U.S. SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-K/A





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





For the fiscal year ended December 31, 2008








Commission File No. 000-52472










CRC CRYSTAL RESEARCH CORPORATION


(Exact name of small business issuer as specified in its charter)





Nevada
86-0728263(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification No.)





4952 East Encanto Street, Mesa, Arizona 85205


(Address of Principal Executive Offices)





(480) 452-3301


(Issuer’s telephone number)





(480) 832-6187


(Issuer’s facsimile number)








(Former name, address and fiscal year, if changed since last report)





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





Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 par value





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter periods 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     No o








1


Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B 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-K or any amendment to this
Form 10-K.  o





Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):





Yes xNo o





Revenues for year ended December 31, 2008:   $-0-





Aggregate market value of the voting common stock held by non-affiliates of the registrant as of March 27, 2009 was:  $-0-





Number of shares of our common stock outstanding as of December 4, 2009 is: 16,386,870





The Company’s Transfer Agent is Pacific Stock Transfer Company, 4045 S. Spencer Street, Suite 403, Las Vegas, NV 89119, Phone: 702-361-3033 Fax: 702-433-1979





State the number of shares outstanding of each of the issuer’s classes of common equity, as of December 31, 2008: 13,370,270 shares of common stock.























































2





EXPLANATORY NOTE





CRC Crystal Research Corporation, a Nevada corporation, is filing this Amendment No. 1 on Form 10-K/A (Amendment) to its annual report on Form 10-K, which was originally filed with the Securities and Exchange Commission (SEC) on  March 31, 2009 (Original Filing) to restate and reissue its audited financial statements for
the fiscal year ending December 31, 2008, contained in the Original Filing to include the opinion of GBH CPAs, PC, a registered public accounting firm.  The previously issued statements were audited by Moore and Associates Chartered, whose registration with the Public Company Accounting Oversight Board was revoked in August of 2009.





The audited financial statements for fiscal year ended December 31, 2008 have been restated to: (1) accrue legal and accounting fees for services rendered during fiscal year 2008, (2)  accrue management salaries earned during fiscal year 2008, and (3) to present in a separate classification within the 2008 financial
statements certain payables  to related parties.  The effect of the restatement is described in note 10 to the financial statements contained in this Amendment.  In addition to the restatements discussed above, this Amendment also amends the information contained in Item 7 of the Original Filing.





Except as described above, no other changes have been made to the Original Filing.  Except as described above, this Amendment No. 1 on From 10-K/A does not reflect events occurring after the filing of the Original Filing or modify or update those disclosures, including any exhibits to the Original Filing affected by subsequent
events.  Information not affected by the changes described above is unchanged and reflects disclosures made at the time of the Original Filing.  Accordingly, this Amendment No. 1 on Form 10-K/A should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original Filing, including any amendments to those filings.













3








CRC CRYSTAL RESEARCH CORPORATION





TABLE OF CONTENTS








PagePART IITEM 1.
DESCRIPTION OF BUSINESS
5ITEM 2.
DESCRIPTION OF PROPERTY
17ITEM 3.
LEGAL PROCEEDINGS
17ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
17PART IIITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
17ITEM 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
17ITEM 8.
FINANCIAL STATEMENTS
19ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
20ITEM 9A.
CONTROLS AND PROCEDURES
20ITEM 9B.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING
21PART IIIITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
22ITEM 11.
EXECUTIVE COMPENSATION
24ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
24ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
25PART IVITEM 14.
EXHIBITS AND REPORTS ON FORM 8-K
26ITEM 15.
PRINCIPAL ACCOUNTANT FEES AND SERVICES
26SIGNATURES

27



















4





PART I





ITEM 1.
DESCRIPTION OF BUSINESS





GENERAL





CRC Crystal Research Corporation (the "Company" or the "Registrant") was incorporated in the State of Nevada on June 9, 2006. The Company is the successor in interest to CRC Crystal Research Corporation (“Arizona CRC”), which was incorporated in the State of Arizona on March 22, 1993.  On June 10, 2006, the board
of directors of the Company and Arizona CRC approved their merger in order to reincorporate the Arizona CRC in the State of Nevada.  The reincorporation process was completed by the filing of Articles of Merger with the Secretary of State of Nevada on September 20, 2006 and with the Secretary of State of Arizona on September 21, 2006.  The Company was formed by Dr. Kiril Pandelisev to commercialize patents for new technology and new crystal growing processes in the manufacture Crystals and
new methods and technology for various crystals and Crystal Products. The technology encompasses a new crystal grower design, new crystal growing processes, and new technology for fabrication of various crystals and more sensitive Crystal and other Products. Management believes that the new technology will allow the Company to manufacture Crystal Products faster, less expensively, and at a higher quality level than that which current industry methods provide.  The Company has as of yet not developed
a prototype for any of its potential products.





The Company has a non-exclusive license to all technology owned by Single Crystal Technologies, Inc. (“SCT”), which is owned by Dr. Kiril A. Pandelisev.  The licensed technology includes patents, whether approved, pending or in process of filing, other contractual agreements, and technical measures relating to
the manufacture of Crystals, Crystal Products and ultra pure materials and products made from them.  The Company plans to raise capital to fund the development of initial manufacturing capabilities to manufacture Crystals, Crystal Products, ultra pure materials and products made from ultra pure materials and alloys for sale in various industrial markets. The Company has never produced any Crystal Products or other products for commercial sale.  The Company estimates that it will need approximately
$1,000,000 to begin the manufacturing process.  This funding will allow the Company to prepare for initial production, and produce several types of fully tested prototypes aimed at different segments of the market.  The amount needed for expansion will vary depending on the growth curve of the Company at the time of funding.  Management has had discussions with at least two investment banks as well as a number of investors but has not received any commitments as of yet for the necessary
funding.





CRC’s continuous plate method of growing flat plates of scintillation material crystal, based on CRC’s patented technology, applies a new solution to an old problem. Crystals can have any desired width, length and thickness equivalent to the needed detector dimensions. The improved melt-solid interface makes heat dissipation
and thermal stress non-issues. The control of the purity of the molten material results in predetermined crystal purity and uniform dopant distribution that will result in better scintillation detectors.  The single crystallinity yield of the process is drastically increased and production costs are reduced proportionately. Furthermore, in a paper by Antonio C. Pastor, "METHOD OF GROWING METAL HALIDE AND CHALCOGENIDE CRYSTALS FOR USE IN INFRARED WINDOWS",
Patent No.: 4,251,315, February 17, 1981. Assigned to Hughes Aircraft Company, Pastor indicates the space requirement for plate growth is at least 36 times less than that for the standard Bridgman-Stockbarger method.  The Company did not cause the paper written by Antonio C. Pastor to be written for the Company’s benefit, nor did the Company sponsor or pay for the paper.





Initially the company intends to address the scintillation material and scintillation detector products using our patents that preclude others from duplicating our work. Alkali halide, rare earth and semiconductor scintillators will be addressed. CRC’s patented process provides for low cost higher quality crystals and crystal
products and detectors. The initial space of 3000-5000 sq.ft based on Pastor’s analysis is equivalent to at least 108,000-180,000 sq. ft and the total capital need associated with the space, equipment and personnel is close to 200 times less than what would be need by the conventional Bridgman method.





Our patents for advanced scintillator devices gives another advantage that will be beneficial to the growing Homeland Security applications, energy applications, medical imaging and many other applications that include but are not limited to beer and beverage industry, automotive industry, and other.





CRC's continuous plate method solution goes way beyond that offered by any other method and provides real hope of the production and deployment of inexpensive and yet higher quality  scintillation crystals.










5







ITEM 1.
DESCRIPTION OF BUSINESS- continued





GENERAL- continued





The benefits from the patented technologies are many and most are as disclosed in the patents themselves. Lower production costs, unlimited applicable crystal product size, low to no built in stress, longer life time, optical and other optimization for better signal to noise ratio.  A list of the benefits follows:





Advanced crystal grower design





Enhanced and optimized crystal growth rates ; introduction of  new purification methods; direct production of crystal plates of any applicable size; over 90% yield regardless of size or shape;  almost indefinite lifetime of crystal products.





Long  life oil well logging assemblies:





Lower production cost; enhanced energy detection; enhanced energy resolution; enhanced signal-to-noise ratio; possibility of life time warranty.





CRC Oil Well Logging/MWD Assembly Advantages:





Long life -- minimum 5 years expected; lower cost; better shock resistance through stronger crystal and multiple shock isolation; higher light output; improved energy resolution; improved temperature and magnetic shielding.





Enhancement of the Current Energy Exploration Tools:





Smaller CRC Crystal for same signal; enhanced depth penetration; enhanced depth resolution; multi million dollar savings per well through small diameter drill hole.





Long Life Gamma Camera Plate Assemblies With Improved Reflector System:





Enhanced energy detection; Lower production cost; enhanced energy resolution; enhanced spatial resolution; life time warranty.





Modular Gamma Camera Plate Assemblies:





Modular; Multi-Crystal or Individual Crystal; Enhanced Energy Resolution; Enhanced Energy Detection; Enhanced Spatial Resolution.





CRC Gamma Camera Plate Assembly  Advantages:





Simple Fabrication Procedure; Long Life; Improved  Spatial Resolution; Improved Energy Resolution; Lower Cost; Plate Size not Limited by Crystal Growth Process Limitations; Light Weight Gamma Camera Plate Assembly.





Superior Performance Subassembly for Scintillation Detection and Detectors Employing the Same:





Modular; Enhanced Energy Resolution; Enhanced Energy Detection; Light Output Self-Focusing Capabilities; Enhanced Signal-to-Noise Ratio.





Continuous Crystal Growth Process and Apparatus:





Improvement of the Current Crystal Growth Process; Opening of New Frontiers; Higher Crystal Quality; Lower Production Cost; No Size Limitations; In-House Constructed Crystal Growth Hardware.





CRC Approach to Product Improvement:





Optimize Light Output by:





Minimize light absorption by using low absorption crystals and minimize optical path of photons.  Maximize light reflection. Minimize reflection loss. Light guide principle application. Apply Better Seal: Glass-to-metal seal and moisture traps.  Use Superior Crystalline Material.  Direct and Focus Output
Light.  Minimize Housing Absorption.











6








ITEM 1.
DESCRIPTION OF BUSINESS- continued





GENERAL- continued





Scintillation (to produce a flash of light in a phosphor by striking it) crystals transform the invisible gamma rays into visible flashes of light that can be converted into digital signals for processing.





The applications of the scintillation crystals (often called phosphors) are many and several examples are as given below.





(1)
Homeland security uses scintillation detectors and scintillation detector based systems for scanning personnel, vehicles and cargo vessels, ships, for radioactive exposure and radioactive material contents. Border crossings, airports, seaports, and many other points where passengers and cargo are passing through use these systems.





(2)
Medical imaging uses scintillation crystals to analyze the radiation emitted from the patients in order to make health related diagnosis. Gamma scanners employ from one to three crystal plates positioned around the patient in order to obtain two dimensional (using one plate) or three dimensional image (using 2 0r 3 plates) of the patients
organs examined.





(3)
Energy explorations use scintillation crystals to do a real-time analysis of the soil the drill is in and to provide estimates of the oil contents of certain oil rich deposits (when found).





(4)
Engine fabricators use scintillation detectors for integrity and the consistency of the engine wall.





(5)
Construction industry uses scintillation detectors for real time weld inspections.





(6)
CRC’s patented technology provides multiple independent benefits that result in more affordable and better gamma ray detectors and systems can be summarized as follows:





The crystal growth method provides for lower production cost realized through low capital cost requirements, faster crystal production and lower
inventory requirements. The crystal growth method also provides for technology for crystal plate sizes beyond what other methods can sustain.





The material purification methods and the crystal growth method provide for higher quality crystal used in fabrication of various scintillation detectors.





The physics of scintillation detector designs as described in our patents provide for higher quality more sensitive detectors having long life time.





The initial equipment design and prototype building for the CRC’s crystal growth technology was done by SCT, LLC in collaboration with Sematech International (Austin, Texas) and the thermal modeling group from Sandia National Laboratories.





The thermal modeling of the CRC’s crystal growth process was done by Prof Motakef from MIT, now President of CAPE Simulations. The initial findings for growth of very low heat conductive crystals such as doped and undoped calcium fluoride (CaF2), sodium
iodide (NaI) cesium iodide [CsI (Tl, Na)] or any other crystal are very favorable. The crystal growth process is very suitable for making rare earth (europium in particular) doped CaF2(Eu) scintillation plates (of any size) to be used for monitoring enemy laser targeting beams in the battle field or any other observational posts, or one can make low cost scintillation detectors to be used for various monitoring and warning systems. For
instance, our modeling indicates production of 2 inch thick crystal plate material can be made 64 times faster. Considering the estimates by Pastor for 36 times less space requirements, and adding the labor, chemicals and power savings, the cost of the produced scintillation detector is only a small fraction of what would have been if the detector was made from a Bridgman-Stockbarger method made crystal.













