURCE SUPPLIERS

Pennsylvania-based Strategic Manufacturing Technologies, Inc. currently procures our components and manufactures 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 dependence 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 we would have to identify and qualify acceptable replacements from alternative sources of supply. If we were unable to obtain these components in a timely fashion, we 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 SUCCESS DEPENDS ON THE ABILITY TO ATTRACT AND RETAIN KEY PERSONNEL

Our future success will depend substantially on the continued service and performance of Don Gilbreath, Robert Betty and other key personnel. We have relatively few senior personnel, and so the loss of Don Gilbreath, Robert Betty 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 our 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 also depends significantly on protecting proprietary technology. Despite our efforts to protect our 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. 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 we fail or are 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.

OUR BUSINESS IS SUBJECT TO GOVERNMENTAL REGULATIONS

International, national and local standards set by governmental regulatory authorities set the regulations by which communications are transmitted within and across respective territories. Our 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. Further, climate change legislation and greenhouse gas regulation is becoming increasingly ubiquitous. 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.

OUR 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, we 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.

Risks Related to our Stock

WE WILL NEED TO RAISE ADDITIONAL CAPITAL TO FUND AN EXPANSION OF OPERATIONS WHICH COULD ADVERSELY AFFECT OUR SHAREHOLDERS

We will need to raise additional capital to fund an expansion of operations up to $3,000,000. Capital realized would be used for research and development expenses, product manufacture, marketing costs and performance bonds. We have no commitment from any sources of financing to provide us with any needed capital requirements. Any equity financing will obligate us to issue additional shares of our common stock which would result in dilution to existing shareholders.

We incur significant expenses as a result of being REGISTERED WITH THE COMMISSION, which EXPENSES negatively impact our financial performance.

We incur significant legal, accounting and other expenses as a result of the Sarbanes-Oxley Act of 2002, as well as related rules implemented by the Commission, which control the corporate governance practices of public companies. 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, has substantially increased our expenses, including legal and accounting costs, and made some activities more time-consuming and costly.

Our common stock is currently deemed to be “penny stock”, which makes it more difficult for investors to sell their shares.

Our common stock is and will be subject to the “penny stock” rules adopted under section 15(g) of the Exchange Act. The penny stock rules apply to companies whose common stock is not listed on the NASDAQ Stock Market or other national securities exchange and trades at less than $5.00 per share or that have tangible net worth of less than $5,000,000 ($2,000,000 if the company has been operating for three or more years). These rules require, among other things, that brokers who trade penny stock to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances. Many brokers have decided not to trade penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. If we remain subject to the penny stock rules for any significant period, it could have an adverse effect on the market, if any, for our securities. If our securities are subject to the penny stock rules, investors will find it more difficult to dispose of their securities.

OUR STOCK PRICE IS VOLATILE

The market price for our common stock is subject to significant volatility and trading volumes are low. Factors affecting our stock price could include:

· our 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 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 or our competitors;

· announcements of legal claims against us;

· market reaction to any acquisitions, joint ventures or strategic investments announced by us or our competitors;

· developments in the financial markets;

· general economic, political or stock market conditions.

In addition, our 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 our 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.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Purchases of Equity Securities made by the Issuer and Affiliated Purchasers

None.

Recent Sales of Unregistered Securities

On October 13, 2011 we issued 400,000 shares of common stock in exchange for services valued at $180,000 or $0.45 per share, pursuant to exemption provided by Section 4(2) of the Securities Act, to the following entities:

*Investor*	*Shares*	*Consideration*
Integra Consulting Group LLC	200,000	$90,000
Crucible Capital Group, Inc.	200,000	$90,000
*Totals*	*400,000*	*$180,000*

We made this offering pursuant to Section 4(2) of the Securities Act based on the following factors: (1) the issuances were isolated private transactions which did not involve a public offering; (2) the offerees have access to the kind of information which a registration would disclose; and (3) the offerees are financially sophisticated.

