UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 20549

                                   Form 10-KSB


(Mark one)

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

                   For the fiscal year ended December 31, 1999

[  ] TRANSITION  REPORT UNDER  SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF 1934


         For the transition period from ______________ to _____________


                         Commission File Number: 0-28453

                       Itronics Communications Corporation
         ---------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)


       Delaware                                                 75-2610236
--------------------------                              ------------------------
 (State of incorporation)                               (IRS Employer ID Number)

                16910 Dallas Parkway, Suite 100, Dallas, TX 75248
               ---------------------------------------------------
                    (Address of principal executive offices)

                                 (972) 248-1922
                            -------------------------
                           (Issuer's telephone number)



          Securities Registered under Section 12(b) of the Exchange Act

Title of each Class                    Name of Each Exchange on which Registered
-------------------                    -----------------------------------------
      None                                             None

          Securities registered Under Section 12(g) of the Exchange Act
                        Common Stock, $0.00001 Par Value



Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 12 months (or for such
shorter  period that the  registrant  was required to file such reports) and (2)
has been subject to such filing requirements for the past 90 days. Yes X NoX

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  management'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 issuer's revenues for its most recent fiscal year: $-0-

State the  aggregate  market  value of the voting  stock held by  non-affiliates
computed by reference  to the price at which the stock was sold,  or the average
bid and asked  prices of such stock,  as of a specified  date within the past 60
days: $-0-(stock is not quoted).

As of December  31, 1999,  the issuer had 100,000  shares of common stock issued
and outstanding.

<PAGE>



PART 1

Item 1. Description of the Business

General

Itronics  Communications  Corporation  ("Company")  filed  a  Form  10-SB  on  a
voluntary  basis on December 10, 1999, in order to make the Company's  financial
information equally available to all parties, including potential investors, and
to meet certain listing requirements for publicly traded securities.

History of the Company

The Company was  incorporated  on August 22, 1995 under the laws of the State of
Delaware. The Company has never had any operations or assets since inception. At
one time, the Company had preliminary plans to enter the Internet communications
business, but said plans never materialized due to lack of funding.

On March 22, 2000,  the Company was acquired from its sole  shareholder,  Halter
Capital Corporation,  by Ameri-First Financial Group, Inc. for $100,000 cash and
50,000 shares of restricted,  unregistered common stock in Ameri-First Financial
Group,  Inc.  This  change in control  of  Itronics  Communications  Corporation
occurred  in   conjunction   with  closing   under  an  Agreement  and  Plan  of
Reorganization   (the   "Reorganization   Agreement")   between   the   Itronics
Communications  Corporation and Ameri-First Financial Group, Inc. As a result of
this transaction, Ameri-First Financial Group, Inc. merged into its wholly-owned
subsidiary, the Company.

The  Reorganization  was  approved  by the  unanimous  consent  of the  Board of
Directors of both entities and is intended to qualify as a reorganization within
the meaning of Section  368(a)(1)(B)  of the Internal  Revenue Code of 1986,  as
amended.

Upon effectiveness of the Reorganization Agreement, pursuant to Rule 12g-3(a) of
the General Rules and  Regulations of the  Securities  and Exchange  Commission,
Ameri-First  Financial  Group,  Inc.  became the  successor  issuer to  Itronics
Communications  Corporation for reporting purposes under the Securities Exchange
Act of 1934 (Act) and elected to report under the Act, effective March 23, 2000.
A copy of the  Reorganization  Agreement  is filed as an  exhibit  to a Form 8-K
filed on March 23, 2000.

Environmental Matters

The  Company  is  not  aware  of any  environmental  liability  relating  to its
operations  that  would  have a  material  adverse  effect on the  Company,  its
business, assets or results of operations.

Inflation

Inflation  has  not  historically  been  a  material  effect  on  the  Company's
operations  and is not expected to have a material  impact on the Company or its
operations in the future.

Item 2.  Description of Property

The Company does not own any properties.

Item 3.  Legal Proceedings.

The Company is not a party to any material pending litigation nor is it aware of
any threatened legal proceeding.


<PAGE>

Item 4.  Submission of Matters to a Vote of Security Holders.