7








ITEM 1.
DESCRIPTION OF BUSINESS- continued





GENERAL- continued





Since inception the Company has been a development stage company. The initial offering provided for the initial prototype crystal growth, modest modeling efforts and initial products tested by third party. Our initial work within our MicroscintTM project was focused on pressing and sintering thallium doped sodium iodide powders which
resulted in rather mechanically strong scintillators. The initial scintillation properties were measured at Ludlum Instruments in Texas. Scintillation detectors made using this technique are expected to be mechanically strong and many scintillation materials can be fabricated using this method. Some may include scintillator alloys – multiple scintillator materials that emit different wavelengths combined into one detector.  Inexpensive, mechanically very strong and disposable scintillation detectors
can be the result from this approach as well. The energy resolution of the crystal pilot line and the MicroscintTM material show excellent energy resolution. The declining modest markets for scintillation products in the nineteen nineties and the “.com” era did not help with our fund raising efforts for expansion. The industrial size equipment development was initiated in January of 2000 in collaboration with SCT, LLC, Sematech International and Sandia National Laboratories. Growth of large crystal
plates suitable for fabrication of various products for the Homeland Security, energy and semiconductor applications is now possible. The company plans to use this technology for its initial product lines. Our past discussions with Allied Signal (now part of Honeywell), Halliburton, GE Medical, Schlumberger, Lockheed Martin, Canon, Nikon, Intel, Zeiss, Shott Lithotech, Corning, and others indicate that we have very interesting technology that can make products for many industries. Public funding will be needed
to provide for the growth of our products in a planned manner.








INDUSTRY BACKGROUND





Crystals are very pure concentrations of elements or compounds that have been melted and then allowed to solidify in such a fashion that their atomic or molecular structure forms a crystal lattice.  A distinguishing characteristic of crystals is that they have a uniform, low energy state as compared to non-crystal concentrations
of the same elements or compounds.  When certain impurities (or dopants) are intentionally added to a crystal, the properties of the crystal are altered.  Dopants can be added while the crystal is grown and/or during the processing of the crystal into a finished product.  One significant alteration is that, with certain impurities, the crystal can be made to react to electromagnetic waves, and the reaction can be detected with detection devices.  In addition, impurities
at certain concentrations can alter the temperature at which the crystal will react to electromagnetic wages.  By measuring the strength of the reaction to electromagnetic waves, it is possible to measure features of an item or process that is emitting the electromagnetic waves.





The effectiveness and quality of a crystal is dependent on the purity of the element or compound used for the crystal, and the number of flaws in the crystal lattice structure, which is determined by the crystal growth process. Optical transmission, scintillation properties and heat tolerance also depend on the uniformity of a crystal,
as well as the amount and uniformity of distributions of dopants within the crystal.  For instance, sodium iodide (NaI) in its pure state can detect gamma rays only at very low temperatures. By adding a small amount of Thallium metal to the crystal (about 0.01%), the crystal can detect gamma rays or nuclear particles at much higher temperatures. Sodium iodide detectors used in the medical imaging need only work at room temperature, while sodium iodide detectors used in energy exploration operate can
be made to work in temperatures as high as 200oC by altering the concentrations of Thallium metal added as a dopant.





A wide variety of commercial and industrial applications have been developed to take advantage of the properties of crystals.  For example:





Medical Imaging:  In medical imaging applications (i.e., a CAT scan), sodium iodide crystals are shaped into plates and placed around a patient that has been injected with radioactive tracer material. The gamma rays emitted from the patient enter the crystal plates and cause
a scintillation event, or flash of light, when they strike a Thallium atom which is used as the dopant.  A light sensor, such as photo multiplier tube (PMT), detects the scintillation events, converts each scintillation event into an electrical pulse and assigns coordinates to the scintillation event. Special electronics amplify these signals and analyze billions of events per second. The result of the analysis is the image of the organ that is scanned. Since healthy tissue absorbs the injected radioactive
material differently than cancerous tissue, a radiologist can detect the cancerous material as darker or brighter material (depending on the radioactive material injected). SCT has developed technology that it believes can make the crystals at lower cost and more sensitive, which will enable more accurate diagnosis of the patient.













8








ITEM 1.
DESCRIPTION OF BUSINESS- continued





INDUSTRY BACKGROUND- continued





Petroleum Exploration:  When drilling for oil or gas, it is important to know the geological formations which are being penetrated. By adding a scintillation crystal to the drilling assembly, a geologist on the surface can be provided with that information. Oil well surveys
are conducted by injecting small traces of radioactive materials into wells under high steam pressure. Gamma rays emitted from the walls of the well and detected by the crystal can be analyzed and interpreted to show the composition of the geological formation in which the crystal is located and whether it contains hydrocarbons. This measurement is called oil well logging and is often referred to as "measured while drilling." When the driller encounters a potential producing zone, a geologist can use the crystal
measurements to assess how much oil is present in the zone and determine whether to stop drilling or continue drilling in search for a more productive zone.  SCT’s patents provide technology for more sensitive soil and hydrocarbon detection and can sustain rougher, hotter environments without being damaged.





Homeland Security:  In homeland security applications, crystal detection devices are commonly used in airports, courthouses, government buildings, nuclear plants and other sensitive areas to for scanning people, luggage and shipping containers for weapons and “dirty
bomb” materials.





Bridgman-Stockbarger Method of Crystal Production





The predominant method of crystal production for industrial uses is the Bridgman-Stockbarger Method, which was perfected in the 1930’s.  Under the Bridgman Stockbarger Method, a crucible is filled with particulate raw materials and melted at a high temperature.  The melted material is then allowed to solidify by
slowly lowering it into a cooling section, which cools the bottom of the crucible.  The entire crystal is formed by slowly cooling the entire crucible from the bottom to the top.  Particularly with respect to non-metallic crystals, which are characterized by poor heat conductivity, the Bridgman-Stockbarger Method suffers from the following manufacturing problems:





·
The yield for marketable crystals is low, and for large crystals can be as low as 1-3%;





·
There are limitations on the maximum possible size of the crystals;





·
The growth rate of the crystals is low, thus inhibiting volume production and increasing crystal production time;





·
There is significant impurity variation within crystals. Often, less than 10% of the crystal produced is within the desired range;





·
The capital investment for mass production is large.





The Bridgeman-Stockbarger Method is inefficient and costly, particularly for non-metallic crystals that are based upon elements or compounds with low heat conductivity.  The Bridgman-Stockbarger Method requires special melting and annealing stations, expensive platinum crucibles, heavy material handling equipment and considerable
personnel. Conventional Bridgman-Stockbarger furnaces can cost over one million dollars to build. Presently, crystals are taken out of furnaces when they are over 900°F, exposing personnel to unhealthy concentrations of iodine and thallium iodide vapors. The crystals produced are subject to thermal induced stress damage, production yields of 70% or less, and size limited to a maximum of 30 inches in diagonal dimension.





The source raw material for CRC’s products may or may not be the same for different products. For instance, Mallinckrodt Chemical manufactures a variety of specialty chemicals for sales to clients in various industry segments. The production of sodium iodide based scintillator
consists of melting pure grade sodium iodide powder made by Mallinckrodt Chemical and growing crystal out of it. To our knowledge there is no shortage of sodium iodide and the raw material can be purchased from many sources around the globe. The gas atmosphere in the crystal grower is either Nitrogen or Argon. Many gas companies such as Air Products, Air Liquide and other gas companies offer an abundant choice of gasses, including Nitrogen and Argon.





MEMC, Sumitomo Metal, and other offer high purity silicon feed material for our silicon/silicon alloy product lines, Chemetall produces high quality Cesium Iodide powder, Tanumal
Chemical from Oklahoma, Stella from Japan, Sérigraphie Richford Inc. from Canada, and others offer calcium Fluoride powder. CRC has over 500 lb of Calcium fluoride powder and there is no shortage of calcium fluoride powder used to make calcium fluoride crystals. Furthermore, CRC intends to produce high purity starting materials or further purify materials offered by others for its production.





To our knowledge there is no shortage of materials that would impede our initial and/or continued production.














9








ITEM 1.
DESCRIPTION OF BUSINESS- continued





PRINCIPAL PRODUCTS AND THEIR MARKETS





The uses for CRC’s Crystal Products are numerous. For example:





·
the medical imaging industry uses NaI crystal plates to transform invisible gamma rays into visible light, which can be converted into an image of the object examined;





·
bottlers use NaI crystal detectors to prevent overfilling of aluminum cans;





·
automobile manufacturers use crystal detectors to control the paint spraying process to guarantee proper color mixing;





·
steel manufacturers use NaI crystal detectors to adjust gigantic rollers to insure uniform thickness of rolled steel;





·
nuclear power plants use thousands of small NaI crystal detectors to measure radiation levels throughout the plant and control any possible leakage of radioactive material that might threaten the general population;





·
Engine manufacturers use scintillation technology to ensure proper engine wall thickness, alloy uniformity and crack free parts;





·
Airports use crystals in personal and baggage scanners for detection of controlled substances, explosives and radioactive material;





·
Borders and ports use scintillation based detectors for detection of controlled substances, explosives and radioactive material.





Various federal agencies, including the Homeland Security Agency, the Environmental Protection Agency and the Nuclear Regulatory Commission, use crystal detectors for qualitative and quantitative composition assessment of nuclear waste. They are effective in providing for the safety of the nuclear waste depositories by detecting possible
leaks from the containers caused by chemical reactions and the effects of nuclear particles bombardment. Crystal detectors are also used to maintain inventory records of nuclear stockpiles and to impose sophisticated security protection measures for these materials, especially those materials used for military applications.





The following table sets forth certain crystal types, their applications, and market information:





Crystal Type/High Tech Product
Application
Market InformationSodium Iodide (NaI)
Homeland Security; Borders, Ports, and inland applications.
Major Customers: US Government, Lockheed Martin, General Electric, Others.
Current Market Size:  Approximately $362 Billion
Current Producer:  Saint Gobain, Foreign Corporation.Sodium Iodide (NaI)
Oil Well Logging Detectors
Major Customers: Schlumberger, Halliburton, Baker Hughes
Current Market Size:  Approximately $100 Million
Current Producer:  Saint Gobain, Foreign Corporation.Sodium Iodide (NaI)
Medical Imaging
Major Customers: GE, ADAC, Siemens, Toshiba
Current Market Size: Over $400 Million
Current Producer: Saint Gobain, Foreign Corporation.
















10








ITEM 1.
DESCRIPTION OF BUSINESS- continued





PRINCIPAL PRODUCTS AND THEIR MARKETS- continued





Cesium Iodide
High Energy Physics
Major Customers: U.S. Nat'l Research Facilities
Current Market Size: Approximately Over $100 Million
Current Producer:  Saint Gobain, Foreign Corporation, and several Chinese Government owned entities.Calcium Fluoride (CaF2)
Semiconductor Equipment manufacturing, Space Applications, Consumer optical products
Major Customers: Nikon, Canon, ASML, Zeiss, US Government.
Current Market Size: Over $1 Billion(per Deutche Bank report)
Current Producers: Canon, Nikon, Corning, Shott LithotechBarium Fluoride (BaF2); Strontium Fluoride (SrF2)
Airborne Laser Defense Systems; Medical Imaging; Semiconductor Equipment Manufacturing
Major Customers: Lockheed Martin, Northrop Grumman, Boeing, GE, Phillips.
Current Market Size: Over $1 Billion
Current Producers: Korth Kristale (Germany), Russian and Chinese Government Companies.Metal and Metal  Alloys
Jet Engine Turbine Blades, Space applications
Major customers: Honeywell International, GE, Rolls Royce
Current Market Size: Over $1 Billion
Major producers: No major producers,Silicon/Silicon Alloy products
Semiconductor Manufacturing, Chemical Industry, Space Applications
Major customers: Intel, Freescale, TI, Sony, AMD, Others.
Current Market Size: Over $5 Billion
Major producers: Toshiba, Norton, Kyocera,High Purity Quartz & Quartz products
Semiconductor manufacturing, Fiber Optic Industry; Food industry
Major customers: Intel, Freescale, Sony, AMD, Others
Current Market Size: Over $1 Billion
Major producers Corning, Asahi, Shott Glass





Except for the Deutsche Bank report and US Government reports, the market size estimates are based on published data that management could find or management estimates, but is not based on a formal CRC commissioned market study.








