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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 10-KSB

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF 
  THE SECURITIES ACT OF 1934

For the Fiscal Year Ended April 30, 2004

COMMISSION FILE NO. **0-21255**

**IAS COMMUNICATIONS, INC.**
  (Name of small business issuer as specified in its charter)

|**OREGON**                      | **91-1063549**        
|------------------------------- | ----------------------
|(State or other jurisdiction of | (I.R.S. Employer      
|incorporation or organization)  | Identification Number)

**1103  11871 HORSESHOE WAY RICHMOND, BRITISH COLUMBIA V7A 5H5, CANADA**
  (Address, including postal code, of registrant's principal executive offices)

**(604) 278-5996**
  (Telephone number including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act: NONE

Securities registered pursuant to Section 12(g) of the Exchange
  Act:

|Title of each class        | Name of each Exchange on which registered:
|-------------------------- | ------------------------------------------
|Common Stock, no par value | Over the Counter Bulletin Board           

**x**   ̈


Check if 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 the 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.** ̈**

State the issuer's revenues for its most recent fiscal year:
  $Nil

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The aggregate market value of the voting stock held by non-affiliates
  of the registrant on July 26, 2004, computed by reference to the price at which
  the stock was sold on that date: $418,000.

The number of shares outstanding of the registrant's Common
  Stock, no par value, as of fiscal year ended April 30, 2004 and July 26, 2004
  was 35,243,562.

Documents incorporated by reference: See Exhibits.

Transitional Small Business Disclosure Format (Check one):
  Yes** ̈**No
  **x******

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IAS COMMUNICATIONS, INC.

FORM 10-KSB

TABLE OF CONTENTS

|PART I     | 4                                                                                                                                  
|---------- | -----------------------------------------------------------------------------------------------------------------------------------
|           | ITEM 1. DESCRIPTION OF BUSINESS                                                                                                    
|           |                                                                                                                                    
|           |                                                                                                                                    
|           |                                                                                                                                    
|           |                                                                                                                                    
|           |                                                                                                                                    
|           |                                                                                                                                    
|           |                                                                                                                                    
|           |                                                                                                                                    
|           | ITEM 2. DESCRIPTION OF PROPERTY                                                                                                    
|           | ITEM 3. LEGAL PROCEEDINGS                                                                                                          
|           | ITEM 4. SUBMISSION OF MATTERS
      TO A VOTE OF SECURITY HOLDERS                                                                  
|PART II    | 9                                                                                                                                  
|           | ITEM 5. MARKET FOR COMMON EQUITY
      AND RELATED STOCKHOLDER MATTERS                                                             
|           |                                                                                                                                    
|           |                                                                                                                                    
|           | ITEM 6: MANAGEMENT'S DISCUSSION
      AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                
|           |                                                                                                                                    
|           |                                                                                                                                    
|           | ITEM 7: FINANCIAL STATEMENTS                                                                                                       
|           | ITEM 8. CHANGES IN AND DISAGREEMENTS
      WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE                                 
|           | ITEM 8A. CONTROLS AND PROCEDURES                                                                                                   
|PART III   | 12                                                                                                                                 
|           | ITEM 9. DIRECTORS, EXECUTIVE
      OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF
      THE EXCHANGE ACT
|           | ITEM 10. EXECUTIVE COMPENSATION                                                                                                    
|           | ITEM 11. SECURITY OWNERSHIP OF
      CERTAIN BENEFICIAL OWNERS AND MANAGEMENT                                                      
|           | ITEM 12. CERTAIN RELATIONSHIPS
      AND RELATED TRANSACTIONS                                                                      
|           | ITEM 13(b). REPORTS ON FORM
      8-K                                                                                              
|           | ITEM 14. PRINCIPAL ACCOUNTANT
      FEES AND SERVICES                                                                              
|SIGNATURES | 20                                                                                                                                 

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PART I

ITEM 1. DESCRIPTION OF BUSINESS

BUSINESS DEVELOPMENT

IAS Communications, Inc. (referred to herein as "us, we, our")
  is a development stage company incorporated in the state of Oregon in 1994.
  Our principal business operations have historically been conducted in Indiana
  and B.C. Canada. Until recently, we have been engaged in the commercialization
  of advanced antenna technology known as the Contrawound Toroidal Helical Antenna,
  (the "CTHA"), for wireless communications markets. We have been granted worldwide
  sublicensing rights for commercial applications, excluding military and governmental
  applications, for the antenna. The CTHA technology is currently on hold due
  to unsuccessful attempts to complete a license agreement with potential customers.

RISK FACTORS

You should carefully consider the following risks and the
  other information in this Report and our other filings with the SEC before you
  decide to invest in us or to maintain or increase your investment.

The risks and uncertainties described below are not the only
  ones facing us. Additional risks and uncertainties may also adversely impact
  and impair our business. If any of the following risks actually occur, our business,
  results of operations, or financial condition would likely suffer. In such case,
  the trading price of our common stock could decline, and you may lose all or
  part of your investment.

Developmental Stage Company. We were incorporated on December
  13, 1994. We are a development stage company. In a development stage company,
  management devotes most of its activities to establishing a new business. Planned
  principal activities have not yet produced significant revenues and we have
  suffered recurring operating losses as is normal in development stage companies.
  We also have a working capital deficit of $285,270. These factors raise substantial
  doubt about our ability to continue as a going concern. Our ability to emerge
  from the development stage with respect to our planned principal business activity
  is dependent upon our successful efforts to raise additional equity financing,
  receive funding from affiliates and controlling shareholders, and develop a
  market for our products.

Lack of Diversification. The Company does not have any other
  business. This lack of diversity may increase the risks associated with our
  operations.

Limited Operating History. The Company does not have any revenues.
  It is not likely that we will be able to generate revenue in the future until
  we acquire another business. We have no significant assets or financial resources,
  and will, in all likelihood, sustain operating expenses without corresponding
  revenues for a period of time that cannot yet be determined. This may result
  in our continuing to incur net operating losses.

Need for Additional Financing. We have experienced significant
  working capital deficiencies and negative cash flows in the past. Our ability
  to continue in business depends upon our

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continued ability to obtain working capital. We will require
  additional financing in order to continue Our ability to continue in business
  depends upon our continued ability to obtain such additional capital and financing.
  There can be no assurance that any such financing would be available upon terms
  and conditions acceptable to us, if at all. The inability to obtain additional
  financing in a sufficient amount when needed and upon acceptable terms and conditions
  could have a material adverse effect upon us. If additional funds are raised
  by issuing equity securities, further dilution to existing or future shareholders
  is likely to result. If adequate funds are not available on acceptable terms
  when needed, we may be required to delay, scale back or eliminate our promotional
  and marketing campaign or our development programs. Inadequate funding also
  could impair our ability to compete in the marketplace and could result in its
  dissolution.

Control by Current Insiders. Approximately 24,800,000 common
  shares, not including currently exercisable options or warrants, are owned by
  current affiliates and insiders representing control of approximately 70% of
  the total voting power. Accordingly, the present insiders will continue to elect
  all of our directors and generally control our affairs.

Uncertain Ability to Manage Growth. Our ability to achieve
  our planned growth is dependent upon a number of factors including our ability
  to hire, train and assimilate management and other employees, the adequacy of
  our financial resources, our ability to identify and efficiently provide such
  new products and services as our customers may require in the future and our
  ability to adapt our own systems to accommodate expanded operations. In addition,
  there can be no assurance that we will be able to achieve our planned expansion
  or that we will be able to manage such expanded operations successfully. Failure
  to manage anticipated growth effectively and efficiently could have a material
  adverse effect on us.

Part-Time Management. Our present officers and directors have
  other full-time or part-time positions for employers unrelated to us. As a result,
  some of our officers and directors serve on an "as-needed" basis. The lack of
  full-time management could have an adverse effect on us.

Dilution. Sales of additional equity securities through a
  traditional underwritten offering or through private placement offerings may
  dilute, on a pro rata basis, the value of our common shares. The grant and exercise
  of warrants of creditors or otherwise or stock options would also likely result
  in a dilution of the value of our common shares.

In addition, we may grant additional stock options or other
  forms of equity-based incentive compensation to attract and retain such personnel.
  We also may in the future offer equity participation in connection with the
  obtaining of non-equity financing, such as debt or leasing arrangements accompanied
  by warrants to purchase our equity securities. Any of these actions could dilute
  the value of our common shares.

Dividend Policy. As of the date of this Form 10-KSB, we have
  not paid any dividends on our common stock and we do not expect to declare or
  pay any dividends on our common stock for the foreseeable future.

Possible Volatility of Securities Prices. The market price
  for our Common Stock traded on the over-the-counter bulletin board has been
  highly volatile since it began trading and will likely to continue to behave
  in this manner in the future. Factors such as our operating results and other
  announcements regarding our development work and business operations may have
  a significant impact on the market price of our securities. Additionally, market
  prices for securities of many smaller companies have experienced wide fluctuations
  not necessarily related to the operating performance of the companies themselves.

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Anti-Takeover Provisions. At the present time, our Board of
  Directors has not adopted any shareholder rights plan or any anti-takeover provisions
  in our Charter or Bylaws.

PATENTS, TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY
  AGREEMENTS, LABOR CONTRACTS, INCLUDING DURATION

We obtained the rights to the CTHA through a series of transactions.
  Dr. James E. Smith ("Dr. Smith"), a tenured professor at West Virginia University
  ("WVU"), directed the research and development of CTHA utilizing WVU's facilities
  and funding. Under Dr. Smith's employment agreement with WVU, the patentable
  ideas for the CTHA were assigned to West Virginia University Research Corporation
  ("WVURC") and became its property on April 12, 1994. An exclusive worldwide
  license was granted by WVURC to Integral Concepts, Inc. (ICI"), a corporation
  owned and controlled by Dr. Smith, to: (1) manufacture the CTHA and, (2) sublicense
  others to manufacture, market, sell copies of, license and distribute the CTHA
  (the "ICI License").

