UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
    1934

                                     For the fiscal year ended December 31, 2003
                                                     Commission File No. 0005468

                          COMMUNICATIONS RESEARCH, INC.
                          -----------------------------
              (Exact name of small business issuer in its charter)

                  NEVADA                                         22-2991753
                  ------                                         ----------
      (State or other jurisdiction                            (I.R.S. Employer
      incorporation or organization)                         Identification No.)

67 RAMAPO VALLEY RD, SUITE 103, MAHWAH, NJ                          07430
------------------------------------------                          -----
     (Address of principal offices)                               (Zip Code)

       Registrant's telephone number, including Area Code: (201) 684-0880

        SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: NONE

           SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE ACT:
                     COMMON STOCK, PAR VALUE $.001 PER SHARE
                     ---------------------------------------
                                (Title of Class)

Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the past 12 months,
and (2) has been subject to such filing requirements for the past 90 days.
[x] Yes  [  ] No

Check if there is no disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]

The issuer's revenues for the fiscal year ended December 31, 2003 were $94,859

Aggregate market value of voting stock (A Common only) held by non-affiliates of
registrant (deemed by registrant for this purpose to be neither a Director,
Officer or active employee of the registrants company) computed by reference to
the SB-2, AMENDMENT 4 dated May, 1, 2002, "DETERMINATION OF SHARE PRICE" sets
the per share value as .35 cents per share, with 8,259,050 non-affiliate shares
for an aggregate market value of $2,890,667.

Number of shares outstanding of registrant's Common Stock, as of December 31,
2003 were 12,216,550 shares

DOCUMENTS INCORPORATED BY REFERENCE

Registrants SB2, AMENDMENT 4, dated May, 1, 2002, is herein incorporated by
reference throughout PART I, II and III of this report.

Transitional Small Business Disclosure Format (check one) Yes  x   No
                                                              ----    ----

<PAGE>

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This document contains forward-looking statements as defined in Safe Harbor
under the Private Securities Litigation Reform Act of 1995. Forward-looking
statements may involve known and unknown risks, uncertainties and other factors
that may cause actual results and performance in future periods to be materially
different from any future results or performance suggested by these statements.
The company cautions investors not to place undue reliance on forward-looking
statements, which speak only to management's expectations on this date. The
Company does not undertake any obligation to publicly release any revisions to
these forward-looking statements to reflect events or circumstances after the
date hereof or to reflect the occurrence of unanticipated events.

This discussion in this Annual Report regarding Communications Research and our
business and operations contains "forward-looking statements." These
forward-looking statements use words such as "believes," "intends," "expects,"
"may," "will," "should," "plan," "projected," "contemplates," "anticipates," or
similar statements. These statements are based on our beliefs, as well as
assumptions we have used based upon information currently available to us.
Because these statements reflect our current views concerning future events,
these statements involve risks, uncertainties and assumptions. Actual future
results may differ significantly from the results discussed in the
forward-looking statements. A reader, whether investing in our common stock or
not, should not place undue reliance on these forward-looking statements, which
apply only as of the date of this report.

When used in this Annual Report on Form 10-KSB, "Communications Research," "we,"
"our," and "us" refers to Communications Research, Inc., a Nevada corporation,
and our subsidiaries.

PART I

ITEM 1.  DESCRIPTION OF BUSINESS

OVERVIEW

        Our Company was incorporated in New Jersey on August 11, 1989. From our
inception until 1992, we had acted as consultants and engineers providing
research and development for manufacturers and clients using RF Broadband
technology for video and data products. In 1992, with data and video networking
migrating away from RF and CATV equipment to twisted pair cable and fiber
optics, we began to design and install Local Area Networked video and data
communication systems, primarily for the Health Care market. In 1994, we began
to design and install video conference and video presentation systems as well.
It was during that period, to meet the requirements of a military location, the
company developed a desktop video conference and distant learning system to meet
their anticipated training needs.

        We became a wholly owned subsidiary of Visual Telephone of New Jersey,
Inc., a publicly traded Delaware corporation ("Visual of New Jersey") on July
17, 1996. With the merger, Visual of New Jersey changed its name to Visual
Telephone International, Inc. ("Visual Telephone") in September of 1996. We
operated as a wholly owned subsidiary of Visual Telephone until May 21, 1999,
when our shares were distributed to the shareholders of Visual Telephone
pursuant to an Agreement and Plan of Reorganization dated May 14, 1999 (the
"Reorganization Agreement") by and among us, to the shareholders of record as of
close of business on May 21, 1999. Since May 21, 1999, we have operated as a
separate and autonomous entity. On July 15, 1999, we completed a change of
domicile pursuant with merger agreement which changed our state of domicile from
New Jersey to Nevada. In November 1999 the company purchased the assets of
Optel, Syosset, NY, the principle asset being the exclusive rights to the
Tele-Writer-AGS (Advanced Graphics System) software. The company incorporated
Tele-Writer Corporation, Inc. to continue with the product development and
planned marketing of the software system.

        We presently design, develop, install and support visual communications
systems that process, display and transmit video, audio and data. We have two
autonomous internal divisions. Our Systems Integration Division designs,
develops and installs sophisticated data, audio and video systems. Our Special
Systems Consulting Division provides clients with design, development, bid
specifications, cost consulting and project management of audio, video, data,
and communications systems and is our core business.

        The diversity of technology we span lends itself to several
applications, both within a particular business and throughout an enterprise or
institution. Our ability spans the gamut of electronic communications. Our
customers need to communicate within their organization and/or reach a diverse
audience at many remote locations.

                                       2
<PAGE>

Very often we begin working with a client to provide a specific system or
technology solution and find our scope of work expand to include other
technology systems.

        We have designed and installed electronic systems to be used as video
conferencing systems, distance learning systems, audio/visual presentation
systems, security/surveillance systems, broadcast and sophisticated campus
distribution systems. Our systems combine data, voice and video transmission in
an efficient and cost effective manner to meet client needs.

        In 2002, the company decided to phase out our line of PC Based desktop
video conferencing products. Our line of video conferencing products that
featured our proprietary Visual-EZ and Communicator products will be frozen and
only existing client systems shall continue to be supported. This decision was
made as the cost to maintain compliance with new PC operating systems and
evolving International Standards compliance was not justified by revenues
generated from sales. The company does own and will continue to support and
develop the collaboration software embedded into the Visual-EZ operating system,
that being the TeleWRITER AGS system and has made an agreement to resell and
support the Polycom series of products.

        The following sets forth a breakdown, by industry, segment of our sales
revenues to unaffiliated entities, sales to related entities, operating profit
or loss and identifiable assets.

INDUSTRY BACKGROUND

        Communication systems play a pivotal role in how industry utilizes
corporate information to satisfy its strategic goals. Networked resources allow
businesses to transmit and track information necessary to manage their
operations. Telecommunication connectivity is the backbone that allows the
transport of this information, in the form of data, voice or video between
employees, management and even customers. Multimedia presentations which utilize
data, voice and full motion video transmission have become an effective means
for communicating ideas, statistics and information at costs significantly lower
than long distance personal presentations.

        Communication technology has evolved in great leaps over the last
several years, yielding high quality digitally compressed, full motion video
capabilities at reduced costs for many applications other than the tradition
video conferencing and distant education. Reduced costs have led to an increase
in options for users. Increased communications options lead to user confusion
and the need to provide guidance and expertise. We believes that the trends of
advancing technology and convergence of technology will continue, yielding
improved productivity and profitability for businesses that have planned their
communications strategies carefully, and we have positioned ourselves to provide
the knowledge and expertise necessary for the deployment of this ever advancing
technology.

DESCRIPTION OF OUR BUSINESS SEGMENTS

        SYSTEMS INTEGRATION DIVISION.
        -----------------------------

        We, through our Systems Integration Division, provide our clients with
sophisticated communications solutions designed to fulfill their strategic
needs. We provide the knowledge and experience necessary for the deployment of
both analog and digital, voice and video technology. We have been providing the
development, design, integration and support of large scale security,
surveillance, audio/visual, professional video and computer/network systems
since 1989. Our Systems Integration Division accounts for approximately 40% of
our business. This division has no foreign operations and no material foreign
sales.

        Supplies, materials and testing equipment used by our System Integration
Division are supplied by various manufacturers and sources. We believe that the
various components, parts and equipment used by our Systems Integration Division
are readily available from a diverse assortment of suppliers. The company
strives to be vendor independent, allowing us to design solutions that fit the
client's needs and are correct to meet project goals defined. This eliminates
the need for us to maintain an excessive level of inventory. The elimination of
any one supplier would not have a material effect on our ability to design and
install systems.

        SPECIAL SYSTEMS CONSULTING DIVISION.
       ------------------------------------

         We offer an array of consulting services as; full system
design/specification service, configuration, program development, cost
consulting, user training, installation management and technical support. Our
Communications

                                       3
<PAGE>

Consulting operations begins with a discussion with the client's management team
to review the client's current requirements and assess their current and future
needs. Existing systems are tested, documented and mapped to aid in the
diagnosis of problems, potential problem areas and to determine what part of
existing systems, if any, can be recovered and incorporated into a client's new
and improved design. A programming review is conducted with the client to
determine actual requirements and budget constraints. A functional design and
implementation plan is established based upon the budget, current and projected
needs, of the client. Upon approval of our preliminary plans, a full design is
prepared with construction details and specifications for the client to bid the
project. After award to successful bidder, our engineers and project managers;
coordinate, manage and test the system through completion, as part of the second
phase support program.

        GOVERNMENT BUSINESS.
        --------------------

        We are qualified and registered to do business with all branches of the
federal government. Our location provides us with a strategic advantage when
bidding on projects for federal, state and local governments in the Middle
Atlantic region

        In June 1999, we were awarded a New Jersey State contract for
telecommunications consulting and technical services. In June; 2003, upon
performance review the per-project cap was increased to $1,500,000.00 value per
project. This is a contract renewed every two years, and will be renewable on or
before expiration by June 30, 2005, upon review of performance and negotiation
of rates. As of this date, we have been awarded projects for engineering and
technical services under this contract and retain our New Jersey Department of
Management and Construction (NJ DPMC) status as a state qualified consulting
firm. No assurances can be given that any additional projects will be awarded to
us pursuant to this contract.

        We are a qualified contractor for bidding in the Commonwealth of
Pennsylvania for video conferencing, distant learning, audio/visual, multimedia,
audio, graphic and image display system projects. This qualification is renewed
annually and is not subject to review or re-negotiation. This work is highly
competitive, requires installation and other personnel to be residents of
Pennsylvania.

        On February 17, 2004, we were qualified by the New Jersey Commerce &
Economic Growth Commission for school construction projects that fall under
Management Interventions, Inc., for the State of New Jersey.