No matters were  submitted to securities  holders during the year ended December
31, 1999.

PART II

Item 5.  Market for Common Equity and Related Stockholder Matters

The stock does not trade on any  exchange or the OTC  market.  There is no known
public market for this security.  The Company has 100,000 shares of common stock
outstanding.  Through March 22, 2000, the Company was a wholly-owned  subsidiary
of  Halter  Capital  Corporation.  Subsequent  to March  22,  2000,  Ameri-First
Financial Group, Inc. merged into its wholly owned subsidiary, the Company.

Item 6. Management's  Discussion and Analysis of Financial Condition and Results
        of Operations

(1)      Caution Regarding Forward-Looking Information

This annual report contains certain  forward-looking  statements and information
relating  to the  Company  that  are  based on the  beliefs  of the  Company  or
management as well as assumptions made by and information currently available to
the Company or management.  When used in this document,  the words "anticipate,"
"believe,"  "estimate," "expect" and "intend" and similar  expressions,  as they
relate  to  the   Company  or  its   management,   are   intended   to  identify
forward-looking  statements.  Such  statements  reflect the current  view of the
Company regarding future events and are subject to certain risks,  uncertainties
and assumptions, including the risks and uncertainties noted. Should one or more
of these risks or uncertainties  materialize,  or should underlying  assumptions
prove incorrect,  actual results may vary materially from those described herein
as anticipated,  believed,  estimated,  expected or intended.  In each instance,
forward-looking  information  should be considered in light of the  accompanying
meaningful cautionary statements herein.

(2)      Results of Operations, Liquidity and Capital Resources

The Company has never had any operations or assets since inception. At one time,
the Company had preliminary plans to enter the Internet communications business,
but said plans never materialized due to lack of funding.

The  Company  was  fully  dependent  upon its  parent  company,  Halter  Capital
Corporation to provide  sufficient  working capital to preserve the integrity of
the Company.

(3)      Year 2000 Considerations

The Year 2000 (Y2K) date change was  believed  to have  affected  virtually  all
computers and organizations. The Company undertook a comprehensive review of its
information  systems,  including  personal  computers,  software and  peripheral
devices,  and its  general  communications  systems.  The  Company has no direct
electronic  links with any customer or supplier.  In addition,  the Company held
discussions with certain of its software  suppliers with respect to the Y2K date
change. The Company was not required to modify or replace  significant  portions
of its computer hardware or software.

The Company monitored its significant suppliers,  shippers,  customers and other
external  business  partners related to their readiness for the Y2K date change.
To date, the Company has not  experienced  any adverse effect from the advent of
Year 2000. However, there can be no assurance that all of the Company's systems,
and the systems of its suppliers, shippers, customers or other external business
partners will not experience  unforseen  problems during the Year 2000 or future
periods.



<PAGE>

Item 7. Financial Statements

The required  financial  statements  are included in this document  beginning on
page F-1.

Item 8.  Changes  in  and  Disagreements  with  Accountants  on  Accounting  and
         Financial Disclosures

There have been no changes in  accountants  since  inception nor have there been
any  disagreements  with  accountants on any matter of accounting  principles or
practices, financial statement disclosure, or auditing scope or procedure.

Item 9. Directors. Executive Officers, Promoters and Control Persons; Compliance
        with Section 16(a) of the Exchange Act.

The  directors  and  officers of the Company are listed  below with  information
about their respective backgrounds.

Name                            Age          Position
-------                        ------        -------------
Kevin B. Halter                  64          Chairman, President, CEO & Director
Kevin B. Halter, Jr.             39          Secretary, Treasurer & Director

Directors are elected to serve until the next annual meeting of the shareholders
of the  Company or until  their  successors  have been  elected  and  qualified.
Officers  serve  at the  discretion  of the  Board  of  Directors.  None  of the
Directors serve as directors of any public or reporting  corporations  except as
disclosed below.

Kevin B.  Halter has served as  Chairman,  President,  CEO and a director of the
Company  since its  inception.  Mr.  Halter has served as Chairman of the Board,
President and Chief Executive Officer of Halter Capital Corporation, a privately
held  investment  and consulting  company,  since 1987. Mr. Halter has served as
Chairman of the Board and President of Millennia, Inc. and Chairman of the Board
of Digital  Communications  Technology Corporation since 1994. Mr. Halter is the
father of Kevin B. Halter, Jr.

