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, 2005

                          Commission File No. 0-50069

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

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

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. [ ]

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

The issuer's revenues for the fiscal year ended December 31, 2005 were $77,251.

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,
2005 was 125,939,444 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, and provide construction management for
audiovisual, video conference, structured cabling and data communications
systems that process, display and transmit video, audio and data. We have two
autonomous internal divisions. Our core business is Special Systems Consulting
that provides clients with design, development, bid specifications, cost
consulting and project management of audio, video, data, security and
communications systems. Our Systems Integration Division is a boutique
design-build operation, for special clients, to provide turnkey design, develop
and act as general contractor to install sophisticated data, audio, video and
communications systems.

                                       2
<PAGE>

         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. 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 were frozen and the
support period has expired. This decision was made as the cost to maintain
compliance with new PC operating systems, hardware 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.

         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 with reduced revenue for designers and integrators.
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

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

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

                                       3
<PAGE>

         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 15% of
our business. This division has no foreign operations and no material foreign
sales.

         Capital equipment, supplies, materials and installation labor used by
our System Integration Division are supplied by various manufacturers, vendors
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. Installation labor on large projects is bid to contract installers
know to provide high quality workmanship that meets our standards and goals. The
elimination of any one supplier would not have a material effect on our ability
to design and install systems.

         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 approved as a New Jersey State DPMC (Department
of Property Management and Construction) Communications Consultant. This is a
contract renewed every two years, and will be renewable on or before expiration
by January 31, 2008, upon review of performance and scope of projects completed.
In 2004, the company was cleared as a NJSCC approved communications consultant
to directly provide K-12 schools engineering and consulting service. We have
been awarded projects for engineering and consulting services under New Jersey
DPMC status as a state qualified consulting firm. The company has elected to
continue working with K-12 schools through our close association with State
approved Architectural firms that we have continuing professional relations
with. 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.

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

         Our Systems Special Systems Consulting or System Integration Division
is currently working on or completed in 2005 the following governmental or
public projects:

                  Ramapo College of New Jersey, Mahwah, NJ
                  Dater School, Jr. High School, Ramsey, NJ
                  NJEdge, new Statewide College and University Network
                  Sussex Community College, Sussex, NJ
                  City of Lodi, Lodi, NJ
                  New Jersey Department of Transportation, Trenton, NJ
                  Ingersoll-Rand Corporate Headquarters, Montvale, NJ
                  Kennelon Schools, Kennelon, NJ
                  West New York Schools, West New York, NJ
                  Wanaque and Haskell Schools, Wanaque, 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 and Goshen, NY
                  Seyffer & Koch Architectural Group, Glen Rock, NJ
                  SNS Partnership, Montvale, NJ

                                       4
<PAGE>

         Current government, education and public projects represent
approximately 100 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.

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, and project management 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:

                  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. Siemon Corporation has recommended and assigned
projects to the company under this agreement in the past three 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 launched 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 have
engaged American Internet to establish and host an on-line ordering for
TeleWRITER products and updates, when reasonable, for better client notification
and easier ordering. In 2005 TeleWRITER began accepting Visa, MasterCard and
American Express as payment for software ordered over the internet.

         The Company WEB site is under revision and will provide information on
the Engineering Consulting and Systems Integration divisions of the company. The
WEB address for that site is www.cri-inc.biz , with the former address
www.vistele.com, remaining in operation until June 2006.

                                       5
<PAGE>

         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.

         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
2005 on expanding its advertising, public relations and investor relations
strategies for both the company and TeleWRITER. The Company will continue to
expand its advertising efforts as we anticipate our sales and marketing spending
will grow dramatically in 2006. The Company also plans to promote specific
technologies or completed projects in trade publications. The company has
received a considerable amount of exposure from previously 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 diagrammatically and functionally detail the construction and
wiring of each system we design and identify, track, and map all cable runs and
devices utilized in a system. Performance test results and certification runs
are compiled and documented to provide quality assurance. In 2004 the company
replaced aging Windows 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 continues to use its
2003 Architectural Desktop system, by Autodesk, for development and design,
including two AutoCAD 2004 stations.

         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 commission.

         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 2005 the company again replaced all
equipment greater than three years old and added 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' professional 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 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:

                                       6
<PAGE>

         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 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, colleges, 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


                                       7
<PAGE>

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.

         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 was 4.8 Billion dollars and
                           is continuing to be funded by the federal government.

                  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.

                                       8
<PAGE>

         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 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


                                       9
<PAGE>

into reality in 2004-2005. 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 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."

                                       10
<PAGE>

         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.

         The need for employee mobility is on the rise. This mobility is taking
the form of off-premises mobility or work at home 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 by 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 number of regional K-12 schools to
replace their 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 provides 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 with up to, 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 PRODUCTS DIVISION.
-------------------------

         The company has totally phased out their line of PC Based desktop video
conferencing products and Visual Products Division. Our proprietary Visual-EZ
and Communicator products have been frozen with only the intellectual property,
trademarks and copyrights retained if required in the future.

         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 a license to use and develop the
TeleWRITER-AGS (Advanced Graphics System) system software in 1999. This software
was assigned by us, to a subsidiary, TeleWRITER CORPORATION, INC., in exchange
for 49% 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, who owns the
original TeleWRITER software, currently valued at 2.5 million dollars.