STRATEGY





Management believes its innovative, manufacturing process will significantly reduce production costs of certain non-metallic crystals; reduce the capital expenditures needed to finance a manufacturing facility; more than triple the rate of crystal production; provide a product yield ranging from approximately 80% to 90% and produce higher
quality crystals and crystal products.





Initially, the Company will focus on production of NaI and other scintillation Crystals and Crystal Products for Homeland Security applications and for Energy Exploration applications. Currently, the market for NaI Crystal Products for oil well drilling and nuclear detection applications is serviced solely by Saint Gobain and its subsidiary,
Harshaw-Bicron Corporation. Management believes that many NaI and other scintillation Crystals and Crystal Products customers will welcome a new supplier that can supply higher quality products, without long and uncertain delivery times and constant price increases.





With respect to the Homeland Security market, the Company is in negotiations to be the sodium iodide crystal supplier for scintillation crystals and nuclear detection devices incorporating the crystal detectors that would be purchased directly or indirectly by entities that need such devices, such as cities, states, ports, mass transit
authorities, and military installations.  With the government contracts, the Company plans to develop a Nuclear/Radioactive Isotope Detection System that is based on radiation detected by sodium iodide and other scintillation crystals and detectors . Available software algorithms allow the system to distinguish threat isotopes (e.g., cobalt-60, cesium-137, iridium-192, and strontium-90) from isotopes naturally occurring in household items, such as fish, bananas, and ceramic tile, or those used for medical
purposes (e.g., potassium-40, thorium-232, and technetium-99m).

















11








ITEM 1.
DESCRIPTION OF BUSINESS- continued





STRATEGY- continued





The system also measures background radiation at predetermined intervals against a standard low-level radiation source within the detector unit to constantly benchmark naturally occurring radiation levels. This will eliminate the possibility of false positive alarms. The sensor system has centralized detection and monitoring capabilities
for identifying both the type and amount of radioactive isotopes.





Indirect deployment - Sales of system components to system integrators that sell the system or products made within a joint venture with the end user is referred as indirect deployment. Direct deployment - Sale of company made systems or products to the end user is referred to as direct deployment.





The Company plans to deploy its products either indirectly, where it will sell system components to system integrators that then sell the system or products made within a joint venture to the end user or directly where the Company will sell its products directly to the end user. Alarms occur only when a valid threat is detected through
the presence of a threat isotope or an unusually large presence of a non-threat isotope.  For example, the system could be mounted under the spreader bars of the cranes that unload cargo containers, so that the system will be able to silently monitor each container as it is unloaded without any additional steps by port workers.  The system would also be mounted in U-Frames, which could be placed at entrances to ports, government and business complexes, airports, train platforms, schools, toll
booths, and special public events to silently monitor vehicles and pedestrian traffic as the pass through the U-Frame.  Finally, the Company plans for portable model to use to verify positive readings generated by the stationary models.





With respect to the Energy Exploration market, the Company intends to become a supplier to a major oilfield service companies by providing superior product at a reasonable price. Our patented technology provides for basis for low cost superior products for energy exploration and other applications.





After the Company has entered the homeland security and energy exploration markets, the Company intends to enter into the gamma camera market, the optical industry for semiconductor process applications and air-borne laser defense applications, the development of high purity materials for support of the crystal growth process and for the
fabrication of chip processing chambers.








DISTRIBUTION METHODS





We plan to offer our products to major customers having a need for products with our technology incorporated therein and to serve as sub-contractor to many US Government contractors that sell various security and other systems to the US Government and Military but have no in-house manufacturing of crystals and crystal detectors.








STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCTS





CRC is basing its technology on substantial number of patents and related intellectual property that present a significant opportunity for future sales growth and profitability.





The patents in USA and elsewhere could lead to products for the following markets (to name few, and not in any specific order):





1.
Ultra pure materials – high purity metals and alloys for direct or indirect use in the semiconductor, medical, energy exploration, military, space, and other leading edge industries.2.
Crystals and crystal products for the semiconductor industry, optics industry, medical applications, military and defense applications, homeland security, aerospace industry, deep space applications, and other industries.


3.
Semiconductor manufacturing system components – high purity, high temperature silicon based wafer processing chamber components.4.
Equipment and Process for production of ultra-pure materials for semiconductor, space and military applications.


5.
All silicon CVD equipment and processes.6.
Equipment and process for crystal growth for the semiconductor industry, space applications and many defense industry products.


7.
Equipment and single crystals for Medical Imaging System Assemblies.8.
Energy Exploration drilling sensor assemblies and drilling tools employing them.


9.
Airport security screening systems10.
Nuclear material radiation sensing and inspecting systems.










12








ITEM 1.
DESCRIPTION OF BUSINESS- continued





STATUS OF ANY PUBLICLY ANNOUNCED NEW PRODUCTS- continued





11.
Fiber optic products – fused silica grain with desired size and purity, preforms, and near-net-shape fused silica products.12.
Equipment and Process for fiber optic preforms.


13.
Fused silica processes14.
Sensors and systems for industrial safety and control.





In particular, the Pandelisev patents cover:





·
Various products for the energy exploration and homeland security applications, all based on detection of gamma rays and particle rays.·
A novel approach for full body scanning technology.


·
The growth of large, high purity crystals of several important compounds such as sodium iodide, cesium iodide, calcium fluoride, barium fluoride – all doped and un-doped materials (by adding or subtracting specific impurities).·
The process and technology for purification of materials and materials mixtures.


·
The process and technology to manufacture components for the semiconductor industry.·
The process and technology to manufacture fiber optic enhanced sensor technology for energy applications (MWD and LWD included), homeland security, nuclear stockpile storage, airport security and other applications.





The potential customers for many of our technology made products are many large corporations such as  Siemens, GE, Lockheed Martin, Honeywell, Boeing, Northrop Grumman, Intel, IBM, Hitachi, Toshiba, Schlumberger,  to
name a few. Our discussions with various companies are bound by terms of non-disclosure agreements which limit our ability to conduct a detailed explanation of the specifics of the discussions.  The Company has had contact with companies such as Zeiss, Shott Lithotech, Canon, Nikon, Toyo Tanso, Intel, Applied Materials, Corning, GE Medical, Picker, Halliburton, Schlumberger, and Allied Signal.  Meetings with executives from some of the companies listed above occurred in the United States,
Japan, and Germany.  Some of the other companies with which CRC has had discussions were held by telephone and through e-mail exchanges,  The common theme in the discussions to date has been the need for CRC to develop its manufacturing capability in order to demonstrate to potential clients the working and beneficial aspects of CRC’s technology.  Once the prototypes are completed we will revisit our discussions with the interested parties regarding the sale of our products
and services, as well as many joint venture programs.  We are in discussions regarding various needs of our products in the Homeland security, defense and many military applications in general. Having working prototypes will reactivate many of these discussions and initiate our entry into these multi billion dollar markets.





At this date, laboratory verification of several crystal products has been made, and process modeling that applies to the production of many of these products has also been completed. Laboratory verification verifies theviability of equipment, technique
or process. Process modeling is computer analysis of the process. It is commonly used to understand any process, including crystal growth equipment design and crystal growth process. Hardware development needed for many of these applications has been developed, however the development process is an ongoing activity and this is reflected through the various granted and ongoing patent applications listed herein.








COMPETITION





The competitive environment in the sodium iodide scintillation crystal detector market is quite unique in today’s global economy, in that a single supplier dominates the world market.  This supplier, St. Gobain of France ($15+ Billion Company),
has over 90% share of the market. The two largest other suppliers, Russian Imports and Horiba Instruments, are very small, with a very limited product offering. It is our understanding that all known competitors utilize the outdated Bridgeman-Stockbarger (developed in the 1930's) crystal growth technology.





It appears that all current suppliers have failed to keep pace with their customers’ needs in the areas of product performance, delivery, reliability and customer service.  Their detector products are often described as being of inconsistent quality, with long and erratic delivery times. These characteristics coupled with
an aging technology that cannot provide cost effective, high performance scintillation crystal detectors lead to a significant opportunity for CRC.











13





ITEM 1.
DESCRIPTION OF BUSINESS- continued





COMPETITION- continued





In addition to the competition described above, there are competing technologies that present a choice for the user of gamma radiation detectors. Some of these technologies include rare earth scintillators, plastic scintillators and ionization tubes.  Detectors based on these technologies have a relatively narrow, limited use
in specialized applications.  They do not currently pose a threat to erode or replace the alkali halide detector market due to many performance price and/or performance limitations.








SOURCES AND AVAILABILITY OF PRODUCTS





There are numerous applications for the technology of the Registrant.  As discussed in the Description of Business section of this prospectus we anticipate offering many different products based on our technology to a number of major customers involved in various segments of the industrial, and national security sectors of the
economy.








DEPENDENCE ON ONE OR A FEW MAJOR CUSTOMERS





The energy exploration is dominated by very large original equipment manufacturers.  The nuclear research customers consist of the national and international Laboratories, while the homeland security detector segment is made up of the US Government, several large corporations such as Boeing, Northrop Grumman, Lockheed Martin and
GE, and numerous relatively small specialty equipment manufacturers.





The petroleum exploration segment led by Halliburton (with Dresser Industries), and followed by Schlumberger, and Baker Hughes Inteq (including the acquisition of Western Atlas) represents over half of the market. Medium size companies (Tensor, now part of Honeywell, Computalog, etc.)
and numerous small companies that provide drilling and logging services to the exploration community represent the remaining half.





CRC will initially develop several technologies and products for the Homeland Security and Energy Exploration applications. According to the Homeland Security Research’s Homeland Security and Homeland Defense 2006-2015 Global Market Outlook, the Worldwide Homeland Security outlay
will continue to grow over the next 10 years should no major terror event occur. It isforecasted that, absent a major terror event in the 2006-2015 periods, overall annual global security and defense outlays will grow from $362.3 billion
in 2006 to approximately $518 billion by 2015. In the aggregate, from 2006 to 2015, $1.5 trillion dollars will be spent on homeland security worldwide and $2.1 trillion dollars spent on homeland defense. The dollars break out to be: $656.1 billion on Borders and Transportation, $193.2 billion on Catastrophic Threats, $415.5 billion on Critical Infrastructure, $394.9 billion on Domestic Terrorism, $709.0 billion
on Emergency Preparedness and Response, and $182.6 billion on Intelligence and Warning.





The nuclear research and homeland security segment is comprised of the national and international Laboratories, while the homeland security detector segment is made up of the US Government and numerous relatively small specialty equipment manufacturers. These potential customers use
standard general-purpose detectors as well as one-of-a-kind custom designed, complex detector configurations.  Portions of these customers are resellers of crystal detectors.  CRC continues its efforts to establish proper dialogue with these customers regarding designing CRC’s detectors into their instruments.





CRC will “target” major customers within each industry and work with these customers to create value for them through the improved
performance and reliability of our crystal detectors. Our focus will be on solving customers’ problems and creating value by providing detectors that offer improved performance and reliability, and creating new products for their new and more demanding applications.  We will also be able to be more responsive to customers’ needs due to our shorter manufacturing time and customer-focused management.





Low capital requirements and large size of the markets were used as a guide for our initial product decision.








PATENTS AND TRADEMARKS





The Company has entered into a non-exclusive license of technology from Single Crystal Technologies, Inc. (“SCT”), which is owned by Dr. Pandelisev.  SCT holds patents obtained by Dr. Pandelisev pertaining to a new method of growing crystals, purifying base compounds, introducing dopants and incorporating finished
crystals into industrial applications.  Among the patents issued to Dr. Pandelisev and licensed to the Company by SCT are:













14





ITEM 1.
DESCRIPTION OF BUSINESS- continued





PATENTS AND TRADEMARKS- continued





Patents Issued





v
6,402,840  Crystal growth employing embedded purification chamber





v
6,352,588  Material Purification





v
6,334,899  Continuous crystal plate growth apparatus





v
6,153,011  Continuous crystal plate growth process and apparatus





v
6,071,339  Continuous crystal plate growth process and apparatus





v
5,993,540  Continuous crystal plate growth process and apparatus





v
5,753,918  Superior performance subassembly for scintillation detection and detectors employing the subassembly





v
5,614,721  Modular gamma camera plate assembly with enhanced energy detection  and resolution





v
5,548,116  Long life oil well logging assembly





v
5,521,385  Long life gamma camera plate assembly with improved reflector system





v
5,229,613  Extended lifetime scintillation camera plate assembly





v
5,178,719  Continuous refill crystal growth method





v
6,743,294 Continuous crystal plate growth process and apparatus





v
6,800,137  Binary and ternary crystal purification and growth method and  apparatus





The licensing agreement with SCT was entered into on September 25, 2006, and is a non-exclusive license.  The following are the basic terms of the licensing agreement with SCT:





(1) Sign up fee: Upon execution of the licensing agreement CRC was to pay to SCT a sign up fee of $50,000 but not before CRC raised a minimum of  $500,000 as its licensee capitalization,





(2) Terms: CRC is to pay SCT a licensing fee on the following terms


-1.5% of the sales if the Licensee’s end product uses only one Licensor’s patents;


-3% of the sales if the Licensee’s end product uses two Licensor’s patents;


-4.5% of the sales if the Licensee’s end product uses three Licensor’s patents; and


-6% of the sales if the Licensees’ end product uses four or more of Licensor’s patents.





