U.S.
SECURITIES AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-KSB /AMENDED





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





For
the fiscal year ended December 31, 2007








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)





1




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







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-KSB or any
amendment to this Form 10-KSB.  o




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




Yes  oNo  x







Revenues
for year ended December 31, 2007:$ - 0 -







Aggregate
market value of the voting common stock held by non-affiliates of the registrant
as of March 26, 2008 was: $ - 0 -







Number of
shares of our common stock outstanding as of December 31, 2007 is: 12,327,449







The
Company’s Transfer Agent is Integrity Stock Transfer, 3027 E. Sunset Road, Suite
103, Las Vegas, Nevada 89120 Telephone (702) 317-7757.







State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of December 31, 2007: 12,327,449 shares of common stock.








2




CRC CRYSTAL
RESEARCH CORPORATION


TABLE OF CONTENTS








PAGEPART
    IITEM 1.
      DESCRIPTION OF BUSINESS
            4ITEM 2.
      DESCRIPTION OF PROPERTY
            10ITEM 3. LEGAL
      PROCEEDINGS
            10ITEM 4.
      SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            10PART
    IIITEM 5. MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
            11ITEM 6.
      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
            11ITEM 7.
      FINANCIAL STATEMENTS
            12ITEM 8.
      CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
            13ITEM 8A.
      CONTROLS AND PROCEDURES
            13PART
    IIIITEM 9.
      DIRECTOR, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE
      WITH SECTION 16(A) OF THE EXCHANGE ACT
            13ITEM 10.
      EXECUTIVE COMPENSATION
            15ITEM 11.
      SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
    MANAGEMENT
            15ITEM 12.
      CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
            16PART
    IVITEM 13.
      EXHIBITS AND REPORTS ON FORM 8-K
            17ITEM 14.
      PRINCIPAL ACCOUNTANT FEES AND SERVICES
            18SIGNATURES
            18

















3






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 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.




The
Company was formed by Dr. Kiril Pandelisev to commercialize patents for new
technology and innovative crystal growing processes in the manufacture Crystals
and Crystal Products. The technology encompasses a new furnace design,
innovative crystal growing processes, and new, more sensitive Crystal Products.
Management believes that the new technology allows the Company to manufacture
Crystal Products faster, less expensively, and at a higher quality level than
that which current industry methods allow.






Planned
Operations




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.  Dr. Pandelisev is the Company’s sole officer and
director. 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.  The Company plans to raise capital to fund the development
of initial manufacturing capabilities to grow Crystal Products for sale in
various industrial markets. The Company has never produced any Crystal Products
or other products for commercial sale.






Properties
of Industrial Crystals




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.




4




ITEM 1.  DESCRIPTION
OF BUSINESS - continued




Properties of Industrial
Crystals-
continued




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:




Medial 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.




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.




5




ITEM 1.  DESCRIPTION
OF BUSINESS - continued
  Properties of Industrial
Crystals-
continued
  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.






Technology
of Single Crystal Technologies, Inc.




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:




Patent No.
            Title6,800,137
            Binary
      and ternary crystal purification and growth method
      and apparatus6,743,294
            Continuous
      crystal plate growth process and apparatus6,402,840
            Crystal
      growth employing embedded purification chamber6,352,588
            Material
      Purification6,334,899
            Continuous
      crystal plate growth apparatus6,153,011
            Continuous
      crystal plate growth process and apparatus6,071,339
            Continuous
      crystal plate growth process and apparatus5,993,540
            Continuous
      crystal plate growth process and apparatus5,753,918
            Superior
      performance subassembly for scintillation detection and detectors
      employing the subassembly5,614,721
            Modular
      gamma camera plate assembly with enhanced energy detection and
      resolution5,548,116
            Long
      life oil well logging assembly5,521,385
            Long
      life gamma camera plate assembly with improved reflector
      system







6




ITEM
1.  DESCRIPTION
OF BUSINESS - continued




Technology of Single
Crystal Technologies, Inc.-
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:




20020117625
            Fiber
      optic enhanced scintillation detector20020092465
            Binary
      and ternary crystal purification and growth method and
      apparatus20020083741
            Hot
      substrate deposition of fused silica20020083740
            Process
      and apparatus for production of silica grain having desired properties and
      their fiber optic and semiconductor application20020083739
            Hot
      substrate deposition fiber optic performs and perform components process
      and apparatus20020062784
            Material
      purification20020053317
            Material
      purification20020040675
            Continuous
      crystal plate growth process and
apparatus







The
Market




The uses
for 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;




·
            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.








7




ITEM
1.  DESCRIPTION
OF BUSINESS - continued




The Market-
continued




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.Cesium
      Iodide
            
            High
      Energy Physics
            
            Major
      Customers: U.S. Nat'l Research Facilities
              Current
      Market Size: Approximately $30-40 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
              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






8




ITEM
1.  DESCRIPTION
OF BUSINESS - continued
  The Market-
continued




Market
size estimates are based on published data that management could find or
management estimates, but is not based on a formal market
study.






Strategy




Manufacture
of proprietary Crystal Products is dependent on building a new furnace capable
of commercial production deploying the licensed technology. 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 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 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 to a government contractor that has a
contract with the Homeland Security Agency to develop and certify nuclear
detection devices that would be purchased by other entities that need such
devices, such as cities, states, ports, mass transit authorities, and military
installations.  With the government contracted , the Company has
developed a Nuclear/Radioactive Isotope Detection System that is based on
radiation detected by sodium iodide crystals. 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).