ICI entered into an option agreement with SMR Investment Ltd.,
  ("SMR") a corporation owned by Sue Robertson, the wife of John Robertson, the
  Company's President, Chief Executive Officer and a member of the Board of Directors
  ("Robertson"), dated November 18, 1994, and amended December 16, 1994 (the 'Option
  Agreement"). The Option Agreement provided that ICI would issue a sublicense
  to SMR for the CTHA subject to the payment of $250,000; a 3% royalty from gross
  sales; and shares in a subsequent public entity. SMR and Robertson organized
  the Company as a result. ICI retained all military and governmental applications
  and resulting procurement interests. The contract period relating to the three-
  percent royalty to be paid to ICI commences when sales are made by us and continues
  during the life of the Option Agreement. The term of the Option Agreement is
  perpetual as is the ICI License.

On December 13, 1994, we were assigned the rights to the Option
  Agreement by SMR in consideration for $50,000 advanced by Access Information
  Services, Inc. (the "Option Assignment"). Access Information Services, Inc.
  is a corporation owned and controlled by Robertson.

On December 14, 1994, we issued 3,000,000 shares to Dr. Smith
  and 3,000,000 shares to Access Information Services Ltd. pursuant to the Option
  Assignment. The value assigned to the 3,000,000 shares issued to Dr. Smith was
  a total of $0.50 and the value assigned to the 3,000,000 shares issued to Access
  Information Systems, Inc. was $0.50. These valuations of the 3,000,000 shares
  issued to Dr. Smith and Access Information Systems, Inc. were arbitrarily determined
  by our Board of Directors. The $250,000 paid to ICI was a one-time payment.

On July 10, 1995, ICI granted an exclusive worldwide sublicense
  to us to: (1) manufacture, sell copies of, sublicense and distribute the process
  and equipment related to the design, construction and operation of the CTHA;
  and, (2) to sublicense others to manufacture, sell copies of, license and distribute
  the same, excluding all military and governmental applications and resulting
  procurement interests (the "Sublicense"). The Sublicense was the culmination
  of the agreements between ICI and SMR, and SMR and us. On December 27, 1995,
  SMR assigned all of its rights and duties in the CTHA technology to us pursuant
  to the Option Assignment. The term of the Sublicense, subject to compliance
  of the terms thereof, is perpetual and requires the payment of a minimum annual
  royalty of $3,000. Further, we will pay a royalty of l0% of the net revenues
  derived from sales, leases or sublicenses of the CTHA technology less a credit
  for the minimum royalty. In addition, we shall pay a royalty of 3% of the gross
  revenues derived from the sales, leases or sublicenses of the CTHA technology.

- 6 -

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The Sublicense was amended effective March 4, 1997, to (i)
  reduce the amount of the royalty payable by us by 50% over the next 3 years,
  (ii) clarify that our rights pertain to commercial applications, excluding military
  and governmental applications, and (iii) enlarge the definition of Technology
  to include all future enhancements to the CTHA technology developed by ICI,
  ETC, or us.

We entered into a Joint Venture Agreement ("JVA") with Emergent
  Technologies Corporation (ETC) on March 4, 1997. The JVA required a new company
  to be incorporated (TEAM) whereby we own 50% and ETC owns 50% of TEAM. Pursuant
  to a voting agreement we can vote 100% of the shares of TEAM. The President
  of ETC is the President of TEAM. TEAM was organized on June 4, 1997 under the
  laws of the State of West Virginia. We retain the worldwide commercial sublicense
  rights to the CTHA excluding all military and governmental applications.

The business purpose of TEAM was to cooperate in the research
  and development of certain applications for the CTHA and to assemble and manufacture
  certain products relating thereto. IAS was to buy product from TEAM at cost
  to manufacture plus 30% for all commercial applications and ETC was to buy product
  from TEAM at cost to manufacture plus 30% for all military applications. ETC
  acquired the worldwide sublicense from ICI for all military and governmental
  applications on January 2, 1997. TEAM is currently inactive.

WVURC received a patent for the CTHA in August 1995. Dr. Smith
  is a tenured professor at WVU and conducts his research and development regarding
  the CTHA at WVU's facilities. As a result, WVURC owns the patent rights to the
  CTHA that it licensed to ICI. The ICI License provides that ICI can grant sublicenses
  of the technology covered by the patent to third parties. On July 10, 1995,
  we were issued the Sublicense by ICI, which was amended in March 1997.

On July 29, 1997, we announced that the second US patent had
  been granted on the CTHA. This patent broadened the protection we already had
  for the CTHA by encompassing several different geometry's not specifically covered
  by the first patent.

RECENT LICENSES AND PROFESSIONAL SERVICE AGREEMENTS

We have had no licenses or professional service agreements
  over the past two fiscal years.

GOVERNMENTAL REGULATIONS

We believe there are no existing governmental guidelines for
  the antennas currently being developed by us.

No governmental approval is necessary for the antenna other
  than meeting certain frequency guidelines for the end users. The end user is
  required to meet certain government specification for several wireless applications.




Due to the lack of capital, we are not able to manufacture
  and sell our products. Accordingly, at this time, we are not dependent upon
  certain customers.

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RESEARCH AND DEVELOPMENT

We spent in 2004 $3,000 on research and development as compared
  to $1,710 in 2003. Research and development is required to keep the license
  in good standing.

COSTS AND EFFECTS OF COMPLIANCE WITH ENVIRONMENTAL LAWS

At the present time there is no direct financial or competitive
  effect upon our business as a result of any need to comply with any federal,
  state or local provisions which have been enacted or adopted regulating the
  discharge of materials into the environment, or otherwise relating to the protection
  of the environment.

NUMBER OF TOTAL EMPLOYEES AND NUMBER OF FULL-TIME EMPLOYEES

In addition to our Officers, we currently employ no full-time
  employees and utilize part-time employees as required.



Our executive offices are located at #1103-11871 Horseshoe
  Way, Richmond, British Columbia V7A 5H5, and the telephone number is (604) 278-5996.
  We lease, on a month-to-month basis, approximately 200 square feet of space
  at the aforementioned office from SMR Investments. The Company occupied this
  space rent-free during the fiscal year.



To the best of the knowledge of our Officers and Directors,
  neither the Company nor any of our Officers and Directors are parties to any
  material legal proceeding or litigation other than as described below. Further,
  our Officers and Directors know of no threatened or contemplated legal proceedings
  or litigation other than as described below. None of our Officers and Directors
  has been convicted of a felony and none has been convicted of any criminal offense,
  felony or misdemeanor, relating to securities or performance in corporate office.
  To the best of the knowledge of our Officers and Directors, no investigations
  of felonies, misfeasance in office or securities investigations are either pending
  or threatened at the present time.

The Company was sued in April 1998 in a civil action filed
  in U.S. District Court for the District of Oregon (the "Oregon Litigation").
  The Plaintiff, Kirk VanVoorhies, ("Plaintiff") sought money damages and equitable
  relief against the Company alleging patent infringement by the Company for the
  CTHA. The Company notified West Virginia University ("WVU") of this claim and
  contacted WVU to assist in the defence. WVU owns the patent rights to the CTHA
  technology, which were licensed to the Company. Two patents were granted for
  the CTHA to WVU; one in August 1995, and another in August 1997. The Plaintiff's
  patent was approved on March 31, 1998.

The Plaintiff in the Oregon Litigation is also a defendant
  in a pending civil action in the U.S. District Court for the Northern District
  of West Virginia brought by WVU (the "West Virginia Litigation") claiming that
  the CTHA invention is owned by WVU. As alleged in the West Virginia Litigation,
  the Company believes that the patent rights for the CTHA technology belongs
  to WVU and therefore based on the license, the Company owns the worldwide rights
  to the CTHA commercial applications. Litigation, the Company believes that the
  patent rights for

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the CTHA technology belongs to WVU and therefore based on
  the license, the Company owns the worldwide rights to the CTHA commercial applications.

A decision by the United States District Court for the Northern
  District of West Virginia will, if upheld on appeal, signal the end to patent
  litigation brought by VorteKx, Inc. against the Company.

VorteKx, Inc. brought a patent infringement action against
  IAS in the United States District Court for the District of Oregon on a patent
  issued to a former graduate student at WVU, Kurt L. VanVoorhies, and subsequently
  assigned to VorteKx. On the Company's motion, the case was transferred to the
  Northern District of West Virginia and consolidated with a previously pending
  action filed by WVU against VanVoorhies, discussed above. The Company and WVU
  both claimed that the technology covered by the patent is actually owned by
  WVU. The Company is the sublicensee of commercial applications of the CTHA technology.

In a Memorandum Opinion and Order entered February 17, 2000,
  the West Virginia federal court granted summary judgment for WVU in its claims
  against VanVoorhies. The Court also dismissed VanVoorhies' claims against WVU
  and third-party defendants West Virginia University Research Corporation, Dr.
  James E. Smith and Integral Concepts, Inc. Because the Court's holding establishes
  that WVU owns the technology, it should bring an end to the litigation against
  the Company, which was stayed pending resolution of the case against VanVoorhies.

The dispute in the WVU action concerned inventions conceived
  during VanVoorhies' time at WVU as a graduate student and later as a graduate
  research assistant, particularly two inventions relating to the CTHA technology.
  The Court found that VanVoorhies validly assigned all rights in the first invention
  to WVU, including all future technology derived from the technology underlying
  that invention. VanVoorhies subsequently declined to assign to WVU any interest
  in a second invention. The Court found that the second invention constituted
  future technology derived from the first invention. Therefore, VanVoorhies'
  assignment of the first invention to WVU also effectively assigned the second
  invention to WVU, and WVU is the rightful owner of the patent applications filed
  by VanVoorhies on the CTHA technology.

Because one of these patent applications led to the issuance
  of the patent underlying VorteKx's infringement suit against the Company, VorteKx
  no longer has standing to pursue that infringement case. The case was stayed
  pending VanVoorhies' appeal from the Court's order. On May 20, 2004 the United
  States Court of Appeals affirmed the stay of the case.

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

No matters were submitted to a vote by our security holders
  during the fourth quarter of our fiscal year ended April 30, 2004.



ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Our Common Stock trades on the OTC Bulletin Board under the
  symbol "IASCA" where it has traded since April 16, 1996. Our Common Stock has
  traded at between $0.010 and $4.62 per share since April 16, 1996.