On October 7, 2011 we issued 220,000 shares of common stock in exchange for services valued at $99,000 or $0.45 per share, pursuant to exemption provided by Section 4(2) of the Securities Act, to the following individual and entity:

*Investor*	*Shares*	*Consideration*
KTK Strategic Development Group	100,000	$45,000
Greg Palmacci	120,000	$54,000
*Totals*	*220,000*	*$99,000*

On September 21, 2011 we issued a convertible debenture to La Jolla Cove Investors, Inc. in exchange for $50,000 which accrues interest of 4 ¾ % per annum, is convertible at the option of the holder and matures on September 21, 2015 in reliance on Section 4(2) of the Securities Act.

On July 5, 2011 we issued 65,385 shares of common stock in exchange for $34,000 in cash or $0.52 per share and 177,000 shares of common stock in exchange for $65,490 in services rendered or $0.37 per share, in reliance on Section 4(2) of the Securities Act, to the following individual and entity:

*Investor*	*Shares*	*Consideration*
Louis A. Woods	177,000	$65,490
SeaFin Capital LLC	65,385	$34,000
*Totals*	*242,385*	*$99,490*

We made this offering pursuant to Section 4(2) of the Securities Act based on the following factors: (1) the issuances were isolated private transactions which did not involve a public offering; (2) the offerees have access to the kind of information which registration would disclose; and (3) the offerees are financially sophisticated.

ITEM 3. DEFAULTS ON SENIOR SECURITIES

None.

ITEM 4. (REMOVED AND RESERVED)

Removed and reserved.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page 30 of this Form 10‑Q, and are incorporated herein by this reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ComCam International, Inc.

Date

/s/ Don Gilbreath

By: Don Gilbreath

Chief Executive Officer, Chief Financial Officer, Principal

Accounting Officer and Director

November 18, 2011

INDEX TO EXHIBITS

Exhibit 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)* 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(ii)* Amendment and Assignment of Convertible Debenture between the Company and Global Convertible Megatrend, LTD, dated June 30, 2007 (incorporated by reference to the Form 10-K/A filed with the Commission on January 14, 2011).

10(iii)* Joinder, Amendment and Consent Agreement between ComCam, Inc., the Company and HNI, LLC dated September 28, 2007 (incorporated by reference to the Form 10-QSB filed with the Commission on November 14, 2007).

10(iv)* Amendment Agreement dated February 14, 2008 (incorporated by reference to the Form 10-K filed with the Commission on April 14, 2008).

10(v)* Amended and Restated Debenture between the Company and HNI dated July 10, 2009 (incorporated by reference to the Form 10-Q filed with the Commission on January 27, 2010).

10(vi)* Share Purchase Agreement between the Company, Pinnacle Integrated Systems, Inc., Robert Betty and Feng Brown dated December 30, 2009 (incorporated by reference to the Form 8-K filed with the Commission on December 31, 2009).

10(vii)* Secured Promissory Note from Paul Higbee dated March 31, 2010 (incorporated by reference to the Form 10-K/A filed with the Commission on January 14, 2011).

10(viii)* Debt Settlement Agreement between the Company and Paul Higbee dated March 31, 2010 (incorporated by reference to the Form 10-K/A filed with the Commission on January 14, 2011).

10(ix)* Restated Accord and Satisfaction Agreement dated March 24, 2011 (incorporated by reference to the Form 8-K/A filed with the Commission on May 16, 2011.

14* Code of Ethics adopted March 24, 2008 (incorporated by reference to the Form 10-K filed with the Commission on April 14, 2008).

21* Subsidiaries (incorporated by reference to the Form 10-K filed with the Commission on April 16, 2010).

32 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 (attached).

99* Pinnacle Integrated Systems, Inc. audited financial statements for the period ended December 30, 2009 and the years ended December 31, 2008 and 2007 (predecessor to ComCam International, Inc.) (incorporated by reference to the Form 10-KA/2 filed with the Commission on March 9, 2011).

101. INS XBRL Instance Document^†

101. PRE XBRL Taxonomy Extension Presentation Linkbase^†

101. LAB XBRL Taxonomy Extension Label Linkbase^†

101. DEF XBRL Taxonomy Extension Label Linkbase^†

101. CAL XBRL Taxonomy Extension Label Linkbase^†

101. SCH XBRL Taxonomy Extension Schema^†

* Incorporated by reference to previous filings of ComCam International.

^†Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, and otherwise is not subject to liability under these sections.

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