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.




The
Company and the contractor are designing the system to work seamlessly without
disrupting daily operations and workflow with nuisance false-positives. 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 and the contractor are developing a
portable model to use to verify positive readings generated by the stationary
models.




With
respect to the Energy Exploration market, the Company is working with
consultants to become a crystal supplier to the major oilfield services
companies, who are currently the suppliers of oil well logging detectors to the
oil and gas exploration industry.




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,
and the development of high purity materials for support of the crystal
growth process and for the fabrication of chip processing chambers.




9




ITEM
1.  DESCRIPTION
OF BUSINESS - continued
  Strategy-
continued
  Environmental Laws




Neither
the materials supplied to manufacture the Crystal Products, the crystal
manufacturing process, nor 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 one officer and one director. The
Company’s officer, Dr. Kiril Pandelisev, does not receive a salary.





As of
December 31, 2007 CRC Crystal Research Corporation had 12,327,449 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.







ITEM
2. DESCRIPTION OF
PROPERTY





CRC
Crystal Research Corporation maintains its 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.





CRC
Crystal Research Corporation management does not currently have policies
regarding the acquisition or sale of real estate assets primarily for possible
capital gain or primarily for income. CRC Crystal Research Corporation does not
presently hold any investments or interests in real estate, investments in real
estate mortgages or securities of or interests in persons primarily engaged in
real estate activities.







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.


10


PART
II





ITEM
5. MARKET FOR COMMON
EQUITY AND RELATED STOCKHOLDER MATTERS





On
December 31, 2007, there were 60 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
6. 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, 2007. For the year ended December 31, 2007, we recognized a net loss of
$63,206. 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, 2007, 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.


11


ITEM
7.  FINANCIAL
STATEMENTS





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







CRC
CRYSTAL RESEARCH CORPORATION





FINANCIAL
STATEMENTS





AS
OF DECEMBER 31, 2007





CRC
Crystal Research Corporation


Financial
Statements Table of Contents








PageINDEPENDENT
      AUDITORS REPORT
            F-1BALANCE
      SHEET
            F-2STATEMENT OF
      OPERATIONS
            F-3STATEMENT OF
      CASH FLOWS
            F-4STATEMENT OF
      STOCKHOLDERS' DEFICIT
            F-5FOOTNOTES TO
      THE FINANCIAL STATEMENTS
            F-7












12


MOORE
& ASSOCIATES, CHARTERED


ACCOUNTANTS AND
ADVISORS


PCAOB REGISTERED








REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM








To
the Board of Directors


CRC
Crystal Research Corporation


(A
Development Stage Company)








We have
audited the accompanying restated balance sheets of CRC Crystal Research
Corporation (A Development Stage Company) as of December 31, 2007 and 2006, and
the related restated  statements of operations, stockholders’ equity
and cash flows through December 31, 2007, 2006 and Inception on March 22,1993
through December 31, 2007. 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.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.





In our
opinion, the restated 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, 2007 and 2006 and
the results of its restated operations and its cash flows through
December 31, 2007, 2006 and Inception on March 22, 1993 through December 31,
2007, 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 never generated any revenues, has
accumulated a loss of $1,813,853 and currently lacks the capital to
pursue its business plan 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.





/s/
Moore & Associates, Chartered





Moore
& Associates Chartered


Las
Vegas, Nevada


August
12 , 2008








2675 S. Jones Blvd. Suite
109, Las Vegas, NV 89146 (702) 253-7499 Fax (702) 253-7501








F-1




CRC
Crystal Research Corporation
 (A
Development Stage Company)


Restated
Balance Sheets




December
      31,
              
              
              December
      31,2007
              
              
              2006ASSETSCurrent
      AssetsCash
              
              $
              500
              
              
              $
              -Total
      Current Assets
              
              
              500
              
              
              
              -Total
      Assets
              
              $
              500
              
              
              $
              -LIABILITIES AND
      STOCKHOLDERS' EQUITY/(DEFICIT)Current
      LiabilitiesAccounts
      Payable
              
              $
              750
              
              
              $
              -Loans
      Payable - Related Parties
              
              
              21,556
              
              
              
              -Total
      Current Liabilities
              
              
              22,306
              
              
              
              -Stockholders'
      EquityPreferred
      Stock, authorized50,000,000
      shares, par value $0.001,no
      preferred stock is outstanding
              
              
              -
              
              
              
              -Common
      Stock, authorized450,000,000
      shares, par value $0.001,issued
      and outstanding on December 31,2007
      and December 31, 2006 is12,327,449
      and 10,659,449 sharesrespectively
              
              
              12,327
              
              
              
              10,659Paid
      in Capital
              
              
              1,779,720
              
              
              
              849,988Accumulated
      Deficit DuringDevelopment
      Stage
              
              
              (1,813,853
              )
              
              
              (860,647
              )Total
      Stockholders' Equity
              
              
              (21,806
              )
              
              
              -Total
      Liabilities and Stockholders' Equity
              
              $
              500
              
              
              $
              -The
      accompanying notes are an integral part of these
      statements







F-2




CRC
Crystal Research Corporation
 (A
Development Stage Company)
  Restated
Statements of Operation




