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SECURITIES
  AND EXCHANGE COMMISSION
  WASHINGTON, D.C. 20549
  FORM 10-KSB
  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
  OF THE SECURITIES EXCHANGE ACT OF 1934

For Fiscal
  Year ended: December 31, 2003         
  Commission File Number 0-16472

COMC, INC.(Exact Name of
  Registrant as Specified in its Charter)

|Delaware                                                                    | ****95-4628378                               
|--------------------------------------------------------------------------- | ---------------------------------------------
|                                                                            |                                              
|(State or other jurisdiction
      of 
      incorporation or organization) | (I.R.S. Employer
      Identification Number)
|                                                                            |                                              
|                                                                            |                                              
|4030 Pike Lane, Suite
      C, Concord, California                          | 94520                                        
|                                                                            |                                              
|(Address of Principal
      Executive Offices)                              | (Zip Code)                                   

Registrants
  telephone number, including Area Code:                      
  (925) 849-1400

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

None

Securities
  registered pursuant to Section 12(g) of the Act:Common Stock
  (par value $.01 per share)

Title of Class

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 (12) months (or for such shorter period that the registrant was required
  to file such reports) and (2) has been subject to such filing requirements for
  the past ninety (90) days. Yes x Noo

Indicate by
  check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
  S-K is not contained herein, and will not be contained, to the registrants
  best 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.
  x

The aggregate
  market value of the 18,090,968 shares of outstanding voting common stock held
  by non-affiliates of the registrant as of March 31, 2004 (based upon the average
  bid and asked prices of such shares) was approximately $3,618,194, based
  on the closing sale price for March 31, 2004, as reported on the OTC Bulletin
  Board. For purposes of this calculation, directors and executive officers of
  the Registrant and their affiliates are deemed to be affiliates of the registrant.

The number of
  shares outstanding of Registrants Common Stock as of March 31, 2004 was
  26,709,091.

|
|



Certain matters
  discussed herein may constitute forward-looking statements, with in the meaning
  of the Private Securities Litigation Reform Act of 1995 and as such may involve
  risks and uncertainties. These forward-looking statements relate to, among other
  things, expectations of the business environment in which the Company operates,
  projections of future performance, perceived opportunities the market and statements
  regarding the Companys mission and vision. The Companys actual results,
  performance, or achievements may differ significantly from the results, performance,
  or achievements expressed or implied in such forward-looking statements.



|Table
      of Contents10KSB              
|------------------------------------------
|                                          
|PART
      1                              
|ITEM
      1                              
|ITEM
      2                              
|ITEM
      3                              
|ITEM
      4                              
|PART
      II                             
|ITEM
      5                              
|ITEM
      6                              
|ITEM
      7                              
|ITEM
      8                              
|ITEM
      8A                             
|PART
      III                            
|ITEM
      9                              
|ITEM
      10                             
|ITEM
      11                             
|ITEM
      12                             
|PART
      IV                             
|ITEM
      13                             
|ITEM
      14                             
|Balance
      Sheet Assets                
|Balance
      Sheet Liabilities and Equity
|Statement
      of Operations             
|Shareholders
      Equity                 
|Cash
      Flow Statement                 

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|2
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PART
  I

ITEM
  1. DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS

COMC, Inc. (COMC, the Company, Corporation we, or us),
through its wholly - owned operating subsidiary ICF Communication Solutions, Inc. (ICF),
is a technology service company in the telecommunications industry with a regional geographic service
coverage area. We design, implement, support and manage LAN/WAN computer network systems, voice communication
network systems, and premise wiring for both data and voice. In addition, we distribute and maintain
equipment on behalf of major telecommunication equipment manufacturers. Our target clients are primarily
Fortune 1000 sized enterprises demanding the highest level of service under project, master and general
maintenance contracts to support their complex and growing national voice and data network systems.
In servicing these customers, we provide trained and experienced technicians and design engineers
on a rapid-response basis to meet our customers telecommunications planning, design, installation,
maintenance and emergency needs. As our customers and other companies continue their geographic growth,
technological expansion and communications modernization, we will provide them with design, product,
maintenance and personnel on a turnkey, outsource basis.

In addition to the services described above, our Recruitment Services division is providing our customers
with permanent and temporary technical professional recruitment and placement services to fill their
internal staffing needs. We are continuing to redirect our business focus away from the recruitment
and placement services in 2004 and we are not actively seeking new customers in this area.

Our assets are
  our employees. Our investments are in our employees. While we do not design
  or take the research and development risk borne by the manufacturers of the
  equipment we service, we continue to invest in the latest training and certification
  for the networks we support and for data products designed by Cisco Systems,
  Inc., Avaya, Inc., Bay Networks (a division of NorTel Networks) and 3Com, as
  well as voice products by Avaya, Inc., NEC and NorTel Networks, Inc.

We reported a
  net loss attributable to common shareholders in calendar year 2003 of $1,540,500
  on revenues of $11,888,200 compared to a net loss attributable to common shareholders
  in calendar 2002 of $2,044,200 on revenues of $12,132,800. In March 2003, a
  new Chairman and CEO joined the Company and one of our co-founders became Executive
  Vice President and Chief Operating Officer.

