ALLNET SECOM (ASZ-CDNX)

Websites: www.allnetsecom.com www.ecomcards.com

Overview

Like many companies Allnet Secom Inc. took a hit when the market for technology stocks collapsed. The company’s been trading around 20 cents although its president and CEO Michael Mueller believes it is very undervalued given the current business situation and Market potential.
Allnet Secom is currently negotiating for an equity investment to give him working capital he needs to feed the demand for digital video security systems which has jumped in the wake of the September 11 terrorist attacks in the U.S.

Allnet Secom is a Canadian company with two wholly-owned operating divisions. These are VidSecure Inc. (remote monitoring products) and Allnet Communications Inc. (telecommunications products and services.)

Mueller says it is a home-grown digital recording system that sets the VidSecure side of his business apart from its competitors.

''Digital now is the 'in' thing in recording today,'' he says. Videotapes have been used for security monitoring purposes for about 15 years or so. People using videotapes, however, found it is tedious and time-consuming work to examine hours of taped footage.

Mueller says VidSecure has developed proprietary software to eliminate that problem. VidSecure’s new digital system records only on motion - only when events actually happen. The system is not triggered unless there is unusual activity, thus eliminating the need to scrutinize much recorded footage.

Mueller explains how the VidSecure system works. Thieves breaking into a jewellery store, for example, would activate cameras and the video system would call a monitoring station or it could be set to call four different locations (including a pager or a cell phone, for example.) Monitoring stations would automatically receive the video feed so they could let the police know that there was somebody on the site. ''They could even send them a picture of a face, so the police know exactly who they are looking for on the way over there,'' says Mueller.

''Right now we are talking to different police departments about them having the system right on board the police cruisers.''

The system's biggest bonus is that it is Window-based, which means that the company can take recorded footage, put it on a disk, send it to the police who can put it in their computer and watch it. ''They don’t need any proprietary software; it all works of a Windows media player which is a huge advantage.''

The system could have other uses than security. ''It could be used for many different applications - monitoring gauges, even say on TransCanadaPipeLines where you have different junction points where gauges should be monitored. We can have cameras pointed at the gauges.''

''We developed the software portion of the VidVision system in-house. It is the software that adds most of the features. The video card is really the only thing we use from other people. You really have to see the system working to see the full effect of what it can do. We will have a system up on our site that you can just click on cameras and see the quality and the speed of the frames. It will be available at www.vidsecure.com.''

The events of September 11 made remote surveillance ''a little bit more of a priority for people,'' says Mueller.

New digital equipment was already having an impact on the market even before September 11. ''Growth in the security market was already quite large,'' says Mueller.

The company's strategy with VidSecure is to grow from within. ''We do a lot of corporate sales out of Toronto with VidSecure. But really now where the growth is happening is our dealer base. We have about 28 dealers across Canada. We plan on increasing that to at least 100 by the end of the year. We are also making a large push across the U.S. as well with the system. We are contacting all the places that, since September 11, are really hot to get new products on - airports and places like that. So we are making inroads in that sense. The dealer base with VidSecure is really where there is going to be the largest growth. We signed a dealer in Britain and he has just started selling our product as well.''

Mueller is also enthusiastic about Allnet Communications Inc., the other corporate arm.

''What's exciting is that we are offering one-stop shopping, meaning you can get all your cabling needs, all your electrical needs, all your telecommunications needs (including telephone and voice mail systems) and your network needs in one place.''

VidSecure has been in business for about four years and Allnet Communications has been around for about seven years.

Allnet Secom expects to have a small loss this year (2001) but expects to show a profit by the end of 2002.

Allnet Secom says it is positioning itself as a one-stop multi-communications, electrical and security company. It believes there are profitable and growing opportunities available to it by aiming superior products at niche markets.

The company claims it is unique in that it operates on multiple channels simultaneously as importers, manufacturers, and distributors of turnkey digital video surveillance equipment to the security systems dealer marketplace as well as being an installing dealer to a local commercial end-user market. By offering customers a complete solution, it is able to maximize on its labour costs and the customer is able to save on installation costs.

Why should investors consider putting their money into Allnet Secom? Mueller is asked.

''Personally I think we are on a huge growth spurt right now. We are all very hard workers. We know what we have here. The system is pretty incredible and we have some great people behind us here.''