March
      22, 1993(Inception)
      toYear
      Ended December 31,
              
              
              December
      31,2007
              
              
              2006
              
              
              2007Operating
      ExpensesGeneral
      and Administrative
              
              $
              29,443
              
              
              $
              18,146
              
              
              $
              1,042,688Impairment
      of Manufacturing Equipment
              
              
              -
              
              
              
              98,931
              
              
              
              198,931Research
      and Development
              
              
              -
              
              
              
              -
              
              
              
              331,459Professional
      Fees
              
              
              33,763
              
              
              
              13,722
              
              
              
              99,255Total
      Operating Expenses
              
              
              63,206
              
              
              
              130,799
              
              
              
              1,672,333(Loss)
      from Operations
              
              
              (63,206
              )
              
              
              (130,799
              )
              
              
              (1,672,333
              )Other
      Income (Expenses)Other
      Income
              
              
              
              
              
              
              
              
              
              
              6,654Loss
      on Sale of Asset
              
              
              -
              
              
              
              -
              
              
              
              (7,491
              )Interest
      Expense
              
              
              -
              
              
              
              -
              
              
              
              (140,683
              )Net
      Income/(Loss)
              
              $
              (63,206
              )
              
              $
              (130,799
              )
              
              $
              (1,813,853
              )Basic
      (Loss) per Share
              
              $
              (0.01
              )
              
              $
              (0.02
              )
              
              $
              (0.45
              )Diluted
      (Loss) per Share
              
              $
              (0.01
              )
              
              $
              (0.02
              )
              
              $
              (0.45
              )Weighted
      AverageNumber
      of Shares Outstanding
              
              
              11,385,991
              
              
              
              6,543,131
              
              
              
              4,050,417The
      accompanying notes are an integral part of these
      statements




F-3


CRC
Crystal Research Corporation
 (A
Development Stage Company)




Restated
Statements of Cash Flows




March
      22, 1993(Inception)
      toYear
      Ended December 31,
              
              
              December
      31,2007
              
              
              2006
              
              
              2007Operating
      Activities:Net
      Profit / (Loss)
              
              $
              (63,206
              )
              
              $
              (130,799
              )
              
              $
              (1,813,853
              )Adjustments
      to reconcile Net (Loss) to cash:Depreciation
              
              
              -
              
              
              
              2,141
              
              
              
              25,545Loss
      on Sale of Asset
              
              
              -
              
              
              
              -
              
              
              
              7,491Impairment
      of Manufacturing Equipment
              
              
              -
              
              
              
              98,930
              
              
              
              198,931Common
      Stock issued for Service
              
              
              41,400
              
              
              
              12,400
              
              
              
              225,000Contributed
      capital
              
              
              
              
              
              
              
              
              
              
              890,000Changes
      in Assets and LiabilitiesIncrease/(Decrease)
      in Accounts Payable
              
              
              750
              
              
              
              -
              
              
              
              750Increase/(Decrease)
      in Accrued Liabilities
              
              
              -
              
              
              
              -
              
              
              
              24,183Net
      Cash (Used) by Operating Activities
              
              
              (21,056
              )
              
              
              (17,328
              )
              
              
              (441,953
              )Investment
      Activities:Equipment
      Purchase
              
              
              -
              
              
              
              -
              
              
              
              (17,858
              )Manufacturing
      Equipment Purchase
              
              
              -
              
              
              
              -
              
              
              
              (214,109
              )Cash
      Used by Investment Activities
              
              
              -
              
              
              
              -
              
              
              
              (231,967
              )Financing
      Activities:Net
      Proceeds from loans - Related Parties
              
              
              21,556
              
              
              
              17,328
              
              
              
              215,548Proceeds
      from Series A Convertible Notes
              
              
              -
              
              
              
              -
              
              
              
              200,000Proceeds
      from sale of Common Stock
              
              
              -
              
              
              
              -
              
              
              
              258,872Cash
      Provided by Financing Activities
              
              
              21,556
              
              
              
              17,328
              
              
              
              674,420Net
      Increase/(Decrease) in Cash
              
              
              500
              
              
              
              -
              
              
              
              500Cash,
      Beginning of Period
              
              
              -
              
              
              
              -
              
              
              
              -Cash,
      End of Period
              
              $
              500
              
              
              $
              -
              
              
              $
              500Supplemental
      Information:Interest
      Paid
              
              $
              -
              
              
              $
              11,500
              
              
              $
              140,683Income
      Taxes Paid
              
              $
              -
              
              
              $
              -
              
              
              $
              -Non-Cash
      Activities:Loss
      on Sale and Impairment of Assets
              
              $
              -
              
              
              $
              98,930
              
              
              $
              206,422Contributed
      Capital
              
              $
              -
              
              
              $
              -
              
              
              $
              890,000Stock
      issued to Convert Notes
              
              $
              -
              
              
              $
              -
              
              
              $
              85,000Stock
      issued  to convert related-party debt
              
              $
              -
              
              
              $
              333,175
              
              
              $
              333,175Stock
      issued in lieu of cash for service
              
              $
              41,400
              
              
              $
              12,400
              
              
              $
              225,000The
      accompanying notes are an integral part of these
      statements


F-4
  CRC
Crystal Research Corporation
 (A
Development Stage Company)
  Restated
Statements of Stockholders' Deficit
  From
22-Mar-1993 (Inception) to 31-December-2007




DeficitAccumulatedPrice
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              During
      theIssue
              