The following table sets forth the high and low prices for
  the Company's Common Stock, as reported by Nasdaq Trading & Market Services
  for the quarters presented. These quotations reflect inter-dealer prices, without
  retail mark-up, mark-down or commissions, and may not reflect actual transactions.

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|                               | Bid Price |  | Asked Price
|------------------------------ | --------- |  | -----------
|                               | High $    |  | Low $      
|Quarter Ended July 31, 2002    | .055      |  | .025       
|Quarter Ended October 31, 2002 | .035      |  | .01        
|Quarter Ended January 31, 2003 | .05       |  | .015       
|Quarter Ended April 30, 2003   | .025      |  | .015       
|Quarter Ended July 31, 2003    | .03       |  | .017       
|Quarter Ended October 31, 2003 | .062      |  | .02        
|Quarter Ended January 31, 2004 | .09       |  | .05        
|Quarter Ended April 30, 2004   | .06       |  | .04        

As of July 26, 2004 there were 35,243,562 shares of Common
  Stock outstanding, held by 144 shareholders of record.

DIVIDEND POLICY

To date we have not paid any dividends on our Common Stock
  and do not expect to declare or pay any dividends on such Common Stock in the
  foreseeable future. Payment of any dividends will be dependent upon future earnings,
  if any, our financial condition, and other factors as deemed relevant by our
  Board of Directors.

RECENT SALES OF UNREGISTERED SECURITIES

Set forth below is information regarding the issuance and
  sales of our securities without registration during the past fiscal year. No
  such sales involved of an underwriter and no commissions were paid in connection
  with the sale of any securities. See the Statement of Stockholders' Equity and
  the Notes to our audited financial statements for the fiscal year ended April
  30, 2004 for more information on recent sales of unregistered securities.

During the fiscal year ended April 30, 2004, there were no
  shares issued in connection with the exercise of warrants or stock options.

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

This report contains forward-looking statements. The words,
  "anticipate", "believe", expect", "plan", "intend", "estimate", "project", "could",
  "may", "foresee", and similar expressions are intended to identify forward-looking
  statements. The following discussion and analysis should be read in conjunction
  with our Financial Statements and other financial information included elsewhere
  in this report which contains, in addition to historical information, forward-looking
  statements that involve risks and uncertainties. Our actual results could differ
  materially from the results discussed in the forward-looking statements. Factors
  that could cause or contribute to such differences include those discussed below,
  as well as those discussed elsewhere in this report.



We were incorporated on December 13, 1994 pursuant to the
  Laws of the State of Oregon, USA.

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We are a development stage company. We are no longer engaged
  in the commercialization of the CTHA and do not have any plan of operations,
  however, we plan to seek other projects, which are yet to be determined.

In a development stage company, management devotes most of
  its activities to establishing a new business. Planned principal activities
  have not yet produced significant revenues and the Company has suffered recurring
  losses from inception, totaling $6,116,238 and has a working capital deficit
  of $285,270 which includes a cash balance of $179. These factors raise substantial
  doubt about our ability to continue as a going concern. Our ability to emerge
  from the development stage with respect to its planned principal business activity
  is dependent upon our successful efforts to raise additional equity financing,
  develop additional markets for its products, identify additional licensees and
  receive ongoing support from the majority of our creditors and affiliates.

We may raise additional funds through the exercise of warrants
  and stock options, if exercised. Options with respect to 1,275,000 shares and
  warrants with respect to 944,250 shares may be exercised for potential proceeds
  of $491,000. These options and warrants are currently not in-the-money and are
  unlikely to be currently exercised.

Results of Operation for the Year Ended April 30, 2004 ("2004")
  as compared to the Year Ended April 30, 2003 ("2003")

In 2002 we shut down our office in Kokomo Indiana. Due to
  a lack of funds we were unable to pursue any sales and as a result for 2003
  and 2004 the Company only incurred expenses to sustain the operations. During
  2004 and 2003 we incurred no revenue. Administrative expenses decreased by $2,000
  in 2004 to $27,094 as compared to 29,702 in 2003. No management fees were charged
  during 2004 nor 2003. Professional fees decreased by $2,000 to $17,000 from
  $19,000 in 2003. In 2004 we wrote off our accounts payable of $150,000, as compared
  to 2003 during which we wrote off our accounts payable of $336,000 that have
  been outstanding in excess of three years. As a result of the write off of the
  accounts payable we incurred a net income of $120,000 as compared to $305,000
  in 2003 and we incurred a net income per share of $nil as compared to a net
  income of $.01 per share in 2003.

During 2004 we financed our operations and received $36,000 by:

|(i) | receiving financial support from related parties in the amount of $36,000.
      These amounts are unsecured, non-interest bearing and due on demand.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------

During 2004 we invested these funds as follows:

|(i) | $36,000 of these funds was spent on operating activities as discussed
      above under Results of Operation for the year ended April 30, 2004.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------

Our cash position remained the approximately the same at $179 as compared to $nil in 2003 and our working capital deficit, as at April 30, 2004, is $285,270.

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ITEM 7: FINANCIAL STATEMENTS

Our financial statements are included and begin immediately
  following the signature page to this report. See Item 13 for a list of the financial
  statements and financial statement schedules included.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
  AND FINANCIAL DISCLOSURE

None.

ITEM 8A. CONTROLS AND PROCEDURES

(a)         
  Evaluation of disclosure controls and procedures

Our Chief Executive Officer and our Chief Financial Officer
  evaluated our "disclosure controls and procedures" (as defined in Rule 13a-14
  (c) of the Exchange Act) as of a date within 90 days before the filing date
  of this annual report. They concluded that as of the evaluation date, our disclosure
  controls and procedures are effective to ensure that information we are required
  to disclose in reports that we file or submit under the Exchange Act is recorded,
  processed, summarized and reported within the time periods specified in SEC
  rules and forms.

(b)         
  Changes in internal controls.

Subsequent to the date of their evaluation, there were no
  significant changes in our internal controls or in other factors that could
  significantly affect these controls. There were no significant deficiencies
  or material weaknesses in our internal controls so no corrective actions were
  taken.

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 the name, age and position
  of each Executive Officer, Director and Significant Employee of the Company:

|Name              | Age |  | Position                                                                                                
|----------------- | --- |  | --------------------------------------------------------------------------------------------------------
|                  |     |  |                                                                                                         
|John G. Robertson | 62  |  | Principal Executive Officer, President, Chairman of the
      Board and Member of the Board of Directors
|Jennifer Lorette  | 31  |  | Secretary and Member of the Board of Directors                                                          
|James Vandeberg   | 60  |  | Chief Operating Officer, Chief Financial Officer and Member
      of the Board of Directors             
|Patrick Badgley   | 59  |  | Vice President, Operations                                                                              

All our Directors have served since the formation of the Company
  in December, 1994, except for James L. Vandeberg, who was appointed to the Board
  of Directors in November, 1998. The Executive Officers were elected on February
  4, 1995, except for James L. Vandeberg, who was appointed as Chief Operating
  Officer on August 1st, 1999. All officers currently devote part-time to our
  operations.

- 12 -

---




There are no family relationships between any director or
  executive officer and any other director or executive officer.

The present and principal occupations of our directors and
  executive officers during the last five years are set forth below:

John G. Robertson - President, Principal Executive Officer
  and a Member of the Board of Directors

Mr. Robertson has been the President and Principal Executive
  Officer and a Director of the Company since its formation. Mr. Robertson has
  been Chairman, President and Chief Executive Officer of REGI U.S., Inc. since
  July 1992. Since October 1984 Mr. Robertson has been President and a Director
  of Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture
  Exchange that has financed the research on the Rand Cam Engine since 1986. REGI
  U.S. is controlled by Rand Energy Group, Inc., a British Columbia corporation
  of which Reg Technologies Inc. is the majority shareholder. REGI U.S. owns the
  U.S. rights to the Rand Cam (TM) technology and Rand Energy Group, Inc. owns
  the worldwide rights exclusive of the U.S. Since June 1997 Mr. Robertson has
  been President, Principal Executive Officer and a Director of Information-Highway.com,
  Inc., a Florida corporation traded on the PinkSheets, and its predecessor. He
  is also the President and Founder of Teryl Resources Corp., a public company
  trading on the TSX Venture Exchange involved in gold, diamond, and oil and gas
  exploration. He is also President of Linux Gold Corp., a public company trading
  on the OTC Bulletin Board. Since May 1977 Mr. Robertson has been President and
  a member of the Board of Directors of SMR Investments Ltd., a British Columbia
  corporation engaged in the business of management and investment consulting.

James L. Vandeberg - Chief Operating Officer, Chief Financial
  Officer and a Member of the Board of Directors

Mr. Vandeberg became a Director of the Company in November
  1998 and its Chief Operating Officer in August 1999. Mr. Vandeberg is an attorney
  in Seattle, Washington. He has served as our legal counsel since 1996. Mr. Vandeberg's
  practice focuses on the corporate finance area, with an emphasis on securities
  and acquisitions. Mr. Vandeberg was previously general counsel and secretary
  of two NYSE companies and is a director of Information-Highway.com, Inc., a
  Florida corporation traded on the Pink Sheets. He is also a director of REGI
  U.S., Inc.. an Oregon corporation traded on the OTC bulletin board since November
  1999. Mr. Vandeberg is also a director of Linux Gold Corp., which is traded
  on the OTC bulletin board. Mr. Vandeberg is also a director of Cyber Merchants
  Exchange, Inc. since May 2001. He is a member and former director of the American
  Society of Corporate Secretaries. He became a member of the Washington Bar Association
  in 1969 and of the California Bar Association in 1973. Mr. Vandeberg graduated
  cum laude from the University of Washington with a Bachelor of Arts degree in
  accounting in 1966, and from New York University School of Law in 1969, where
  he was a Root-Tilden Scholar.