Kevin B. Halter,  Jr. has served as  Secretary,  Treasurer and a Director of the
Company since inception. Mr. Halter also serves as Vice President, Secretary and
a Director of Halter  Capital  Corporation.  He is the  President of  Securities
Transfer  Corporation,  a  stock  transfer  agency  registered  with  the U.  S.
Securities  and  Exchange  Commission,  a position he has held since  1987.  Mr.
Halter has served as Vice President, Secretary and a director of Millennia, Inc.
and Digital  Communications  Technology Corporation since 1994. He is the son of
Kevin B. Halter.

No  director  or officer  of the  Company  has been  convicted  in any  criminal
proceeding  (excluding  traffic  violations)  or is the  subject  of a  criminal
proceeding which is currently proceeding.  No director or officer of the Company
is the subject of any legal proceeding  involving the Company or the performance
of his duties as such director or officer.

Compliance with Section 16(a) of the Exchange Act
-------------------------------------------------
Section  16(a) of the Exchange Act requires the Company's  directors,  executive
officers and persons who own more than ten percent of a registered  class of the
Company's equity  securities  ("10%  holders"),  to file with the Securities and
Exchange  Commission  (the "SEC")  initial  reports of ownership  and reports of
changes in ownership of Common Stock and other equity securities of the Company.
Directors,  officers and 10% holders are required by SEC  regulation  to furnish
the Company with copies of all of the Section  16(a)  reports  they file.  Based
solely on a review of reports furnished to he Company or written representations
from the Company's directors and executive officers during the fiscal year ended
December  31, 1999,  all Section  16(a) filing  requirements  applicable  to its
directors, officers and 10% holders for such year were complied with.

<PAGE>

Item 10.  Executive Compensation

The Company currently pays no compensation to its officers and directors and has
paid no compensation  in any amount or of any kind to its executive  officers or
directors for the fiscal years ended December 31, 1999 and 1998.

Item 11.  Security Ownership of Certain Beneficial Owners and Management.

The following  information  table sets forth certain  information  regarding the
Company's common stock owned on March 21, 2000 by (1) any person  (including any
"group")  who is known by the  Company to own  beneficially  more than 5% of its
outstanding Common Stock, (2) each director and executive  officer,  and (3) all
executive officers and directors as a group.

Name and Address                  Shares Owned               Percentage
----------------                 ---------------            -------------
Halter Capital Corporation (1)        100,000                    100%
16910 Dallas Parkway
Suite 100
Dallas, TX 75248

Executive Officers and Directors as   100,000                  100.0%
a group (five persons)

(1)  - Halter  Capital  Corporation  is owned by Kevin B.  Halter  and  Kevin B.
       Halter, Jr.

On March 22, 2000,  the Company was acquired from its sole  shareholder,  Halter
Capital Corporation,  by Ameri-First Financial Group, Inc. for $100,000 cash and
50,000 shares of restricted,  unregistered common stock in Ameri-First Financial
Group,  Inc.  This  change in control  of  Itronics  Communications  Corporation
occurred  in   conjunction   with  closing   under  an  Agreement  and  Plan  of
Reorganization   (the   "Reorganization   Agreement")   between   the   Itronics
Communications  Corporation and Ameri-First Financial Group, Inc. As a result of
this  transaction,  Itronics  Communications  Corporation  became a wholly-owned
subsidiary of the Ameri-First Financial Group, Inc. Ameri-First Financial Group,
Inc.  merged  into  its   wholly-owned   subsidiary,   Itronics   Communications
Corporation also referred to as the Company.

The  Reorganization  was  approved  by the  unanimous  consent  of the  Board of
Directors of both entities and is intended to qualify as a reorganization within
the meaning of Section  368(a)(1)(B)  of the Internal  Revenue Code of 1986,  as
amended.