              Per
              
              
              Common
      Stock
              
              
              Paid
      in
              
              
              Subscriptions
              
              
              Development
              
              
              TotalDate
              
              Share
              
              
              Shares
              
              
              Amount
              
              
              Capital
              
              
              Receivable
              
              
              Stage
              
              
              EquityBalance
      at inception, March 22, 1993
              
              
              
              
              
              
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -
              
              
              $
              -Common
      shares issued to founderfor
      cash and subscriptions
              22-Mar-93
              
              $
              0.01
              
              
              
              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
              21-Sep-95
              
              $
              0.04
              
              
              
              44,000
              
              
              
              44
              
              
              
              1,956
              
              
              
              
              
              
              
              
              
              
              
              2,000Common
      shares issued for services
              30-Sep-95
              
              $
              0.25
              
              
              
              47,000
              
              
              
              47
              
              
              
              11,703
              
              
              
              
              
              
              
              
              
              
              
              11,750Common
      shares issued for cash
              21-Sep-95
              
              $
              0.22
              
              
              
              112,333
              
              
              
              112
              
              
              
              24,888
              
              
              
              
              
              
              
              
              
              
              
              25,000Common
      shares issued in
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -conversion
      of convertible notes
              30-Oct-95
              
              $
              0.25
              
              
              
              100,000
              
              
              
              100
              
              
              
              24,900
              
              
              
              
              
              
              
              
              
              
              
              25,000Common
      shares issued for services
              15-Nov-95
              
              $
              0.25
              
              
              
              31,600
              
              
              
              32
              
              
              
              7,868
              
              
              
              
              
              
              
              
              
              
              
              7,900Common
      shares issued in
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              -conversion
      of convertible notes
              30-Dec-95
              
              $
              0.25
              
              
              
              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
              18-Jan-96
              
              $
              0.25
              
              
              
              40,000
              
              
              
              40
              
              
              
              9,960
              
              
              
              
              
              
              
              
              
              
              
              10,000Common
      shares issued for services
              06-Apr-96
              
              $
              0.25
              
              
              
              7,000
              
              
              
              7
              
              
              
              1,743
              
              
              
              
              
              
              
              
              
              
              
              1,750Common
      shares issued for services
              19-Aug-96
              
              $
              0.25
              
              
              
              4,000
              
              
              
              4
              
              
              
              996
              
              
              
              
              
              
              
              
              
              
              
              1,000Common
      shares issued for services
              17-Dec-06
              
              $
              0.25
              
              
              
              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
              09-May-97
              
              $
              0.50
              
              
              
              50,000
              
              
              
              50
              
              
              
              24,950
              
              
              
              
              
              
              
              
              
              
              
              25,000Common
      shares issued for services
              09-May-97
              
              $
              0.50
              
              
              
              22,000
              
              
              
              22
              
              
              
              10,978
              
              
              
              
              
              
              
              
              
              
              
              11,000Common
      shares issued inconversion
      of convertible notes
              29-May-97
              
              $
              0.25
              
              
              
              80,000
              
              
              
              80
              
              
              
              19,920
              
              
              
              
              
              
              
              
              
              
              
              20,000Common
      shares issued for services
              14-Jul-97
              
              $
              0.50
              
              
              
              15,000
              
              
              
              15
              
              
              
              7,485
              
              
              
              
              
              
              
              
              
              
              
              7,500Common
      shares issued for cash
              14-Jul-97
              
              $
              0.50
              
              
              
              70,000
              
              
              
              70
              
              
              
              34,930
              
              
              
              
              
              
              
              
              
              
              
              35,000Common
      shares issued in conversion ofconvertible
      notes
              19-Aug-97
              
              $
              0.25
              
              
              
              120,000
              
              
              
              120
              
              
              
              29,880
              
              
              
              
              
              
              
              
              
              
              
              30,000Common
      shares issued for cash
              26-Aug-97
              
              $
              0.50
              
              
              
              113,472
              
              
              
              113
              
              
              
              56,623
              
              
              
              
              
              
              
              
              
              
              
              56,736Common
      shares issued for cash
              04-Dec-97
              
              $
              0.50
              
              
              
              30,000
              
              
              
              30
              
              
              
              14,970
              
              
              
              
              
              
              
              
              
              
              
              15,000Common
      shares issued for services
              04-Dec-97
              
              $
              0.50
              
              
              
              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
              26-Feb-98
              
              $
              0.50
              
              
              
              20,000
              
              
              
              20
              
              
              
              9,980
              
              
              
              
              
              
              
              
              
              
              
              10,000Common
      shares issued for services
              26-Feb-98
              
              $
              0.50
              
              
              
              8,000
              
              
              
              8
              
              
              
              3,992
              
              
              
              
              
              
              
              
              
              
              
              4,000Common
      shares issued for cash
              11-May-98
              
              $
              0.50
              
              
              
              64,000
              
              
              
              64
              
              
              
              31,936
              
              
              
              
              
              
              
              
              
              
              
              32,000Common
      shares issued for cash
              30-Sep-98
              
              $
              0.50
              
              
              
              30,000
              
              
              
              30
              
              
              
              14,970
              
              
              
              
              
              
              
              
              
              
              
              15,000Common
      shares issued for services
              21-Dec-98
              
              $
              0.50
              
              
              
              3,000
              
              
              
              3
              
              
              
              1,497
              
              
              
              
              
              
              
              
              
              
              
              1,500Net
      (Loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (220,547
              )
              