(3) Duration and Termination: The Agreement is to remain in force until the expiration of the last patent licensed by SCT to CRC.  Other events such as failure to cure a breach within 60 days, bankruptcy/insolvency, appointment of a trustee/receiver, or failure to commercialize the patents within two years from the signing of
the Agreement constitute further grounds for termination of the Agreement.





When $500,000 is raised $50,000 is paid to SCT, Inc. The funds will be used for research and development of new technologies, and/or refinement of the already patented technologies now part of CRC.





All licensing fees are shown as part of the production cost of the products based on those patents.











15





ITEM 1.
DESCRIPTION OF BUSINESS- continued





PATENTS AND TRADEMARKS- continued





In addition, the SCT and Dr. Pandelisev have the following pending patents that relating the manufacture of Crystals and the development of Crystal Products:





Publication (Pending Application)





v
20020117625 Fiber optic enhanced scintillation detectorv
20020092465 Binary and ternary crystal purification and growth method and apparatus





v
20020083741 Hot substrate deposition of fused silica





v
20020083740 Process and apparatus for production of silica grain having desired properties and their fiber optic and semiconductor application





v
20020083739 Hot substrate deposition fiber optic performs and perform components process and apparatus





v
20020062784 Material purification





v
20020053317 Material purification





v
20020040675 Continuous crystal plate growth process and apparatus





Global Filings





Patents in U.S., Europe and Asia with an impressive 100 supporting claims.





Duration of Licensed Patents





The life time of the patents is 20 years from filing, unless extended by the patent office. The licensing of the know-how has no time limit. No negative impact  is currently expected to occur to the Company upon expiration of any of the patents.  The Company will apply to the patent office to renew any patents that
may be expiring.





Environmental Laws





Neither the materials supplied to manufacture the Crystal Products, the crystal manufacturing process, or refuse produced by the crystal manufacturing process is subject to any federal or state environmental regulations. The refuse discarded after production of Crystal Products is not classified as a "hazardous substance" under either
federal or state law and the airborne, chemicals emitted from the production process do not exceed federal or state ambient air quality standards.





CRC Crystal Research Corporation currently has three officers and six directors. None of the Company’s officers receives a salary.





As of December 31, 2008 CRC Crystal Research Corporation had 13,370,270 shares of $0.001 par value common stock issued and outstanding.





CRC Crystal Research Corporation has administrative offices located at 4952 East Encanto Street, Mesa, Arizona 85205.





CRC Crystal Research Corporation fiscal year end is December 31.








EMPLOYEES





We have no full time employees.  Dr. Kiril Pandelisev, our President, Chief Executive Officer and Director,  has agreed to allocate a portion of his time to our activities without compensation.  On June 21, 2007 the following individuals were elected to the Board of Directors of the Company as Directors:
Charlie Searock, Don Jackson, and Shariar Motakef.  The new Directors have also agreed to allocate a portion of their time to the Company’s activities receiving shares of common stock as compensation for their services.










16






ITEM 2.
DESCRIPTION OF PROPERTY





CRC Crystal Research Corporation maintains its main office at 4952 East Encanto Street, Mesa, Arizona 85205. There are currently no proposed programs for the renovation, improvement or development of the facilities currently in use.








ITEM 3.
LEGAL PROCEEDINGS





There is no litigation pending or threatened by or against us.








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





None.








PART II





ITEM 5.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS





On December 31, 2008, there were 66 shareholders of record of our common stock.  Our shares of common stock have never been traded on any recognized stock exchange.








DIVIDENDS





We do not intend to retain future earnings to support our growth.  Any payment of cash dividends in the future will be dependent upon: the amount of funds legally available therefore; our earnings; financial condition; capital requirements; and other factors which our Board of Directors deems relevant.








ITEM 7.
MANGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS





Plan of Operation





CRC Crystal Research Corporation (the "Company" or the "Registrant") was incorporated in the State of Nevada on June 9, 2006. The Company is the successor in interest to CRC Crystal Research Corporation (“Arizona CRC”), which was incorporated in the State of Arizona on March 22, 1993.  On June 10, 2006, the board
of directors of the Company and Arizona CRC approved their merger for the purpose of reincorporating Arizona CRC in the State of Nevada.  The reincorporation was completed by the filing of Articles of Merger with the Secretary of State of Nevada on September 20, 2006 and with the Secretary of State of Arizona on September 21, 2006.





Results of Operation





We did not have any operating income from inception (March 22, 1993) through December 31, 2008.  For the year ended December 31, 2008, we recognized a net loss of $1,021,249.  Some general and administrative expenses during the quarter were accrued.  Expenses for the quarter were comprised of costs mainly
associated with legal, accounting, and office.





Liquidity and Capital Resources





At December 31, 2008, we had no capital resources and will rely upon the issuance of common stock and additional capital contributions from shareholders to fund administrative and manufacturing expenses.





The Company is looking to raise up to $1 Million to expand its quartz products and services to the semiconductor industry and to start selling crystals and crystal products and an additional $1.5 Million for facilities expansions.











17





ITEM 7.
MANGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - continued
 
 Inflation





We believe that inflation has not had a material effect on our operations during 2007 and 2008.





Off-balance Sheet Arrangements





We did not have any off-balance sheet arrangements during 2007 and 2008.





Recently Issued Accounting Standards





Below is a listing of the most recent Statement of Financial Accounting Standards (SFAS) issued by the Financial Accounting Standards Board (FASB) SFAS 157-163 and their effect on the Company.





Statement No. 157 – Fair Value Measurements





In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, to clarify how to measure fair value and to expand disclosures about fair value measurements.  The expanded disclosures include the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value, and the effect of fair value on earnings and is applicable whenever other standards require (or permit) assets and liabilities to be measured at fair value.  SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.





The adoption of this new Statement has not had a material effect on our current financial position, results or operations, or cash flows.





Statement No. 141 (revised 2007) –Business Combinations





In December 2007, the FASB revised SFAS No. 141 (revised 2007), Business Combinations.This revision changes the way the minority interest in a company is measured, recorded and reported in the parent companies financial statements to the end that a statement user
can better evaluate the nature and financial effects of the business combination.  The Company will adopt this statement beginning March 1, 2009.





It is not believed that this will have an impact on our consolidated financial position, results of operations or cash flows.





Statement No. 160 –Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51





In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51.A noncontrolling interest, sometimes called a minority interest, is the portion of equity in a subsidiary not attributable,
directly or indirectly, to a parent. The objective of this Statement is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements related to the noncontrolling or minority interest.





We will adopt this statement beginning March 1, 2009. It is not believed that this will have an impact on our consolidated financial position, results of operations or cash flows.





Statement No. 162 –The Hierarchy of Generally Accepted Accounting Principles





In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles.  SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where there
might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards.





SFAS No. 162 has no effect on our financial position, statements of operations, or cash flows at this time.





Statement No. 163 –Accounting for Financial Guarantee Insurance Contracts – and interpretation of FASB Statement No. 60





In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60.  SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts.  SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years.





SFAS No. 163 has no effect on our financial position, statements of operations, or cash flows at this time.





Critical Accounting Policies and Estimates





We prepared our consolidated financial statements in conformity with accounting principles generally accepted in the United States of America.  In preparing these consolidated financial statements, we are required to make judgments, assumptions and estimates, which we believe are reasonable and prudent based on the available
facts and circumstances.  These judgments, assumptions and estimates affect certain of our revenues and expenses and their related balance sheet.   On an on-going basis, we re-evaluate our selection of assumptions and the method of calculating our estimates.  Actual results, however, may materially differ from our calculated estimates and this difference would be reported in our current operations.  We do not have any critical accounting policies.










18








ITEM 8.
FINANCIAL STATEMENTS





Our financial statements, together with the report of auditors, are as follows:





CRC CRYSTAL RESEARCH CORPORATION





FINANCIAL STATEMENTS





AS OF DECEMBER 31, 2008





CRC Crystal Research Corporation


Financial Statements Table of Contents








PageREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
F-1BALANCE SHEETS
F-2STATEMENTS OF OPERATIONS
F-3STATEMENTS OF STOCKHOLDERS’ EQUITY
F-4STATEMENTS OF CASH FLOWS
F-7NOTES TO THE FINANCIAL STATEMENTS
F-8





































19





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To the Board of Directors


CRC Crystal Research Corporation


(A Development Stage Company)


Mesa, Arizona





We have audited the accompanying balance sheets of CRC Crystal Research Corporation (A Development Stage Company) as of December 31, 2008 and 2007, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended December 31, 2008, 2007 and since inception on March 22, 1993 to December
31, 2008. These financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these financial statements based on our audits.





We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement.  The Company is not required,
to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements, 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 CRC Crystal Research Corporation (A Development Stage Company) as of December 31, 2008 and 2007, and the related statements of operations, stockholders’ equity (deficit) and cash flows for the years ended
December 31, 2008, 2007 and since inception on March 22, 1993 to December 31, 2008, in conformity with accounting principles generally accepted in the United States of America.





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has an accumulated deficit of $2,605,102, which raises substantial doubt about its ability
to continue as a going concern.  Management’s plans concerning these matters are also described in Note 3.  The financial statements do not include any adjustments that might result from the outcome of this uncertainty.





As discussed in Note 10 to the financial statements, these financial statements have been restated.








/s/ GBH CPAs, PC





www.gbhcpas.com


Houston, Texas





December 4, 2009



















F-1







CRC CRYSTAL RESEARCH CORPORATION


(A DEVELOPMENT STAGE COMPANY)


BALANCE SHEETS








December 31,2008


December 31As Restated


2007ASSETSCurrent assetsCash

$
2,730


$
500Total assets

$
2,730


$
500LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent liabilitiesAccounts payable and accrued expenses

$
313,000


$
750Accounts payable and accrued liabilities – related parties


10,260



-Advances from shareholders


73,954



21,556Total current liabilities


397,214



22,306Stockholders' deficitPreferred stock, par value $0.00150,000,000 shares authorized,no issued or outstanding


-



-Common stock, par value $0.001450,000,000 shares authorized,13,370,270 and 12,327,449 sharesissued and outstanding, respectively


13,370



12,327Paid in Capital


2,197,248



1,549,720Deficit accumulated during the development stage


(2,605,102
)


(1,583,853
)Total stockholders' deficit


(394,484
)


(21,806
)Total liabilities and stockholders' deficit

$
2,730


$
500The accompanying notes are an integral part of these statements













F-2








CRC CRYSTAL RESEARCH CORPORATION


(A DEVELOPMENT STAGE COMPANY)


STATEMENTS OF OPERATIONS


For the Years Ended December 31, 2008 and 2007 and For the


Period From March 22, 1993(Inception) to December 31, 2008





March 22, 1993Year Ended


(Inception) toDecember 31,


December 31,2008
As Restated


2007


2008
As RestatedOperating expensesGeneral and administrative

$
326,444


$
29,443


$
1,379,632Loss on sale of asset


-



-



7,491Patent maintenance


7,070







7,070Research and development


-



-



331,459Impairment of manufacturing equipment


627,821



-



826,752Professional fees


59,914



33,763



148,669Total expenses


1,021,249



63,206



2,701,073Loss from operations


(1,021,249
)


(63,206
)


(2,701,073
)Other income (expenses)Other income


-



-



6,654Gain on write-off of debt


-



-



230,000Interest expense


-



-



(140,683
)Net Loss

$
(1,021,249
)

$
(63,206
)

$
(2,605,102
)Basic and Diluted Loss per Share

$
(0.08
)

$
(0.01
)Basic and diluted weighted averagenumber of shares outstanding


13,075,863



11,361,778The accompanying notes are an integral part of these statements



















F-3








CRC CRYSTAL RESEARCH CORPORATION


(A DEVELOPMENT STAGE COMPANY)