Jennifer Lorette - Secretary/Treasurer and a Member of the
  Board of Directors

Ms. Lorette is a founder, and has been Secretary/Treasurer,
  Principal Financial Officer and Principal Accounting Officer of the Company
  since February 1995. Since June 1994 Ms. Lorette has been Vice President and
  director of REGI U.S., Inc., an Oregon corporation traded on the OTC bulletin
  board. Since April 1994 she has also been Vice President of Administration and

- 13 -

---

Secretary for Reg Technologies, Inc., a British Columbia corporation
  listed on the TSX Venture Exchange that has financed the research on the Rand
  Cam Engine since 1986. REGI U.S. is controlled by Rand Energy Group, Inc., a
  British Columbia corporation of which Reg Technologies Inc. is the majority
  shareholder. Since June 1997 Ms. Lorette has been Executive Vice President and
  a Director of Information-Highway.com, Inc., a Florida corporation traded on
  the PinkSheets, and its predecessor. Since June 1994 Ms. Lorette has also been
  Vice President and Secretary of Linux Gold Corp. Since November 1997 Ms. Lorette
  has been Vice President of Teryl Resources Corp., a public company trading on
  the TSX Venture Exchange involved in gold, diamond, and oil and gas exploration.
  She also became a director in February 2001.



Mr. Badgley is a founder of the Company. Since February 1994,
  Mr. Badgley has been a Vice President of REGI U.S., Inc., an Oregon corporation
  traded on the OTC bulletin board. Since July 1993 he has been a Director of
  Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture
  Exchange. REGI U.S. is ultimately controlled by Reg Technologies Inc. From November
  1986 to February 1994, Mr. Badgley was the Director of Research and Development
  for Adiabatics, Inc., an Indiana corporation, which was engaged in the business
  of advanced engine concepts. Mr. Badgley holds a Bachelor of Mechanical Engineering
  degree from the Ohio State University, Columbus, Ohio. Mr. Badgley is currently
  working for Global Aircraft Company.

Section 16(a) Beneficial Ownership Reporting Compliance

Based solely upon a review of Forms 3, 4 and 5 furnished to
  us, other than James Vandeberg, and Patrick Badgley, who furnished no Forms
  to us during the year, no officer, director or beneficial owner of more than
  ten percent of our Common Stock failed to file on a timely basis reports required
  to be filed by Section 16(a) of the Exchange Act during the most recent fiscal
  year.



None of our executive officers had an annual salary and bonus
  in excess of $100,000 during the past fiscal year. Mr. Robertson was previously
  granted 350,000 options which have been cancelled and replaced with options
  to purchase 1,000,000 shares of common stock at $0.20 share and which expire
  on November 20, 2006.

|Name and Principal
      Position    | Year           | Annual Compensation                 | Long-Term  Compensation            
|------------------------------------ | -------------- | ----------------------------------- | -----------------------------------
|                                     |                |                                     | Awards                             
|Salary ($)                           | Bonus ($)      | Other Annual Compensation
      ($) | Restricted Stock Award(s)
      (#)
|John G. Robertson, President and CEO | 2004 2003 2002 | Nil NilNil                          | Nil Nil Nil                        

|(1) | "SARS"or "stock appreciation right"means
        a right granted by US, as compensation for services rendered, to receive
        a payment of cash or an issue or transfer of securities based wholly or
        in part on changes in the trading price of our publicly traded securities.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 14 -

---

|(2) | "LTIP"or "long term incentive plan"means
        any plan which provides compensation intended to serve as incentive for
        performance to occur over a period longer than one financial year, but
        does not include option or stock appreciation right plans or plans for
        compensation through restricted shares or restricted share units.                                                                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(3) | Access Information Services, Inc., a Washington
        corporation which is owned and controlled by the Robertson Family Trust,
        the beneficiary of which is Kelly Robertson, daughter of John G. Robertson,
        received or is to receive $2,500 per month from us for management services
        provided to us and rent in the sum of $500 per month. Mr. Robertson is
        a trustee of the Robertson Family Trust. However, the rent previously
        changed was not accrued for 2003 and 2004.

No other compensation is paid to any of our Executive Officers
  or Directors. We may in the future create retirement, pension, profit sharing,
  insurance and medical reimbursement plans covering our Officers and Directors.
  At the present time, we have no such plans. No advances have been made or are
  contemplated by us to any of our Officers or Directors.

On November 20, 2001, Mr. Robertson was granted a new stock
  option for 1,000,000 common shares at a price of $0.20 per share expiring November
  20, 2006.

The following table sets forth certain information concerning
  exercises of stock options pursuant to stock option plans by the named Executive
  Officers during the year ended April 30, 2004, and stock options held at year
  end.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND YEAR END
  OPTION VALUES

|Name              | Shares Acquired On Exercise (#) | Value realized ($) | Number of Unexercised Options at Years
      End Exercisable / Unexercisable | Value of Unexercised Options
      at Year End (1)
      Exercisable/
|----------------- | ------------------------------- | ------------------ | ---------------------------------------------------------------------------- | ---------------------------------------------------------------------
|John G. Robertson | -0-                             | -0-                | 1,000,000 / 0                                                                | -0- / -0-                                                            

(1) The calculation of the value of unexercised options is
  based on the difference between the last sale price of $0.04 per share for our
  Common Stock on April 30, 2004, and the exercise price of each option ($0.20),
  multiplied by the number of shares covered by the option.



We do not have any employment contracts, termination of employment
  and change of control arrangements.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
  MANAGEMENT

The following table sets forth, as of July 26, 2004, our outstanding
  Class A Common Stock owned of record or beneficially by each person who owned
  of record, or was known by us to own beneficially, more than 5% of our Common
  Stock, and the name and shareholdings of each Executive Officer and Director
  and all Executive Officers and Directors as a group. A person is deemed to be
  the beneficial owner of securities that can be acquired by such person within
  60

- 15 -

---

days from the date of this report upon the exercise of warrants
  or options. Each beneficial owner's percentage ownership is determined by assuming
  that options that are held by such person and which are exercisable within 60
  days from the date are exercised.

|Name                                                                        | Class A Shares Owned |  | Percentage of  | 
|--------------------------------------------------------------------------- | -------------------- |  | -------------- | 
|                                                                            |                      |  | Class A Shares | 
|                                                                            |                      |  | Owned          | 
|John G. Robertson, President and member of                                  | 13,511,808           |  | 38.3%          | 
|the Board of Directors [1] [2]                                              |                      |  |                | 
|Dr. James Smith [3] **                                                      | 2,712,680            |  | 23.4%          | 
|Access Information Services, Inc. [4]                                       | 12,467,508           |  | 35.4%          | 
|JGR Petroleum Inc. [10]                                                     | 7,825,810            |  | 22.2%          | 
|SMR Investments [11]                                                        | 4,370,252            |  | 12.4%          | 
|Robertson Family Trust [5]                                                  | 12,467,508           |  | 35.4%          | 
|Jennifer Lorette Secretary/Treasurer [1] [7]                                | 146,000              |  | *              | 
|James L. Vandeberg [1][6], Chief Operating                                  | 100,000              |  | *              | 
|Officer, Chief Financial Officer and Member                                 |                      |  |                | 
|of the Board of Directors                                                   |                      |  |                | 
|Patrick Badgley, [1] [8] Vice President,                                    | nil                  |  | Nil            | 
|Operations                                                                  |                      |  |                | 
|                                                                            |                      |  |                | 
|ALL EXECUTIVE OFFICERS &  DIRECTORS AS A GROUP (FOUR
      INDIVIDUALS) (7) | 13,757,808           |  | 39.0%          | 

* Less than one percent

Except as noted below, all shares are held beneficially and
  of record and each record shareholder has sole voting and investment power.

[1]      These individuals are our
  Executive Officers and Directors and may be deemed to be our "parents or founders"
  as that term is defined in the Rules and Regulations promulgated under the Securities
  Act of 1933, as amended.

[2]      Includes 12,467,508 shares
  registered in the name of Access Information Services, Ltd., a corporation controlled
  by the Robertson Family Trust, and 1,000,000 options that are currently exercisable.
  Mr. Robertson is one of three trustees of the Robertson Family Trust, which
  acts by the majority vote of the three trustees. Mr. Robertson disclaims beneficial
  ownership of the shares owned or controlled by the Robertson Family Trust. Mr.
  Robertson's address is the same as our address.

[3]      Dr. Smith's address is Route
  4, Box E36, Bruceton Mills, WV 26525. ** This information provided by the Company's
  transfer agent, The Nevada.Agency and Trust Co.

[4]      Access Information Services
  is a corporation owned by the Robertson Family Trust. Its address is 1103 -
  11871 Horseshoe Way, Richmond, British Columbia V7A 5H5, Canada.

[5]      Includes 12,467,508 shares
  owned of record by Access Information Services, a corporation owned by the trust.
  The address of the Robertson Family Trust is 1103 - 11871 Horseshoe Way, Richmond,
  British Columbia V7A 5H5, Canada.

- 16 -

---

[6]      Includes 100,000 options
  that are currently exercisable. Mr. Vandeberg's address is Ogden Murphy Wallace,
  P.L.L.C., 1601 Fifth Avenue, Suite 2100, Seattle, Washington 98101-1686.

[7]      Includes 100,000 options
  that are currently exercisable. Ms. Lorette's address is the same as our address.

[8]      Mr. Badgely's address is
  2815 Franklin Drive, Columbus, Indiana, 47201.

[9]      Includes 12,467,508 shares
  registered in the name of Access Information Services, Inc., a corporation controlled
  by the Robertson Family Trust, and 1,000,000 options that are currently exercisable.
  Mr. Robertson is one of three trustees of the Robertson Family Trust, which
  acts by the majority vote of the three trustees. Mr. Robertson disclaims beneficial
  ownership of the shares owned or controlled by the Robertson Family Trust.

[10]    JGR Petroleum Inc. is a corporation
  owned by The Robertson Family Trust. Its address is 1103 - 11871 Horseshoe Way,
  Richmond, British Columbia V7A 5H5, Canada

[11]    SMR Investments is a corporation owned
  by Sue Robertson, the wife of Mr. Robertson. Its address is 1103 - 11871 Horseshoe
  Way, Richmond, British Columbia V7A 5H5, Canada



We know of no arrangements the operation of which may result
  in a change of our control.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Integral Concepts, Inc. ("ICI"), holder of the exclusive worldwide
  license to the CTHA technology, entered into an option agreement with SMR Investments
  Ltd. ("SMR"), a corporation owned by Sue Robertson, the wife of Mr. Robertson,
  dated November 18, 1994, and amended December 16, 1994 (the "Option Agreement").
  The Option Agreement provided that ICI would issue a sublicense to SMR for the
  CTHA subject to the payment of $250,000; a 3% royalty from gross sales; and
  a subsequent public entity to be established. We were organized by SMR and Robertson
  as a result. ICI retained all military applications and resulting procurement
  interests. The contract period relating to the three percent royalty to be paid
  to ICI commences when sales are made by us and SMR and continue during the life
  of the Option Agreement. The term of the Option Agreement is perpetual as is
  the ICI License.