              
              (220,547
              )




F-5
  Restated 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
                  14-Apr-98
                  
                  $
                  0.50
                  
                  
                  
                  12,000
                  
                  
                  
                  12
                  
                  
                  
                  5,988
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  6,000Common
      shares issued for cash
                  15-Sep-98
                  
                  $
                  0.50
                  
                  
                  
                  8,000
                  
                  
                  
                  8
                  
                  
                  
                  3,992
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  4,000Common
      shares issued for services
                  15-Sep-99
                  
                  $
                  0.50
                  
                  
                  
                  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
                  28-Mar-00
                  
                  $
                  0.25
                  
                  
                  
                  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
      capital
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  890,000
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  890,000Net
      Income / (Loss)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (116,326
                  )
                  
                  
                  (116,326
                  )Balance,
      December 31, 2005
                  
                  
                  
                  
                  
                  
                  
                  3,679,605
                  
                  
                  
                  3,679
                  
                  
                  
                  1,401,393
                  
                  
                  
                  -
                  
                  
                  
                  (1,619,849
                  )
                  
                  
                  (214,777
                  )Common
      shares issued forexercise
      of warrants for debt
                  10-Jun-06
                  
                  $
                  0.12
                  
                  
                  
                  869,844
                  
                  
                  
                  870
                  
                  
                  
                  100,305
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  101,175Common
      shares issued forconversion
      of related party debt
                  10-Jun-06
                  
                  $
                  0.04
                  
                  
                  
                  5,800,000
                  
                  
                  
                  5,800
                  
                  
                  
                  226,200
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  232,000Common
      shares issued for services
                  10-Jun-06
                  
                  $
                  0.04
                  
                  
                  
                  300,000
                  
                  
                  
                  300
                  
                  
                  
                  11,700
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  12,000Common
      shares issued for services
                  30-Sep-06
                  
                  $
                  0.04
                  
                  
                  
                  10,000
                  
                  
                  
                  10
                  
                  
                  
                  390
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  400Net
      (Loss)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (130,798
                  )
                  
                  
                  (130,798
                  )Balance,
      December 31, 2006
                  
                  
                  
                  
                  
                  
                  
                  10,659,449
                  
                  
                  
                  10,659
                  
                  
                  
                  1,739,988
                  
                  
                  
                  -
                  
                  
                  
                  (1,750,647
                  )
                  
                  
                  -Common
      shares issued for services
                  15-Jun-07
                  
                  $
                  0.01
                  
                  
                  
                  1,050,000
                  
                  
                  
                  1,050
                  
                  
                  
                  9,450
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  10,500Common
      shares issued for services
                  01-Oct-07
                  
                  $
                  0.05
                  
                  
                  
                  618,000
                  
                  
                  
                  618
                  
                  
                  
                  30,282
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  30,900Net
      Income / (Loss)
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (63,206
                  )
                  
                  
                  (63,206
                  )Balance,
      December 31, 2007
                  
                  
                  
                  
                  
                  
                  
                  12,327,449
                  
                  
                  $
                  12,327
                  
                  
                  $
                  1,779,720
                  
                  
                  $
                  -
                  
                  
                  $
                  (1,813,853
                  )
                  
                  $
                  (21,806
                  )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)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)


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 effected 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 PRACTICES





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.





Fiscal
Year





The
Company operates on a December 31st fiscal
year end.





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
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 number of
shares adjusted for any potentially dilutive debt or equity
common stock equivalents.  As of December 31, 2007 and 2006, the
Company had 300,000 in common stock purchase warrants outstanding as common
stock equivalents, respectively.




F-7
 CRC
Crystal Research Corporation
 (A
Development Stage Company)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)


NOTE 2. SUMMARY
OF SIGNIFICANT ACCOUNTING PRACTICES - continued




Dividends





The
Company has not yet adopted any policy regarding payment of dividends. No
dividends have been paid during the periods shown.





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.





Property
and Equipment





Property
and equipment are carried at cost and depreciated on straight-line bases 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.  During 2004 the Company sold an asset and
recorded a loss on disposition of $7,491.





The net
book value of manufacturing equipment at December 31, 2004 was
$203,212.  Because the Company had been inactive and the manufacturing
equipment had been in storage for several years, the Company decided to review
the equipment for impairment.  It was determined that not all
components were still useful.  Accordingly, the Company recorded an
impairment charge of $100,000 at December 31, 2005, which represented
the book value of the components which the Company determined were
no longer useful.  As of December 31, 2006, the Company reviewed the
manufacturing equipment again, and decided to fully impair the equipment, which
resulted in an impairment charge of $98,931 in the year ended December 31,
2006.





Income
Taxes





The
provision for income taxes is the total of the current taxes payable and the net
of the change in the deferred income taxes. Provision is made for the deferred
income taxes where differences exist between the period in which transactions
affect current taxable income and the period in which they enter into the
determination of net income in the financial statements.




Research
and Development




The
Company follows the policy of expensing research and development costs in the
period incurred. The Company incurred $0, $0 and $331,459 during the years ended
December 31, 2007 and 2006 and from inception through December 31, 2007,
respectively.


F-8
 
 CRC
Crystal Research Corporation
 (A
Development Stage Company)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)
  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 $1,813,853 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 effected a four for
one stock split.  All share amounts herein are adjusted to give effect
to the stock split.