STATEMENTS OF STOCKHOLDERS’ DEFICIT


For the Period From March 22, 1993 (Inception) to December 31, 2008





DeficitAccumulatedDuring the


TotalCommon Stock


Paid in


Subscriptions


Development


Stockholders’Shares


Amount


Capital


Receivable


Stage


EquityBalance at inception, March 22, 1993


-


$
-


$
-


$
-


$
-


$
-Common shares issued to founderfor cash and subscriptions


2,210,000



2,210



22,926



(12,555
)


-



12,581Payment of stock subscription














12,555







12,555Net Loss


















(33,292
)


(33,292
)Balance, December 31, 1994


2,210,000



2,210



22,926



-



(33,292
)


(8,156
)Common shares issued for services


44,000



44



1,956











2,000Common shares issued for services


47,000



47



11,703











11,750Common shares issued for cash


112,333



112



24,888











25,000Common shares issued in






















-conversion of convertible notes


100,000



100



24,900











25,000Common shares issued for services


31,600



32



7,868











7,900Common shares issued in






















-conversion of convertible notes


40,000



40



9,960











10,000Net (Loss)


















(236,109
)


(236,109
)Balance, December 31, 1995


2,584,933



2,585



104,201



-



(269,401
)


(162,615
)Common shares issued for cash


40,000



40



9,960











10,000Common shares issued for services


7,000



7



1,743











1,750Common shares issued for services


4,000



4



996











1,000Common shares issued for services


15,200



15



3,785











3,800Net (Loss)


















(192,969
)


(192,969
)Balance, December 31, 1996


2,651,133



2,651



120,685



-



(462,370
)


(339,034
)Common shares issued for cash


50,000



50



24,950











25,000Common shares issued for services


22,000



22



10,978











11,000Common shares issued inconversion of convertible notes


80,000



80



19,920











20,000Common shares issued for services


15,000



15



7,485











7,500Common shares issued for cash


70,000



70



34,930











35,000Common shares issued inconversion of convertible notes


120,000



120



29,880











30,000Common shares issued for cash


113,472



113



56,623











56,736Common shares issued for cash


30,000



30



14,970











15,000Common shares issued for services


85,000



85



42,415











42,500Net (Loss)


















(175,534
)


(175,534
)Balance, December 31, 1997


3,236,605



3,236



362,836



-



(637,904
)


(271,832
)Common shares issued for cash


20,000



20



9,980











10,000Common shares issued for services


8,000



8



3,992











4,000Common shares issued for cash


64,000



64



31,936











32,000Common shares issued for cash


30,000



30



14,970











15,000Common shares issued for services


3,000



3



1,497











1,500Net (Loss)


















(220,547
)


(220,547
)










F-4





STATEMENT OF STOCKHOLDERS’ DEFICIT - continued





Balance, December 31, 1998


3,361,605



3,361



425,211



-



(858,451
)


(429,879
)Common shares issued for cash


12,000



12



5,988











6,000Common shares issued for cash


8,000



8



3,992











4,000Common shares issued for services


8,000



8



3,992











4,000Net (Loss)


















(154,943
)


(154,943
)Balance, December 31, 1999


3,389,605



3,389



439,183



-



(1,013,394
)


(570,822
)Common shares issued for services


290,000



290



72,210











72,500Net (Loss)


















(231,985
)


(231,985
)Balance, December 31, 2000


3,679,605



3,679



511,393



-



(1,245,379
)


(730,307
)Net (Loss)


















(80,558
)


(80,558
)Balance, December 31, 2001


3,679,605



3,679



511,393



-



(1,325,937
)


(810,865
)Net (Loss)


















(16,760
)


(16,760
)Balance, December 31, 2002


3,679,605



3,679



511,393



-



(1,342,697
)


(827,625
)Net (Loss)


















(18,063
)


(18,063
)Balance, December 31, 2003


3,679,605



3,679



511,393



-



(1,360,760
)


(845,688
)Net (Loss)


















(142,763
)


(142,763
)Balance, December 31, 2004


3,679,605



3,679



511,393



-



(1,503,523
)


(988,451
)Contributed service










660,000











660,000Net Income / (Loss)


















113,674



113,674Balance, December 31, 2005


3,679,605



3,679



1,171,393



-



(1,389,849
)


(214,777
)Common shares issued forexercise of warrants for debt


869,844



870



100,305











101,175Common shares issued forconversion of related party debt


5,800,000



5,800



226,200











232,000Common shares issued for services


300,000



300



11,700











12,000Common shares issued for services


10,000



10



390











400Net (Loss)


















(130,798
)


(130,798
)
















F-5





STATEMENT OF STOCKHOLDERS’ DEFICIT - continued





Balance, December 31, 2006


10,659,449



10,659



1,509,988



-



(1,520,647
)


-Common shares issued for services


1,050,000



1,050



9,450











10,500Common shares issued for services


618,000



618



30,282











30,900Net Income / (Loss)


















(63,206
)


(63,206
)Balance, December 31, 2007


12,327,449



12,327



1,549,720



-



(1,583,853
)


(21,806
)Common shares issued to acquire:Assets


627,821



628



627,193











627,821Common shares issued for services


415,000



415



20,335











20,750Net Income (Loss)


















(1,021,249
)


(1,021,249
)Balance, December 31, 2008


13,370,270


$
13,370


$
2,197,248


$
-


$
(2,605,102
)

$
(394,484
)
  On June 9, 2006 the Company exercised articles of conversion from an Arizona Corporation to a Nevada Corporation and changed its capital stock from no par value stock to a $0.001 par value, this change has been retroactively applied to this schedule.





On June 10, 2006 the Company exercised a 4:1 forward stock split that has been retroactively applied to this schedule and increases the number of shares issued and thereby decreases the price per share.





The accompanying notes are an integral part of these statements



















F-6





CRC CRYSTAL RESEARCH CORPORATION


(A DEVELOPMENT STAGE COMPANY)


STATEMENTS OF CASH FLOWS


For the Years Ended December 31, 2008 and 2007 and For the


Period From March 22, 1993(Inception) to December 31, 2008





March 22, 1993Year Ended


(Inception) toDecember 31,


December 31,2008
As Restated


2007


2008
As RestatedOperating Activities:Net loss

$
(1,021,249
)

$
(63,206
)

$
(2,605,102
)Adjustments to reconcile net loss to cash:Depreciation


-



-



25,545Loss on sale of asset


-



-



7,491Impairment of manufacturing equipment


627,821



-



826,752Common stock issued for service


20,750



41,400



245,750Contributed services


-



-



660,000Changes in operating assets and liabilitiesIncrease in accounts payable and accrued liabilities


312,250



750



328,718Increase in accounts payable and accrued liabilities – related parties


10,260



-



10,260Net used in operating activities


(50,168
)


(21,056
)


(500,586
)Investment Activities:Equipment purchase


-



-



(17,858
)Manufacturing equipment purchase


-



-



(214,109
)Cash used in investment activities


-



-



(231,967
)Financing Activities:Net proceeds from shareholder advances


52,398



21,556



276,411Proceeds from Series A convertible notes


-



-



200,000Proceeds from sale of common stock


-



-



258,872Cash provided by financing activities


52,398



21,556



735,283Net increase in cash


2,230



500



2,730Cash, beginning of year


500



-



-Cash, end of year

$
2,730


$
500


$
2,730Supplemental  cash flow information:Interest expense paid in cash

$
-


$
-


$
140,683Income taxes paid in cash

$
-


$
-


$
-Non-cash investing and financing activities:Stock issued for purchase of assets

$
627,821


$
-


$
627,821Stock issued to convert notes

$
-


$
-


$
85,000Stock issued  to convert related-party debt

$
-


$
-


$
333,175The accompanying notes are an integral part of these statements











F-7
 
 CRC CRYSTAL RESEARCH CORPORATION
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO THE FINANCIAL STATEMENTS
 (December 31, 2008 (restated) and December 31, 2007)





NOTE 1.
GENERAL ORGANIZATION AND BUSINESS





CRC Crystal Research Corporation (“CRC Arizona”) was organized in the state of Arizona on March 22, 1993.  CRC Arizona had difficulty obtaining sufficient capital to maintain operations and ceased active operations in 1999.  In June, 2006, CRC Arizona’s board approved a plan to reincorporate in
the State of Nevada.  CRC Arizona completed the reincorporation by filing of Articles of Merger with the States of Arizona and Nevada on September 21, 2006, which affected the merger of the CRC Arizona with and into CRC Crystal Research Corporation (“CRC Nevada”), a Nevada corporation.  Prior to filing the Articles of Merger, CRC Nevada was a wholly-owned subsidiary of CRC Arizona.   CRC Arizona and CRC Nevada shall be referred to collectively as the “Company.”





The Company is a development stage company as defined by SFAS 7 and not a “Shell” Company.  The Company is the licensee under a License Agreement dated September 25, 2006, with Single Crystal Technologies, Inc. (“SCT”), under which the Company holds a non-exclusive, worldwide license to use and employ
certain intellectual property rights owned by SCT to manufacture, use and sell scintillation crystals, well logging assemblies, scintillation crystal plate assemblies and gamma camera plate assemblies.  The Company intends to use the rights granted under the License Agreement to develop product and services for use in energy exploration and homeland security, among other applications, and is actively seeking capital to fund the commencement of operations.







NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





The relevant accounting policies and procedures are listed below.





Accounting Basis





The statements were prepared following generally accepted accounting principles of the United States of America consistently applied.





Use of Estimates





The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.





Earnings (Loss) per Share





The basic earnings (loss) per share is calculated by dividing the Company’s net income available to common shareholders by the weighted average number of common shares outstanding during the year. The diluted earnings (loss) per share is calculated by dividing the Company’s net income (loss) available to common shareholders
by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted average number of shares plus any potentially dilutive debt or equity common stock equivalents.  As of December 31, 2008 and December 31, 2007, the Company had 160,000 and 300,000, respectively, of common stock purchase warrants outstanding that are considered common stock equivalents and which had been excluded from the diluted earnings (loss)
per share calculation due to their anti-dilutive effect.





Fair Value of Financial Instruments





Statement of Financial Accounting Standards ("SFAS") No. 107 "Disclosures about Fair Value of Financial Instruments" requires disclosure of fair value information about financial instruments when it is practicable to estimate that value. Management believes that the carrying amounts of Company's financial instruments, consisting primarily
of cash, accounts payable and accrued liabilities approximated their fair values as of December 31, 2008, due to their short-term nature.





Property and Equipment





Property and equipment are carried at cost and depreciated on a straight-line basis over their useful lives.  Office Equipment is depreciated over five years.  Manufacturing equipment is depreciated over ten years and is periodically reviewed for impairment.  A gain or loss on disposal is included in the
statement of operation net of cost and accumulated depreciation for all disposed assets.






F-8
 
 CRC CRYSTAL RESEARCH CORPORATION
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO THE FINANCIAL STATEMENTS
 (December 31, 2008 (restated) and December 31, 2007)




NOTE 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
  Property and Equipment - continued
  In March 2008 the Company purchased the following crystal growth and materials purification equipment from SCT, LLC, a company owned and controlled by our chief executive officer (SCT). The equipment was recorded at SCT’s cost basis of $627,821, which was the cost incurred by SCT
in the procurement and development of these assets.  Because these are custom made assets, and have had minimal use, as such no impairment was taken at the time of purchase.  SCT agreed to accept 627,821 common shares for the assets purchased.  The assets purchased follow:





Asset

CostPurification Stations - Qty 3Including Spare Parts and Materials

$
593,486Generator


3,256Converters - Qty 2


8,500Gas Cabinet


2,579Total

$
627,821





The Company expected to install and put these purchased assets into production by December 31, 2008.  However, because of the unexpected delays (about six months) in the compliance process allowing the beginning of the funding process, the Company was unable to put these assets into production by year end, resulting in the requirement
to consider impairment.


The SCT assets were developed and held by SCT for several years without being put into production.  Because the timing of the installation and operation of the equipment, and therefore the receipt by the Company of any related cash flows, is dependent on the Company’s ability to raise the necessary funds, the Company, given this uncertainty, has fully impaired these assets.





Income Taxes





The Company accounts for income taxes under the provisions of SFAS No. 109, "Accounting for Income Taxes". SFAS No. 109 requires recognition of deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Under this method deferred
tax liabilities and assets are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates for the year in which the differences are expected to reverse.





Research and Development





The Company follows the policy of expensing research and development costs in the period incurred. The Company incurred $0 during the years ended December 31, 2008 and 2007, and $331,459 from inception through December 31, 2008.








NOTE 3.
GOING CONCERN





The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of its assets and the liquidation of its liabilities in the normal course of business.  However, the Company has never generated revenues, has accumulated a loss of $2,605,102
during its development stage, and currently lacks the capital to pursue its business plan.  This raises substantial doubt about the Company’s ability to continue as a going concern.  The financial statements do not include any adjustments that might result from this uncertainty.