On December 13, 1994, SMR assigned us the rights to the Option
  Agreement in consideration of $50,000 advanced by Access Information Services,
  Inc. (the "Option Assignment"). Access Information Services, Inc. is a corporation
  owned and controlled by the Robertson Family Trust.

On December 14, 1994, we issued 3,000,000 Class A Shares to
  Access Information Services, Inc., pursuant to the Option Assignment. The value
  assigned to the 3,000,000 Class A common shares issued to Access Information
  Services Inc. was $0.50. The valuation of the 3,000,000 shares issued to Access
  Information Services, Inc. was arbitrarily determined by our Board of Directors.
  The $250,000 has been paid to ICI and was a one time payment.

On July 10, 1995, ICI entered into the Sublicense wherein
  ICI granted to us the exclusive worldwide right to manufacture, sell copies
  of, sublicense and distribute the process and equipment related to the design,
  construction and operation of the CTHA and to further sublicense others the
  rights to manufacture, sell copies of, license and distribute the same,

- 17 -

---

excluding all military applications and procurement interests.
  The Sublicense was the culmination of the agreement between ICI and SMR, and
  SMR and us. On December 27, 1995, SMR assigned us all of its rights and duties
  in the CTHA technology. The purpose of this assignment was to assign any and
  all rights or duties which may have been held by SMR as a result of the Option
  Agreement, it being understood that the Option Agreement was nothing more than
  an agreement in principle. The term of the Sublicense is perpetual and requires
  the payment of a minimum annual royalty of $3,000. Further, we will pay a royalty
  of 10% of the net revenues derived from sales, licenses or sublicenses of the
  CTHA technology with a credit for the minimum royalty. In addition we shall
  pay a royalty of 3% of the gross revenues derived from the sales, licenses or
  sublicenses of the CTHA technology.

We amended the Sublicense with ICI in March 1997 to clarify
  the applications of CTHA technology subject to our sublicense. As amended, we
  have exclusive rights to all commercial applications. Emergent Technologies
  Corporation ("ETC") has the exclusive rights to all governmental and military
  applications for the CTHA antenna. In consideration for the amendment, we received
  a 50% reduction in royalties to be paid to ICI over a three year period plus
  an enlarged definition of Technology to include all future enhancements to the
  CTHA technology.

To date, there have not been any transactions between us and
  our officers, directors, principal shareholders or affiliates other than as
  set forth above. We believe that the transactions described here were on terms
  more favorable to our officers, and directors, than otherwise could be obtained
  if such transactions were with non-related parties.

|Number | Description                                                                                                                                                                  |    
|------ | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|3.1    | Articles of Incorporation                                                                                                                                                    | (1)
|3.2    | Article of Amendment                                                                                                                                                         | (1)
|3.3    | By-Laws                                                                                                                                                                      | (1)
|4.1    | Specimen Share Certificate for Class A Shares                                                                                                                                | (1)
|4.2    | Specimen Share Certificate for Class B Shares                                                                                                                                | (1)
|4.3    | Specimen Warrant                                                                                                                                                             | (2)
|4.4    | Marketing Agreement between IAS and Information
      Highway.com, Inc.                                                                                                      | (3)
|23.1   | Professional Service Agreement between IAS and
      Cadence Design Systems, Inc.                                                                                            | (3)
|23.2   | Consulting Agreement between IAS and Capital
      Research Group Inc.                                                                                                       | (3)
|23.3   | License Agreement between IAS and World Tracking
      Technologies, Inc.                                                                                                    | (3)
|23.4   | Amendment to License Agreement between IAS and
      World Tracking Technologies, Inc.                                                                                       | (3)
|10.6   | License Agreement between IAS and ARINC Incorporated                                                                                                                         | (3)
|10.7   | Renewal Lease Agreement for Kokomo, Indiana Facilities                                                                                                                       | (3)
|23.1   | Amendment No.2 to License Agreement between IAS
      and Wherify Wireless, Inc. (formerly "World Tracking Technologies, Inc.)                                               | (4)
|23.1   | Consent of Manning
      Elliott                                                                                                                                             |    
|31.1   | Certification of Chief
      Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                     |    
|31.2   | Certification of Chief
      Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                     |    
|32.1   | Certification of John
      Robertson, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350,
      as adopted pursuant to Section 906 of Sarbanes - Oxley Act of 2002 |    
|32.2   | Certificate of James
      Vandeberg, Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of Sarbanes - Oxley Act of 2002   |    

- 18 -

---

|(1) | Incorporated by reference from Form S-1 Registration Statement (33-92592).
|--- | --------------------------------------------------------------------------
|(2) | Incorporated by reference from Form 10-KSB for Fiscal Year 1998.          
|(3) | Incorporated by reference from Form 10-KSB for Fiscal Year 2000.          
|(4) | Incorporated by reference from Form 10-KSB for Fiscal Year 2001.          

ITEM 13(b). REPORTS ON FORM 8-K.

None.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The following table discloses accounting fees and services
  which we paid to our auditor, Manning Elliott:

|                          | 2004        | 2003       
|------------------------- | ----------- | -----------
|Type of Services Rendered | Fiscal Year | Fiscal Year
|                          | (CAD$)      | (CAD$)     

|                       |        |       
|---------------------- | ------ | ------
|(a) Audit Fees         | $7,950 | $7,200
|                       |        |       
|(b) Audit-Related Fees | $0     | $0    
|                       |        |       
|(c) Tax Fees           | $500   | $500  
|                       |        |       
|(d) All Other Fees     | Nil    | Nil   

- 19 -

---

SIGNATURES

In accordance with Section 13 or 15(d) of the Securities Exchange
  Act of 1934, the Registrant has duly caused this report or amendment to be signed
  on its behalf by the undersigned, thereunto duly authorized.

IAS COMMUNICATIONS, INC.

By: /s/ John G. Robertson 
  John G. Robertson, President 
  Chief Executive Officer and Director

Dated: July 27, 2004

In accordance with the Securities Exchange Act of 1934, this
  report has been signed by the following persons on behalf of the Registrant
  and in the capacities indicated as of July 27, 2004.

|Signature             |  | Title                                |  | Date   
|--------------------- |  | ------------------------------------ |  | -------
|                      |  |                                      |  |        
|/s/ John G. Robertson |  | Chairman of the Board, President,    |  | 7/27/04
|(John G. Robertson)   |  | Chief Executive Officer and Director |  |        
|                      |  |                                      |  |        
|                      |  |                                      |  |        
|/s/James Vandeberg    |  | Chief Operating Officer and          |  | 7/27/04
|(James Vandeberg)     |  | Chief Financial Officer and Director |  |        
|                      |  |                                      |  |        
|                      |  |                                      |  |        
|/s/ Jennifer Lorette  |  | Secretary and Director               |  | 7/27/04
|(Jennifer Lorette)    |  |                                      |  |        

- 20 -

---

Item 7: Financial Statements

Independent Auditor's Report

Balance Sheets as of April 30, 2004 and 2003

Statements of Operations accumulated from December 13,
  1994 (Inception) to April 30, 2003 and the years ended April 30, 2004 and 2003

Statements of Cash Flows accumulated from December 13,
  1994 (Inception) to April 30, 2004 and the years ended April 30, 2004 and 2003

Statement of Stockholders' Deficit accumulated from December
  13, 1994 (Inception) to April 30, 2004

Notes to the Financial Statements

- 21 -

---

Independent Auditors' Report
        To the Stockholders and Board of Directors of 
          IAS Communications, Inc. (A Development Stage Company)
        We have audited the accompanying balance sheets of
          IAS Communications, Inc. (A Development Stage Company) as at April 30,
          2004 and 2003 and the related statements of operations, cash flows and
          stockholders' deficit 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 audit in accordance with the Standards
          of the Public Company Accounting Oversight Board (United States). Those
          standards require that we plan and perform an audit to obtain reasonable
          assurance whether the financial statements are free of material misstatement.
          An audit includes examining, on a test basis, evidence supporting the
          amounts and disclosures in the financial statements. An audit also includes
          assessing the accounting principles used and significant estimates made
          by management as well as evaluating the overall financial statement
          presentation. We believe that our audits provide a reasonable basis
          for our opinion.
        In our opinion, the aforementioned financial statements
          present fairly, in all material respects, the financial position of
          the Company as at April 30, 2004 and 2003 and the results of its operations
          and its cash flows for the years then ended in accordance with generally
          accepted accounting principles used in the United States. As required
          by the British Columbia Company Act we report that, in our opinion,
          these principles have been applied on a consistent basis.
        The accompanying financial statements have been prepared
          assuming the Company will continue as a going concern. As discussed
          in Note 1 to the financial statements, the Company has not generated
          profitable operations since inception and has a working capital deficit.
          These factors raise substantial doubt about the Company's ability to
          continue as a going concern. Management's plans in regard to these matters
          are also discussed in Note 1. These financial statements do not include
          any adjustments, which might result from the outcome of these uncertainties.
        CHARTERED ACCOUNTANTS
        Vancouver, Canada
        July 15, 2004
        F-1