        RECENTLY COMPLETED PROJECTS.
        ----------------------------

        Our Systems Special Systems Consulting or System Integration Division is
currently working on the following governmental or public projects:

                  Ramapo College of New Jersey, Mahwah, NJ
                  Dater Jr. High School, Ramsey, NJ
                  NJEdge, new Statewide College and University Network
                  Sussex Community College, Sussex, NJ
                  First Seventh Day Adventist Church, Teaneck, NJ
                  Mt. Olive Baptist Church, Hackensack, NJ
                  City of Lodi, Lodi, NJ

        We have enjoyed business relationships with the following architectural
and engineering firms:

                  H2L2 Partners, Philadelphia, PA
                  GBQC Architects, Philadelphia, PA
                  LAN Associates, Inc. Midland Park, NJ
                  SNS Partnership, Montvale, NJ

        Current government, education and public projects represent
approximately 40 percent of our revenues. However, one large system project in
either the public or private sector could dramatically change this percentage.
Recently with the economic climate, many large projects have been suspended or
cancelled with reductions in funding for higher education in the State of New
Jersey.

                                       4
<PAGE>

         We are in the process of making application for the New Jersey State
Contractor's License. No guaranty can be given that the State will grant this
authorization.

MARKETING AND SALES STRATEGY.

        We focus our sales and marketing efforts on developing strategic
alliances with equipment manufacturers ("OEMs"), Architects and service
providers. This permits us to act as a vendor for the OEM, Architectural Firm or
service provider, sub-contracting our engineering, integration and installation
into the OEM's products, Architects Specifications or other service provider's
scope of work. We rely on the sales efforts of the sales professionals employed
by our business affiliates. This philosophy allows us to function without the
added burden of a large direct sales force. Additionally, we directly market our
services to Fortune 500 companies, federal, state and local governments, the
military, Department of Defense, courts and education institutions. The company
has become a boutique consulting engineering firm and engineering contractor
with its diverse understanding and competency, providing a broad range of
technology solutions.

        We have enjoyed business relationships with the following equipment
manufacturers:

                  AutoPatch Division of XN Technology, Chency, WA
                  Baxall, Denver, CO and Baxall Limited, Great Britain,
                  Crestron, Creskill, NJ
                  Extron Electronics, Anaheim, CA
                  Steward Filmscreen Corporation, Torrance, CA
                  Siemon Corporation, Waterbury, CT

        The company is a qualified System Consultant in the Siemon
Engineer/Contractor program. The term of the qualification expires on May 14,
2005. Siemon Corporation has recommended and assigned projects to the company
under this agreement in the past two years.

        While we strive to maintain such relationships, no assurances are given
that it will be able to do so or whether it will be able to develop new
relationships with other manufacturers and suppliers.

        We do not believe that the business generated by our Systems Integration
Division is seasonal. While our Systems Integration Division does a significant
amount of business with agencies of federal, state and local governments, we are
not dependent upon the business of one or a few customers, the loss of any one
or more of which would have a material adverse effect upon our operations. No
single customer of our Systems Integration Division is responsible for 10% or
more of our aggregate sales.

While our Systems Integration Division employs pricing and payment terms that
our management considers competitive, we do not employ extended payment terms or
liberal return policies that could have a materially adverse effect on our
operations. This division's sales varies with the timing and scope of the
projects booked. In most cases, backlog varies between two weeks and four
months.

ADVERTISING AND PROMOTION

        The Company shall launch an updated TeleWRITER Corporation website in
2004 which provides potential clients with detailed capability and technical
information about TeleWRITER-AGS, its principle product,. The WEB address of the
new site is either www.telewriterags.com or www.telewriter-ags.com. We will look
into on-line ordering for TeleWRITER products and updates, when reasonable, for
better client notification and easier ordering.

        The Company WEB site is under revision and will provide information on
the Engineering Consulting and Systems Integration and divisions of the company.
The WEB address for that site is www.cri-inc.biz , with the former address
www.vistele.com, still remaining in operation at least through the end of 2004.

        In addition, the company website will offer, information for investors,
new releases, vendor/manufacturers represented and client specific log-in area
for e-mail, project scheduling and system updates for clients with access. The
Company will continue to make improvements and expand its website. We will look
into posting any product specials or inventory closeouts for better client
notification and easier ordering.

                                       5
<PAGE>

        The primary advertising medium used to attract new clients shall be
advertisement placement in trade publications, placed in strategic issues, as
convention and exhibition issues. The Company will place increased emphasis in
2004 on expanding its advertising, public relations and investor relations
strategies for both the company and Tele-Writer. The Company will continue to
expand its advertising efforts as we anticipate our sales and marketing spending
will grow dramatically in 2004. The Company also plans to promote specific
technologies or completed projects in trade publications. The company has
received a considerable amount of exposure from being featured in System
Contractor News. We plan to continue this method of exposure and marketing.

DOCUMENTATION AND QUALITY ASSURANCE.

        Truly effective communications systems require easy and inexpensive
maintenance. Maintenance costs are reduced by employing accurate and easy to use
documentation. We identify, track, and map all cable runs and devices utilized
in a system. Cable test results and certification runs are compiled and
documented to provide quality assurance. The company replaced three Window 98
workstations with new Windows XP systems, Microsoft Office 2003, and Microsoft
Project. We provide complete sets of prints reflecting cable runs, equipment
location and functional interconnect details for all systems that it engineers
and installs. The company added a new AutoCad 2004 station and its first
Architectural Desktop system, by Autodesk, for development and design, including
upgrading the existing two AutoCad 2000 stations to AutoCad 2004.

        Our mapping documentation becomes a most useful maintenance tool.
Documentation is supplied on CD's that can be readily modified. When clients are
unable to provide digitized floor plans of their facility, we can scan and
digitize any floor plan into an AutoCad file for an additional fee. We believe
that the use of our documentation and quality assurance strategies will provide
our clients with significant savings as our mapping decreases the amount of time
that technicians need to maintain the systems that we design and install.

        We own and maintain an inventory of test and measurement equipment for
the daily requirements of our business. Additional testing equipment is acquired
to support special project requirements on a case by case basis. All such
testing and measurement equipment is re-calibrated every six months to traceable
National Bureau of Standards sources. In 2004, the company has plans to replace
all equipment greater than three years old and add additional test equipment to
meet current testing standards.

RESEARCH AND DEVELOPMENT.

        It is not anticipated that the Consulting Division or Systems
Integration Division will incur material research and development expenses and
we have not made any budgeting provisions for research and development. The
company will continue to be required to partake in advanced technology and
product training seminars, by manufacturers we represent, and certification
agencies requiring continuing education and re-certification. The company will
continue to support these programs and re-certifications out of operating
revenues.

        While some of the companies research and development costs are funded
from our operating revenues, much of our research and development costs are
performed under contract and paid for by our clients. In such events, we own the
rights to the fruits of such research and development and our clients have the
unlimited but non-exclusive use of the technology or design that we have
developed for them. Most development projects are to solve a specific client
problem, with no commercial viability, there is always the potential some
specific solutions could become reoccurring revenue streams.

MARKET SEGMENTS SERVED.

        We have offered our system integration and consulting services in
connection with video conference/distant learning, large scale
security/surveillance, audio/visual media display/retrieval, professional video
and communications/networking projects. Our systems have been geared towards the
following applications:

         VIDEO CONFERENCING/DISTANCE LEARNING SYSTEMS.

        Corporations, large and small, have significantly increased their
reliance for corporate meetings and training since September 11th. With the
perfection of the H.323 IP standards, MPEG codec's streaming at megabit speeds,
gigabit network standard and the availability of reserve bandwidth in corporate
and educational networks, video conferencing has matured and new generations of
video conference products are being embraced by corporate and educational users.
The emphasis on locational convenience, together with the availability of
tuition reimbursement

                                       6
<PAGE>

incentives offered by employers, have contributed to an increase in demand for
higher education and training at off-campus locations. This allows educational
institutions, businesses and others to offer classes and training to remote
locations far from the traditional campus or home office.

        A number of national, economic, demographic and social trends,
including: i) employer and employee recognition of the need to have employees
advance their skills; ii) the shift from unskilled jobs to skilled jobs in the
United States due to the shift from an industrial to an information based
economy; iii) improvement in the student's financial prospects; and iv) the need
for colleges to increase their revenue base, are contributing to the growing
demand for career oriented education.

        We design and integrate video conferencing and distant learning systems
for corporations, educational institutions, private sector and governmental
agencies. Our marketing objectives for these systems are achieved by:

                *Targeting major corporations, federal, state and local
                governmental agencies and other organizations that are
                distributed over large and medium geographic areas requiring
                spontaneity of corporate meeting, corporate doctrine and job
                related training for their personnel at diverse locations.

                *Making alliances with colleges, universities and primary
                education school boards to provide support, re-manufacturing of
                existing systems and rollout new technology systems.

                *Making alliances with equipment vendors and telecommunications
                services providers to gain access to the latest technology
                capable of providing quality, cost-effective interactive video
                conferencing systems.

        COMPETITION - VIDEO CONFERENCING/DISTANCE LEARNING SYSTEMS
        ----------------------------------------------------------

        We face competition from a number of large and small companies, both
public and private. Many of the companies we compete with possess greater
financial and personnel resources than we possess and have greater leverage in
acquiring prospects, hiring personnel and marketing. A high degree of
competition in these areas is expected to continue. No assurance is given that
we will not be adversely affected by these factors.

                SECURITY/SURVEILLANCE SYSTEMS.

        The use of video surveillance has aided the automation of the security
industry. Closed Circuit Television ("CCTV") surveillance is being relied upon
more heavily today to protect lives and property as an adjunct to classical
security alarm measures. Larger corporate, institutional and governmental
agencies require CCTV systems that utilize high quality industrial grade video,
elaborate control of cameras with pan/tilt/zoom capability, video matrix
switching of sources and archival recording for audit trails or submittal as
legal evidence.

        Competition in the small and medium surveillance system market is
intense as the levels of technical expertise and financial resources needed are
minimal. Large security system design and integration requires a high degree of
technical knowledge in a number of electronic systems areas. These systems are
usually distributed in a wide area making the need for multiplexing video and
control mandatory. Fiber optics are generally needed to support the wide
bandwidth multiplexing for transmittal of signals over greater distances than
copper cable will allow without equalization. Control of different pan/tilt/zoom
devices needed to meet various specifications must be designed for remote single
or multiple control. Video from multiple camera sources must be processed and
switched among numerous monitors and monitor locations.

        We have successfully designed and implemented high level
security/surveillance systems for museums, casinos and high security military
installations. Recently our services have been sought after by various local
municipalities and state agencies to provide a new generation of high end visual
surveillance system to meet objectives and directives as outlined in the
Homelands Security Bill, approved November 2002 and the `Safe Street Act'. While
the events of September 11th have negatively impacted business for us and most
American companies, in its aftermath it has opened opportunity to provide 21st
century Technology to meet expanded security needs.