Management’s Plan





Management plans to seek funding from its shareholders and other qualified investors to pursue its business plan.








NOTE 4.
STOCKHOLDERS’ EQUITY





Common Stock





The Company is authorized to issue 450,000,000 shares of common stock, par value $0.001 per share, and 50,000,000 shares of preferred stock, par value $0.001 per share.  As of December 31, 2006, there were 10,659,449 shares of common stock outstanding, and no shares of preferred stock outstanding.   On June 10,
2006, the Company affected a four for one stock split.  All share and per share amounts herein are adjusted to give effect to the stock split.




F-9
 
 CRC CRYSTAL RESEARCH CORPORATION
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO THE FINANCIAL STATEMENTS
 (December 31, 2008 (restated) and December 31, 2007)




NOTE 4.
STOCKHOLDERS’ EQUITY- continued





Common Stock - continued





The Company issued 6,979,844 shares of common stock in 2006 in the following transactions:





·
On June 10, 2006, the Company issued 469,844 shares of common stock to the CEO as a result of his exercise of an option to purchase such shares at $0.0025 per share, or $1,175.  The purchase price was paid by the cancellation of indebtedness from the Company to the CEO in an equal amount.·
On June 10, 2006, the Company issued 400,000 shares of common stock to the CEO as a result of his exercise of an option to purchase such shares at $0.25 per share, or $100,000.  The purchase price was paid by the cancellation of indebtedness from the Company to the CEO in an equal amount.





·
On June 10, 2006, the Company issued 5,800,000 shares of common stock to the CEO in satisfaction of $232,000 of indebtedness from the Company to CEO, or $0.04 the trading price of the shares on the date of issuance of per share.





·
On June 10, 2006, the Company issued 300,000 shares of common stock to six unrelated parties for services rendered to the Company.  The shares were valued at the trading price of the shares on the date of issuance of $0.04 per share.





·
On September 30, 2006, the Company issued 10,000 shares of common stock to an unrelated person for services rendered to the Company.  The shares were valued at $0.04 per share.





The Company issued 1,668,000 shares of common stock during the period ended December 31, 2007 as follows:





·
On June 15, 2007 the Company issued 1,050,000 common shares at the trading price of the shares on the date of issuance of $0.01 for professional consulting services of $10,500.





·
On October 1, 2007 the Company issued 440,000 common shares to four board members for services in lieu of cash at $0.05 per share or $22,000 and 178,000 common shares at $0.05 per share to convert accounts payable of $8,900.





The Company issued 1,042,821 shares of common stock during the period ended December 31, 2008 as follows:





·
On March 31, 2008 the Company issued 627,821 common shares to acquire certain crystal growth and material purification assets valued at $627,821 from SCT, LLC.  The assets were valued at the actual cost to the predecessor related party and the number of shares issued are the number of shares negotiated.





·
On June 4, 2008 the company issued 300,000 common shares at $0.05 for consulting services of $15,000; 110,000 Common Shares at $0.05 for $5,500 executive compensation and 5,000 common shares at $0.05 for $250 bookkeeping services.





On January 22, 2008 the company entered in to a consulting agreement with Mirador Consulting Inc. (Mirador) for Investor Relations consulting.  The Company issued 300,000 restricted common shares to Mirador upon execution of the agreement.  Subsequently, the agreement was nullified and Mirador provided notice that the
certificate was returned, however the Company has not yet received the certificate.  Accordingly, the Company has affected an administrative hold on the stock until the certificate is received and these shares are still considered outstanding in the accompanying financial statements.





Warrants and Options





Information relating to warrant activity during 2007 and 2008 follows:





Number of Shares


Weighted –Average Exercise PriceTotal Warrants outstanding at December 31, 2006


300,000


$
0.50Less:  Warrants Exercised


-



-Less: Warrants Expired


-



-Total Warrants outstanding at December 31, 2007


300,000



0.50Less:  Warrants Exercised


-



-Less: Warrants Expired


(140,000
)


0.50Total Warrants outstanding at December 31, 2008


160,000


$
0.50







F-10
 
 CRC CRYSTAL RESEARCH CORPORATION
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO THE FINANCIAL STATEMENTS
 (December 31, 2008 (restated) and December 31, 2007)
 
 NOTE 4.
STOCKHOLDERS’ EQUITY- continued
 
 Warrants and Options - continued





On December 31, 2008 the Company had warrants outstanding for the purchase of an aggregate of 160,000 shares of its Common Stock, which are summarized in the table below.





Warrants


Exercise

ExpirationOutstanding


Price

Date160,000


$
0.50

8-Apr-2010Total


160,000





The outstanding and exercisable warrants had zero intrinsic value at December 31, 2008.





All exercise prices and share amounts have been adjusted to account for a 4:1 stock split affected on June 10, 2006.








NOTE 5.
RELATED PARTY TRANSACTIONS





License Agreement with Single Crystal Technologies, Inc.





On September 25, 2006, the Company entered into a License Agreement with Single Crystal Technologies, Inc. (“SCT”), under which the Company holds a non-exclusive, worldwide license to use and employ certain intellectual property rights owned by SCT to manufacture, use and sell scintillation crystals, well logging assemblies,
scintillation crystal plate assemblies and gamma camera plate assemblies.





SCT is owned by the Company’s CEO.  Under the License Agreement, the Company is obligated to pay SCT a license fee of $50,000 when it raises at least $500,000 in capital.  In addition, the Company will be obligated to pay SCT royalties in varying percentages based on the revenues received from products that
incorporate the technology licensed to the Company under the License Agreement.  In the event the Company fails to commence the production of products incorporating the technology licensed under the License Agreement within two years of the date of the Agreement, SCT may terminate the License Agreement at its option.





The terms of the License agreement also obligates the Company to pay all the patent filing and maintenance fees associated with all the patents held and new patents developed by SCT, Inc.  The agreement also grants to the Company exclusive rights to use any patents and patent improvements developed by either SCT or the Company
during the license period.





During the year ended December 31, 2007 the actual costs paid by a related party on behalf of the Company is $18,000 for legal fees associated with patent improvement and maintenance related to the license agreement.





During the year ended December 31, 2008 the Company paid and additional $7,070 in patent maintenance fees.





Accounts Payable and Accrued Liabilities – Related Party





At December 31, 2008, the Company had amounts due to its former CFO of $10,260.





Advances from Shareholders





As of December 31, 2008, Dr. Pandelisev, our CEO and major shareholder, has provided short term operating capital to the company in the amount of $73,954.  These advances are non-interest bearing and due upon demand.








NOTE 6.
PROVISION FOR INCOME TAXES





The Company provides for income taxes under SFAS No. 109.





For the years ending December 31, 2008 and 2007, and the period from Inception through December 31, 2008, the Company had no significant current or deferred net income tax expense.








F-11

CRC CRYSTAL RESEARCH CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
(December 31, 2008 (restated) and December 31, 2007)




NOTE 6.
PROVISION FOR INCOME TAXES- continued





The net deferred income tax asset consists of the following:





December 31,


December 31,2008


2007Net Operating Losses

$
672,276


$
538,510Deferred income tax liabilities


-



-Subtotal


672,276



538,510Valuation allowance


(672,276
)


(538,510
)Net

$
-


$
-





SFAS No. 109 requires the reduction of deferred tax assets by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.  Based upon the net operating losses incurred since inception, the Company has determined that the
deferred tax asset at December 31, 2008 will likely not be realized and accordingly, has established a valuation allowance against the entire deferred tax asset.





Below is a chart showing the operating losses from continuing operations and the years in which they will expire.





Year

Amount

Expiration1994

$
-

20141995


155,727

20151996


192,969

20161997


175,534

20171998


220,547

20181999


154,943

20192000


231,985

20202001


80,558

20212002


16,760

20222003


18,063

20232004


142,763

20242005


-

20252006


130,798

20262007


63,206

20272008


393,428

2028Total

$
1,977,281








NOTE 7.
USE OF PATENTS LICENSE, COMMITMENTS AND CONTINGENCIES





On September 25, 2006, the Company entered into a License Agreement with Single Crystal Technologies, Inc. (“SCT”), under which the Company holds a non-exclusive, worldwide license to use and employ certain intellectual property rights (Patents) owned by SCT to manufacture, use and sell scintillation crystals, well logging assemblies,
scintillation crystal plate assemblies and gamma camera plate assemblies.





SCT is owned by Kiril A. Pandelisev, the Company’s sole officer and director.  Under the License Agreement, the Company is not obligated to pay SCT the license fee of $50,000 until it raises at least $500,000 in capital.  However, the Company is obligated to pay certain patent filing and maintenance fees as described
below as part of cost of the license.  The Company has not recorded a liability to SCT for the $50,000 because it is uncertain at this time that the Company will be able to raise sufficient capital to trigger the obligation to make this payment.





The terms of the License agreement also obligate the Company to pay all the patent filing and maintenance fees associated with all the patents held and new patents developed by SCT, Inc.  The agreement also grants to the Company exclusive rights to use any patents and patent improvements developed by either SCT or the Company
during the license period.







F-12

CRC CRYSTAL RESEARCH CORPORATION
(A DEVELOPMENT STAGE COMPANY)
NOTES TO THE FINANCIAL STATEMENTS
(December 31, 2008 (restated) and December 31, 2007)




NOTE 7.
USE OF PATENTS LICENSE, COMMITMENTS AND CONTINGENCIES- continued





During the year ended December 31, 2007 the actual costs paid by a related party on behalf of the Company is $18,000 for legal fees associated with patent improvement and maintenance fees related to the license agreement.





During the year ended December 31, 2008 the Company paid actual patent maintenance costs of $7,070.





In addition, the Company will be obligated to pay SCT royalties in varying percentages based on the revenues received from products that incorporate the technology licensed to the Company under the License Agreement.  The License Agreement remains in force until the expiration of the last patent licensed by SCT to CRC.








NOTE 8.
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS





Below is a listing of the most recent Statement of Financial Accounting Standards (SFAS) issued by the Financial Accounting Standards Board (FASB) SFAS 157-163 and their effect on the Company.





Statement No. 157 – Fair Value Measurements





In September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, to clarify how to measure fair value and to expand disclosures about fair value measurements.  The expanded disclosures include the extent to which companies measure assets and liabilities at
fair value, the information used to measure fair value, and the effect of fair value on earnings and is applicable whenever other standards require (or permit) assets and liabilities to be measured at fair value.  SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those fiscal years.





The adoption of this new Statement has not had a material effect on the Company’s current financial position, results or operations, or cash flows.





Statement No. 141 (revised 2007) –Business Combinations





In December 2007, the FASB revised SFAS No. 141 (revised 2007), Business Combinations.This revision changes the way the minority interest in a company is measured, recorded and reported in the parent companies financial statements to the end that a statement user
can better evaluate the nature and financial effects of the business combination.  The Company will adopt this statement beginning March 1, 2009.





It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.





Statement No. 160 –Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51





In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51.A noncontrolling interest, sometimes called a minority interest, is the portion of equity in a subsidiary not attributable,
directly or indirectly, to a parent. The objective of this Statement is to improve the relevance, comparability, and transparency of the financial information that a reporting entity provides in its consolidated financial statements related to the noncontrolling or minority interest.





The Company will adopt this statement beginning March 1, 2009. It is not believed that this will have an impact on the Company’s consolidated financial position, results of operations or cash flows.





Statement No. 162 –The Hierarchy of Generally Accepted Accounting Principles





In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 162, The Hierarchy of Generally Accepted Accounting Principles.  SFAS No. 162 sets forth the level of authority to a given accounting pronouncement or document by category. Where
there might be conflicting guidance between two categories, the more authoritative category will prevail. SFAS No. 162 will become effective 60 days after the SEC approves the PCAOB’s amendments to AU Section 411 of the AICPA Professional Standards.





SFAS No. 162 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.









F-13
 
 CRC CRYSTAL RESEARCH CORPORATION
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO THE FINANCIAL STATEMENTS
 (December 31, 2008 (restated) and December 31, 2007)




NOTE 8.
THE EFFECT OF RECENTLY ISSUED ACCOUNTING STANDARDS- continued





Statement No. 163 –Accounting for Financial Guarantee Insurance Contracts – and interpretation of FASB Statement No. 60





In May 2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 163, Accounting for Financial Guarantee Insurance Contracts-and interpretation of FASB Statement No. 60.  SFAS No. 163 clarifies how Statement 60 applies to financial guarantee insurance
contracts, including the recognition and measurement of premium revenue and claims liabilities. This statement also requires expanded disclosures about financial guarantee insurance contracts.  SFAS No. 163 is effective for fiscal years beginning on or after December 15, 2008, and interim periods within those years.