                                       11
<PAGE>

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

          The TeleWRITER product has evolved since its inception by Optel in
1982. 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 users share and
access documents, resources and computing programs. In point to point operation
the software provided in band, face to face audio and video of participants. In
multipoint mode the conference required a simultaneous multipoint bridge
telephone conference with full graphic and annotation T.120 functionality over
an IP network. The principal feature of the TeleWRITER-AGS operating system is
its powerful white boarding, graphics and collaboration package. All uses in a
conference require the PC client software installed and operating on the PC.

          The company recognizes the T.120 Transport Protocol and H.323 audio
and video compression standard used in the TeleWRITER-AGS are on the down side
of their life expectancy as useable standards with potentially at lease three
usable years remaining. The company has recognized this and for that reason has
begun a development effort to replace T.120 with SIP for a transport Protocol
and MPEG-4 for compression algorithm.

          After almost a year of development and testing, TeleWRITER Corporation
released Version 3.0 of the TeleWRITER-AGS operating system, the first major
revision and update to the software in five years since the former release of
Version 2.15 In 1998. Since the software was released for the market in October
2004, the company has embarked on a very aggressive show and exhibition schedule
to bring the product before the industry in an attempt to re-establish its
presence in the collaborative computing market. In 2005, TeleWRITER Corporation
released its first variation in what will become a family of products. The
product is a standalone white boarding software product at $200.00 per client
copy to compete with the $2,000.00+ hardware white boarding solutions. The new
white boarding product revives an old product name by Optel, called VideoWRITER.

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

          We focused our efforts in 2005 to update the operating system and
further enhance its features by building an internal software development team
of programmers directly engaged by the company with the knowledge and ability to
revise the software to meet current operating system compatibility requirements.

          As a direct result of exhibiting in the National Court Technology
Conference Court (CTC9) in Seattle, Washington, September 2005, the company
began development of a new product targeted and optimized for court and judicial
applications. The new product was subsequently announced and purchased by the
Maricopa County (AZ) District attorney's office, Savanna (GA) Courts and
Hillsborough (FL) courts. The product has proven its effectiveness in automating
and executing `First Appearance' and `Video Arraignment' documents for judicial
uses in reducing the process costs and lead time, resulting in significant cost
saving for the counties.

          In 2004 TeleWRITER Corporation hired Mr. Bill B. Davis in the capacity
of Federal and GSA sales Director. Since his engagement Mr. Davis has
aggressively gone forward in the sales and marketing of the TeleWRITER AGS
software system and has been give the additional responsibility of corporate
sales. Further, Mr. Davis is coordinating the company's initiative to acquire
products that are synergetic with TeleWRITER or enhance its features for
specific markets or applications. In the fall of 2005 Mr. Davis was elevated to
Vice President, Sales and has continued to expand TeleWRITER's market position.

          The company raised the bar in establishing the industry standard with
its MultiMedia Authoring tool for automating classroom and meeting preparation;
and recently by, adding a Digital Streaming Recorder to capture the class or
meeting session in AVI or MPEG2 video standard. This new capability includes an
editing tool for authoring courseware to a DVD, uploading to a streaming WEB
server or to an archival library server.

          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. The new release is future compatible, with
modern era computing operating systems and software. It has been revised
consistent with current programming philosophy with development of a core
engine, with modules that can be mixed and readily modified for meeting
different needs and applications. The company is closing monitoring the new
operating system to be introduced by Microsoft in the winter of 2007, currently
to be named Vista. Testing will continue to assure compliance without delay when
released.

                                       12
<PAGE>

          TeleWRITER software holds the potential of shaping the direction of
the market and shifting the role that collaborative computing will have on the
way people share information and communicate in group settings. The TeleWRITER
product line, with a universal product, holds a potential paralleling the market
served by Adobe. Adobe has made the Adobe Acrobat Reader a standard. It is a
software that is available for every computer and PDA. Similarly, the TeleWRITER
engine represents a capability that should be in every computer, while holding
the potential of serving a range of robust and unique, industry-specific
collaborative communications computing needs. The company will be developing a
free, lite version with reduced capability of full licensed version that will be
freely distributed and provided to PC manufactures for distribution with their
products.

          Trends points to the opportunity reflected by companies seeking
desktop solutions to their real-time, interactive multi-media collaborative
communication requirements. Recent growth and momentum marked by the eLearning
and collaborative computing market has reached a stage of maturity to where the
demand for more is creating much activity and opportunity among competitors. New
buzzwords mark the distinctive's and niches being targeted: Collaborative
Computing", "satellite distance learning," "web-conferencing," "online
communities," "collaborative learning," "knowledge sharing" represent only the
tip of the iceberg.

         COMPETITION - TELEWRITER CORPORATION
         ------------------------------------

         The data collaboration industry has met and exceeded projections for
growth over the past five years. Frost and Sullivan estimated the web
conferencing industry to be at $485 million dollars in sales at the end of 2005.
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.