Upon effectiveness of the Reorganization Agreement, pursuant to Rule 12g-3(a) of
the General Rules and  Regulations of the  Securities  and Exchange  Commission,
Ameri-First  Financial  Group,  Inc.  became the  successor  issuer to  Itronics
Communications  Corporation for reporting purposes under the Securities Exchange
Act of 1934 (Act) and elected to report under the Act, effective March 23, 2000.
A copy of the  Reorganization  Agreement  is filed as an  exhibit  to a Form 8-K
filed on March 23, 2000.

Item 12.  Certain Relationships and Related Transactions.

As of December 31, 1999, Halter Capital  Corporation had advanced funds totaling
approximately  $151 for operating  capital  purposes.  The advances are due upon
demand and are non-interest bearing.

<PAGE>

Item 13.  Exhibits and Reports on Form 8-K.

(a) Financial Statements and Exhibits

Financial  Statements:  The following financial statements are submitted as part
of this report:

                                                                          Page
                                                                         ------
     Report of Independent Certified Public Accountants                    F-2
     Balance Sheets - December 31, 1999 and 1998                           F-3
     Consolidated Statements of Income and Comprehensive Income
       Years Ended December 31, 1999 and 1998                              F-5
     Consolidated Statements of Changes in Shareholders' Equity
       Years Ended December 31, 1999 and 1998                              F-6
     Consolidated Statement of Cash Flows
       Years Ended December 31, 1999 and 1998                              F-7
     Notes to Consolidated Financial Statements                            F-8

   Exhibits
     27.1 - Financial Data Schedule

(b) Reports on Form 8-K
     March 23, 2000 -  Acquisition  of Itronics  Communications  Corporation  by
     Ameri-First  Financial  Group,  Inc. for $100,000 cash and 50,000 shares of
     restricted,  unregistered  shares of common stock of Ameri-First  Financial
     Group, Inc.

                                   SIGNATURES

In accordance  with Section 13 and 15(d) of the Exchange Act, the Registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized, on the 18th day of May, 2001.

Dated: May 18, 2001                          ITRONICS COMMUNICATIONS CORPORATION
       ------------

                                             By: /s/ Kevin B, Halter
                                                --------------------------------
                                                 Kevin B.  Halter
                                                 Chairman, President,
                                                 Chief Executive Officer
                                                 and Director

Pursuant to the requirements of The Securities Exchange Act of 1934, this report
has been signed  below by the  following  persons in the  capacities  and on the
dates indicated:

/s/ Kevin B.  Halter                                            May 18, 2001
--------------------
Kevin B.  Halter
Chairman, President,
Chief Executive Officer
and Director
(Principal Executive Officer)

/s/ Kevin B.  Halter, Jr.                                       May 18, 2001
-------------------------
Kevin B.  Halter, Jr.
Secretary, Treasurer and Director


<PAGE>




                               S. W. HATFIELD, CPA
                          certified public accountants

                      Use our past to assist your future sm


                             ITRONICS COMMUNICATIONS
                                   CORPORATION
                          (a wholly-owned subsidiary of
                           Halter Capital Corporation)

                              Financial Statements
                                       and
                                Auditor's Report

                           December 31, 1999 and 1998




<PAGE>


                       ITRONICS COMMUNICATIONS CORPORATION
            (a wholly-owned subsidiary of Halter Capital Corporation)

                                    CONTENTS



                                                                          Page

Report of Independent Certified Public Accountants                         F-3

Financial Statements

   Balance Sheets
     as of December 31, 1999 and 1998                                      F-4

   Statements of Operations and Comprehensive Income
     for the years ended December 31, 1999 and 1998                        F-5

   Statement of Changes in Stockholder's Equity
     for the years ended December 31, 1999 and 1998                        F-6

   Statements of Cash Flows
     for the years ended December 31, 1999 and 1998                        F-7

   Notes to Financial Statements                                           F-8


<PAGE>


S.  W.  HATFIELD, CPA
certified public accountants

Member:  American Institute of Certified Public Accountants
         SEC Practice Section
         Information Technology Section
         Texas Society of Certified Public Accountants


               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS



Board of Directors and Stockholders
Itronics Communications Corporation

We have  audited the  accompanying  balance  sheets of  Itronics  Communications
Corporation  (a Delaware  corporation  and a  wholly-owned  subsidiary of Halter
Capital Corporation) as of December 31, 1999 and 1998 and the related statements
of operations and comprehensive income, changes in stockholders' equity and cash
flows for each of the years  then  ended.  These  financial  statements  are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

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

In our opinion,  the financial  statements  referred to above present fairly, in
all  material  respects,  the  financial  position  of  Itronics  Communications
Corporation  as of December 31, 1999 and 1998, and the results of its operations
and its  cash  flows  for each of the  years  then  ended,  in  conformity  with
generally accepted accounting principles.