On
December 3, 2007 the Company registered 4,000,000 common shares and 2,000,000
options to purchase common shares under an S-8 Non-Qualified Stock Compensation
Plan to assist in the acquisition of services and provide incentives for
employees as it executes its business plan of which zero shares have been issued
or committed as of December 31, 2007.  The Form S-8 was subsequently
withdrawn.





The
Company did not issue any shares of common stock in 2005.





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.


F-9
 
 CRC
Crystal Research Corporation
 (A
Development Stage Company)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)




NOTE
4. STOCKHOLDERS’
EQUITY - continued




·
              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 the trading price of the shares on
      the date of issuance of $0.05 per share or $22,000 and 178,000 common
      shares at the trading price of the shares on the date of issuance of $0.05
      per share to convert accounts payable of
$8,900.





Warrants and
Options





Information
relating to warrant activity during 2006 and 2005 follows:






Warrants
      Outstanding at December 31, 2004
            
            
            1,169,844Less: Warrants
      Issued/Exercised
            
            
            0Less: Warrants
      Expired
            
            
            0Total Warrants
      outstanding at December 31, 2005
            
            
            1,169,844Less: Warrants
      Exercised
            
            
            869,844Less: Warrants
      Expired
            
            
            0Total Warrants
      Outstanding at December 31, 2006
            
            
            300,000




F-10
 
 CRC
Crystal Research Corporation
 (A
Development Stage Company)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)




NOTE
4. STOCKHOLDERS’
EQUITY - continued




On
December 31, 2007, the Company had warrants outstanding for the purchase of an
aggregate of 300,000 shares of its Common Stock, which are summarized in the
table below.







Warrants
              Outstanding
            
            
            Exercise
              Price
            
            Expiration
              Date140,000
            
            
            $0.50
            
            19-Oct-2008160,000
            
            
            $0.50
            
            08-Apr-2010Total
            
            
            300,000




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








NOTE
5. RELATED PARTY
PAYABLES





Loans from Kiril A.
Pandelisev





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 (see below).





Employment Agreement with
the CEO





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 a contribution to
capital 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.


F-11
 
 CRC
Crystal Research Corporation
 (A
Development Stage Company)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)




NOTE
5. RELATED
PARTY PAYABLES - continued


Satisfaction of Amounts Due
the CEO


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.





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.
 Current Loans from the
CEO





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








NOTE
6.  CONVERTIBLE
NOTES




During
the years ended December 31, 1997, 1996 and 1995 the Company issued Series A
Convertible Unsecured Promissory Notes (the Notes) in the total aggregate
principal of $200,000.  The Notes bore interest at 10% payable
quarterly commencing December 31, 1995 through maturity on December 31,
1999.  Any notes that were not paid at maturity would continue to bear
interest at 10% per annum until paid.
  The
notes were convertible into shares of common stock at the rate of four (4)
shares of common stock for each one dollar principal amount of note (after
giving effect to a subsequent 4 for 1 stock split).   As of
December 31, 1999, notes in the aggregate principle amount of $85,000 had been
converted by the holders into 340,000 shares of common stock, leaving notes with
a principal balance of $115,000 outstanding.
  The
notes also provided the Company with the opportunity to redeem any unconverted
notes after the December 31, 1999 maturity date at the rate of 2,500 common
shares for every $5,000 in notes payable converted if certain interest and
profit sharing payments were made by the maturity date.  The Company
did not satisfy the conditions for redemption of the notes and therefore was not
eligible to redeem the notes at maturity on December 31, 1999.
  Because
the Company was unable to pay the remaining notes in full on their maturity
date, the Company’s board approved the issuance of two shares of common stock
for each one dollar principal amount of notes, or an aggregate of 230,000
shares, in March 2000 as a gesture of goodwill to the note
holders.  The Company recorded an expense of $57,500 resulting from
the issuance of these shares.
  As of
December 31, 2005, total principle and accrued interest on the notes was
$230,000.  Because no collection demands had been made by the holders
of the notes during the six years following the maturity date of the notes to
December 31, 2005, the Company was advised that any claim by a note-holder would
be barred by the statute of limitations under Arizona law. Accordingly the
Company wrote off its liability on the notes as of December 31, 2005, and
recorded contributed capital of $230,000 at December 31,
2005.




F-12
 
 CRC
Crystal Research Corporation
 (A
Development Stage Company)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)




NOTE
7.            
PROVISION FOR INCOME TAXES
 
 The
Company provides for income taxes under Statement of Financial Accounting
Standards NO. 109, Accounting for Income Taxes. SFAS No. 109 requires the use of
an asset and liability approach in accounting for income taxes.
  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.  The
total deferred tax asset is $399,048 as of December 31, 2007 which is
calculated by multiplying a 22% estimated tax rate by the cumulative NOL of
$1,813,853 the total valuation allowance is a comparable
$399,048 .
  The
provision for income taxes for the period ended December 31, 2007 and 2006 is
calculated by applying the statutory rate of 22% to the income/(loss) from
continuing operations and deducting appropriate taxes and allowances as
follows:




Year Ended December
      31,
            
            2007
            
            
            2006Deferred Tax
      Asset
            
            $
            13,905
            
            
            $
            28,776Valuation
      Allowance
            
            
            (13,905
            )
            
            
            (28,776
            )Current Taxes
      Payable
            
            
            0.00
            
            
            
            0.00Income Tax
      Expense
            
            $
            0.00
            
            
            $
            0.00






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






Year
            
            Amount
            
            Expiration1994
            
            $
            33,292
            
            20141995
            
            
            236,109
            
            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
            
            
            116,326
            
            20252006
            
            
            130,799
            
            20262007
            
            
            63,206
            
            2027Total
            
            $
            1,813,853






NOTE
8. 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 notobligated 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 SCTfor
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 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 fees related to the license
agreement.
  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.