SFAS No. 163 has no effect on the Company’s financial position, statements of operations, or cash flows at this time.








NOTE 9.
SUBSEQUENT EVENTS





The Company issued 3,516,600 shares of common stock in 2009 in the following transactions:





On January 16, 2009, the Company issued 30,000 shares of common stock for accounting services.  The transaction was valued at $0.50 per share using the valuation of the company obtained in the prior period.





On February 14, 2009, the Company issued 44,600 shares of common stock to acquire certain assets from Company’s Chief Executive Officer.  The assets were determined to have a fair market value of $0 and the transaction was valued at par.





On March 1, 2009, the Company issued 550,000 shares of common stock to the Company’s Board of Directors and 62,000 shares of common stock for professional services. Both of these transactions were valued at the closing price of the shares on the date of issuance of $1.40 per share.





On July 28, 2009, the Company issued 240,000, 260,000, and 340,000 shares of common stock to the Company’s Chief Executive Officer, Chief Operating Officer, and Chief Financial Officers, respectively.  The common stock was issued in lieu of compensation per each officer’s management agreement.  The shares
were valued at $0.50 per share, which was determined based on the officer’s compensation in their respective management agreement.





On July 31, 2009, the Company issued 190,000 shares of common stock for professional services. These transactions were valued at the closing price of the shares on the date of issuance of $.035 per share.





On August 7, 2009, the Company issued 1,000,000 shares of common stock for the purchase of 100% of Arizona Quartz Tech, Inc.’s common stock. The transaction was valued at the closing price of the shares on the date of issuance of $0.035 per share.





On September 30, 2009, the Company issued 800,000 shares of common stock for the purchase of assets. The transaction was valued at the closing price of the shares on the date of issuance of $0.15 per share.  This transaction resulted in the Company recording $110,159 in equipment and $9,841 in inventory.





On October 2009, the Company issued 350,000 shares of common stock for professional services. The transaction was valued at the closing price of the shares on the date of issuance of $0.15 per share.





On November 10, 2009 the Company issued 500,000 shares of common stock as collateral to For Your Information, Inc.  The collateral was used to borrow $35,500 for the purchase of equipment. The debt is due on demand with no other terms associated with the borrowing.














F-14
 
 CRC CRYSTAL RESEARCH CORPORATION
 (A DEVELOPMENT STAGE COMPANY)
 NOTES TO THE FINANCIAL STATEMENTS
 (December 31, 2008 (restated) and December 31, 2007)




NOTE 10.
RESTATED FINANCIAL STATEMENTS





On August 27, 2009, the PCAOB revoked the registration of the Company’s prior auditors Moore & Associates Chartered. The Company was notified by the SEC that a due to the revocation, a re-audit of the Company’s financial statements for the year ended December 31, 2008 would be required.





The Company has identified material errors in its previously issued financial statements.  These misstatements require that the financial statements for the fiscal year ended December 31, 2008 be restated.





Below is a summary of the changes made to the financial statements previously files for the period ended December 31,2008.





As of December 31, 2008

As Originally Reported


Adjustments


As RestatedCash


2,730






2,730Accounts payable and accrued expenses


(27,330
)


(285,670
)


(313,000
)Accounts payable and accrued expenses – related parties


-



(10,260
)
[3]

(10,260
)Advances from shareholders


(73,954
)






(73,954
)Preferred stock


-







-Common stock


(13,370
)






(13,370
)Additional paid-in capital


(2,197,248
)






(2,197,248
)Retained earnings/(accumulated deficit)


2,309,172



295,930



2,605,102TWELVE MONTHS ENDEDDecember 31, 2008

As Originally Reported


Adjustments


As RestatedGeneral and administrative expenses


46,444



280,000

[2]

326,444Patent fees


7,070







7,070Professional fees


43,984



15,930

[1]

59,914Impairment of manufacturing equipment


627,821







627,821Income tax expense


-







-Net Loss


725,319



295,930



1,021,249Net loss per common share

$
(0.06
)

$
(0.02
)

$
(0.08
)Weight average common shares outstanding


13,037,287



38,576



13,075,863
 Adjustment Entry Description for December 31, 2008[1]
Accrue legal and accounting fees.[2]
Accrue management salaries.[3]
Reclass of related party payables























F-15




ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE





On August 7, 2009, Board of Directors of the Registrant dismissed Moore & Associates Chartered, its independent registered public account firm. On the same date, August 7, 2009 the accounting firm of Seale and Beers, CPAs was engaged as the Company’s new independent registered public account firm. The Board of Directors of
the Company and the Company's Audit Committee approved of the dismissal of Moore & Associates Chartered and the engagement of Seale and Beers, CPAs as its independent auditor.





The PCAOB revoked the registration of Moore and Associates, Chartered on August 27, 2009 because of violations of PCAOB rules and auditing standards in auditing the financial statements, PCAOB rules and quality controls standards, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and noncooperation
with a Board investigation. At the time of initial filing of the 8-K on August 7, 2009, the Company was completely unaware of the SEC investigation of Moore and Associates. Seale and Beers, CPAs, the new auditors for the registrant, did not disclose any knowledge of the problems within Moore and Associates or the SEC investigation of the same while they were being engaged as auditors for the registrant.





During the period between August 7, 2009 and September 17, 2009 the Company was made aware that Seale and Beers CPAs was aware of Moore and Associates problems and the SEC investigation but chose not to disclose this to the registrant. Furthermore, the registrant requested many times via email and phone schedule for amendment of the
2008 10-K needed for the registrants pending S-1 registration, but never obtained one. On September 17 Seale and Beers notified the registrant that they were withdrawing as auditor.





On September 22, 2009, Board of Directors of the Registrant dismissed Seale and Beers for cause and GHB CPAs, PC was engaged as the Company’s new independent registered public account firm. The Board of Directors of the Company approved of the dismissal of Seale and Beers and the engagement of GHB CPAs, PC as its independent
auditor.








ITEM 9A.
CONTROLS AND PROCEDURES





Management’s Report On Internal Control Over Financial Reporting





Our management is responsible for establishing and maintaining adequate internal control over financial reporting.  Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Securities Exchange Act of 1934 as a process designed by, or under the supervision of, the company’s
principal executive and principal financial officers and effected by the company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:





-
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;-
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and-
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s assets that could have a material effect on the financial statements.





Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies
or procedures may deteriorate.  All internal control systems, no matter how well designed, have inherent limitations.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.  Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However,
these inherent limitations are known features of the financial reporting process.  Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.





As of December 31, 2008 management assessed the effectiveness of our internal control over financial reporting based on the criteria for effective internal control over financial reporting established in Internal Control--Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") and SEC
guidance on conducting such assessments.  Based on that evaluation, they concluded that, during the period covered by this report, such internal controls and procedures were not effective to detect the inappropriate application of US GAAP rules as more fully described below.  This was due to deficiencies that existed in the design or operation of our internal controls over financial reporting that adversely affected our internal controls and that may be considered to be material weaknesses.











20








ITEM 9A.
CONTROLS AND PROCEDURES- continued





The matters involving internal controls and procedures that our management considered to be material weaknesses under the standards of the Public Company Accounting Oversight Board were: (1) lack of a functioning audit committee due to a lack of a majority of independent members and a lack of a majority of outside directors on our board
of directors, resulting in ineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) inadequate segregation of duties consistent with control objectives; and (3) ineffective controls over period end financial disclosure and reporting processes.  The aforementioned material weaknesses were identified by our Chief Executive Officer in connection with the review of our financial statements as of December 31, 2008.





Management believes that the material weaknesses set forth in items (2) and (3) above did not have an effect on our financial results.  However, management believes that the lack of a functioning audit committee and the lack of a majority of outside directors on our board of directors results in ineffective oversight in the establishment
and monitoring of required internal controls and procedures, which could result in a material misstatement in our financial statements in future periods.





This annual report does not include an attestation report of the Corporation's registered public accounting firm regarding internal control over financial reporting.  Management's report was not subject to attestation by the Corporation's registered public accounting firm pursuant to temporary rules of the SEC that permit the
Corporation to provide only the management's report in this annual report.





Management’s Remediation Initiatives





In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:





We will create a position to segregate duties consistent with control objectives and will increase our personnel resources and technical accounting expertise within the accounting function when funds are available to us.  And, we plan to appoint one or more outside directors to our board of directors who shall be appointed to
an audit committee resulting in a fully functioning audit committee who will undertake the oversight in the establishment and monitoring of required internal controls and procedures such as reviewing and approving estimates and assumptions made by management when funds are available to us.





Management believes that the appointment of one or more outside directors, who shall be appointed to a fully functioning audit committee, will remedy the lack of a functioning audit committee and a lack of a majority of outside directors on our Board.





We anticipate that these initiatives will be at least partially, if not fully, implemented by December 31, 2009.  Additionally, we plan to test our updated controls and remediate our deficiencies by December 31, 2009.








ITEM 9B.
CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING





There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting.  Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management’s report in this Annual Report on Form 10-K/A.

























21





PART III





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT





The directors and officers as of December 31, 2008, are set forth below.  The directors hold office for their respective term and until their successors are duly elected and qualified. Vacancies in the existing Board are filled by a majority vote of the remaining directors.  The officers serve at the will of our Board
of Directors.





Name

Age

First Year as Director

PositionDr. Kiril A. Pandelisev

58

1993

CEO/DirectorCharles J. Searock

72

2007

President/DirectorDon Meyers

66

2008

Chief Financial OfficerDr. Don Jackson

74

2007

DirectorProf. Alexander Ostrogorsky

51

2007

DirectorDr. Shariar Motakef

51

2007

Director








BUSINESS EXPERIENCE





Set forth below is the name of our director and officer, all positions and offices held, the period during which he has served as such, and the business experience during at least the last five years:





Dr. Kiril A. Pandelisev, Chief Executive Officer and Chairman of the Board





Dr. Kiril A. Pandelisev joined the Company at its inception in 1993.  From 1975 to 1984, Dr. Pandelisev was a member of the faculty of St. Cyril and Methodius University, Skopje, Macedonia.  From 1979 to 1982, Dr. Pandelisev was an Exchange Scientist at Arizona State University.  From 1985 to 1988, Dr.
Pandelisev was a Research Analyst at Arizona State University.  From 1988 to 1990, Dr. Pandelisev was a Research Physicist at Johnson Matthey Electronics.  In 1991, Dr. Pandelisev was a Senior Scientist at Horiba Instruments, Inc.,  Since 1991, Dr. Pandelisev has been employed by various private entities which he owns and controls, including the Crystal Research Corporation .  Dr. Pandelisev received a B.Sc. degree in Applied Physics from St. Cyril and Methodius University,
Skopje, Macedonia, in 1973.  Dr. Pandelisev received an M.Sc. degree in Physics from St. Cyril and Methodius University in 1976.  Dr. Pandelisev received a Sc.D degree in Physics from St. Cyril and Methodius University in 1984.  Dr. Pandelisev is an authority on crystal growth, and is the author or contributing author of 17 papers on the subject published in various scientific journals.





Lt. Gen. Charles J. Searock Jr., USAF Retired, President and Director





Lt. Gen. Charles J. Searock Jr. retired from active duty military service in 1993 after almost 37 years in the Air Force and two years in the Army National Guard. He served most recently as the President of the International Tactical Training Center in Denison, Texas and left that position on 31 Dec 06.  He was recently reappointed
by the Secretary of the Air Force to the Civil Air Patrol Board of Governors.





For the past six years, the general has consulted in aviation and high technology matters. His background also includes service on the board of directors and as a volunteer president of the Air Victory Museum. From 1996 to 2001, he was CEO/president and a member of the board of directors of Dynasil Corp., a publicly traded high-tech
glass manufacturing company. He also spent four years in the general aviation industry as the Air Victory Museum’s original director, as executive vice president of Aero Development Corp., the owner/operator of the South Jersey Regional Airport and as president of Royal Air Inc., a charter air service company he co-founded.





Searock is a 1976 Army War College graduate who commanded at the squadron, wing, center and major command levels. He served as a KC-97 pilot, B-52 pilot/instructor pilot/flight examiner and FB-111 pilot/instructor pilot. He flew 152 B-52 combat missions during the Vietnam War and has accumulated over 7,000 hours of flying time.
He was assigned to the Pentagon as a member of the air staff, and he served as Assistant for Plans to the Military Assistant to the President at the White House. He maintains his currency as a commercial multi-engine instrument-rated pilot and is a Civil Air Patrol pilot.