         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 Elluminate, 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, 2005, we had 3 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 2006 we anticipate to increase the number of our
permanent employees, primarily in software development, technical and marketing
positions in the TeleWRITER Subsidiary. 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
$225,000.00. We anticipate our budget for marketing, trade shows and advertising
to be $275,000. We believe that we will be able to satisfy our cash
requirements, for both working capital and product development purposes, during
the next year from funds generated from our operations, and that of TeleWRITER
Corporation. 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.

                                       13
<PAGE>

         In our core business of communications consulting, 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
development and design 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.

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 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. On or about November 29, 2004 the company was approved to increase its
Class A shares authorized to 160,000,000 and Class B shares authorized to
2,000,000.

         The Company is a fully 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.

        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

         Communications Research currently occupies 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 $3,500 monthly rent subject to annual escalations and special
seasonal fees as for snow plowing.

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

         TeleWRITER Corporation will continue to use our Mahwah Location as the
headquarters for TeleWRITER Corporation and Federal/GSA/Dealer Sales will remain
in Hampton, Virginia. It is anticipated that a west coast presence and operation
will be established potentially by summer 2006. While no definite location has
been selected at this time, the company is exploring all possibilities.

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

                                       14
<PAGE>

                                     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 Bulletin Board since
October 21, 2003. We hope to establish a market for said shares. Our securities
have traded recently in a range of . 02 (low)-.14 (high) cents per share since
trading commenced.

HOLDERS.

         As of December 31, 2005, there were approximately 1361 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.

         We have been principally focused upon our core business of
communications consulting and the TeleWRITER operations. Management believes
that our TeleWRITER subsidiary 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 $77,251 for the year ending
December 31, 2005, as compared to revenues $149,468 for the prior year.
Resources normally used productively for income producing work continue to be
redirected to launch TeleWRITER sales and marketing to reintroduce the product
into the marketplace.

         Gross profit Our gross profit was approximately 64% for the year ended
December 31, 2005, as compared to approximately 14% for fiscal 2004. The
increase in our gross profit was the result of system projects requiring
primarily in house consulting and engineering resources.

         Operating Expenses For Communications Research individually, our
revenues were down from 2004 by approximately 48% overall. Our operating
expenses have only decreased approximately 30% from $674,268 for the year ending
December 31, 2004, to $477,069 for the year ending December 31, 2005. The
decrease in total operating expenses for 2005 reflects our efforts to transfer
operating expenses to TeleWRITER. The most significant reduction being office
salaries being reduced from $423,019 to $66,368 in 2005 which in 2004 reflected
the salaries and compensation of employees of the TeleWRITER Corporation and
value of stock issued to company employees of TeleWRITER Corporation.

         Operating Loss We have not shown a net profit for a calendar year as an
independent company to date. Our net operating losses have decreased from
$652,649 as of December 31, 2004 to $427,160 as of December 31, 2005, due
largely to the transference of expenses to TeleWRITER Corporation, therefore
decreasing operating expenses. Over the past years, our executive officers have
been loaning us funds to finance our losses over the last several years. No
money has been advanced in 2005 as the Regulation S stock offering provided
suitable reserves until profitability is achieved. That offing is complete and
closed.

         Cash and cash Equivalents Total cash as of December 31, 2005 was $2,078
as compared to $203,519 as to December 31, 2004. Total accounts receivable as of
December 31, 2005 was $3,570, of which CRI direct business accounts receivable
portion was $150,650 in 2004. Total current assets increased to $660,827 as of
December 31, 2005 from $366,052 at December 31, 2004 largely as a result of
notes and receivables from TeleWRITER Corporation.

                                       15
<PAGE>

         Current Liabilities Our current liabilities have slightly increased
approximately 8% from $131,903 as of December 31, 2004 to $142,228 as of
December 31, 2005. The increase is attributable to an increase in accrued
expenses. The company does not show the intellectual property asset value of the
TeleWRITER software system that was purchased by our President 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. With six years passing and the product
re-released, the intellectual value is estimated to be at $2,500,000.

         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.

         The company will need to replace aging office and data processing
equipment. CRI has provided funding to TeleWRITER Corporation to purchase
additional demonstration equipment for shows. Additionally we require additional
technical testing equipment to install and maintain state of the art electronic
systems and equipment. If the company is unable to purchase this equipment it
will be unable to effectively 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, 2005 we have an accumulated deficit of
$2,322,051, compared to $1,912,231 at December 31, 2004 and the report from of
our independent auditor on our audited financial statements at December 31, 2005
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.

         We do not have adequate working capital for the near term. We will
continue to be reliant on loans from our officers or proceeds of sale of stock
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 had entered into four 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 require 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 Regulation S Stock offering expired in 2005 and is
complete.

ITEM 7. FINANCIAL STATEMENTS.

SEE ATTACHMENT 1. AUDITORS FINANCIAL STATEMENT


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

        NONE


                                       16
<PAGE>

ITEM 8A CONTROLS AND PROCEDURES

        We maintain disclosure controls and procedures designed to ensure that
information required to be disclosed in reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the specified time periods. Our management, President and Chief
Financial Officer, has evaluated the effectiveness of our disclosure controls,
procedures and internal control over financial reporting (as defined in Rule
13a-14(c) promulgated under the Securities and Exchange Act of 1934, as amended)
and we have concluded these were effective as of Dec 31, 2005 (the "Evaluation
Date"). Based on the evaluation, which disclosed no significant deficiencies or
material weaknesses, our Chief Executive Officer/Chief Financial Officer
concluded that our disclosure controls and procedures and internal controls over
financial reporting have been designed and are being operated in a manner that
provides reasonable assurance that the information required to be disclosed by
us in reports filed under the Securities Exchange Act of 1934, as amended, is
recorded, processed, summarized and reported within the time periods specified
in the SEC's rules and forms. There were no changes in our disclosure controls
and procedures or internal control over financial reporting that occurred during
the quarter covered by this Report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.