F-13
 CRC
Crystal Research Corporation
 (A
Development Stage Company)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)
  NOTE   9. THE EFFECT OF
RECENTLY ISSUED ACCOUNTING STANDARDS





Below is
a listing of the most recent Statement of Financial Accounting Standards (SFAS)
SFAS 155-157 and their effect on the Company.





Statement No. 155 –Accounting for Certain Hybrid
Financial Instruments




In
February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid
Financial Instruments, which amends SFAS No. 133, Accounting for Derivatives
Instruments and Hedging Activities and SFAS No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of
Liabilities.  SFAS No. 155 amends SFAS No. 133 to narrow the
scope exception for interest-only and principal-only strips on debt instruments
to include only such strips representing rights to receive a specified portion
of the contractual interest or principle cash flows.  SFAS No. 155
also amends SFAS No. 140 to allow qualifying special-purpose entities to hold a
passive derivative financial instrument pertaining to beneficial interests that
itself is a derivative instrument.




Statement No. 156 –Accounting for Servicing of
Financial Assets




In March
2006, the FASB issued SFAS No. 156, Accounting for Servicing of
Financial Assets, which provides an approach to simplify efforts to
obtain hedge-like (offset) accounting.  This Statement amends FASB
Statement No. 140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities, with respect to the accounting for separately recognized
servicing assets and servicing liabilities. The Statement (1) requires an entity
to recognize a servicing asset or servicing liability each time it undertakes an
obligation to service a financial asset by entering into a servicing contract in
certain situations; (2) requires that a separately recognized servicing asset or
servicing liability be initially measured at fair value, if practicable; (3)
permits an entity to choose either the amortization method or the fair value
method for subsequent measurement for each class of separately recognized
servicing assets or servicing liabilities; (4) permits at initial adoption a
one-time reclassification of available-for-sale securities to trading securities
by an entity with recognized servicing rights, provided the securities
reclassified offset the entity's exposure to changes in the fair value of the
servicing assets or liabilities; and (5) requires separate presentation of
servicing assets and servicing liabilities subsequently measured at fair value
in the balance sheet and additional disclosures for all separately recognized
servicing assets and servicing liabilities. SFAS No. 156 is effective for all
separately recognized servicing assets and liabilities as of the beginning of an
entity's fiscal year that begins after September 15, 2006, with earlier adoption
permitted in certain circumstances. The Statement also describes the manner in
which it should be initially applied.




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 these new Statements is not expected to have a material effect on
the Company’s current financial position, results or operations, or cash
flows.






NOTE   10 .       
SUBSEQUENT EVENTS





On January 22, 2008 the
company entered in to a consulting agreement with Mirador Consulting Inc.
(Mirador) for Investor Relations consulting.The
Company is sued
300,000 restricted common sharesto Mirador upon execution of the
agreement.   Subsequently,
the agreement was
nullified andMiradorprovided
notice that the certificate was returned.  Accordingly, the company
has affected an administrative hold on the stock until the certificate is
received.






NOTE
11.          RESTATED
FINANCIALS
  The
Company has restated its December 31, 2007 and 2006 financial statements as
follows:
  Balance
Sheets
  Corrected
error in commons shares reported as issued and outstanding on December 31, 2007
from 12,327,805 shares to 12,327,449 shares consistent with the Statement of
Stockholders equity.
   F-14
 CRC
Crystal Research Corporation
 (A
Development Stage Company)
 NOTES
TO AUDITED FINANCIAL STATEMENTS
 (December
31, 2007 and 2006)
 (AS
RESTATED)
  NOTE
11.          RESTATED
FINANCIALS - continued
  Income
Statements
  Reformatted
statements to display Other Income/(Expenses) rather than Extraordinary Items
and to reclassify the reported $230,000 gain on expiration of debt and $660,000
gain on write-off of accrued liabilities as $890,000 contributed
capital.  This had the effect of increasing the reported inception to
date loss by $890,000 from $923,853 to $1,813,853.
  Corrected
the classification of Impairment of Manufacturing Equipment as an Operating
Expense rather than an Extraordinary Item and reclassified Interest Expense as
an Other Expense rather than an Operating Expense.
  Separated
Basic and Diluted Loss per share to individual components and added the
inception to date calculations.
  Statements
of Stockholders Deficit
  Contributed
Capital of $890,000 is added in the period ended December 31,
2005.
  Statements
of Cash Flow
  The
$230,000 gain on expiration of debt and the $660,000 gain on write-off of
accrued liabilities is corrected to show contributed capital of $890,000 in the
inception to date column.
  Notes
to Audited Statements
  A Note
6 entitled “CONVERTIBLE NOTES” was added to disclose the conversion and
write-off of convertible notes.


F-14


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





Our
accountant is Moore & Associates, Chartered, Certified Public
Accountants.  We do not presently intend to change
accountants.  At no time have there been any disagreements with such
accountant regarding any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure.