                                       7
<PAGE>

        Provisions of the Homeland Security Bill provides:

            o   Establishment of new Transportation Security Administration
                (TSA) within the Department of Transportation under the Aviation
                and Transportation Security Act. This Act significantly changes
                the way transportation security will be performed and managed in
                the United States. This new administration was chartered to
                secure critical and strategic assets as 10,000 FAA facilities,
                pipelines, railroad and highway bridges, Ports, highways and
                railroads. TSA's initial budget for 2004 is 4.8 Billion dollars.

            o   The Homeland Security Bill directly provides funding to secure
                the 7500 miles of land and sea borders shared with Canada and
                Mexico. Each year more than 500 million people are admitted into
                the United States of which 330 million are non-citizens. Ten
                Billion dollars is allocated to securing Americas borders, 700
                Million dollars is allocated to "21st century technology
                development for defending the homeland, 5 billion for aviation
                security, 5 billion for non-Department of Defense (DOD) Homeland
                security and 4.6 billion allocated for physical security of DOD
                facilities and personnel.

            o   An additional 35 billion is expected to be spent for Critical
                Infrastructure Protection (CIP) by private industry to secure
                high risk facilities as nuclear power plants, fossil fuel power
                plants, ports, hydro-electric dams, telecommunications nodes and
                chemical facilities.

        An advanced technology solution has been developed to meet the needs and
objectives of the Homeland Security initiative. The criteria for visual security
will provide the highest level of surveillance, merging video compression
technology with IP interfaces, over high speed networks, or the internet, with
real-time digital archive servers. Using IP video and control, there are no
distance limitations. The quality, performance and controls are the same across
a campus, county, state or country.

        The company has elected to team with Baxall USA, a British manufacturer
of digital cameras and digital archive servers to provide a suitable solution to
the complex archive and retrieval issues of this program. This system allows any
camera or group of cameras to be viewed in real time, or playback prerecorded
cameras to recreate past events. The company pioneered the use of high speed
internet cable access for the transport of digitally compressed video
surveillance cameras for locations within a municipality to the police, fire and
municipal command center.

        This highly advanced approach conceived by the company involves using
digital, full motion compressed video for visual surveillance. The company works
with the local cable company to define their fixed resources that must be
enhanced for higher bandwidth and quality of signal service, needed for the
digital camera signal transport.

        This new concept has many advantages to solve some high level
requirements of the Homeland Security Bill, allowing surveillance monitoring,
remote control and Command Centers to be distributed over large geographic
areas. To accomplish this, IP (Internet protocol) based digital cameras can be
connected by standard telephone/data cable to high speed data network backbone.
These cameras, monitors and recording devices also can be connected by wide area
networks, private virtual networks and even through the internet.

        The digital security cameras have what is termed a codec for
Coder/Decoder. The technology of digitally compressed full motion video and
audio was developed in the early 1980's and has advanced to international
standards for the interchange of audio and video signals. Currently, the
international H.261 video standard is most commonly used for what is known as
video teleconferencing and distant learning.

        The systems currently being deployed are fully capable of meeting
international standards with either, MPEG IV Motion JPEG or H.261 compression
standards. Presently, digital cameras, transmission and archival storage are
currently available with proprietary protocols that are exclusive to only one
manufacturer. CRI elected to use standards based IP networks and compression
protocols for greater flexibility now, with vendor independence for the future.

        COMPETITION - SECURITY/SURVEILLANCE SYSTEMS

        We face competition from a number of large and small manufacturers, most
possessing greater financial and personnel resources than we possess and have
greater leverage in acquiring prospects, hiring personnel and marketing. The
company approach is to continue to support Baxall and their commercially
available, standards based digital cameras to be processed, controlled and
archived. This will allow a more open platform for vendor

                                       8
<PAGE>

independence of peripheral equipment. Currently there are a number of
manufactures that offer digital recording of surveillance cameras using their
own proprietary algorithms and recording methods. A high degree of competition
in these areas is expected to continue. No assurance can be given that we will
not be adversely affected by these factors.

        AUDIO/VISUAL AND IMAGING.

        Audio Visual systems have grown in sophistication over the past five to
8 years and can generally be dubbed the work horse of the information age. The
convergence of technology has impacted the A/V industry in a positive way, which
has lead to a great deal of cross over technology being implemented, in a unique
way, to make presentations, training and entertainment more effective.

        Effective AV presentations are a blend of audio, video, computer,
graphics, large screen video display and network technologies integrated in a
way that meets the user requirements. These systems are used in many
applications as classrooms, lecture halls, corporate board rooms, meeting rooms,
Houses of Worship, museums to name only a few. AV presentation has additionally
been linked between corporate, educational and government locations with audio
and video conferencing over a network to expand the reach of participants that
potentially will take part in meetings and class sessions.

        The highly specialized AV presentation systems require an engineering
approach and integration support that has a broad knowledge base of multiple
communications technologies. The company has been specializing and developing
large system solutions in all the allied fields and has an opportunity to
integrate special solutions bringing these special talents together to meet the
broad based needs of AV presentation system today. It is this ability, the
company believes, is what has expanded to new opportunities with our existing
client base and opened new relationships with clients. Successful completion of
special system projects has opened market awareness to the value and broad base
technical expertise we bring to a project. The company has migrated from
depending on a few clients that represented 80% of its revenue to working on
projects for multiple clients, none of which represents greater than 10% of our
present revenues.

        Typically a system includes multiple images with large screen video
projection, high resolution graphics, video media, audio sources, Surround
Sound, High Definition retrieval, computer data input, and remote access.
Systems the company is presently working on includes; normal classrooms, meeting
rooms, and conference rooms and beyond into large venue auditoriums, churches,
screening rooms, theaters, multi-purpose rooms and even home theaters. While the
scale of the project increases or decreases to meet the application, the design,
implementation, technology and quality are always to the highest degree. As a
human to information interface, Audio Video presentations provide an effective
tool to meet and communicate knowledge, information and ideas.

        COMPETITION - AUDIO/VISUAL AND IMAGING
        --------------------------------------

        Competition among integrators and consultants is fierce but with the
high amount of opportunities, the growth for all the companies capable of
providing solutions for audio video presentation systems in on a steady rise.
There is significant competition in this market from small and large companies
as well as electrical contractors, retailers, and manufacturers. The company
recognizes this competition and prefers to address the market of specialty
systems with the greatest technical suffocation using multiple technologies for
meeting the presentation requirements of clients. May competitors have greater
resources and financial backing than we have. There is no guaranty we can
continue to make a significant market impact with limited financial resources.

        PROFESSIONAL VIDEO.

        The company was founded on the belief the convergence of technology and
the Advanced Television system will create a huge market for replacement and new
installations of television equipment in broadcast support, post production and
corporate professional video users. This recognition of potential is turning
into reality in 2004. Communications Research, having recognized this potential
over the past years has worked in technology markets to build recognition in
allied technology industries in preparation for the large scale deployment of HD
systems. The company has begun to effectively compete in the Broadcast and
Professional Video market.

        The company recognizes, and has been carefully monitoring proceedings of
The Advanced Television Systems Committee, Inc. (ATSC), an international,
non-profit membership organization developing voluntary standards for the entire
spectrum of advanced television systems. ATSC is working to coordinate
television

                                       9
<PAGE>

standards among different communications media focusing on digital television,
interactive systems, and broadband multimedia communications. ATSC is also
developing digital television implementation strategies and presenting
educational seminars on the ATSC standards.

        ATSC was formed in 1982 by the member organizations of the Joint
Committee on InterSociety Coordination (JCIC): the Electronic Industries
Association (EIA), the Institute of Electrical and Electronic Engineers (IEEE),
the National Association of Broadcasters (NAB), the National Cable Television
Association (NCTA), and the Society of Motion Picture and Television Engineers
(SMPTE). Currently, their membership is comprised of representatives of
broadcast, broadcast equipment manufacturers, motion picture, consumer
electronics, computer, cable, satellite, and semiconductor industries. ATSC
Digital TV Standards include digital high definition television (HDTV), standard
definition television (SDTV), data broadcasting, multichannel surround-sound
audio, and satellite direct-to-home broadcasting.

        The market for Digital Television Sets (DTV) is anticipated to reach 58
million units in 2007 according to the research firm of In-Stat/MDR. Although
DTV sets only began shipping in 1998, the anticipated growth is attributed to
the FCC mandating all TV sets sold in the US larger than 13" be equipped with
DTV tuners by 2007. Set manufacturers are anticipating providing these DTV sets
with IEEE 1394 and DVI connection capability and most are considering also
adding 802.11b and Ethernet connections. This proliferation is anticipated to
cause a surge of rebuilding and upgrading in the professional television market.
The technology shall require all program and content production facilities to
begin recording, distributing and transmitting in the DTV format.

        To this extent, the company has been successful in building a number of
advanced High Definition screening rooms for production companies and developing
systems for tele-production, mobile video production and educational clients.
The company believes it has found a new potential hire to head up the sales and
engineering effort in this market. Supplemented with the support our key
employees can provide, we feel the company can make sufficient progress into
capturing a significant share of this market. Additionally the company will look
for strategic alliances with manufacturers and distributors of digital video
production equipment to have access to a broad competitive line of products.

        COMPETITION - PROFESSIONAL VIDEO

While it is premature to fully evaluate the competitive market place, it is
reasonable to assume the greatest competition in deploying digital television
systems will be from end users and their in-house engineering and construction
staff. Smaller companies, education, low power television stations and
production houses will be most likely going outside to furnish and build there
digital infrastructure and new facilities. It is these opportunities that we
expect to pursue but there is no guarantee the company will have the resources
to effectively compete against equipment manufacturers and large system
integrators.

        COMMUNICATIONS/NETWORKING.

        We provide specialized system design, installation and support for
structured cable system solutions that support local area networks that connect
data clients and display devices with host computers and shared resources. Over
the last ten years, we have seen network technology change many times, as the
need to transmit more data, voice and video at faster rates increases. Data
systems with fiber backbones running at gigabit speeds are becoming common. A
properly designed and carefully installed system will require low maintenance
and provide reliable operation over the system's service life. Since our
inception, we have successfully designed and installed such systems.

        In a recent white paper, by Frost & Sullivan, they discuss the changing
enterprise telephony market and "all-in-one box" enterprise media exchange
solutions for organizations. According to the White Paper, "The new millennium
is expected to bring a profound change in the communications requirements for a
typical enterprise."