22





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT- continued





BUSINESS EXPERIENCE- continued





A former member of the National Aviation Hall of Fame Board of Directors, he continues to serve as a member of its Nominating Committee.  He currently serves on the Crystal Research Corporation Board of Directors and is a former member of the New Jersey Governor’s Air and Space Medal Nominating Committee. He is also a member
of the Wings Club in New York City, the Air Force Association, the Aircraft Owners and Pilots Association, the Experimental Aircraft Association, the Veterans of Foreign Wars and Military Officers Association.





General Searock graduated from the University of Nebraska, Omaha in 1962 with a BS in Education and from Central Michigan University with a MBA in 1975.  He is married for the past 49+ years to Ann Brackeen Searock and they have four sons and five grandchildren.





Don Meyers, Chief Financial Officer





Mr. Don D. Meyers brings strong financial background to the Company both with regulatory compliance and financial management.  For the past five years Mr. Meyers has specialized in the preparation of GAAP compliant financial statements for public companies, three years as a partner with a PCAOB registered CPA firm and two years
as the owner of his own firm.  Mr. Meyers received his Bachelor of Science in Accounting from Arizona State University in December 1984.  Since that time Mr. Meyers spent almost nine years with the Defense Contract Audit Agency as a senior auditor performing a variety of financial and compliance audits resulting is multi-million dollar savings to the Government on new contracts and the recovery of over $10,000,000 returned to the Government from contracts found to be in violation of the Truth
in Negotiations act.  Mr. Meyers also spent a year as a fraud auditor with the Department of Justice where his audits resulted in the recovery of funds and the conviction of individuals responsible for defrauding the Medicare and Medicaid programs.  Mr. Meyers has also served as an Operations Officer and Comptroller with both public and private companies.





Mr. Meyers spent six years un the U.S. Army as an senior accounting specialist where he was directly responsible for the preparation and management of multi-million dollar budgets for battalion size organization or larger.  Mr. Meyers was often cited for his innovations and sound judgment in the management of funds allowing for
high operational readiness even in times of limited funding.





Dr. Don Jackson, Director





From 2002 to the present, Dr. Jackson has been the chairman and chief executive officer of Findem, Inc.  Prior to joining Findem, Inc., Dr. Jackson held a variety of officer and managerial positions in technology and engineering-related companies, including Prodeo Technologies, Inc., Westech Systems, Inc./IPEC, The Arena Group, Superwave
Technologies, Inc., and Microelectronic Packaging, Inc.  Dr. Jackson is on the Dean’s Advisory Board of Fulton School of Engineering at Arizona State University and serves as an adjunct physics professor at Embry Riddle Aeronautical University in Prescott, Arizona.  Dr. Jackson has an AB degree in Physics from William Jewell College, an M.S. degree in Physics from Iowa State University, and a Ph.D. in Electrical Engineering from Arizona State University.





Professor. Alexander Ostrogorsky, Director





Prof. Ostrogorsky is with the Mechanical, Aerospace and Nuclear Engineering Department, Materials Science and Engineering Department, Rensselaer Polytechnic Institute, in Troy, New York.  Prof. Ostrogorsky received his B.S. in Mechanical Engineering from University of Belgrade,  M.S. Nuclear Engineering, Rensselaer
Polytechnic Institute and Sc.D. in Mechanical Engineering from  Massachusetts  Institute of Technology, with Minor in Nuclear Engineering.  Prior to joining Rensselaer Polytechnic Institute, he was a Director,  Center for Microgravity and Materials Research (CMMR) and Professor at the Univ. of Alabama in Huntsville, Associate Professor at the Mechanical, Aerospace and Mechanics, Rensselaer Polytechnic Institute and Assistant Professor at the Mechanical Engineering, Columbia University.
Prof Ostrogorsky was a Fulbright Fellow at the Rensselaer Polytechnic Institute, Nuclear Engineering Dept in 1980-81, and an Alexander von Humboldt Fellow: Universität Erlangen-Nürnberg, Electronic Materials Lab. In 1991.  Prof. Ostrogorsky is an Associate Editor for the Journal of Crystal Growth, Member of the Executive Committee at the American Association for Crystal Growth (AACG); Fellow of the American Society of Mechanical Engineers (ASME), Associate Fellow at the American Inst. of Aeronautics
and Astronautics (AIAA), and member of many other professional organizations.  Prof. Ostrogorsky’s research encompasses heat and mass transfer phenomena occurring in solidification/crystal growth, crystals for gamma ray detectors (semiconductors and scintillators), ternary alloys, and the design of equipment for biomedical research.














23





ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT- continued





BUSINESS EXPERIENCE- continued





Dr  Shariar Motakef, Director





Prof. Motakef is the founder of CAPE Simulations, Inc., a company serving the thermal engineering, computational, and control needs of the materials processing industry.  Prof. Motakef was an Associate Professor of Mechanical Engineering at Massachusetts Institute of Technology for seven years.  At MIT he was a pioneer
in developing high-fidelity large-scale numerical simulation packages and on-line model-based control algorithms for the semiconductor processing industry.  He also led an effort in the development of advanced sensors such as the Full-Field Holographic Temperature and Species (FHTS) sensor for chemical vapor deposition applications.  During his stay at MIT, Prof. Motakef taught graduate and under graduate level courses in thermo-fluids, championed the introduction of simulation-based projects
into graduate level curriculum, and led or participated in academic research projects with the nearly 2-million dollars funding provided by DARPA, USAF, NASA, and NSF.  Prof. Motakef has over 40 publications in technical journals and proceedings and has delivered more than 30 lectures in the U.S., Europe, and Japan.  At MIT, he was a consultant to nearly a dozen corporations and a consultant for two Phase I and Phase II SBIR programs supported by NASA to develop CFD codes for materials processing
applications.  Prof. Motakef is an editor of Journal of Materials Processing and Manufacturing Science, and a member of the American society of Mechanical Engineering, American Society of Metals, Materials Research Society, American Institute of Aeronautics and Astronautics, and the American Association for Crystal Growth.








CERTAIN LEGAL PROCEEDINGS





No director, nominee for director, or executive officer has appeared as a party in any legal proceeding material to an evaluation of his ability or integrity during the past five years.








COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT





To date, we have not filed Form 5 for the year ended December 31, 2008.








ITEM 11.
EXECUTIVE COMPENSATION





None of the Company's officers or directors has received any cash or other remuneration within the last three years.  It is likely, however, that after the Company successfully raises capital to fund its business plan, the Company will begin paying compensation to its officers and directors, the amount of which will be determined
by the board of directors at the time.





No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees.








ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





We have issued a total of 8,907,844 shares of our common stock to the following persons for services as of March 27, 2009:





Title of
Class

Name, Title and Address of Beneficial
Owner of Shares

Amount of Beneficial
Ownership

% of
ShareholdingsCommon

Kiril A. Pandelisev, CEO, and Director

8,189,844

61.25%Common

Charles J. Searock, President and Director

110,000

.82%Common

Don Meyers

278,000

2.08%Common

Dr. Don Jackson

110,000

.82%Common

Dr. Shariar Motakef

110,000

.82%Common

Prof. Alexander Ostrogorsky

110,000

.82%





The address for Dr. Pandelisev, Charlie Searock, Don Meyers, Dr. Jackson, Alexander Ostrogorsky and Dr. Motakef is 4952 East Encanto Street, Mesa, Arizona 85205.








24








ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS





During the fiscal year ended December 31, 2005, the Company received loans from the Company’s sole officer and director, and its majority shareholder.  As of December 31, 2005, the Company was indebted to the CEO in the amount of $176,665.





During the fiscal year ended December 31, 2006, the Company received loans from the CEO in the amount of $17,327.





The loans made by the CEO to the Company in 2005 and 2006 were used to fund general and administrative expenses of the Company.  The loans were not evidenced by a note, were unsecured, did not bear interest and were payable on demand.





On June 10, 2006, the CEO utilized the amount due him by the Company to pay the exercise price under warrants held by him.





The Company was a party to an Employment Agreement with its CEO dated March 31, 1997.  The Employment Agreement provided that the CEO was entitled to base compensation of $120,000 per year, among other provisions.  The Employment Agreement terminated by its terms on March 31, 2002.





As of December 31, 2005 the Company had accrued $799,182 in deferred salary under an Employment Agreement with the CEO.





As of December 31, 2005, the CEO agreed to forgive any claim for $660,000 of the accrual compensation, and as a result the Company recorded an unusual gain in that amount in fiscal 2005.  As a result of the forgiveness, the balance owed to CEO at December 31, 2005 for accrued compensation was $139,182 accrued salary.





On June 10, 2006, the CEO agreed to satisfy the amounts due him for accrued compensation under his Employment Agreement and for loans he had made the Company by exercising his options in the Company and converting the balance of the indebtedness into additional shares of common stock.





As of June 10, 2006, the CEO held options to purchase 400,000 shares of common stock at $0.25 per share, and options to purchase 469,844 shares of common stock at $0.0025 per share.  The aggregate exercise price under both options was $101,175.  The CEO applied $101,175 of the indebtedness due him by the Company
to the exercise price under the options, which resulted in him acquiring 869,844 shares of common stock.





After exercising the options, the balance owed to the CEO was $232,000, which was converted into 5,800,000 shares of common stock at $0.04 per share.





On September 25, 2006, the Company entered into a License Agreement with Single Crystal Technologies, Inc. (“SCT”), under which the Company holds a non-exclusive, worldwide license to use and employ certain intellectual property rights owned by SCT to manufacture, use and sell scintillation crystals, well logging assemblies,
scintillation crystal plate assemblies and gamma camera plate assemblies.





SCT is owned by the Company’s CEO.  Under the License Agreement, the Company is obligated to pay SCT a license fee of $50,000 when it raises at least $50,000 in capital.  In addition, the Company will be obligated to pay SCT royalties in varying percentages based on the revenues received from products that
incorporate the technology licensed to the Company under the License Agreement.  In the event the Company fails to commence the production of products incorporating the technology licensed under the License Agreement within two years of the date of the Agreement, SCT may terminate the License Agreement at its option.





During the year ended December 31, 2007, Mr. Pandelisev has provided short term operating capital to the company in the amount of $21,556.  This is non-interest bearing demand loans.





On January 22, 2008 the company entered in to a consulting agreement with Mirador Consulting Inc. (Mirador) for Investor Relations consulting.  The Company is obligated to pay $3,000 per month payable in arrears at the time Mirador raises not less that $250,000, a 5% finders fee on any money raised by them and 600,000 restricted
shares of common stock, 300,000 shares to be issued upon execution of the agreement and 300,000 common shares when the Company receives $250,000 in investments brought by Mirador.





On December 31, 2008 the Securities and Exchange Commission approved the company’s Form S-1 Registration Statement for the registration of 2,394,605 already issued and outstanding common shares.





CRC Crystal Research Corporation’s principal office space is provided at no cost.  Please refer to the section titled “Description of Property” herein.








25








PART IV





ITEM 14.
EXHIBITS AND REPORTS ON FORM 8-K





(a)  The following documents are filed as part of this report:





1.
Financial statements; see index to financial statements and schedules in Item 8 herein.





2.
Financial statement schedules; see index to financial statements and schedules in Item 8 herein.





3.
Exhibits:








The following exhibits are filed with this Form 10-K and are identified by the numbers indicated; see index to exhibits immediately following financial statements and schedules of this report.





EXHIBIT INDEX





3.1
Articles of Incorporation    (1)





3.2
By-laws    (1)





14.1
Code of Ethics    (2)








31.1
Certification pursuant to Section 302 of the Sarbanes-Oxley At of 2002





32.1
Certification pursuant to Title 18 Section 1350





(1)           Incorporated by reference to our Form 10SB (SEC File No. ____________________).







Reports on Form 8k:





23.
8k filed June 28, 2007 (incorporated by reference)








ITEM 15.
PRINCIPAL ACCOUNTANT FEES AND SERVICES





Audit Fees





For the Company's fiscal year ended December 31, 2008, we were billed and paid $8,500.  The audit fees were for professional services rendered for the audit of our financial statements, respectively.





Tax Fees





For the Company's fiscal year ended December 31, 2008, we were billed and paid $4,000 for  professional services rendered for tax compliance, tax advice, and tax planning, as well as for legal services.





All Other Fees





The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal year ended December 31, 2008.











26





SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, there unto duly authorized.








CRC CRYSTAL RESEARCH CORPORATION





By:  /s/  Dr. Kiril Pandelisev


Dr. Kiril Pandelisev


President, Chief Executive Officer,


and Director





Dated:   December 7, 2009





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








By:   /s/  Dr. Kiril Pandelisev


President, Chief Executive Officer,


Director


















27