ITEM
8A.         CONTROLS AND
PROCEDURES
 
 As of
the end of the period covered by this Annual Report, we carried out an
evaluation, under the supervision of our President and Treasurer, of the
effectiveness of the design and operation of our disclosure controls and
procedures.  Based on this evaluation, our President and Treasurer
concluded that our disclosure controls and procedures are effective in timely
alerting them to material information required to be included in our periodic
Securities and Exchange Commission reports.  It should be noted that
the design of any system of controls is based in part upon certain assumptions
about the likelihood of future events, and there can be no assurance that any
design will succeed in achieving its stated goals under all potential
conditions, regardless of how remote.  The Company’s disclosure
controls and procedures however are designed to provide a reasonable level of
assurance of reaching the Company’s desired control objectives.  In
addition, we reviewed our internal controls, and there have been no significant
changes in our internal controls or in other factors in the last fiscal quarter
that has materially affected, or is reasonably likely to materially affect, the
Company’s internal control over financial reporting or that could significantly
affect those controls subsequent to the date of our last
evaluation.
 
 This
annual report does not include a report of management’s assessment regarding
internal control over financial reporting or an attestation report of the
company’s registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for newly public
companies.
   PART
III





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





The
directors and officers as of December 31, 2007, 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
            
            Positions and
      Offices HeldDr. Kiril
      Pandelisev
            
            
            57
            
            President/CEO/DirectorCharlie
      Searock
            
            
            71
            
            DirectorDon
      Jackson
            
            
            73
            
            DirectorShariar
      Motakef
            
            
            50
            
            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 Pandelisev,
President, Chief Executive Officer, and Director:





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 employee by various private entities which he owns and
controls, including the Company.  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.





13


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




Charlie Searock,
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 CEO/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.  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. From October 2001 to August 2002, Lt. Gen. Searock was
President and member of the Board of Directors of the Air Victory Museum, a
non-profit educational museum.  From August 2002 to March 2005, Lt. Gen.
Searock served as a consultant to several start-up high tech companies.
 From February 2005 to July 2005, Lt. Gen. Searock was a consultant and
contract employee with e2ECTA, Inc., which provides energy conservation
consultation and products.  From July 2005 to February 2006, Lt. Gen.
Searock was a consultant to Aviation Management, Inc., which provides jet engine
management services primarily to small fleet jet aircraft owners.  From
February 2005 to December 2006, Lt. Gen. Searock was president of International
Tactical Training Center, which provides fighter jet contract services to the
federal government.  Since January 2006, Lt. Gen. Searock has been
retired.




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 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.  Searock is a member of the Board of Nominations of the
National Aviation Hall of Fame and is one of three members 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, Aircraft Owners and
Pilots Association and the Experimental Aircraft Association.




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.




Dr. Shariar Motakef,
Director:





Dr.
Motakef is the founder and president of Cape Simulations, which specializes in
the development of advanced simulation tools and model-based control and testing
systems for manufacturing and materials processing industries. In addition, Cape
Simulations provides engineering consulting services.  Dr. Motakef received
a B.S., M.S. and Ph.D degrees from the Mechanical Engineering Department at
Massachusetts Institute of Technology.  Prior to founding Cape Simulations,
he was the Samual C. Collins Associate Professor of Mechanical Engineering at
MIT’s Heat Transfer Laboratory.  At MIT, Dr. Motakef’s research team was
involved with thermo-fluid design and analysis of electronic materials and
semiconductor processing equipment.   Dr. Motakef was on the editorial
board of the Journal of Materials Science and Manufacturing Science from 1992 to
1995, and is a member of the American Association of Crystal
Growth.




14


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




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, 2007.







ITEM
10. 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
11. SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT





We have
issued a total of 8,519,844 shares of our common stock to the following persons
for services as of March 24, 2008:








Name
            
            Number of Total
      Shares
            
            
            % of
      ShareholdingsDr. Kiril
      Pandelisev
            
            
            8,189,844
            
            
            
            66%Charlie
      Searock
            
            
            110,000
            
            
            
            .09%Dr. Don
      Jackson
            
            
            110,000
            
            
            
            .09%Dr. Shariar
      Motakef
            
            
            110,000
            
            
            
            .09%




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







15


ITEM
12. 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.


16


ITEM
12. CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS - continued




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.





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







PART
IV





ITEM
13. 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 7
herein.





2.   Financial
statement schedules; see index to financial statements and schedules in Item 7
herein.





3.   Exhibits:





The
following exhibits are filed with this Form 10-KSB 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
            Code of Ethics
      (2)




31
              Certification pursuant to Section 302 of the
      Sarbanes-Oxley At of 2002
 
 32
              Certification pursuant to Title 18 Section
      1350





(1)
            Incorporated
      by reference to our Form 10SB (SEC File No.
      333-151309 ).




(2)
            Incorporated by
      reference to our Form 10KSB filed on March 28,
    2008.




Reports
on Form 8k:





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




17


ITEM
14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES





Audit
Fees





For the
Company's fiscal year ended December 31, 2007, we were billed and paid
$3,500.  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, 2007, we were billed and paid $500
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, 2007.










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 CORPORATIONDate:  August
      26, 2008
              By:
              /s/   
      Dr. Kiril
      PandelisevDr.
      Kiril PandelisevPresident,
      Chief Executive Officer,and
      Director





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




Date:  August
      26, 2008
              By:
              /s/  
      Dr. Kiril
      PandelisevPresident,
      Chief Executive Officer,and
      Director







18