        Many corporations, institutions and schools are again faced with the
need to upgrade their data and or telephone network. With the convergence of
technologies formally autonomous video, voice and data networks are being
considered for replacement or restructuring to provide even higher data networks
speeds, IP telephony, media servers for information interchange, conferencing
and training. Corporate communications which is distributed between offices now
must face the reality of the ever growing dependence on their workers and
executives needs for mobility and ability to work at home.

                                       10
<PAGE>

        A new telecommunications system opportunity is expected to start in
2004, creating many opportunities for all communications industry participants.
This opportunity is being driven by those companies with aging telephone systems
and communications infrastructure that had little more than a band aid put on
there system to meet Y2K requirements.

        The need for employee mobility is on the rise. This mobility is taking
the form of off-premises mobility or offices. On premises wireless networks
frees the workers from being tied to one location for access to data or media
servers. IP telephony further frees the workers from accessing the corporate
network from their office, car, home or while traveling. People can have a
"follow me" communications system for messages, calls, e-mail and conferencing
anywhere around the country or world. Telephone features, corporate databases
and network applications can be retrieved remotely, creating virtual offices
anywhere, anytime.

        The company envisions new communications infrastructure to be a merging
of voice, data and video on a single integrated platform, with efficiency
greater than any singled ended solution. With telephones, media, cameras, data,
and many other communications sources becoming available with IP interfaces,
there has been a greater trend to utilize open standards in the software and
hardware in order to enable products and applications to inter-operate among
each other, and simplify the complexity associated with applications and system
design.

        The company has been successful in completing the design and providing
the specifications that meet the needs of a regional high school to replace its
aging telephone infrastructure with a unified system that immediately provides,
telephone, intercom, paging and master clock, with ability to transparently
include distributed data and video in all offices and classrooms. This solution
provided a cost effective unified system immediately with the capability to add
value added features at significantly reduced cost to the school district
compared to older systems. This advanced system provides automated operation,
300 telephone, 380 speakers and 250 clocks. Only a few years ago it would have
required the procurement and installation of three independent, autonomous
propriety systems that could not inter-operate seamlessly.

        COMPETITION - COMMUNICATIONS/NETWORKING.
        ----------------------------------------

        While the network and communications the company provides is cutting
edge, these advanced solutions utilize existing technology implemented in a
unique way. While the designs are covered by copyright their is no means of
patent or other protection of these designs. Many of the companies we compete
with possess greater financial and personnel resources than we possess and can
acquire the resources, hiring personnel and conceive systems of similar design.
A high degree of competition in these areas is expected. No assurance is given
that we will not be adversely affected by these factors.

VISUAL TELEPHONE PRODUCTS DIVISION.

        In 2002, the company completed the phase out of our line of PC Based
desktop video conferencing products and Visual Telephone Products Division. Our
company shall maintains a suitable supply of replacement parts in inventory to
meet any servicing or repair needs of the existing client base. Our proprietary
Visual-EZ and Communicator products will be frozen and only existing client
systems shall continue to be supported at the level of system software of the
original system purchased.

        Competing technologies, emerging definitions of the current
international standard and the development of new industry standards have
rendered our video conferencing products non-competitive and obsolete. The
competitive nature of this industry mandates higher research and development
budgets in response to rapidly evolving standards and features with short
product life cycles and downward pricing trends. In recognition of these
concerns, we have elected to provide Polycom equipment as our preferred vendor
of choice, for our video conferencing and distant learning systems. Polycom has
become the leading company in the market and purchasing these products for
inclusion into our video conferencing systems makes the company less susceptible
to the aforementioned competitive risks with fixed equipment costs.

        The company owns and will continue to support, and develop, the
collaboration software embedded into the Visual-EZ operating system, that being
the TeleWRITER AGS system.

        TELEWRITER-AGS OPERATING SYSTEM SOFTWARE. The TeleWRITER operating
system software was the custom operating interface for the Visual series of
products. This collaboration software was developed by Optel Communications,
Inc., Syosset, NY ("Optel"). We acquired all rights to the TeleWRITER-AGS system
software in 1999. This software was assigned by us, to a wholly owned
subsidiary, TeleWRITER CORPORATION, INC., in exchange for 51% of the common
stock in the subsidiary as well as a perpetual license to use the software as we
deem appropriate. The remainder of stock in TeleWRITER Corporation, incorporated
under the laws of the state of Nevada in September 1999, is independently held
by our President, Carl Ceragno.

                                       11
<PAGE>

TELEWRITER CORPORATION
----------------------

        The TeleWRITER product has evolved for over eighteen years. TeleWRITER
was the first audio graphic collaboration software system and in the mid 1990's
captured almost 60% of the collaboration market. TeleWRITER is a client based
product with a capability of having up to 32 uses share and access documents,
resources and computing programs. In a point to point environment the software
was capable of having in band face to face audio and camera video of
participants. In multipoint mode the audio conference required a simultaneous
multipoint bridge telephone conference with full graphic and annotation
functionality over an IP network. The principal feature TeleWRITER-AGS operating
system is its powerful white boarding, graphics and collaboration package. All
uses in a conference required the PC client software installed and operating on
the PC.

        The current version of the TeleWRITER-AGS operating system is at the end
of its life expectancy as it is based on Microsoft's Windows 95 and 98 and
requires Version 2 series Microsoft NetMeeting for the T.120 engine. With the
release and wide spread acceptance of Microsoft's XP current operating system,
and their discontinuing support of Version 2 NetMeeting for the current version
3.01, the salability of the software is dwindling.

        NEW PRODUCT DEVELOPMENT.
        ------------------------

        We directed our efforts to further enhance and update the operating
system by looking to team with a corporation with the knowledge and ability to
revise the software to meet current operating system compatibility requirements.
In October 2003, the company entered into a software development agreement with
the Arkansas School of Math and Science (ASMS), to partner with the school for
the revision, updating further development of the Tele-Writer Product.

        The Arkansas School of Math and Science is one of the most advanced and
intensive programs for preparing exceptional students for college and university
programs pursuing continuing education in math and science. The School is well
suited for the initiative, as they have a great depth of technical resources and
the State of Arkansas has been a power user of Tele-WRITER for many years to
provide classroom programs between schools and children at home, without the
high cost of video conference equipment and high speed telecommunications
circuits. Under the program, the company retains all rights to the product and
the State of Arkansas may implement the new program in all state schools K-20.
The company will pay a royalty fee up to a maximum of $1,000,000 over a period
not to exceed seven (7) years from their completion of a workable, saleable
product. The company anticipates the new version shall be ready to release for
upgrade sales of existing client base and commercial and consumer sales.

        The company has engaged Mr. Jeffery Cone of Tampa Florida as VP, Sales
and Marketing for TeleWRITER Corporation. With the programming and computing
resources available in the Tampa area, the company is considering the potential
of relocating the headquarters of TeleWRITER Corporation to the Tampa/Clearwater
area. We will need to retain the services of one or more programmers to further
develop the software to continue its commercially feasibility for us to license
it to others. The Tampa Area offers many attractive advantages for relocation of
the company.

        The TeleWRITER software system is widely used by many federal,
educational and corporate clients. The product potentially can recapture the
market it lost due to inactivity with a new release that is future compatible
with modern Computing operating systems and software. No assurances can be given
that this software can be developed by us to the point that it is commercially
viable as a product that we can license to others, that we will have sufficient
financial resources to develop it to the point that it can be marketed to others
on our own or that we possess the marketing ability to sell it once it has been
fully developed.

        COMPETITION - TELEWRITER CORPORATION

        The data collaboration industry has met and exceeded projections for
growth over the past five years. Frost and Sullivan reported "the recent
acquisition of PlaceWare by Microsoft could be exactly what the web conferencing
industry needs to reach $1 billion dollars by the end of 2004. With the high
visibility and awareness for collaboration that will likely result from
Microsoft's increasing focus on the collaborative industry, we feel web
conferencing vendors should be excited by this new venture rather than being
intimidated."

        This market has become highly competitive and relatively highly priced
with respect to product acquisition and other costs for needed computing
hardware as well as ongoing costs of operation and maintenance.

                                       12
<PAGE>

        Microsoft themselves have launched a new networked service that provides
clients the ability to connect as workgroups for collaborative work sessions.
TeleWRITER is a low initial cost solution requiring only a high speed
interconnection that can out perform with greater features, the Microsoft system
or any server based internet product.

        We face competition from a number of large companies both public and
private with more expensive server based products that function with the new
operating systems and use a standard browser as the user interface in
collaborative mode. Our most significant competitors are Voyant, WebEx,
Placeware and NetMeeting. Many of the companies competing with us, with respect
to our TeleWRITER products, possess greater financial and personnel resources
than we possess and have greater leverage in acquiring prospects, hiring
personnel and marketing.

EMPLOYEES

        As of December 31, 2003, we had 6 full-time employees, none of whom are
employed pursuant to the terms of an employment agreement. We also engage
independent contractors and contract workers on an as-needed basis for the
installation of the systems that we design and engineer. The number of
independent contracts utilized by us for the installation of our systems is
directly proportionate to the amount of business that our Systems Integration
Division is conducting. In 2004 we anticipate to increase the number of our
permanent employees, primarily in engineering, technical and marketing
positions. None of our employees or independent contractors are covered by a
collective bargaining agreement. We believe that our relationship with our
employees is satisfactory.

CASH REQUIREMENTS

        It is anticipated that we will require expenditures for salaries,
professional fees, office and facility lease payments and general operating
expenses over the next six months, which in the aggregate should not exceed
$175,000.00. We believe that we will be able to satisfy our cash requirements,
for both working capital and product development purposes, during the next six
months from funds generated from our operations. However, no assurance is given
that we will not be required to raise additional funds to satisfy our working
capital and other needs either privately or in a subsequent public offering of
our securities.

        When pricing a particular project, we usually require an advance payment
of 33% to 50% of the project's purchase price. Client's generally make
negotiated progress payments thereafter. Advance payments and ensuing progress
payments may not be sufficient to continuously fund our operations during the
course of large system integration projects that we undertake, resulting in gaps
in the cash flow necessary to complete the project. Internally generated cash
flow from our other projects may not be sufficient to fill these gaps. To insure
adequate cash flow and the ability to pursue larger projects, we have entered
into an asset based loan agreement with a commercial lender that permits us to
draw up to 80% of a client's purchase order up to $1,000,000.00. We cannot
undertake large system integration projects without this loan facility. While we
believe that we can continue to rely upon the availability of this loan
facility, we cannot give any assurances that this loan facility will be
available to us in the future or whether we will be able to replace it if it is
terminated.

ADDITIONAL INFORMATION

        The Company filed our the SEC a registration statement on Form SB-2
under the Securities Act of 1933 with respect to the common stock that we are
registering. Our SEC registration became effective May 8, 2002. The company was
cleared by NASD and was assigned the trading symbol CRHI. The company was
cleared to commence trading on or about May 5, 2003. The Company posted a
Bid/Ask on the Over the Counter Pink Sheets on or about October 21, 2003 and on
or about November 6, 2003, was authorized to trade on the Over the Counter
Bulletin Board.