---

IAS Communications, Inc.
  (A Development Stage Company) 
  Balance Sheets

|                                                                                    | April 30,  |   | April 30,  |  
|----------------------------------------------------------------------------------- | ---------- | - | ---------- | -
|                                                                                    | 2004       |   | 2003       |  
|                                                                                    | $          |   | $          |  
|                                                                                    |            |   |            |  
|Assets                                                                              |           
|                                                                                    |            |   |            |  
|Current Assets                                                                      |            |   |            |  
|Cash                                                                                | 179        |   | -          |  
|                                                                                    |            |   |            |  
|Property and Equipment (Note 3)                                                     | 447        |   | 1,135      |  
|                                                                                    |            |   |            |  
|Total Assets                                                                        | 626        |   | 1,135      |  
|                                                                                    |            |   |            |  
|Liabilities and Stockholders' Deficit                                               |           
|                                                                                    |            |   |            |  
|Current Liabilities                                                                 |            |   |            |  
|                                                                                    |            |   |            |  
|Cheques issued in
      excess of funds on deposit                                  | 234        |   | 1,482      |  
|Accounts payable                                                                    | 71,577     |   | 149,191    |  
|Accrued liabilities
      (Note 6(c))                                               | 17,721     |   | 96,588     |  
|Due to related parties
      (Note 7)                                               | 170,917    |   | 133,690    |  
|Convertible debentures (Note 5)                                                     | 25,000     |   | 25,000     |  
|                                                                                    |            |   |            |  
|Total Liabilities                                                                   | 285,449    |   | 405,951    |  
|                                                                                    |            |   |            |  
|Commitments and Contingencies (Note 8)                                              |            |   |            |  
|                                                                                    |            |   |            |  
|Stockholders' Deficit                                                               |            |   |            |  
|                                                                                    |            |   |            |  
|Preferred Stock            
              50,000,000 shares authorized; none issued | -          |   | -          |  
|                                                                                    |            |   |            |  
|Common Stock (Note 6)                                                               |            |   |            |  
|                                                                                    |            |   |            |  
|Class "A" voting           
       100,000,000 shares authorized without           |            |   |            |  
|par value; 35,243,562 shares
      issued and                                       |            |   |            |  
|outstanding                                                                         | 5,831,415  |   | 5,831,415  |  
|                                                                                    |            |   |            |  
|Class "B" non-voting     100,000,000
      shares authorized without               |            |   |            |  
|par value; none issued                                                              | -          |   | -          |  
|                                                                                    |            |   |            |  
|Deficit Accumulated During the Development Stage                                    | (6,116,238 | ) | (6,236,231 | )
|                                                                                    |            |   |            |  
|Total Stockholders' Deficit                                                         | (284,823   | ) | (404,816   | )
|                                                                                    |            |   |            |  
|Total Stockholders' Deficit and Liabilities                                         | 626        |   | 1,135      |  

F-2

(The accompanying notes are an integral part of these financial
  statements)

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Statements of Operations

|                                           | Accumulated from    |   |                    |   |            |  
|------------------------------------------ | ------------------- | - | ------------------ | - | ---------- | -
|                                           | December 13, 1994   |   |                    |   |            |  
|                                           | (Date of Inception) |   | For the year ended |  
|                                           | to April 30,        |   | April 30,          |   | April 30,  |  
|                                           | 2004                |   | 2004               |   | 2003       |  
|                                           | $                   |   | $                  |   | $          |  
|Revenue                                    | -                   |   | -                  |   | -          |  
|                                           |                     |   |                    |   |            |  
|Expenses                                   |                     |   |                    |   |            |  
|General
      and Administration           |                     |   |                    |   |            |  
|Bank charges                               | 1,385               |   | 982                |   | 403        |  
|Depreciation                               | 1,376               |   | 688                |   | 688        |  
|Interest on convertible debentures         | 4,376               |   | 2,188              |   | 2,188      |  
|Investor relations                         | 1,595               |   | 828                |   | 767        |  
|Office, postage and courier                | 4,315               |   | 1,774              |   | 2,541      |  
|Professional fees                          | 36,880              |   | 17,455             |   | 19,425     |  
|Transfer agent and
      regulatory        | 6,869               |   | 3,179              |   | 3,690      |  
|                                           | 56,796              |   | 27,094             |   | 29,702     |  
|                                           |                     |   |                    |   |            |  
|Research
      and Development             |                     |   |                    |   |            |  
|Royalty                                    | 4,500               |   | 3,000              |   | 1,500      |  
|Consulting                                 | 210                 |   | -                  |   | 210        |  
|                                           | 4,710               |   | 3,000              |   | 1,710      |  
|Loss from Continuing Operations            | (61,506             | ) | (30,094            | ) | (31,412    | )
|Discontinued Operations                    | (6,054,732          | ) | 150,087            |   | 335,988    |  
|Net Income (Loss) for the Year             | (6,116,238          | ) | 119,993            |   | 304,576    |  
|                                           |                     |   |                    |   |            |  
|Basic and Diluted Loss From Continuing     |                     |   |                    |   |            |  
|Operations                                 |                     |   | -                  |   | 0.00       |  
|                                           |                     |   |                    |   |            |  
|Basic and Diluted Income From Discontinued |                     |   |                    |   |            |  
|Operations                                 |                     |   | -                  |   | 0.01       |  
|                                           |                     |   |                    |   |            |  
|Basic and Diluted Loss Per Share           |                     |   | -                  |   | 0.01       |  
|                                           |                     |   |                    |   |            |  
|Weighted Average Shares Outstanding        |                     |   | 35,244,000         |   | 24,960,000 |  

F-3

(The accompanying notes are an integral part of these financial
  statements)

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Statements of Cash Flows

|                                                          | Accumulated from    |   |                    |   |           |  
|--------------------------------------------------------- | ------------------- | - | ------------------ | - | --------- | -
|                                                          | December 13, 1994   |   |                    |   |           |  
|                                                          | (Date of Inception) |   | For the year ended |  
|                                                          | to April 30,        |   | April 30,          |   | April 30, |  
|                                                          | 2004                |   | 2004               |   | 2003      |  
|                                                          | $                   |   | $                  |   | $         |  
|Cash Flows to Operating Activities                        |                     |   |                    |   |           |  
|Net income (loss) for
      the year                      | (6,116,238          | ) | 119,993            |   | 304,576   |  
|Adjustments to
      reconcile net loss to cash           |                     |   |                    |   |           |  
|Depreciation
      and amortization                       | 188,662             |   | 688                |   | 688       |  
|Shares
      and options issued for services              | 556,050             |   | -                  |   | -         |  
|Accounts
      payable written off                        | (486,075            | ) | (150,087           | ) | (335,988  | )
|Assets
      written-off                                  | 455,957             |   | -                  |   | -         |  
|Gain
      on shares cancelled                            | (10                 | ) | -                  |   | -         |  
|Shares
      issued for convertible debenture interest    | 18,786              |   | -                  |   | -         |  
|Change
      in non-cash working capital items            |                     |   |                    |   |           |  
|Decrease
      (increase) in prepaid expenses and other   |                     |   |                    |   |           |  
|current
      assets                                      | (1                  | ) | -                  |   | 3,541     |  
|Decrease
      in inventory                               | (28,615             | ) | -                  |   | -         |  
|Increase
      (decrease) in accounts payable and accrued |                     |   |                    |   |           |  
|liabilities                                               | 731,076             |   | (6,394             | ) | 2,227     |  
|                                                          |                     |   |                    |   |           |  
|Net Cash Used in Operating Activities                     | (4,680,408          | ) | (35,800            | ) | (24,956   | )
|                                                          |                     |   |                    |   |           |  
|Cash Flows from Financing Activities                      |                     |   |                    |   |           |  
|Cheques issued in excess
      of funds on deposit        | 234                 |   | (1,248             | ) | (5,289    | )
|Advances from related
      parties                       | 851,877             |   | 37,227             |   | 30,245    |  
|Increase in common
      stock                            | 4,044,924           |   | -                  |   | -         |  
|Proceeds from convertible debentures                      | 400,000             |   | -                  |   | -         |  
|                                                          |                     |   |                    |   |           |  
|Net Cash Provided by Financing Activities                 | 5,297,035           |   | 35,979             |   | 24,956    |  
|                                                          |                     |   |                    |   |           |  
|Cash Flows to Investing Activities                        |                     |   |                    |   |           |  
|Increase in capital
      assets                          | (99,626             | ) | -                  |   | -         |  
|Increase in license                                       | (250,000            | ) | -                  |   | -         |  
|Increase in patent protection costs                       | (266,822            | ) | -                  |   | -         |  
|                                                          |                     |   |                    |   |           |  
|Net Cash To Investing Activities                          | (616,448            | ) | -                  |   | -         |  
|                                                          |                     |   |                    |   |           |  
|Increase in Cash                                          | 179                 |   | 179                |   | -         |  
|Cash Beginning of Period                                 | -                   |   | -                  |   | -         |  
|                                                          |                     |   |                    |   |           |  
|Cash  End of Period                                      | 179                 |   | 179                |   | -         |  
|                                                          |                     |   |                    |   |           |  
|Non-Cash Financing Activities                             |                     |   |                    |   |           |  
|Shares issued to settle related party debt                | 892,741             |   | -                  |   | 680,960   |  
|Shares issued for services                                | 499,098             |   | -                  |   | -         |  
|Shares issued for convertible debentures and accrued      |                     |   |                    |   |           |  
|interest converted                                        | 394,661             |   | -                  |   | -         |  
|Shares issued for property                                | 1                   |   | -                  |   | -         |  
|Shares issued to an officer donated back and cancelled    | (10                 | ) | -                  |   | -         |  
|                                                          | 1,786,491           |   | -                  |   | 680,960   |  
|                                                          |                     |   |                    |   |           |  
|Supplemental disclosures:                                 |                     |   |                    |   |           |  
|Interest paid with
      cash                             |                     |   | 1,750              |   | -         |  
|Income tax paid with
      cash                           |                     |   | -                  |   | -         |  

F-4

(The accompanying notes are an integral part of these financial
  statements)