                                                  S.  W.  HATFIELD, CPA
Dallas, Texas
January 3, 2000

                                      F-3
<PAGE>

                       ITRONICS COMMUNICATIONS CORPORATION
            (a wholly-owned subsidiary of Halter Capital Corporation)
                                 BALANCE SHEETS
                           December 31, 1999 and 1998


                                                               1999      1998
                                                             --------  --------
                                     ASSETS
Current Assets
   Cash on hand and in bank                                   $    -     $ 94
                                                               -----      ---

Total Assets                                                  $    -     $ 94
                                                               =====      ===


                      LIABILITIES AND STOCKHOLDER'S EQUITY

Current Liabilities
   Due to parent company                                      $  151    $   -
                                                               -----     ----


Commitments and Contingencies


Stockholder's Equity Preferred stock - $0.00001 par value.
     5,000,000 shares authorized; none
     issued and outstanding                                        -        -
   Common stock - $0.00001 par value.
     10,000,000 shares authorized.
     100,000 issued and outstanding                                1        1
   Additional paid-in capital                                    999      999
   Accumulated deficit                                        (1,151)    (906)
                                                              -------    -----

     Total stockholder's equity                                 (151)      94
                                                              -------    -----

Total Liabilities and Stockholder's Equity                    $    -     $274
                                                               ======    =====

                                      F-4
<PAGE>

                       ITRONICS COMMUNICATIONS CORPORATION
            (a wholly-owned subsidiary of Halter Capital Corporation)
                STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
                     Years ended December 31, 1999 and 1998


                                                    1999              1998
                                                 -----------      ------------

Revenues                                          $     -           $     -
                                                   -------           -------

Expenses
   General and administrative expenses                245              180
                                                   -------           -------

Net Loss                                             (245)            (180)

Other Comprehensive Income                              -                -
                                                   -------           -------

Comprehensive Income                                $(245)           $(180)
                                                   =======           =======

Net loss per weighted-average
   share of common stock
   outstanding, calculated on
   Net Loss - basic and fully diluted                 nil              nil
                                                    ======           =======

Weighted-average number of shares
   of common stock outstanding                    100,000          100,000
                                                  ========         =========


                                      F-5
<PAGE>

                       ITRONICS COMMUNICATIONS CORPORATION
            (a wholly-owned subsidiary of Halter Capital Corporation)
                  STATEMENT OF CHANGES IN STOCKHOLDER'S EQUITY
                     Years ended December 31, 1999 and 1998

<TABLE>
                                                           Additional
                                      Common Stock          paid-in      Accumulated
                                  Shares         Amount     capital        deficit         Total
                                 --------        ------   -----------   -------------    ---------
<S>                              <C>            <C>       <C>           <C>              <C>

Balances at January 1, 1998       100,000       $  1         $999           $ (726)       $274

Net loss for the year                   -          -            -             (180)       (180)

Balances at December 31, 1998     100,000        1           999             (906)          94

Net loss for the year                   -          -            -            (245)        (245)

Balances at December 31, 1999     100,000      $   1         $999          $(1,151)      $(151)
</TABLE>

                                      F-6

<PAGE>

                       ITRONICS COMMUNICATIONS CORPORATION
            (a wholly-owned subsidiary of Halter Capital Corporation)
                            STATEMENTS OF CASH FLOWS
                     Years ended December 31, 1999 and 1998


                                                          1999        1997
                                                        --------   ---------
Cash Flows from Operating Activities
   Net loss for the period                              $ (245)     $(180)
   Adjustments to reconcile net loss to
     net cash provided by operating activities               -          -
                                                         ------      -----

   Net cash used in operating activities                  (245)      (180)
                                                         ------      -----