        The Company is a reporting company and all filings and accompanying
exhibits, may be inspected and copied at the principal offices of the SEC, 450
Fifth Street, N.W., Washington, D.C. 20549, and at any of the 12 regional
offices of the SEC around the country. Copies of all or any part of this
registration statement may be obtained at prescribed rates from the SEC's Public
Reference Section at 450 Fifth Street, N.W., Washington, D.C. 20545 or by
calling the SEC at 1-800 SEC-0330. The SEC also maintains a World Wide Web site
on the Internet at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC.

                                       13
<PAGE>

        When we qualify statements in this document with the word "believe",
unless otherwise indicated, we are basing our belief on the knowledge and
experience of our personnel and advisors. Statistical information included in
this prospectus has been obtained by us from publications we deem reliable and
with which we have no relationship.

ITEM 2. DESCRIPTION OF PROPERTY

        We currently occupy approximately 2,850 square feet of space at 67
Ramapo Valley Road, Suite 103, Mahwah, New Jersey 07430 for our corporate and
administrative offices under a lease expiring on October 31, 2006 and requiring
$2,868.54 monthly rent subject to annual escalations. We believe that our
current space is suitable for our current and projected needs over the next ten
month period and we have no current plans to lease additional space for the
Company.

The lease requires the Company to bear, in addition to the basic rent, the costs
of insurance, and certain maintenance costs.

With TeleWRITER Corporation beginning to commence its re-release into the
market, initially the Company will use our Mahwah Location as the headquarters
for TeleWRITER Corporation. It is anticipated that operation will be moved to
separate facilities potentially by winter 2005. While no definite location has
been selected at this time, the company is considering the Tampa/Clearwater area
of Florida as it offers many advantages and resource availability for locating a
`high tech' software company as TeleWRITER.

ITEM 3. LEGAL PROCEEDINGS

        There are no pending or threatened legal or governmental claims, actions
or proceedings against or relating to us which could, individually or in the
aggregate, have a materially adverse effect on us.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

NOT APPLICABLE

                                     PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

Market Information:

        On March 19, 2003 the company was given approval to trade its securities
on the National Association of Securities Dealers in the National Quotations
Bureau Pink Sheets under the symbol CRHI. Our Class A shares have been
recognized and traded on the NASD Over the Counter Pink Bulletin Board since
October 21, 2003. We hope to establish a market for said shares. Our securities
have traded recently in a range of . 04 (low)-.14 (high) cents per share since
trading commenced.

HOLDERS.

        As of December 31, 2003, there were approximately 939 shareholders of
record of our common stock.

DIVIDENDS.

        We have not declared any cash dividends on our common stock since our
inception and do not anticipate paying such dividends in the foreseeable future.
We plan to retain any future earnings for use in our business. Any decisions as
to future payment of dividends will depend on our earnings and financial
position and such other factors, as the Board of Directors deems relevant.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

                                       14
<PAGE>

        We have been principally focused upon our consulting and systems
integration operations. Management believes that our systems integration related
operations, which had been largely ignored while we had been a wholly owned
subsidiary of our former parent company, will be instrumental to increasing our
revenues. We believe that we are on the right path towards sustained
profitability as our revenues increase. However, we cannot be certain that we
will be able to do so. To the extent that we cannot achieve and maintain
profitability, we will require additional financing to continue our operations.

RESULTS OF OPERATIONS.

        Revenues We booked total revenues of $94,859 for the year ending
December 31, 2003, as compared to revenues $224,884 for the prior year. The
economic and business climate for the year made it difficult to perform at the
level projected. Resources normally used productively for income producing work
was redirected to sales and marketing to maintain project bookings and billings.

        We attribute the decrease in revenues during 2003 to the state of the
economy. While the fourth quarter revenues increased sharply, it was
insufficient to overcome the slow first, second and third quarters.

        Gross profit Our gross profit was approximately 86% for the year ended
December 31, 2003, as compared to approximately 60% for fiscal 2002. The
decrease in our gross profit was the result of system projects requiring
integration of manufactured equipment, procured and build into custom systems,
at a lesser overall markup than labor intensive consulting and engineering
projects performed solely with in-house labor and increased cost of sales.

        Operating Expenses While our revenues were down from 2002 by
approximately 42% overall, our operating expenses have increased
approximately40% from $175,288 for the year ending December 31, 2002, to
$244,777 for the year ending December 31, 2003. The increase in total operating
expenses for 2003 reflects our efforts to update our TeleWRITER product and
mobilization expenses to prepare for the new product release in the second
quarter of 2004 .

        Operating Loss We have not shown a net profit for a calendar year as an
independent company to date. While our operating losses have increased from
$40,777 as of December 31, 2002 to $162,883 as of December 31, 2003, it is due
largely to reduction in revenues and increased operating expenses. Our executive
officers have been loaning us funds to finance our losses over the last several
years. The last Quarter in 2003 was the first profitable quarter in the four
years since again becoming an independent company. We expect this trend to
continue in the First quarter of 2004 and throughout the remaining year but we
have no assurance that will happen.

        Cash and cash Equivalents Total cash as of December 31, 2003 was $12,677
as compared to $4,158 as of December 31, 2002. Accounts receivable increased
slightly to $25,112 as of December 31, 2003 from $22,027 as of December 31, 2002
reflecting credit terms that the Company has had to extend to promote business.
Total current assets increased to $42,749 as of December 31, 2003 from $32554 at
December 31, 2002 as a result of our increased revenues, mainly in the fourth
quarter.

        Current Liabilities Despite our improving operations, we are technically
insolvent as our current liabilities exceed our current assets. Our current
liabilities have decreased approximately 12% from $568,067 as of December 31,
2002 to $494,666 as of December 31, 2003. Our Total Liabilities for notes
payable to related parties decreased from to $221,207 to $183,637 on December
31, 2003, which is currently due our president and secretary. The company does
not show the intellectual property asset value of the TeleWRITER software system
that was purchased for .01 cents on a dollar, or the amount of $150,000 as
defined in Auditor Note 10, representing an asset valued at $1,500,000. Upon
release of this product the intellectual value can be re-evaluated and verified.

        While we are taking measures to expand our revenues, improve our
liquidity and continue to trim our expenses, we cannot guaranty that we will be
able to operate profitably. Until we can do so, we are reliant upon the ongoing
loans from our executive officers or the proceeds of any stock offerings to
remain in business.

Future Expenditures

        Our future capital expenditures will depend upon our ability to generate
revenues or additional investment capital if our revenues are not sufficient.
If, and to the extent that we are successful in generating net revenues or
raising investment capital, our future expenditures will be applied towards
salaries and general working capital purposes.

                                       15
<PAGE>

        The company will continue replacing aging office and data processing
equipment. Additionally we require additional technical testing equipment to
install and maintain sate of the art electronic systems and equipment. If the
company is unable to purchase this equipment it will be unable to effetely
compete in the markets it has defined.

LIQUIDITY AND CAPITAL RESOURCES

        We have incurred cumulative losses since being spun off as an
independent corporation. At December 31, 2003 we have an accumulated deficit of
$1,434,441, and the report from of our independent auditor on our audited
financial statements at December 31, 2003 contained a going concern statement.
We will continue to incur losses during the foreseeable future and have yet to
achieve revenues sufficient to offset direct expenses and corporate overhead. We
do not have any present commitments for capital expenditures. While we are
taking measures to expand our revenues, improve our liquidity and trim our
expenses, we cannot guaranty that we will be successful in our efforts.

        If we are unable to raise capital in the near future, we will continue
to be reliant on loans from our officers to provide additional working capital.
If our officers are unable to continue to loan us working capital, or we do not
raise working capital through our public offering, we cannot guarantee that we
will be successful in obtaining capital upon terms acceptable to us, if at all.
Our failure to secure necessary capital when needed could have a material
adverse effect on our financial condition and results of operations in future
periods.

ADDITIONAL CAPITALIZATION
The Company has entered into three Regulation S agreements for the sale of
restricted securities off-shore. The regulation stock sale allows the Company to
sell stock equity in the company to raise needed revenue for the capitalization
of the Company and initially seed the roll out of the new Tele-WRITER products.
This method of capitalization was attractive to the company as it did not
required the considerably high expense to register company stock for sale and
institute a full public offering. Further the shares of stock can not be
registered or be eligible for sale for a period of one year after initial
purchase. The company feels this will be more than adequate time to build our
revenues and stock value that it will not dilute current shareholders share
price on the open market or equity position.

Two Regulations S offering have been executed by the company as of March 2004.
First is Westbay Consulting of Barcelona, Spain which opened on or about January
15 2004. The Company has begun raising funs under this agreement. A second offer
has been executed with A-Street Capital, Chicago, IL on or about February 28,
2004. The Company has not yet begun raising funds under this agreement.

CONTROLS AND PROCEDURES

        Our management, including Carl Ceragno our President and Chief Financial
Officer, has conducted an evaluation of the effectiveness of our disclosure
controls and procedures (as defined in Rule 13a-14(c) promulgated under the
Securities and Exchange Act of 1934, as amended) as of March 30, 2004 (the
"Evaluation Date"), which is within 90 days prior to the filing date of this
report. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer, Mr. Ceragno, has concluded that our disclosure controls and
procedures are effective for timely gathering, analyzing and disclosing the
information we are required to disclose in our reports filed under the
Securities Exchange Act of 1934, as amended. There have been no significant
changes made in our internal controls or in other factors that could
significantly affect our internal controls subsequent to the Evaluation Date.

ITEM 7. FINANCIAL STATEMENTS.

AUDITORS FINANCIAL STATEMENT
SEE PAGES F-1 THROUGH F-?

ITEM 8. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES.

NONE

                                       16
<PAGE>

                                    PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.

        The following table sets forth information regarding the executive
officers, directors and our control persons.

NAME                       AGE           POSITIONS HELD
-----                      ---           -----------------------------------
Carl R. Ceragno            57            Director, President and Treasurer
Lawrence S. Hartman        38            Director and Vice President
Almajean O'Connor          54            Secretary

        The directors named above will serve until the next annual meeting of
our shareholders to be held within six (6) months of the close of our fiscal
year or until their successors shall have been elected and accepted their
positions. Directors are elected for one year terms. Mr. Ceragno and Ms.
O'Connor are our executive officers.

        Carl R. Ceragno. Carl R. Ceragno, who is our founder, has served as our
president and chief executive officer since our inception. His principal
responsibilities include system design engineering, project management, sales
and technical proposal preparation. From July 1969 through June of 1992, Mr.
Ceragno served as a studio engineer, project engineer, chief engineer, and
ultimately vice president of engineering for Tele-Measurements, Inc., an A/V
systems integration business located in Clifton, New Jersey.

