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OTC STOCK REVIEW NEWSLETTER

Compliance Systems Corp. (OTCBB: COPI $0.023)

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If you're sick of trying to guess which way the market is headed, or if it's time to buy, maybe you should focus on low priced stocks with solid business plans. After all, these stocks have been beaten down with the larger stocks and a small move can return a great profit. Take a look at Compliance Systems Corp. (OTCBB: COPI). The stock is at 2.3 cents and has traded as high as $0.09 earlier this year. Since then, investors have seen nothing but good news. This is a great company with a real business and BIG customers. Buy it like any other stock. If you trade online, enter the ticker COPI, the number of shares, and a limit price. You can also call your broker.

We gave you COPI at $0.007 in December and told you this low-priced stock could move significantly higher after the first of the year. Those of you who followed our lead have already seen a triple. With the volume we have been seeing, we believe the fat's in the fire, so to speak, and the stock will be heading back towards the year high.
Compliance Systems Corp. (OTCBB: COPI) is a small company on the verge of breaking into two big, new markets. COPI's patented TeleBlock Call Blocking System helps telemarketing operators ensure compliance in the highly regulated Do-Not-Call environment by automatically screening and blocking outbound calls against federal, state, and in-house Do-Not-Call lists. Since 1999, TeleBlock has a perfect record, over six billion error free calls since its commercial introduction. No TeleBlock Subscriber has been fined in nine years.
Here is why you might want to buy the stock. There are two catalysts that, in our opinion, could move the stock price to much higher levels. First, Canada just had Do-Not-Call legislation go into effect on September 30, 2008. Much like the Do-Not-Call rules in the U.S., Canadians can now sign up to prevent telemarketers from contacting them. The second reason we are bullish on COPI is that the primary distributor of its TeleBlock technology, VeriSign, Inc. (NASDAQ: VRSN), entered into a Managed Service Agreement with AT&T Services, Inc. on September 5, 2008 to make COPI's TeleBlock technology available to its telemarketing customers. Like COPI's arrangements with other carriers, AT&T’s customers will pay a fee for each inquiry to the Do-Not-Call database, regardless of whether the telephone number appears on a Do-Not-Call list. COPI pays VeriSign a portion each such fee for hosting and managing the platform. In our opinion, since AT&T serves millions of businesses, including all of the Fortune 1000, this opportunity could result in exponential revenue growth for COPI.
How It Works
Without getting too technical, COPI's TeleBlock works at the signaling level of a telephone call. Many years ago, in an effort to reduce traffic on their networks, the telephone companies started using an out of band signaling platform, known as SS7, to set up and manage the routing of telephone calls in a separate network rather than within the same network that the voice portion of a telephone call is made on. If you place a call, the SS7 platform gives you a busy signal if the line is in use. VeriSign operates the largest independent SS7 network in the world with direct access to carriers throughout North America and worldwide. Obviously a great partner for a small company. TeleBlock is based on COPI’s patented technology which runs on VeriSign’s SS7 network and lets service providers access federal and state Do-Not-Call lists without requiring new connectivity by VeriSign’s carrier customers.
Do-Not-Call Regulations
Failure to fully comply with Do-Not-Call rules can reach $25,000 per infraction. The federal rules in the U. S. pose more serious challenges, with fines ranging up to $11,000 per call violation. If that is not enough, consumers have the authority to bring a civil action against the violating party and potentially recover civil penalties inclusive of court costs, attorney fees and monetary fines. In Canada, CRTC can levy penalties of up to $1,500 for an individual and $15,000 for a corporation, for each call violation.
The difference between 100% and 99.9% compliant is very costly. A call center making 100,000 calls per month with a 99.9% compliance rate ends up making 100 calls to Do-Not-Call numbers. Based on federal penalty guidelines, this equates to upwards of $1.1 million in fines. Simply put, Call Centers can not afford to be without COPI's TeleBlock. There is no comparable product on the market and now it is available to customers of AT&T, which makes up a major portion of the TeleCom industry revenues. To sweeten the pot for shareholders, Canadian telemarketers must get compliant with the new regulations, fast. As new customers are added, revenues should increase. As revenues increase, we believe the market capitalization of COPI will expand, resulting in a much higher stock price.