                                    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                  59            Director, President and Treasurer
Lawrence S. Hartman, Esq.        40            Director and Vice President
Almajean O'Connor                56            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 RailCar 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


                                       17
<PAGE>

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.

ITEM 10. EXECUTIVE COMPENSATION.

         The following table sets forth the compensation of our three (3)
officers for the last five (5) fiscal years:

<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              2001        $ 16,400.00      $0.00      $0.00      $0.00     $0.00    $0.00      $0.00
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
President & Treasurer        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
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
                             2004              $0.00      $0.00      $0.00      $0.00     $0.00    $0.00      $0.00
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
                             2005         $13,653.00      $0.00      $0.00      $0.00     $0.00    $0.00      $0.00
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
Lawrence S. Hartman          2001             $ NONE      $0.00      $0.00      $0.00     $0.00    $0.00      $0.00
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
Vice President               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
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
                             2004             $ NONE      $0.00      $0.00      $0.00     $0.00    $0.00      $0.00
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
                             2005             $ NONE      $0.00      $0.00      $0.00     $0.00    $0.00      $0.00
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
Almajean O'Connor            2001        $ 13,900.00      $0.00      $0.00      $0.00     $0.00    $0.00      $0.00
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
Secretary                    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
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
                             2004         $50,000.00      $0.00      $0.00      $0.00     $0.00    $0.00      $0.00
---------------------------- --------- -------------- ---------- ---------- ---------- --------- -------- ----------
                             2005          51,715.00      $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. 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.

                                       18
<PAGE>

PERCENTAGE OF TOTAL SHARES


--------------------- ------------------------- ---------------- -------------
TITLE OF                                           NO. OF        PERCENTAGE OF
CLASS                  NAME & ADDRESS              SHARES        Ownership
--------------------- ------------------------- ---------------- -------------
Class A Common        Lawrence S. Hartman          1,050,000        1.25%
--------------------- ------------------------- ---------------- -------------
Class A Common        Almajean O'Connor            1,405,000         1.4%
--------------------- ------------------------- ---------------- -------------
Class A Common        Carl R. Ceragno              5,800,000         5.5%
--------------------------- ------------------- ---------------- -------------
All Officers and                                   8,255,000         8.25%
Directors as
a Group
(3 Individuals)
--------------------- ------------------------- ---------------- -------------
Class B Common        Carl R. Ceragno              2,000,000        100.0%
--------------------- ------------------------- ---------------- -------------

         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. The loans from Mr. Ceragno and Ms.
O'Conner 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 and Mr. Ceragno's loan accrue interest at the rate of 7% per annum.
The balance of Mr. Ceragno's loan does not accrue interest.

         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.

         RECENT DEVELOPMENTS

         None

                                       19
<PAGE>

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

31.1  Certification of Chief Executive Officer

31.2  Certification of Principle Financial Officer

32.1  Certification of Chief Executive Officer and Chief Financial Officer
      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906
      Of The Sarbanes-Oxley Act Of 2002

(b) Reports on Form 8-K

The Company filed one report on Form 8-K to date in 2005 as follows.

September 27, 2005 S-8 Registration of Certain Classes of Securities Pursuant to
Section 12(g) of the Securities exchange Act of 1934.

                                       20
<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 31, 2005                          By: /s/ Carl R. Ceragno
                                                  -------------------
                                                  Carl R. Ceragno

                                       21
<PAGE>







                          COMMUNICATIONS RESEARCH, INC.

                              FINANCIAL STATEMENTS

                                December 31, 2005






<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Directors of
Communications Research, Inc.

We have audited the accompanying balance sheets of Communications Research, Inc.
as of December 31, 2005 and 2004, 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 standards of the PCAOB (United
States). Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. The Company is not required to have, nor were we engaged to
perform, an audit of its internal control over financial reporting. Our audit
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal control over financial reporting. Accordingly, we express no
such opinion. 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 Communication Research, Inc. as
December 31, 2005 and the results of its operations and its cash flows for the
years ended December 31, 2005 and 2004, which is in conformity with U.S.
generally accepted accounting principles.

The accompanying financial statements have been prepared assuming that
Communications Research, Inc. will continue as a going concern. As discussed in
Note 2 to the financial statements, Communications Research, Inc. has suffered
recurring losses from operations and has a net capital deficiency that raises
substantial doubt about the company's ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 2. The
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.