        Mr. Ceragno received a bachelor of sciences degree in June of 1968 from
Emerson College, Boston, MA. At graduation, he was honored by receiving the
departmental award for excellence and service to the Emerson College
broadcasting department.

        Mr. Ceragno has given numerous network, audiovisual and video
conferencing design lectures, authored technology white papers and has authored
numerous lectures regarding telecommunications technology and integration.

        From 1998 to 2001, Mr. Ceragno has served as trustee and president of
the New York Susquehanna & Western Technical and Historical Society. He
currently serves is a delegate to the United Railroad Historical Society of New
Jersey (custodian of historic railroad equipment owned by the State of New
jersey and destined for the State railroad and transportation to be built in
Phillipsburg, New Jersey), Director of North East Rail Car Association (NERCA)
and is active in railroad equipment restoration and preservation.

        Lawrence S. Hartman. Lawrence S. Hartman has served as Vice
President-Corporate Counsel since May of 1999. Mr. Hartman does not devote his
full time efforts to our affairs. Rather, he provides his time on an "as needed"
basis. From June of 1999 to the present, Mr. Hartman has served as Director,
President and Secretary of Omega Ventures, Inc., which provides on-line
marketing services. From May of 1998 to June of 1999, Mr. Hartman had served as
a senior manager of the Ocwen Federal Bank, where his responsibilities were
devoted towards real estate asset management. From January 1996 to May of 1998,
Mr. Hartman served as Vice President, secretary and general counsel with
Terragon Realty Advisors, a real estate investment trust. From January of 1994
until January of 1996, Mr. Hartman was employed as an associate attorney with
the law firm of Coudert Brothers, where his area of practice was limited to real
estate law. Mr. Hartman earned a Bachelor of Arts degree from Albany University
in May of 1987. He earned his Juris Doctor degree from Columbia Law School in
May of 1990. Mr. Hartman is currently licensed to practice law in the State of
New York.

        Almajean M. O'Connor Almajean M. O'Connor has served as our corporate
secretary since May of 1999. She has been employed by us as our office manager
since November of 1996. From November of 1987 to November of 1996, Ms. O.'Connor
had been employed as a legal secretary and legal assistant with the law firm of
Hannoch Weisman, Roseland, New Jersey. While Ms. O'Connor has not earned a four
year degree, she has attended Atlantic County Community College, Mays Landing,
New Jersey, where she had taken computer science classes.

                                       17
<PAGE>

ITEM 10. EXECUTIVE COMPENSATION.

        The following table sets forth the compensation of our three (3)
officers for the last two (2) fiscal years and the first nine months of this
year:

<TABLE>
<CAPTION>
NAME AND                                 ANNUAL COMPENSATION                 LONG TERM COMPENSATION
---------------------------    ------------------------------------    --------------------------------
PRINCIPAL POSITION             YEAR      SALARY      BONUS    OTHER    STOCK    SAR's     LTIP    OTHER
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
<S>                            <C>     <C>           <C>      <C>      <C>      <C>      <C>      <C>
Carl R. Ceragno                1999    $40,384.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
President & Treasurer          2000    $21,000.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2001    $16,400.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2002    $     0.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2003    $     0.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
Lawrence S. Hartman            1999    $     NONE    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
Vice President                 2000    $     NONE    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2001    $     NONE    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2002    $     NONE    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2003    $     NONE    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
Almajean O'Connor              1999    $31,538.43    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
Secretary                      2000    $ 5,500.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2001    $13,900.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2002    $   800.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
                               2003    $     0.00    $0.00    $0.00    $0.00    $0.00    $0.00    $0.00
---------------------------    ----    ----------    -----    -----    -----    -----    -----    -----
</TABLE>

TERMS OF OFFICE.

        Our directors hold office until the next annual meeting of our
stockholders or until their successors are elected and duly qualified. All
officers serve at the discretion of the directors.

DIRECTORS' COMPENSATION

No compensation has been paid to any directors for service in such capacity in
the past. Directors may be reimbursed for expenses incurred while attending
Board and committee meetings. Board of Directors intends to adopt an appropriate
policy to compensate non-employee directors, in order to attract and retain the
services of qualified non-employee directors. Non-employee directors will be
issued 25,000 shares of common stock as compensation for their participation as
Board Members in 2003. Out of pocket expenses shall continue to be paid to all
independent directors to travel to Board and committee meetings.

STOCK OPTIONS

NONE

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

        The following tables set forth the ownership, as of December 31, 2000,
of our common stock (i) by each person known by us to be the beneficial owner of
more than 5% of our outstanding common stock, (ii) by each of our directors,
(iii) by stockholders owning more than five percent (5%) of our shares, and (iv)
by all executive officers and our directors as a group. All persons named have
sole voting and investment power with respect to such shares, subject to
community property laws, and except as otherwise noted.

PERCENTAGE OF TOTAL SHARES

TITLE OF                                            NO. OF        Percentage of
CLASS                      NAME & ADDRESS           SHARES        Ownership
-----                      --------------           ------        ----------
Class A Common            Lawrence S. Hartman        415,000          3.4%
------------------------- ---------------------- ---------------- -------------
Class A Common            Almajean O'Connor          452,500          3.7%
------------------------- ---------------------- ---------------- -------------
Class A Common            Carl R. Ceragno          2,690,000           22%
------------------------- ---------------------- ---------------- -------------
Class B Common            Carl R. Ceragno            400,000        100.0%
------------------------- ---------------------- ---------------- -------------
All Officers and                                   3,957,500         32.4%
Directors as a Group
(3 Individuals)

                                       18
<PAGE>

        As our Class B shares are entitled to 100 votes per share at all
meetings at which shareholders are entitled to vote, Mr. Ceragno possesses
voting control over all matters that may come to a vote of our shareholders.

Changes in Control.

        There are currently no arrangements which would result in a change in
control of our management.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        Carl R. Ceragno founded the company in 1989 and served as our President
from inception and was a director, executive officer and control person of
Visual Telephone, our former parent company. Pursuant to the Reorganization
Agreement, we changed the state in which we had been incorporated from New
Jersey to Nevada and we were to issue two classes of common stock and vest
voting control of our shares with Mr. Ceragno.

        Carl R. Ceragno, our president, and Alma Jean O'Connor, our secretary,
have been funding our ongoing losses. Mr. Ceragno has outstanding loans to us in
the amount of $211,649 as of December 31, 2002 and Ms, O'Connor has outstanding
loans to us in the amount of $9,558, as of December 31, 2002.

        Mr Lawrence Hartman, our VP has outstanding loads to the company in the
amount of $11,000. The loans from Mr. Ceragno have been used to pay salaries and
other operating expenses. These loans are demand loans and are not evidenced by
promissory notes and may be called by Mr. Ceragno and Ms. O'Connor, as the case
may be, at any time.

        Ms. O'Connor's loan and $150,000 of Mr. Ceragno's loan accrue interest
at the rate of 7% per annum. The balance of Mr. Ceragno's loan does not accrue
interest. Additionally, we received loans of $7,050 from an entity controlled by
Mr. Ceragno during 1999. A portion of that amount has been paid back and the
remaining outstanding amount totals, $4,279.

        We have been issued a line of credit in the amount of $1,000,000 by the
Brookdale Funding Group, none of which is currently drawn upon. We anticipate
that this loan facility would be used to help finance long term projects that
cannot be financed by other means. Repayment of this loan facility is personally
guarantied by our President, Carl R. Ceragno. The terms of this facility require
Mr. Ceragno to exercise voting control of our common stock so as to avoid a
change in our control.

        Pursuant to our agreement to acquired the Optel/TeleWriter AGS software,
we paid CSTI-Outreach Technology the sum of $150,000.00 of which $15,000.00 was
advanced by Carl R. Ceragno, our president and the balance of $135,000.00 was
paid in the form of a convertible promissory note.

RECENT DEVELOPMENTS

        The company has executed and instituted two Regulation S offers to raise
needed operating capital as defined herein

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.

(a) Exhibits

1.   Audited Financial report of company by Chisholm, Bierwolf & Nilson, L.L.C.,
     North Salt Lake City, Utah

2.   Risk Factors

99.1 Certificate of Chief Executive Officer and Chief Financial Officer

(b)  Reports on Form 8-K

The Company filed one report on Form 8-K during 2003 as follows.

March 26, 2003, For Registration of Certain Classes of Securities Pursuant to
Section 12(g) of the Securities exchange Act of 1934.

The Company filed two reports on Form 8-K to date in 2004 as follows.

February 10, 2004 change of Auditor notification Pursuant To Section 13 Or 15(D)
of the Securities and Exchange Act Of 1934, and on March 17,2004 For
Registration of Certain Classes of Securities Pursuant to Section 12(g) of the
Securities exchange Act of 1934.

                                       19
<PAGE>

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.

COMMUNICATIONS RESEARCH, INC.

Date: March 30, 2004

                                                         By: /s/ Carl R. Ceragno
                                                             -------------------
                                                             Carl R. Ceragno

<PAGE>

                                 C O N T E N T S

Accountants' Report .........................................................F-2

Balance Sheets ..............................................................F-3

Statements of Operations ....................................................F-4

Statements of Stockholders' Equity...........................................F-5

Statements of Cash Flows ....................................................F-6

Notes to the Financial Statements ...........................................F-7

                                      F-1
<PAGE>

                          INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
of Communications Research, Inc.:

We have audited the accompanying balance sheets of Communications Research, Inc.
as of December 31, 2003 and 2002 and the related statements of operations,
stockholders' equity and cash flows for the years then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Communications Research, Inc.
as of December 31, 2003 and 2002 and the results of its operations and cash
flows for the years then ended in conformity with generally accepted accounting
principles in the United States of America.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 7, the Company's
recurring operating losses and lack of working capital raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard
to those matters are also described in Note 7. The financial statements do not
include any adjustments that might result from outcome of this uncertainty.