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Statement of Stockholders' Equity 
  Accumulated from December 13, 1994 (Inception) 
  to April 30, 2004

|                                                     |           |   |           |   | Deficit     |  
|---------------------------------------------------- | --------- | - | --------- | - | ----------- | -
|                                                     |           |   |           |   | Accumulated |  
|                                                     |           |   | Common    |   | During the  |  
|                                                     |           |   | Stock     |   | Development |  
|                                                     | Shares    |   | Class "A" |   | Stage       |  
|                                                     | #         |   | $         |   | $           |  
|Balance  December 13, 1994 (Inception)              |          |   |          |   |            |  
|                                                     |           |   |           |   |             |  
|Shares issued for cash                               | 100       |   | 10        |   |            |  
|                                                     |           |   |           |   |             |  
|Shares issued for property                           | 6,000,000 |   | 1         |   |            |  
|                                                     |           |   |           |   |             |  
|Shares issued for cash pursuant to:                  |           |   |           |   |             |  
|a private placement                                  | 700,000   |   | 70,000    |   |            |  
|a public offering memorandum                         | 336,333   |   | 252,250   |   |            |  
|                                                     |           |   |           |   |             |  
|Net loss for the period                              |          |   |          |   | (83,615     | )
|                                                     |           |   |           |   |             |  
|Balance  April 30, 1995                             | 7,036,433 |   | 322,261   |   | (83,615     | )
|                                                     |           |   |           |   |             |  
|Shares previously issued, donated back and cancelled | (100      | ) | (10       | ) |            |  
|                                                     |           |   |           |   |             |  
|Shares issued for cash pursuant to options exercised | 210,000   |   | 52,500    |   |            |  
|                                                     |           |   |           |   |             |  
|Net loss for the year                                |          |   |          |   | (480,298    | )
|                                                     |           |   |           |   |             |  
|Balance  April 30, 1996                             | 7,246,333 |   | 374,751   |   | (563,913    | )
|                                                     |           |   |           |   |             |  
|Shares issued for cash pursuant to:                  |           |   |           |   |             |  
|a private placement                                  | 722,000   |   | 1,124,500 |   |            |  
|options exercised                                    | 224,000   |   | 140,500   |   |            |  
|                                                     |           |   |           |   |             |  
|Shares issued for services                           | 25,000    |   | 8,333     |   |            |  
|                                                     |           |   |           |   |             |  
|Net loss for the year                                |          |   |          |   | (1,044,516  | )
|                                                     |           |   |           |   |             |  
|Balance  April 30, 1997                             | 8,217,333 |   | 1,648,084 |   | (1,608,429  | )
|                                                     |           |   |           |   |             |  
|Shares issued for cash pursuant to:                  |           |   |           |   |             |  
|a public offering memorandum                         | 263,667   |   | 197,750   |   |            |  
|options exercised                                    | 87,500    |   | 26,875    |   |            |  
|a private placement                                  | 7,000     |   | 15,750    |   |            |  
|a private placement
      and foreign units offering | 575,600   |   | 1,007,300 |   |            |  
|                                                     |           |   |           |   |             |  
|Shares issued for services                           | 169,250   |   | 260,125   |   |            |  
|                                                     |           |   |           |   |             |  
|Net loss for the year                                |          |   |          |   | (1,633,047  | )
|                                                     |           |   |           |   |             |  
|Balance  April 30, 1998                             | 9,320,350 |   | 3,155,884 |   | (3,241,476  | )

F-5

(The accompanying notes are an integral part of these financial
  statements)

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Statement of Stockholders' Equity 
  Accumulated from December 13, 1994 (Inception) to April 30, 2004

|                                                       |            |  |           |  | Deficit     |  
|------------------------------------------------------ | ---------- |  | --------- |  | ----------- | -
|                                                       |            |  |           |  | Accumulated |  
|                                                       |            |  | Common    |  | During the  |  
|                                                       |            |  | Stock     |  | Development |  
|                                                       | Shares     |  | Class "A" |  | Stage       |  
|                                                       |            |  |           |  |             |  
|Carryforward balance  April 30, 1998                  | 9,320,350  |  | 3,155,884 |  | (3,241,476  | )
|                                                       |            |  |           |  |             |  
|Shares issued for cash pursuant to:                    |            |  |           |  |             |  
|options exercised                                      | 2,000      |  | 500       |  |            |  
|a private placement
      and foreign units offering   | 95,000     |  | 166,250   |  |            |  
|a private placement                                    | 200,000    |  | 200,000   |  |            |  
|exercise of warrants                                   | 43,000     |  | 84,000    |  |            |  
|                                                       |            |  |           |  |             |  
|Shares issued for services                             | 132,000    |  | 230,640   |  |            |  
|                                                       |            |  |           |  |             |  
|Shares issued pursuant to conversion of convertible    |            |  |           |  |             |  
|debentures including
      accrued interest            | 471,508    |  | 345,520   |  |            |  
|                                                       |            |  |           |  |             |  
|Net loss for the year                                  |           |  |          |  | (1,219,435  | )
|                                                       |            |  |           |  |             |  
|Balance  April 30, 1999                               | 10,268,858 |  | 4,182,794 |  | (4,460,911  | )
|                                                       |            |  |           |  |             |  
|Shares issued for cash pursuant to:                    |            |  |           |  |             |  
|a private placement                                    | 968,902    |  | 484,451   |  |            |  
|options exercised                                      | 2,500      |  | 2,500     |  |            |  
|warrants exercised                                     | 18,125     |  | 30,938    |  |            |  
|                                                       |            |  |           |  |             |  
|Shares issued pursuant to conversion of convertible    |            |  |           |  |             |  
|debentures including
      accrued interest            | 62,854     |  | 38,266    |  |            |  
|                                                       |            |  |           |  |             |  
|Net loss for the year                                  |           |  |          |  | (572,169    | )
|                                                       |            |  |           |  |             |  
|Balance  April 30, 2000                               | 11,321,239 |  | 4,738,949 |  | (5,033,080  | )
|                                                       |            |  |           |  |             |  
|Shares issued to settle debt                           | 267,048    |  | 211,781   |  |            |  
|                                                       |            |  |           |  |             |  
|Shares issued pursuant to conversion of convertible    |            |  |           |  |             |  
|debentures including
      accrued interest            | 12,358     |  | 10,875    |  |            |  
|                                                       |            |  |           |  |             |  
|Net loss for the year                                  |           |  |          |  | (755,406    | )
|                                                       |            |  |           |  |             |  
|Balance  April 30, 2001                               | 11,600,645 |  | 4,961,605 |  | (5,788,486  | )
|                                                       |            |  |           |  |             |  
|Net loss for the year                                  |           |  |          |  | (752,321    | )
|                                                       |            |  |           |  |             |  
|Balance  April 30, 2002                               | 11,600,645 |  | 4,961,605 |  | (6,540,807  | )
|                                                       |            |  |           |  |             |  
|Shares issued for cash pursuant to a private placement | 944,250    |  | 188,850   |  |            |  
|                                                       |            |  |           |  |             |  
|Shares issued to settle related party debt             | 22,698,667 |  | 680,960   |  |            |  
|                                                       |            |  |           |  |             |  
|Net income for the year                                |           |  |          |  | 304,576     |  
|                                                       |            |  |           |  |             |  
|Balance  April 30, 2003                               | 35,243,562 |  | 5,831,415 |  | (6,236,231  | )
|                                                       |            |  |           |  |             |  
|Net income for the year                                |           |  |          |  | 119,993     |  
|                                                       |            |  |           |  |             |  
|Balance  April 30, 2004                               | 35,243,562 |  | 5,831,415 |  | (6,116,238  | )

F-6

(The accompanying notes are an integral part of these financial
  statements)

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Notes to the Financial Statements

|1. | Development Stage Company                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | IAS Communications, Inc., herein "the
        Company", was incorporated on December 13, 1994 pursuant to the Laws of
        the State of Oregon, USA. The Company is a Development Stage Company,
        as defined by Statement of Financial Accounting Standard ("SFAS") No.
        7.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   | The Company, a development stage company,
        was engaged in the commercialization of advanced antenna technology known
        as the Contrawound Toroidal Helical Antenna, herein "CTHA", for wireless
        communications markets including cellular, meter reading and global positioning
        services. The CTHA, developed in conjunction with researchers at West
        Virginia University, is a technologically advanced antenna design, which
        can be incorporated into a wide variety of telecommunications applications.
        The Company has been granted worldwide sublicensing rights for commercial
        applications, excluding military and governmental applications, for the
        CTHA pursuant to an agreement with Integral Concepts Inc. and West Virginia
        University Research Corporation. See Note 8(a) for legal proceedings regarding
        underlying patents. The Company is not currently developing the CTHA.
|  
|   | The Company currently does not have any
        plan of operations; however, the Company plans to seek other projects,
        which are yet to be determined.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | Originally planned principal activities
        did not produce significant revenues and the pursuit of that business
        ceased. The Company suffered recurring losses from inception, totalling
        $6,116,238 and has a working capital deficit of $285,270. These factors
        raise substantial doubt about the Company's ability to continue as a going
        concern. The ability of the Company to emerge from its current dormant
        status is dependent upon its successful efforts to acquire or develop
        a new business and raise additional equity financing to achieve profitability
        and positive cash flow.                                                                                                                                                                                                                                                                                                                       
|  
|   | The Company may raise additional funds
        through the exercise of warrants and stock options, if exercised. Options
        with respect to 1,275,000 shares and warrants with respect to 944,250
        shares may be exercised for potential proceeds of $491,000. These options
        and warrants are currently not in-the- money and are unlikely to be currently
        exercised.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   | The Company will require significant additional
        capital to settle its debts and provide sufficient working capital for
        basic operations over the next twelve months.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|2. | Summary of Significant Accounting Policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   | (a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|  
|   | (c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

F-7

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Notes to the Financial Statements

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|  
|   | (d)                                                           
|  
|   |                                                               
|  
|   | (e)                                                           
|  
|   |                                                               
|  
|   | (f)                                                           
|  
|   |                                                               
|  
|   | (g)                                                           
|  
|   |                                                               
|  
|   | (h)                                                           
|  
|   |                                                               
|  
|   | (i)                                                           
|  
|   |                                                               

F-8

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Notes to the Financial Statements

|2. | Summary of Significant Accounting Policies
        (continued)
|-- | --------------------------------------------------------------
|  
|   | (j)                                                           
|  
|   |                                                               
|  
|   | (k)                                                           
|  
|   |                                                               
|  
|   | (l)                                                           
|  
|   |                                                               
|  
|   | (m)                                                           
|  
|   |                                                               
|  
|   | (n)                                                           
|  
|   |                                                               
|  
|   | (o)                                                           
|  
|   |                                                               