Cash Flows from Investing Activities                         -          -
                                                         ------      -----


Cash Flows from Financing Activities
   Cash advanced by parent                                 151          -
                                                         ------      -----

   Net cash used in financing activities                   151          -
                                                         ------      -----

Decrease in Cash                                           (94)      (180)

Cash at beginning of period                                 94        274
                                                         ------      -----

Cash at end of period                                   $    -      $  94
                                                         ======      =====

Supplemental Disclosure of
   Interest and Income Taxes Paid

     Interest paid for the period                       $    -       $   -
                                                         ======       =====
     Income taxes paid for the period                   $    -       $   -
                                                         ======       =====

                                      F-7
<PAGE>

                       ITRONICS COMMUNICATIONS CORPORATION
            (a wholly-owned subsidiary of Halter Capital Corporation)

                          NOTES TO FINANCIAL STATEMENTS



NOTE A - Organization and Description of Business

Itronics  Communications  Corporation  (Company) was  incorporated on August 22,
1995 under the laws of the State of Delaware  as a  wholly-owned  subsidiary  of
Halter Capital Corporation.

The Company has never had any operations or assets since inception.  The current
business purpose of the Company is to seek out and obtain a merger,  acquisition
or outright sale transaction  whereby the Company's  stockholders  will benefit.
The Company is not engaged in any  negotiations and has not undertaken any steps
to initiate the search for a merger or acquisition candidate.

The Company is fully dependent upon its current  management  and/or  significant
stockholders to provide  sufficient working capital to preserve the integrity of
the  corporate  entity  during this phase.  It is the intent of  management  and
significant  stockholders to provide  sufficient  working  capital  necessary to
support and preserve the integrity of the corporate entity.

The Company  has a year end of  December  31 and  follows the accrual  method of
accounting.

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


NOTE B - Summary of Significant Accounting Policies

1. Cash and cash equivalents
   -------------------------

     The Company considers all cash on hand and in banks,  including accounts in
     book overdraft  positions,  certificates of deposit and other highly-liquid
     investments with maturities of three months or less, when purchased,  to be
     cash and cash equivalents.

2. Income taxes
   ------------
     The Company provides  deferred income taxes,  where material,  based on the
     asset and liability  method under the  provisions of Statement of Financial
     Accounting  Standards No. 109,  "Accounting for Income Taxes".  At December
     31, 1999 and 1998,  respectively,  the  deferred tax asset and deferred tax
     liability   accounts,   consisting  solely  of  temporary   differences  in
     accumulated depreciation, were not material to the financial statements and
     no valuation allowance was provided against deferred tax assets.

     The  Company  files its income tax  returns  as a  component  of its parent
     company's  consolidated tax return.  Accordingly,  all net operating losses
     are offset  against the tax  liabilities  of the Company's  parent.  No net
     operating  loss  carryforwards  exist as of  December  31,  1999 and  1998,
     respectively.

                                      F-8
<PAGE>

                       ITRONICS COMMUNICATIONS CORPORATION
            (a wholly-owned subsidiary of Halter Capital Corporation)

                    NOTES TO FINANCIAL STATEMENTS - CONTINUED

NOTE B - Summary of Significant Accounting Policies - Continued

3. Loss per share
   ---------------
     Basic  earnings  (loss) per share is computed  by  dividing  the net income
     (loss) by the weighted-average  number of shares of common stock and common
     stock  equivalents  (primarily  outstanding  options and warrants).  Common
     stock equivalents  represent the dilutive effect of the assumed exercise of
     the  outstanding  stock  options and  warrants,  using the  treasury  stock
     method.  The calculation of fully diluted earnings (loss) per share assumes
     the dilutive effect of the exercise of outstanding  options and warrants at
     either the  beginning  of the  respective  period  presented or the date of
     issuance, whichever is later. As of December 31, 1999 and 1998, the Company
     has no warrants and/or options issued and outstanding.


NOTE C - Fair Value of Financial Instruments

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

NOTE D - Related Party Transactions

As of December 31,  1999,  the  Company's  parent has  advanced  funds  totaling
approximately  $151 for operating  capital  purposes.  The advances are due upon
demand and are non-interest bearing.

                                      F-9