Chisholm, Bierwolf & Nilson, LLC
Bountiful, Utah
March 29, 2006


                                      F-1
<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                                 Balance Sheets

                       ASSETS
                       ------
                                                            December 31,
                                                                2005
                                                            ------------
CURRENT ASSETS

     Cash and cash equivalents                              $     2,118
     Accounts receivable, net                                     4,929
     Prepaid expenses                                                35
     Inventory                                                       --
                                                            -----------

         Total Current Assets                                     7,082
                                                            -----------

PROPERTY AND EQUIPMENT, net                                      31,002
                                                            -----------

OTHER ASSETS

     Note receivable, related party                             200,000
     Interest receivable                                         19,124
     Due from related company                                   393,724
     Deposits and other assets                                    4,988
                                                            -----------

         Total Other Assets                                     617,836
                                                            -----------

         TOTAL ASSETS                                       $   655,920
                                                            ===========









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

                                      F-2



<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                           Balance Sheets (Continued)

             LIABILITIES AND STOCKHOLDERS' EQUITY
             ------------------------------------
                                                            December 31,
                                                                2005
                                                            ------------
CURRENT LIABILITIES

     Accounts payable                                       $     7,483
     Accrued expenses                                            81,588
     Stock deposits                                               8,182
     Notes payable, current                                      32,980
                                                            -----------

         Total Current Liabilities                              130,233
                                                            -----------
LONG-TERM DEBT

     Notes payable, related parties                                  --
     Notes payable                                                8,657
     Less current portion                                            --
                                                            -----------

         Total Long-Term Debt                                     8,657
                                                            -----------

         Total Liabilities                                      138,890
                                                            -----------
STOCKHOLDERS' EQUITY

     Preferred stock, par value $0.0001 per share;
      authorized 100,000,000 shares; no shares issued
      or outstanding                                                 --
     Common stock Class A, par value $0.001 per share;
      authorized 160,000,000 shares; 125,934,444
      shares issued and outstanding                             125,934
     Common stock Class B, par value $0.0001 per share;
      authorized 2,000,000 shares; 400,000
      shares issued and outstanding                                  --
     Additional paid-in capital                               2,734,681
     Subscriptions receivable                                   (19,965)
     Accumulated deficit                                     (2,323,620)
                                                            -----------

         Total Stockholders' Equity                             517,030
                                                            -----------

         TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY         $   655,920
                                                            ===========

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

                                      F-3

<PAGE>
                          COMMUNICATIONS RESEARCH, INC.
                            Statements of Operations

                                                      For the
                                                    Years Ended
                                                    December 31,
                                          --------------------------------
                                               2005                2004
                                          -------------      -------------

REVENUES                                  $      77,251      $     149,468

COST OF SALES                                    27,342            127,849
                                          -------------      -------------

GROSS PROFIT                                     49,909             21,619
                                          -------------      -------------

OPERATING EXPENSES

     Office salaries                             66,368            423,019
     Rent                                        39,987             38,149
     Insurance                                   23,728             25,142
     Travel and lodging                           7,700             13,252
     Consulting                                 300,000                 --
     Other general and administrative             2,448            142,932
     Impairment of Inventory                      4,947                 --
     Depreciation and amortization               32,822             31,774
                                          -------------      -------------

         Total Operating Expenses               478,000            674,268
                                          -------------      -------------

NET OPERATING LOSS                             (428,091)          (652,649)
                                          -------------      -------------

OTHER INCOME (EXPENSE)

     Write-off of debt                               --            190,320
     Interest income                             17,340              3,458
     Interest expense                              (638)           (18,919)
                                          -------------      -------------

         Total Other Income (Expense)            16,702            174,859
                                          -------------      -------------

NET LOSS                                  $    (411,389)     $    (477,790)
                                          =============      =============

BASIC LOSS PER COMMON SHARE               $       (0.00)     $       (0.02)
                                          =============      =============

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                  113,016,157         25,625,416
                                          =============      =============

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

                                      F-4

<PAGE>
                          COMMUNICATIONS RESEARCH, INC.
                       Statements of Stockholders' Equity
                 For the Years Ended December 31, 2005 and 2004
<TABLE>
<CAPTION>
                                                    Common Stock
                           -----------------------------------------------------
                                     Class A                        Class B        Additional
                           ---------------------------     ---------------------     paid-in        Subscription     Accumulated
                              Shares          Amount          Shares      Amount     capital         Receivable        Deficit
                           -----------     -----------     -----------    ------   -----------      -----------      -----------
<S>                         <C>            <C>                 <C>         <C>     <C>              <C>              <C>
Balances,
  January 1, 2004           12,216,550     $    12,217         400,000     $--     $ 1,018,961      $    (3,250)     $(1,434,441)

Common stock issued
  for cash pursuant
  to a Regulation S
  offering at
  prices ranging from
  $0.01 to $0.19
  per share                 78,100,265          78,100              --      --       2,005,566         (147,547)              --

Costs of issuance                   --              --              --      --      (1,136,847)              --               --

Common stock issued
  for compensation
  at $0.07 per share         5,050,000           5,050              --      --         348,450               --               --

Common stock issued
  for services
  rendered valued at
  $0.04 per share            1,500,000           1,500              --      --          58,500               --               --

Common stock issued
  for cash
  at $0.02 per share         7,214,855           7,214              --      --         137,083               --               --

Subscriptions received              --              --              --      --              --            3,250               --

Net loss for 2004                   --              --              --      --              --               --         (477,790)
                           -----------     -----------     -----------     ---     -----------      -----------      -----------