Chisholm, Bierwolf & Nilson
Bountiful, Utah
March 16, 2004

                                      F-2
<PAGE>

                          COMMUNICATIONS RESEACH, INC.
                           Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                     ASSETS
                                     ------
                                                                     December 31,   December 31,
                                                                        2003            2002
                                                                     -----------    -----------
<S>                                                                  <C>            <C>
Current Assets
  Cash                                                               $    12,677    $     4,158
  Accounts Receivable                                                     25,112         22,027
  Inventory                                                                4,960          6,369
                                                                     -----------    -----------

Total Current Assets                                                      42,749         32,554
                                                                     -----------    -----------

Property & Equipment, Net                                                 40,416         97,452
                                                                     -----------    -----------

Other Assets
  Deposits                                                                 4,988          4,988
                                                                     -----------    -----------

    Total Assets                                                     $    88,153    $   134,994
                                                                     ===========    ===========

                      LIABILITIES AND STOCKHOLDERS' EQUITY
                      ------------------------------------

Current Liabilities
  Accounts Payable                                                   $    30,791    $    76,854
  Accounts Payable-Related Party                                           4,104          4,279
  Accrued expenses                                                       118,499         97,182
  Convertible debenture                                                  135,000        135,000
  Current portion of long-term liabilities                               190,623        232,329
                                                                     -----------    -----------

Total Current Liabilities                                                479,017        545,644
                                                                     -----------    -----------

Long Term Liabilities
  Notes payable - related party                                          183,637        221,207
  Notes payable                                                           22,635         33,535
  Less current portion                                                  (190,623)      (232,329)
                                                                     -----------    -----------

Total Long Term Liabilities                                               15,649         22,413
                                                                     -----------    -----------

    Total Liabilities                                                    494,666        568,057
                                                                     -----------    -----------

Stockholders' Equity
  Common Stock Class A, authorized 40,000,000 Shares of $.001 Par
    value, Issued and Outstanding 12,216,550 and 12,580,591 shares        12,217         12,581
  Common Stock Class B, authorized 700,000 shares of no
    par value, issued and outstanding 400,000                               --             --
  Additional Paid in Capital                                           1,018,961        807,037
  Subscriptions receivable                                                (3,250)        (3,250)
  Deficit Accumulated During the Development Stage                    (1,434,441)    (1,249,431)
                                                                     -----------    -----------

Total Stockholders' Equity                                              (406,513)      (433,063)
                                                                     -----------    -----------

    Total Liabilities and Stockholders' Equity                       $    88,153    $   134,994
                                                                     ===========    ===========
</TABLE>

   The accompanying notes are an integal part of theses financial statements.

                                      F-3
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                      Consolidated Statements of Operations

<TABLE>
<CAPTION>
                                                        For the Year Ended
                                                           December 31,
                                                 -------------------------------
                                                      2003             2002
                                                 ------------      -------------
<S>                                              <C>               <C>
  Revenues                                             94,859           224,884

Cost of Sales                                          12,965            90,373
                                                 ------------      ------------

Gross Profit (Loss)                                    81,894           134,511

Operating Expenses
General and administrative expenses                    98,286            67,906
Office salaries                                        40,800             6,665
Rent                                                   34,580            32,174
Insurance                                               9,802            15,701
Travel and lodging                                      4,273             3,740
Payroll taxes                                            --               1,073
Depreciation and amortization                          57,036            48,029
                                                 ------------      ------------

    Total Operating Expenses                          244,777           175,288
                                                 ------------      ------------

Net Operating Income (Loss)                          (162,883)          (40,777)
                                                 ------------      ------------

Other Income(Expense)
  Interest Income                                        --                --
  Interest Expense                                    (22,127)          (23,072)
  Other Income (Expense)                                 --                --
                                                 ------------      ------------

    Total Other Income(Expense)                       (22,127)          (23,072)
                                                 ------------      ------------

Net Income (Loss)                                $   (185,010)     $    (63,849)
                                                 ============      ============

Net Income (Loss) Per Share                      $      (0.02)     $      (0.01)
                                                 ============      ============

Weighted Average Shares Outstanding                10,855,981        12,580,591
                                                 ============      ============
</TABLE>

   The accompanying notes are an integal part of theses financial statements.

                                      F-4
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Statement of StockHolders' Equity

<TABLE>
<CAPTION>
                                                             Common Stock
                                        -----------------------------------------------------
                                               Class A                         Class B            Additional
                                        --------------------------    -----------------------       Paid-In        Accumulated
                                           Shares         Amount         Shares        Amount       Capital         (Deficit)
                                        -----------    -----------    ----------       ------     -----------      -----------
<S>                                      <C>           <C>               <C>            <C>       <C>              <C>
 Balance December 31, 2001               12,580,591    $    12,581       400,000        $ --      $   807,037      $(1,185,582)

Net Loss for the year ended
  December 31, 2002                            --             --            --            --             --            (63,849)
                                        -----------    -----------    ----------        ----      -----------      -----------

  Balance December 31, 2002              12,580,591         12,581       400,000          --          807,037       (1,249,431)

  Cancellation of shares                 (5,116,541)        (5,116)         --                         --              5,116

  Issuance of Common Stock
  for services at $.04                    1,187,500          1,187          --            --           46,313             --

  Issuance of Common Stock
  for salaries at $.04                    1,020,000          1,020          --            --           39,780             --

  Issuance of Common Stock
  to satisfy payables at $.11               400,000            400          --            --           43,977             --

  Issuance of Common Stock
  to satisfy officer loans at $.35          150,000            150          --            --           52,350             --

  Issuance of Common Stock
    for services at$.01                   1,600,000          1,600          --                         --             14,400

  Issuance of Common Stock
  for cash at $.04 and $.02                 395,000            395          --            --            9,988             --

Net Loss for the year ended
  December 31, 2003                            --             --            --                                      (185,010)
                                        -----------    -----------    ----------        --      -----------      -----------

Balance December 31, 2003                12,216,550    $    12,217       400,000        $ --      $ 1,018,961      $(1,434,441)
                                        ===========    ===========    ==========        ==      ===========      ===========

</TABLE>

   The accompanying notes are an integal part of theses financial statements.

                                      F-5
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                      Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
                                                                 For the years ended
                                                                      December 31,
                                                               -------------------------
                                                                  2003            2002
                                                               ---------       ---------
<S>                                                            <C>             <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

  Net Income (Loss)                                            $(185,010)      $ (63,849)
  Adjustments to Reconcile Net Loss to Net Cash
    Provided by Operations:
     Depreciation & Amortization                                  57,036          48,029
     Shares issued for Services                                  104,300            --
  Change in Assets and Liabilities
     (Increase) Decrease in Accounts Receivable                   (3,085)         (9,750)
     (Increase) Decrease in Inventory                              1,409           2,264
     Increase (Decrease) in accounts payable                      (1,714)         54,003
     Increase (Decrease) in Accrued Expenses                      21,317          18,381
     Increase (Decrease) in Accouts payable-related party           (175)           --
                                                               ---------       ---------

  Net Cash Provided(Used) by Operating Activities                 (5,922)         49,078
                                                               ---------       ---------

CASH FLOWS FROM INVESTING ACTIVITIES:

  Cash paid/received for deposits                                   --             3,613
  Purchases of Property and Equipment                               --            (1,102)
                                                               ---------       ---------

  Net Cash Provided (Used) by Investing Activities                  --             2,511
                                                               ---------       ---------

CASH FLOWS FROM FINANCING ACTIVITIES:

  Proceeds from Stockholder Loan                                  43,639          21,676
  Payment on long-term debt                                      (39,581)        (71,195)
  Proceeds from Issuance of common stock                          10,383            --
                                                               ---------       ---------

  Net Cash Provided(Used) by Financing Activities                 14,441         (49,519)
                                                               ---------       ---------
</TABLE>

   The accompanying notes are an integal part of theses financial statements.

                                      F-6
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                Consolidated Statements of Cash Flows (Continued)

<TABLE>
<CAPTION>
                                                            For the years ended
                                                                December 31,
                                                          ----------------------
                                                            2003          2002
                                                          --------      --------
<S>                                                       <C>           <C>
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS              8,519         2,070
                                                          --------      --------

CASH AND EQUIVALENTS AT BEGINNING OF PERIOD                  4,158         2,088
                                                          --------      --------

CASH AND CASH EQUIVALENTS AT END OF PERIOD                $ 12,677      $  4,158
                                                          ========      ========

Cash Paid For:
  Interest                                                $    757      $  2,274
                                                          ========      ========
  Income Taxes                                            $     --      $     --
                                                          ========      ========

Non-Cash Activities:

Shares issued for Services and wages                      $104,300      $     --
                                                          ========      ========
Shares issued for officer debt conversion                 $ 52,500      $     --
                                                          ========      ========
shares issued for payable satisfaction                    $ 44,375      $     --
                                                          ========      ========
</TABLE>

   The accompanying notes are an integal part of theses financial statements.

                                       23
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2003 and 2002

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

        a. Organization

        The financial statements presented are those of Communications Research,
        Inc. (The Company). The Company was organized on August 11, 1989 in the
        State of New Jersey. On July 17, 1996, the Company became a wholly owned
        subsidiary of Visual Telephone International (VTI), a publicly traded
        Delaware corporation. On May 21, 1999 shares of the Company were
        distributed to the shareholders of VTI pursuant to an agreement and Plan
        of Reorganization spin off. The Company has operated as a separate
        entity since that date. Effective July 15, 1999, the Company changed its
        domicile to the State of Nevada through the spin off reorganization.
        These financial statements are therefore unconsolidated with the
        Company's parent for all dates presented.

        The Company is engaged in the design and installation of sophisticated
        communications systems for data and audio visual systems integration.

        b. Recognition of Revenue

        The Company recognizes income and expense on the accrual basis of
        accounting. Revenue is recorded upon sale and delivery of the Company's
        product, and/or the installation of the communication system.

        c. Earnings (Loss) Per Share

        The computation of earnings per share of common stock is based on the
        weighted average number of shares outstanding at the date of the
        financial statements.

<TABLE>
<CAPTION>
                                                             Loss            Shares      Per Share
                                                          (Numerator)     (Denominator)    Amount
                                                          -----------     -------------    ------
<S>                                                       <C>              <C>             <C>
        For the year ended December 31, 2003:

                Income (loss) to common
                stockholders                              $ (185,010)      10,855,981      $(0.02)
                                                          ==========       ==========      ======
        For the year ended December 31, 2002:

                Income (loss) to common
                stockholders                              $  (63,849)      12,580,591      $(0.01)
                                                          ==========       ==========      ======
</TABLE>

                                      F-7
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2003 and 2002

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        c. Earnings (Loss) Per Share (continued)

        The following is the calculation for Weighted-average common shares used
        in basic and dilutive net loss per common share:

                                                      For the Year Ended
                                                          December 31,
                                                    2003                2002
                                                -----------         ------------

        Common shares outstanding during
         the entire period                       12,580,591          12,580,591
        Weighted-average common shares
         issued during the period                (1,724,610)               --
                                                -----------         -----------
        Weighted-average common shares
          used in basic EPS                      10,855,981          12,580,591
        Dilutive effects of potential
         common shares                                 --                  --
                                                -----------         -----------
        Weighted-average number of
          common shares and dilutive
          potential common stock used
          in diluted EPS                         10,855,981          12,580,591
                                                -----------         -----------

        d. Provision for Income Taxes

        No provision for income taxes has been recorded due to the net operating
        losses of the Company of approximately $1,434,000. The NOL carryforward
        will begin to expire in the year 2011. No tax benefit has been reported
        in the financial statements because the Company has yet to generate
        taxable income from operations, or show probability of taxable income.
        Some of the losses will be limited due to the acquisition and change of
        control.