F-9

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Notes to the Financial Statements

|2. | Summary of Significant Accounting Policies (continued)
|-- | ------------------------------------------------------
|  
|   | (o)                                                   
|  
|   |                                                       
|  
|3. | Property and Equipment                                

| |                               |  |       |  |              |  | April 30, |  | April 30,
| | ----------------------------- |  | ----- |  | ------------ |  | --------- |  | ---------
| |                               |  |       |  |              |  | 2004      |  | 2003     
| |                               |  |       |  | Accumulated  |  | Net Book  |  | Net Book 
| |                               |  | Cost  |  | Amortization |  | Value     |  | Value    
| |                               |  | $     |  | $            |  | $         |  | $        
| |                               |  |       |  |              |  |           |  |          
| | Computer and office equipment |  | 3,441 |  | 2,994        |  | 447       |  | 1,135    



|4. | Intangible Assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Although the Company is not currently
        developing the CTHA, it has not terminated its rights to it.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | The Company's sublicence is exclusive,
        covering any and all international markets but excludes all military and
        governmental applications and resulting procurement interests. All improvements
        and embodiments that are created as a result of these military applications
        and additional research and development efforts will be transferred directly
        to the Company. The terms of the sublicence agreement are as follows:                                                                                                                                                                                                                                                             
|  
|   | (i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|   | (ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | (iii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|  
|   | All royalties are payable within 30 days
        of each calendar quarter. The term of the original licence agreement and
        the sublicence agreement, subject to compliance with the terms thereof,
        is perpetual and renewable annually. The Company paid the December 31,
        2003 minimum annual royalty and intends on continuing to renew annually.                                                                                                                                                                                                                                                                                                                                                          
|  
|5. | Convertible Debentures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|  
|   | The Company offered three year, 83⁄4%
        interest, convertible debentures. Interest is due annually. The remaining
        $25,000 of such debentures were convertible into Class "A" shares at $3.50
        on June 15, 2000. In the event the shares traded below $4.00 per share
        over a ten-day average prior to exercising into shares of the Company
        during November 16, 2000 to December 16, 2000, the convertible debentures
        were to be exercisable at 20% below the said ten-day average. The original
        maturity date was June 15, 2000. The Company will offer the debenture
        holders an additional extension on the maturity date or convert the debenture
        into shares.

F-10

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Notes to the Financial Statements

|6. | Common Stock
|-- | ------------
|  
|   | (a)         
|  
|   |             
|  
|   |             
|  
|   |             
|  
|   |             

| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Class "A" |  |          |  |               
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------- |  | -------- |  | --------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Common    |  | Weighted |  | Weighted      
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Shares    |  | Average  |  | Average       
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Under     |  | Option   |  | Remaining Life
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Option    |  | Price    |  | of Options    
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | #         |  | $        |  | (Months)      
| |  | Beginning of year                                                                                                                                                                                                                                                                                                                                                                                                               |  | 1,225,000 |  | .20      |  |               
| |  | Granted                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 50,000    |  | .20      |  |               
| |  | Exercised                                                                                                                                                                                                                                                                                                                                                                                                                       |  | -         |  |          |  |               
| |  | Cancelled                                                                                                                                                                                                                                                                                                                                                                                                                       |  | -         |  |          |  |               
| |  | Lapsed                                                                                                                                                                                                                                                                                                                                                                                                                          |  | -         |  |          |  |               
| |  | End of year                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 1,275,000 |  | .20      |  | 34            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |           |  |          |  |               
| |  | On June 10, 2002, pursuant to
        an agreement with a business consultant, the Company granted stock options
        to acquire 1,000,000 Class "A" common shares exercisable at $0.05 per
        share. These options were cancelled on March 24, 2003.
      If compensation expense had been determined pursuant
        to SFAS 123, the Company's net loss and net loss per share would have
        been as follows:

| |  |  |                            |  | April 30, |  | April 30,
| |  |  | -------------------------- |  | --------- |  | ---------
| |  |  |                            |  | 2004      |  | 2003     
| |  |  |                            |  | $         |  | $        
| |  |  | Net income                 |  |           |  |          
| |  |  | As reported                |  | 119,993   |  | 304,576  
| |  |  | Pro
      forma            |  | 32,633    |  | 217,216  
| |  |  | Basic net income per share |  |           |  |          
| |  |  | As reported                |  | -         |  | .01      
| |  |  | Pro forma                  |  | -         |  | .01      




---

IAS Communications, Inc.
  (A Development Stage Company) 
  Notes to the Financial Statements

|6. | Common Stock (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | (b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|7. | Due to Related Parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|   | The amounts due to related parties are
        non-interest bearing, unsecured and without specific terms of repayment.
        Related parties consist of companies controlled or significantly influenced
        by the President.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|  
|8. | Legal Proceedings                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | The Company was sued in April 1998 in
        a civil action filed in U.S. District Court for the District of Oregon
        (the "Oregon Litigation"). The Plaintiff, Kirk VanVoorhies, ("Plaintiff")
        sought money damages and equitable relief against the Company alleging
        patent infringement by the Company for the CTHA. The Company notified
        West Virginia University ("WVU") of this claim and contacted WVU to assist
        in the defence. WVU owns the patent rights to the CTHA technology, which
        were licensed to the Company. Two patents were granted for the CTHA to
        WVU; one in August 1995, and another in August 1997. The Plaintiff's patent
        was approved on March 31, 1998.                                                                                                                                                                                   
|  
|   | The Plaintiff in the Oregon Litigation
        is also a defendant in a pending civil action in the U.S. District Court
        for the Northern District of West Virginia brought by WVU (the "West Virginia
        Litigation") claiming that the CTHA invention is owned by WVU. As alleged
        in the West Virginia Litigation, the Company believes that the patent
        rights for the CTHA technology belongs to WVU and therefore based on the
        license, the Company owns the worldwide rights to the CTHA commercial
        applications. Litigation, the Company believes that the patent rights
        for the CTHA technology belongs to WVU and therefore based on the license,
        the Company owns the worldwide rights to the CTHA commercial applications.                                                                                                                                     
|  
|   | A decision by the United States District
        Court for the Northern District of West Virginia will, if upheld on appeal,
        signal the end to patent litigation brought by VorteKx, Inc. against the
        Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|  
|   | VorteKx, Inc. brought a patent infringement
        action against IAS in the United States District Court for the District
        of Oregon on a patent issued to a former graduate student at WVU, Kurt
        L. VanVoorhies, and subsequently assigned to VorteKx. On the Company's
        motion, the case was transferred to the Northern District of West Virginia
        and consolidated with a previously pending action filed by WVU against
        VanVoorhies, discussed above. The Company and WVU both claimed that the
        technology covered by the patent is actually owned by WVU. The Company
        is the sublicensee of commercial applications of the CTHA technology.                                                                                                                                                                                                                             
|  
|   | In a Memorandum Opinion and Order entered
        February 17, 2000, the West Virginia federal court granted summary judgment
        for WVU in its claims against VanVoorhies. The Court also dismissed VanVoorhies'
        claims against WVU and third-party defendants West Virginia University
        Research Corporation, Dr. James E. Smith and Integral Concepts, Inc. Because
        the Court's holding establishes that WVU owns the technology, it should
        bring an end to the litigation against the Company, which was stayed pending
        resolution of the case against VanVoorhies.                                                                                                                                                                                                                                                                                                                  
|  
|   | The dispute in the WVU action concerned
        inventions conceived during VanVoorhies' time at WVU as a graduate student
        and later as a graduate research assistant, particularly two inventions
        relating to the CTHA technology. The Court found that VanVoorhies validly
        assigned all rights in the first invention to WVU, including all future
        technology derived from the technology underlying that invention. VanVoorhies
        subsequently declined to assign to WVU any interest in a second invention.
        The Court found that the second invention constituted future technology
        derived from the first invention. Therefore, VanVoorhies' assignment of
        the first invention to WVU also effectively assigned the second invention
        to WVU, and WVU is the rightful owner of the patent applications filed
        by VanVoorhies on the CTHA technology.

F-12

---

IAS Communications, Inc.
  (A Development Stage Company) 
  Notes to the Financial Statements

|8. | Legal Proceedings (continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | Because one of these patent applications led to
        the issuance of the patent underlying VorteKx's infringement suit against
        the Company, VorteKx no longer has standing to pursue that infringement
        case. The case was stayed pending VanVoorhies' appeal from the Court's
        order. On May 20, 2004 the United States Court of Appeals affirmed the
        stay of the case.                                                                                                                                                                                                                                             
|  
|9. | Income Tax                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | Potential benefits of income tax losses are not
        recognized in the accounts until realization is more likely than not.
        The Company has incurred net operating losses of $6,080,000 expiring between
        2010 and 2017. Pursuant to SFAS No. 109 the Company is required to compute
        tax asset benefits for net operating losses carried forward. Potential
        benefit of net operating losses have not been recognized in these financial
        statements because the Company cannot be assured it is more likely than
        not it will utilize the net operating losses carried forward in future
        years.
|  
|   | The components of the net deferred tax asset at
        April 30, 2004, and the statutory tax rate, the effective tax rate and
        the elected amount of the valuation allowance are indicated below:                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |  |                                                           | 2004     |   | 2003     |  
| |  | --------------------------------------------------------- | -------- | - | -------- | -
| |  |                                                           | $        |   | $        |  
| |  |                                                           |          |   |          |  
| |  | Net Operating Income                                      | 120,000  |   | 304,000  |  
| |  |                                                           |          |   |          |  
| |  | Utilization of net operating losses carried
      forward |          |   |          |  
| |  | from prior years                                          | (120,000 | ) | (304,000 | )
| |  |                                                           |          |   |          |  
| |  |                                                           |         |   |         |  
| |  |                                                           |          |   |          |  
| |  | Statutory Tax Rate                                        | 34%      |   | 34%      |  
| |  |                                                           |          |   |          |  
| |  | Effective Tax Rate                                        |         |   |         |  
| |  |                                                           |          |   |          |  
| |  | Deferred Tax Asset                                        |         |   |         |  
| |  |                                                           |          |   |          |  
| |  | Valuation Allowance                                       |         |   |         |  
| |  |                                                           |          |   |          |  
| |  | Net Deferred Tax Asset                                    |         |   |         |  

F-13

---