Balances,
 December 31, 2004         104,081,670     $   104,081         400,000     $--     $ 2,431,713      $  (147,547)     $(1,912,231)

Common stock issued
  for cash pursuant
  to a Regulation S
  offering at
  prices ranging from
  $0.01 to $0.02
  per share                 16,652,774          16,653              --      --         322,651               --               --

Costs of issuance                   --              --              --      --        (318,483)              --               --

Common stock issued
  for services
  rendered valued at
  $0.06 per share            5,000,000           5,000              --      --         295,000               --               --

Common stock issued
  for services
  rendered at $0.02
  per share                    200,000             200              --      --           3,800               --               --

Subscriptions received              --              --              --      --              --          127,582               --

Net loss for 2005                   --              --              --      --              --               --         (411,389)
                           -----------     -----------     -----------     ---     -----------      -----------      -----------
Balances,
 December 31, 2005         125,934,444     $   125,934         400,000     $--     $ 2,734,681      $   (19,965)     $(2,323,620)
                           ===========     ===========     ===========     ===     ===========      ===========      ===========
</TABLE>

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

                                      F-5
<PAGE>
                          COMMUNICATIONS RESEARCH, INC.
                            Statements of Cash Flows
<TABLE>
<CAPTION>
                                                                   For the
                                                                Years Ended
                                                                December 31,
                                                       ----------------------------
                                                           2005             2004
                                                       -----------      -----------
<S>                                                    <C>              <C>
CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss                                               $  (409,820)     $  (477,790)
Adjustments to reconcile net loss to net cash
  used in operating activities:
     Depreciation and amortization                          32,822           31,774
     Write-off of long-term debt                                --         (135,000)
     Common stock issued for services rendered             304,000          413,500
Changes in operating assets and liabilities:
     Accounts receivable                                   (43,673)        (125,538)
     Prepaid expenses                                        4,778           (4,813)
     Interest receivable                                   (17,000)          (2,124)
     Inventory                                                  --               14
     Accounts payable and accrued expenses                  12,125          (73,243)
                                                       -----------      -----------

         Net Cash Used in Operating Activities            (116,768)        (373,220)
                                                       -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES:

     Advances to related company                          (291,676)        (200,000)
     Purchases of property and equipment                   (23,367)         (31,425)
                                                       -----------      -----------

         Net Cash Used in Investing Activities            (315,043)        (231,425)
                                                       -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES:

     Payments on notes payable                              (7,296)         (14,057)
     Proceeds from notes payable -related parties           16,000               --
     Payments on notes payable -related parties            (23,623)        (137,275)
     Proceeds from issuance of common stock                431,656        2,083,666
     Stock offering costs paid                            (318,483)      (1,136,847)
     Stock deposits received                                 8,182               --
     Cash received on subscriptions receivable              35,229               --
                                                       -----------      -----------

         Net Cash Provided by Financing Activities         141,665          795,487
                                                       -----------      -----------

NET INCREASE (DECREASE) IN CASH                           (290,146)         190,842

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD           203,519           12,677
                                                       -----------      -----------

CASH AND CASH EQUIVALENTS AT END OF PERIOD             $   (86,627)     $   203,519
                                                       ===========      ===========
</TABLE>

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

                                      F-6
<PAGE>
                          COMMUNICATIONS RESEARCH, INC.
                      Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
                                                                   For the
                                                                Years Ended
                                                                December 31,
                                                       ----------------------------
                                                           2005             2004
                                                       -----------      -----------
<S>                                                    <C>              <C>
SUPPLEMENTAL CASH FLOW INFORMATION

CASH PAID FOR:

         Interest                                      $    10,358      $     8,119
         Income taxes                                  $        --      $        --

NON-CASH FINANCING ACTIVITIES

         Common stock issued for services rendered     $   304,000      $   413,500
</TABLE>














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

                                      F-7


<PAGE>


                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND 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.  Accounting Methods

              The Company's financial statements are prepared using the accrual
              method of accounting. The Company has elected a December 31 year
              end.

              c.  Cash and Cash Equivalents

              Cash equivalents include short-term, highly liquid investments
              with maturities of three months or less at the time of
              acquisition.

              d.  Estimates

              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 expenses
              during the reporting period. In these financial statements,
              assets, liabilities and expenses involve extensive reliance on
              management's estimates. Actual results could differ from those
              estimates.

              e.  Basic (Loss) Per Share

              The computations of basic (loss) per share of common stock are
              based on the weighted average number of common shares outstanding
              during the period of the financial statements.

                                                          December 31,
                                                 ------------------------------
                                                      2005             2004
                                                 -------------    -------------
              Numerator - (loss)                 $    (409,820)   $    (477,790)
              Denominator - weighted average
              number of shares outstanding         113,016,157       25,625,416
                                                 -------------    -------------

              Loss per share                     $       (0.00)   $       (0.02)
                                                 =============    =============

                                      F-8

<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

              f.  Property and Equipment

              Property and equipment is recorded at cost. Major additions and
              improvement are capitalized. The cost and related accumulated
              depreciation of equipment retired or sold are removed from the
              accounts and any differences between the undepreciated amount and
              the proceeds from the sale are recorded as gain or loss on sale.
              Depreciation is computed using the straight-line method over the
              estimated useful life of the assets as follows:

                  Description                            Estimated Useful Life
                  -----------                            ---------------------
                  Furniture and fixtures                         5 years
                  Lab and test equipment                         5 years
                  Software                                       3 years
                  Vehicles                                       5 years

              Depreciation expense for the years ended December 31, 2005 and
              2004 was $32,822 and $31,774, respectively.