Financials
COPI has a market capitalization less than its annual revenues. In fact, COPI has a market cap of roughly $1 million even though the Company posted $1.4 million in revenues for the nine months ending September 30, 2008.
Revenues for Q3 '08 were $480,642 versus $509,190 for Q3 '07. COPI posted a net loss of $295,741 in Q3 '08 compared to $177,708 for Q3 '07. Management had anticipated a decrease in revenues generated from clients in industries hit hard by the recent economic downturn. In an effort to make up lost revenues, COPI is expanding its product line and service offerings by acquiring other entities; negotiations with a wholesale VoIP (Voice-over-Internet-Protocol) transport company have commenced and COPI management hopes a definitive agreement will be signed shortly. COPI management is also actively exploring other potential acquisition targets.
For the nine months ended September 30, 2008, revenues were $1,426,270 versus $1,348,273 for the same period in 2007. COPI had a net loss of $916,272, or $0.01 per share, for the nine month period compared to $917,423, or $0.02 per share, in 2007.
Growth Strategy
COPI was granted patent protection in Greece for a modified version of the TeleBlock system in February 2006. This patent protection could apply throughout the European Union, which could enable COPI to market the TeleBlock technology in Europe, as the EU countries implement Do-Not-Call programs similar to those in the U.S and Canada.
Voice over IP allows TeleBlock usage anywhere in the world and in areas where COPI lacks distributors locally. VoIP telephone service gives domestic companies that have existing contracts with telephone carriers that do not license TeleBlock the ability to obtain the TeleBlock service. COPI is in talks with several industry leaders to offer this VOIP version of TeleBlock, first deployed through VeriSign in November 2002. Currently, more than 40 telephone carriers and resellers, including AT&T, Qwest, Verizon Business, XO, and Paetec, have licensed TeleBlock and offer it to their telemarketing customers.
Currently, COPI's VoIP service is available at www.citadeltel.com. The Citadel TeleBlock service provides COPI with another avenue by which TeleBlock can be offered to the teleservices industry. Citadel is currently providing US dial tone with TeleBlock through out the USA and in countries such as India, Mexico, the Dominican Republic and Canada. COPI recently launched TeleBlock Office through Citadel, which delivers a powerful tool for teleservices employees who work remotely or agents who are representing a company's products and services.
Summary
Opportunities in the stock market are not always so clear-cut, and certainly do not happen often. COPI has a tremendous opportunity to generate significant revenues through its relationship with VeriSign and AT&T, the new Do-Not-Call legislation in Canada, and by delivering TeleBlock over its own VoIP platform.
Since the carriers bill their customers for TeleBlock, COPI has no credit risk with respect to the end-users. Carriers pay a contractually determined amount on a per query basis.
The stock, which now trades for $0.023 a share, traded for $1.56 less than 24 months ago.
In our opinion, investors who purchase shares of COPI at these levels will be able to take profits off of the table at higher prices while maintaining a long term position at zero or reduced cost.
Current Quote: $0.023

Shares Outstanding: 140.1 million

Market Cap: $3.22 Million
52-Week Low: $0.005

52-Week High: $0.09

Corporate Offices:

90 Pratt Oval
Glen Cove, NY 11542

Phone: [phone]
Email:
[e-mail]
Website:
www.callcompliance.com

Since 1999, TeleBlock has a perfect record, over six billion error free calls since its commercial introduction. No TeleBlock Subscriber has been fined in nine years.


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“…TeleBlock® is a cost effective, straightforward tool to comply with the FCC's rules, the FTC's rules, and the various state rules governing telephone solicitations…"
Steve Carter, Attorney General of Indiana, in comments before the FCC, CG No. 02-278



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Forward Looking Statements: Certain statements in this release constitute forward-looking statements or statements which may be deemed or construed to be forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "forecast," "project," "intend," "expect" "should," "would," and similar expressions and all statements, which are not historical facts, are intended to identify forward-looking statements. These forward-looking statements involve and are subject to known and unknown risks, uncertainties and other factors which could cause the Company's actual results, performance (finance or operating) or achievements to differ from future results, performance (financing and operating) or achievements expressed or implied by such forward-looking statements.