        Deferred tax assets and the valuation account is as follows at December
        31, 2003 and 2002.

                                                   December 31,
                                           ----------------------------
                                              2003               2002
                                           ---------          ----------
        Deferred tax asset:
           NOL carryforward                $ 487,000          $ 440,000
           Valuation allowance              (487,000)          (440,000)
                                                              ---------
        Total                                     $-                 $-
                                           =========          =========

                                      F-8
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2003 and 2002

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

        e. Cash and Cash Equivalents

        The company considers all highly liquid investments with maturities of
        three months or less to be cash equivalents.

        f. Property and Equipment

        Expenditures for property and equipment and for renewals and
        betterments, which extend the originally estimated economic life of
        assets or convert the assets to a new use, are capitalized at cost.
        Expenditures for maintenance, repairs and other renewals of items are
        charged to expense. When items are disposed of, the cost and accumulated
        depreciation are eliminated from the accounts, and any gain or loss is
        included in the results of operations.

        The provision for depreciation is calculated using the straight-line
        method over the estimated useful lives of the assets. Depreciation
        expense for the period ended December 31, 2003 and 2002 is $57,036 and
        $48,029, respectively.

        g. Inventory

        Inventory is recorded at the lower of cost or market and consists
        primarily of computer components and parts.

NOTE 2 - Property and Equipment

        Property and Equipment consists of the following:

                                               2003              2002
                                            ---------         ---------

        Furniture & Equipment                  34,523            34,523
        Lab & test equipment                   14,977            29,849
        Software                              150,000           150,000
        Vehicles                               51,711            51,711
                                            ---------         ---------
                Total                         251,211           266,083

           Accumulated Depreciation          (210,795)         (168,631)
                                            ---------         ---------

           Net Property & Equipment         $  40,416         $  97,452
                                            =========         =========

                                      F-9
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2003 and 2002

NOTE 3 - RELATED PARTY TRANSACTIONS

        As part of being acquired by Visual Telephone International, Inc., the
        Company is indebted to Carl Ceragno an officer and director of the
        Company. The original balance owed was $150,000 bearing interest at 7%.
        During 2003 and 2002, Mr Ceragno advanced an additional $31,659 and
        $20,876, respectively, and was paid back $81,209 and $26,709,
        respectively. The balance at December 31, 2003 and 2002 is $162,099 and
        $211,649, respectively.

        The Company received advances from RCP Enterprises, Inc. of $7,050
        during 1999. The balance due at December 31, 2003 and 2002 is $4,279,
        respectively.

        During the year ended December 31, 2000, Alma Jean O'Connor, an officer,
        loaned the Company $19,410. The note bears interest at 7% and is due
        upon demand. The balance due at December 31, 2003 and 2002 is $9,558 and
        $9,558, respectively.

NOTE 4 - LONG-TERM LIABILITIES

        Notes payable related party is detailed as follows:

<TABLE>
<CAPTION>
                                                                   2003           2002
                                                                --------        --------
<S>                                                             <C>             <C>
        Note payable to a officer & director, bears
         interest at 7%, payable upon demand,
         unsecured note                                         $162,099        $211,649

        Note Payable to a director and shareholder
         non-interest bearing, due on demand                      11,980            --

        Note payable to a officer, bears interest at 7%,
         payable upon demand, unsecured note                       9,558           9,558
                                                                --------        --------

        Total Notes payable related party                        183,637         221,207
                                                                --------        --------

        Notes Payable are as follows:

        Note payable to a corporation, bears interest at
         1.9%, monthly payments due of $608 through
         October 2006, secured by a vehicle                       22,635          26,419

        Note payable to a bank, bears interest
         at 8.5%, installments due monthly of
         $331 through September 2004, secured
         by a vehicle                                           $   --          $  7,116
                                                                --------        --------

              Total Notes Payable                                 22,635          33,535
                                                                --------        --------

        Total Long-Term Liabilities                              206,272         254,742
                                                                --------        --------

        Less current portion of:
         Notes payable - related party                           183,637         221,207
         Notes payable                                             6,986          11,122
                                                                --------        --------
        Total current portion                                    190,623         232,329
                                                                --------        --------

        Net Long Term Liabilities                               $ 15,649        $ 22,413
                                                                ========        ========
</TABLE>

                                      F-10
<PAGE>

                                           COMMUNICATIONS RESEARCH, INC.
                                         Notes to the Financial Statements
                                             December 31, 2003 and 2002

        NOTE 4 - LONG-TERM LIABILITIES (Continued)

        Future minimum principal payments on notes payable related party are as
        follows:

                 2004                                    $183,637
                                                         --------

        Total notes payable-related party                $183,637
                                                         ========

        Future principal payments on Notes
         payable are as follows:

                 2004                                      10,863
                 2005                                       7,120
                 2006                                       5,430
                                                         --------

                     Total                               $ 22,635
                                                         ========

NOTE 5 - USE OF ESTIMATES IN THE PREPARATION OF FINANCIAL STATEMENTS

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements and revenues and
expenses during the reporting period. In these financial statements, assets and
liabilities involve extensive reliance on management's estimates. Actual results
could differ from those estimates.

                                      F-11
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2003 and 2002

NOTE 6 - COMMITMENTS AND CONTINGENCIES

The Company is committed to a lease agreement for their office and warehouse
facilities. Monthly lease payments are due of $2,869 through November of 2006.

Future minimum operating lease payments are as follows:

        2004                                                       $34,428
        2005                                                        34,428
        2006                                                        28,690
                                                                   -------
                   Total                                           $97,546
                                                                   =======

Legal Proceedings
-----------------

Under the terms of the reorganization, VTI has assigned to the Company all of
its rights to a lawsuit captioned VTI vs. Michael O'Brien Pickens and the
Pickens Venture Group, Case No. 97-2969(JWB) and filed in the United States
District Court. On August 26, 1999, the Company was granted a summary judgement
against Pickens in the amount of $415,000 plus legal fees. On January 25, 2001,
Michael O'Brien Pickens filled a petition of personal bankruptcy under chapter 7
of the United States cod in U.S. Bankruptcy Court. Upon review by the Bankruptcy
Court , they denied a request for summary judgement in favor of the Company, and
on June 18, 2001, the debt to the Company was discharged. The Company has
recourse against the Pickens Venture Group, Inc. and the Pickens Group,
co-defendants in the lawsuit, however no assurances can be given that the
remaining defendants in this case can be located and would be able to satisfy
any award of damages. The Company has therefore not recorded a receivable in
connection with the judgement due to the uncertain ability to collect.

The Company was the Plaintiff in a lawsuit involving IVoice.com , wherein the
Company was seeking reimbursement for office sharing expenses due. In March 2002
the Company was awarded a judgment in the amount of $31,977.89 in the Superior
Court of New Jersey. The Company received $15,000 as a settlement in the suit
and the case is closed.

NOTE 7 - GOING CONCERN

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. The Company has had recurring
operating losses for the past several years and is dependent upon financing to
continue operations. The financial statements do not include any adjustments
that

                                      F-12
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2003 and 2002

NOTE 7 - GOING CONCERN (Continued)

might result from the outcome of uncertainty. It is management's plan to
continue to implement their marketing strategy to generate the necessary revenue
to support operations. The Company's revenues continue to increase, and
management expects to report net income in the coming year. With the increase in
revenues, management believes they will have sufficient funds to support
operations for the coming year. Officers will continue to advance funds as
needed for any shortfalls in cashflow.

NOTE 8 - FAIR VALUE OF FINANCIAL INSTRUMENTS

Estimated fair values of the Company's financial instruments (all of which are
held for non-trading purposes) are as follows:

                                              2003                   2002
                                     --------------------    -------------------
                                     Carrying      Fair      Carrying      Fair
                                      Amount       Value      Amount      Value
                                     --------    --------    --------    -------
        Cash and Cash Equivalents   $ 12,677    $ 12,677    $  4,158    $  4,158
        Long - Term Debt             206,272     206,272     254,742     254,742

The carrying amount approximates fair value of cash and cash equivalents. The
fair value of long-term debt is based on current rates at which the Company
could borrow funds with similar remaining maturities.

NOTE 9 - STOCKHOLDERS EQUITY

Pursuant to the reorganization and spin off agreement dated May 21, 1999, the
Company issued 9,233,092 shares of class A common stock to the shareholders of
VTI, and 400,000 shares of class B common stock to a principal of the Company.
No value is placed on the stock issuance due to the nature of the issuance being
similar to a forward stock split. The financial statements have been
retroactively restated for the reorganization stock split as though it occurred
at inception.

Concurrent with the reorganization, the Company changed its domicile to the
State of Nevada, and changed the authorized capital of the class A common to
40,000,000 shares of $.001 par value stock. The Company also authorized the
creation of the 700,000 shares of class B common stock with no par value and 100
to 1 voting power as compared to class A common. The Company issued 400,000
shares of class B common to the Company's founder and president as part of the
reorganization.

                                      F-13
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2003 and 2002

NOTE 9 - STOCKHOLDERS EQUITY (Continued)

On June 1, 1999, the Company authorized and issued 3,250,000 shares of class A
common stock at $.001 per share, to various officers and employees for
subscriptions receivable of $3,250. These subscriptions are to be paid to the
Company once the shares are registered.

During November 2000, the Company issued 97,500 shares of its common stock at
$.31 per share for services valued at $30,225.

In 2003, 5,110,000 unclaimed shares issued pursuant to the spin-off agreement
stated above were cancelled and returned to treasury.

In January 2003, the Company issued 2,607,500 shares for services to contract
laborers, wages to officers, and to settle payables.

In April 2003, the Company issued 1,000,000 shares for services valued at
$10,000 pursuant to an S-8 offering.

In October 2003, the Company issued 600,000 shares for services valued at
$6,000.

In November and December, the Company issued 120,000 and 275,000 shares,
respectively for cash at $.04 and $.02 per shares respectively.

NOTE 10 - CONVERTIBLE DEBENTURES

On November 17, 1999, the Company entered an agreement to purchase software from
Communication Systems Technology, Inc.(CSTI). Pursuant to the purchase agreement
the company paid $15,000 cash and became indebted to CSTI for $135,000.
Principal and interest on the note is currently due, bears interest at 8%, and
is secured by the software. The note is convertible into shares of common stock,
upon registration of the Company's stock. The conversion rate is 80% of the
average trading price for the common stock for the 10 trading days ending one
day prior to the conversion election date.

                                      F-14