              In accordance with Financial Accounting Standards Board Statement
              No. 144, the Company records impairment of long-lived assets to be
              held and used or to be disposed of when indicators of impairment
              are present and the undiscounted cash flows estimated to be
              generated by those assets are less than the carrying amount. At
              December 31, 2005, no impairments were recognized.

              g.  Accounts Receivable

              The Company in the normal course of business extends credit to its
              customers on a short-term basis. Although the credit risk
              associated with these customers is minimal, the Company routinely
              reviews its accounts receivable balances and makes provisions for
              doubtful accounts. The Company ages its receivables by date of
              invoice. Management reviews bad debt reserves quarterly and
              reserves specific accounts as warranted or sets up a general
              reserve based on amounts over 90 days past due. When an account is
              deemed uncollectible, the Company charges off the receivable
              against the bad debt reserve. Since inception of the Company, no
              receivables have been charged off against the bad debt reserve. At
              the 2005 year end, the Company's bad debt reserve of $0. Accounts
              receivable are shown net of an allowance for doubtful accounts of
              $0 at December 31, 2005.

              h.  Inventory

              Raw materials are stated at the lower of cost (on a first-in,
              first-out basis) or market. The inventory at December 31, 2005
              consists primarily of computer components and parts.

                                      F-9

<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

              i.  Revenue Recognition

              The Company applies the provisions of SEC Staff Accounting
              Bulletin ("SAB") No. 104, Revenue Recognition in Financial
              Statements ("SAB 104"), which provides guidance on the
              recognition, presentation and disclosure of revenue in financial
              statements filed with the SEC. The SAB 104 outlines the basic
              criteria that must be met to recognize the revenue and provides
              guidance for disclosure related to revenue recognition policies.
              In general, the Company recognizes revenue related to monthly
              contracted amounts for services provided when (i) persuasive
              evidence of an arrangement exists, (ii) delivery has occurred or
              services have been rendered, (iii) the fee is fixed or
              determinable and (iv) collectibility is reasonably assured.

              j.  Provision for Income Taxes

              No provision for income taxes has been recorded due to the net
              operating losses (NOL) of the Company of approximately $2,010,000.
              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.

              The deferred tax asset and the valuation account is as follows at
              December 31, 2005 and 2004:

                                                          December 31,
                                                    ----------------------
                                                      2005          2004
                                                    ---------    ---------
              Deferred tax asset:
              Deferred noncurrent tax asset         $ 763,800    $ 628,997
                                                    ---------    ---------
              Valuation allowance                    (763,800)    (628,997)
                                                    ---------    ---------
                               Total                $      --    $      --
                                                    =========    =========


           The components of Income Tax expense are as follows:

                                                          December 31,
                                                    ----------------------
                                                      2005          2004
                                                    ---------    ---------
              Current Federal Tax                          --           --
              Current State Tax                            --           --
              Change in NOL benefit                  (134,803)     (21,003)
              Change in Allowance                     134,803       21,003
                                                    ---------    ---------
                                                    $      --    $      --
                                                    =========    =========

                                      F-10

<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 1 -      ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
              (Continued)

              k.  Newly Adopted Pronouncements

              In December 2004, the Financial Accounting Standards Board (FASB)
              issued SFAS No. 123 (Revised 2004), Share-Based Payment (SFAS
              123R). SFAS 123R requires that compensation cost related to
              share-based employee compensation transactions be recognized in
              the financial statements. Share-based employee compensation
              transactions within the scope of SFAS 123R include stock options,
              restricted stock plans, performance-based awards, stock
              appreciation rights and employee share purchase plans. The Company
              has previously accounted for any stock-based employee compensation
              under Accounting Principles Board (APB) Opinion No. 25, the effect
              of which has not been significant in recent periods due to the
              absence of such compensation. The provisions of SFAS 123R will be
              effective during the first interim fiscal period that begins after
              December 15, 2005, during which the Company grants any form of
              stock-based compensation. Since the Company has no present plans
              to award such compensation in the foreseeable future, the likely
              effect of adoption cannot be predicted at this time.

              In May 2005, the FASB issued SFAS No. 154, Accounting Changes and
              Error Corrections, a Replacement of APB Opinion No. 20 and SFAS
              No. 3. SFAS No. 154 replaces APB Opinion No. 20, Accounting
              Changes and SFAS No 3, Reporting Accounting Changes in Interim
              Financial Statements and changes the requirement for the
              accounting for and reporting of a change in accounting principles.
              SFAS No. 154 applies to all voluntary changes in accounting
              principles. It also applies to changes required by an accounting
              pronouncement in the unusual instance that the pronouncement does
              not include specific transition provisions. When a pronouncement
              includes specific transition provisions, those provisions should
              be followed. The provisions of SFAS No. 154 will be effective for
              accounting changes made in fiscal year beginning after December
              15, 2005. We do not presently expect to make any accounting
              changes that would be affected by the adoption of SFAS No. 154
              that will have a material impact on the Company's financial
              condition or operations in the foreseeable future.

              l. Fair Value of Financial Instruments

              The fair value of the Company's cash and cash equivalents,
              receivables, accounts payable and accrued liabilities approximate
              carrying value based on their effective interest rates compared to
              current market prices.

                                      F-11

<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 2 -      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 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. Officers will continue to advance funds as needed for
              any shortfalls in cash flows.

NOTE 3 -      PROPERTY AND EQUIPMENT

              Property and equipment consists of the following at December 31,
2005:

              Furniture and fixtures                          $     48,517
              Lab and test equipment                                21,880
              Software                                             204,792
              Vehicles                                              51,711
              Accumulated depreciation                            (295,898)
                                                              ------------

              Total property and equipment                    $     31,002
                                                              ============

NOTE 4 -      RELATED PARTY TRANSACTIONS

              At December 31, 2005, the Company was indebted to two separate
              related parties Larry Harman, shareholder and Albert Adams,
              shareholder for a total of $32,980. The amounts are non-interest
              bearing, unsecured, and due on demand. At December 31, 2005, the
              Company has loaned a related company a total of $393,724. The
              amount is non-interest bearing, unsecured, and due on demand.

               At December 31, 2005, the Company holds a note receivable from a
               related company for a total of $200,000. Interest accrues on the
               note at 8.50% per annum. Accrued interest at December 31, 2005
               totaled $19,124. The accrued interest and principal is due on
               November 15, 2008.




                                      F-12

<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


NOTE 5 -      NOTES PAYABLE

              Notes payable consisted of the following at
              December 31, 2005:

              Note payable to a corporation, principal and interest
               of $608 due monthly at 1.90% per annum interest rate,
               matures in October 2006, secured by a vehicle.         $   8,398

              Note payable to related individual, non-interest
                bearing, due on demand, unsecured.                        5,000

              Note payable to a director and shareholder, non-interest
                bearing, due on demand, unsecured.                       27,980
                                                                      ---------

              Total Notes Payable                                        41,378

              Less: Current Portion                                     (35,276)
                                                                      ---------

              Long-Term Notes Payable                                 $   6,102
                                                                      =========

              The aggregate principal maturities of notes payable are as
follows:

                    Year Ended
                   December 31,                      Amount
                   ------------                     --------
                       2006                         $ 35,276
                       2007                            6,102
                       2007                               --
                       2008                               --
                       2009                               --
                       2010 and thereafter                --
                                                    --------

                       Total                        $ 41,378
                                                    ========

NOTE 6 -       STOCKHOLDERS' EQUITY

               During the year ended December 31, 2004, the Company issued a
               total of 78,100,265 shares of common stock at per share prices
               from $0.01 to $0.19 per share pursuant to a regulation S
               offering. Accordingly, common stock and additional
               paid-in-capital have been charged $78,100 and $868,719
               respectively. Additional pain-in-capital has been presented net
               of costs of acquisition in the amount of $1,136,847. At December
               31, 2004, the cash had not yet been received for this amount of
               shares issued. As such, subscriptions receivable has been charged
               with the total value of the shares of $147,547. The Company also
               issued a total of 7,214,855 shares for cash at a price of $0.02
               per share.

               On February 25, 2004, the Company issued 5,050,000 shares of
               common stock at $0.07 per share, for compensation to management.
               Accordingly, common stock and additional paid-in-capital have
               been charged $5,050 and $348,450, respectively.


NOTE 6 -       STOCKHOLDERS' EQUITY (Continued)

               On March 24, 2004, the Company issued 1,500,000 shares of common
               stock for services rendered on behalf of the Company. The shares
               were valued at $0.04 per share.

                                      F-13

<PAGE>

                          COMMUNICATIONS RESEARCH, INC.
                        Notes to the Financial Statements
                           December 31, 2005 and 2004


               During the year ended December 31, 2005, the Company issued a
               total of 16,652,774 shares of common stock at per share prices
               from $0.01 to $0.02 per share, pursuant to a regulation S
               offering. Accordingly, common stock and additional
               paid-in-capital have been charged $16,653 and $322,651
               respectively. Additional paid-in-capital has been presented net
               of costs of acquisition in the amount of $318,483. The Company
               also received a total of $127,582 related to the subscriptions
               receivable recorded during the year ended December 31, 2004.
               Remaining subscriptions receivable at December 31, 2005 totaled
               $19,965.

               On October 7, 2005, the Company issued 5,000,000 shares of common
               stock at $0.06 per share, for services rendered totaling $300,000
               on behalf of the Company.

               On April 29, 2005, the Company issued 200,000 shares of common
               stock for services rendered to the Company valued at $4,000, or
               $0.02 per share.

               During 2005, the Company also increased the authorized amount of
               Class B common shares to 2,000,000 and issued an additional
               1,600,000 to the Company's founder and President. These
               additional 1,600,000 Class B common shares have no determinable
               value and no value was assigned to these shares on the date of
               issuance. The Class B common shares do not have dividend rights
               and no funds shall be paid on the Class B shares upon
               liquidation.





                                      F-14