As of the date of this filing, we are looking at several small acquisitions of data and voice service/outsourcing
businesses in key markets but nothing has advanced to a stage that requires reporting.

| | Our History
| | -----------

We were originally
  incorporated in December of 1978, in the State of Illinois, under the name Automedix
  Sciences, Inc. Initially, our purpose was to research and develop medical technologies
  for the treatment of cancer and other medical conditions. In the Spring of 1992,
  Automedix ceased operations due to the fact that we were unable to raise capital
  to continue clinical trials with respect to a medical device for cancer treatment
  that Automedix designed. As a consequence, our then Board of Directors began
  to investigate the possibility of a new business direction and to search for
  viable acquisition or merger candidates that would enable us to maximize value
  to our shareholders.

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In November of 1996, we consummated the acquisition of Complete Communications, Inc., a California
corporation (CCI). At the time, CCI was primarily engaged in the business of providing
computer network and telephone system services, which included the design and installation of such
networks and systems. As consideration for the acquisition of CCI, we issued 10,000,000 shares of
our Common Stock to John Ackerman, the sole shareholder of CCI. In connection with this transaction,
we changed our name to COMC, Inc.

In August of 1998, we acquired ICF, a California corporation based in Martinez, California. At the
time that we acquired ICF, ICF was a telephone service provider with operations that focused on the
San Francisco Bay Area and the western United States. ICFs operations focused on the design,
installation, maintenance, and servicing of data and voice networks. ICFs customer base included
primarily large financial institutions as well as municipalities located in the greater San Francisco
Bay Area. Our acquisition of ICF was part of our strategy to expand operations and revenues through
acquisitions of small and mid-sized companies that generate most of their revenues through maintenance
service contracts, and that are strategically located in high growth markets, such as the western
and southwestern United States. ICF has become our base of operations and the source from which all
of our revenues are generated. CCIs entire customer base was absorbed by ICF effective as of August, 1998.

Effective December 27, 2000, we changed our state of incorporation from Illinois to Delaware. To effectuate
our reincorporation in the State of Delaware, we merged into COMC, Inc., a Delaware corporation,
and we are now continuing our business as a Delaware corporation. The reincorporation did not result
in any change in our business, assets or liabilities, did not cause our corporate headquarters or
other facilities to be moved and did not result in any relocation of management or other employees.
The reincorporation, which was approved by more than two-thirds of our shareholders at our annual
meeting on November 28, 2000, has a number of advantages for COMC: the Delaware legislature is responsive
to business needs of corporations and acts quickly to enact relevant new laws; Delaware has extensive
case law on corporate issues, thereby providing corporations with more certainty about the application
of laws in specific circumstances; Delaware state courts that specialize in corporate law have developed
an expertise in dealing with corporate issues; and Delaware has developed a sharper definition of
director responsibilities so that boards may act with greater certainty on issues affecting shareholders.

| | ICF Communication
      Solutions
| | ---------------------------------

Today, through ICFs data and voice services division, we provide voice communications and data
network design, equipment sales, installation, systems integration consulting, and maintenance to
Fortune 1000 size companies and municipalities. In addition, through ICFs Recruitment Services
division, we provide technical employee recruitment, leasing and permanent placement services. In
2003, we redirected our business focus away from the recruitment and placement services and
are not actively seeking new customers in this area.

ICF was founded in 1989 to provide telephone systems and services to Bank of America. At December
31, 2003, ICF was servicing Bank of America and Wells Fargo, which combined represented 85.5% of
2003 revenues. In addition, the Company had approximately 200 different customers during the year
that on a combined basis represent over 4,000 customer location sites, including ATM locations. At
December 31, 2003, ICF employed 138 employees and is headquartered in Concord, California. ICF has
additional sales and service offices in Burbank, California, as well as Houston, Texas, and Phoenix,
Arizona. At December 31, 2003, we also had 13 contract employees through an outsourcing service.

Our expertise
  in voice communications and data networks permits us to offer customers a wide
  range of professional services, including network planning, design, implementation,
  management, maintenance and optimization. Our broad range of distribution of
  various voice and data equipment manufacturers allows us to serve our customers
  as a vendor-neutral, single-source provider of communications equipment and
  service.

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Through ICF, we
  currently market our products in the following industry segments or arenas:

| | Banking;                                                   
|- | -----------------------------------------------------------
| | Insurance and Financial
      Services;                    
| | Federal, State and Local
      Government Agencies;        
| | Local and Higher Education
      Institutions;             
| | Healthcare, Medical,
      and Pharmaceutical institutions;
| | Retail and Service Companies;                              

We continue to provide local, statewide and regional services for such clients as Bank of America,
Wells Fargo Bank, Bank of the West, SBC, Cingular Wireless, McKesson, BioRad Labs, and Expanets.

Through ICF we distribute the products and services of a number of leading communications suppliers.
In voice systems, we support Avaya and NorTel products. In data systems, we support Cisco Systems,
Avaya, Bay Networks, and 3Com. In wiring systems, we install and support Avaya/Systemax, IBM, Siemens,
Krone-Belden and Ortronics. By offering equipment from a variety of vendors, we can provide businesses
with tailored, scalable solutions to all of their communications needs.

Approximately $11.8 million and $11.6 million of revenues were recorded for data and voice services
during 2003 and 2002, respectively. Approximately $100,000 and $500,000 of revenues were recorded
for Recruitment Services during 2003 and 2002, respectively. In 2003, we redirected our business
focus away from the recruitment and placement services and are not actively seeking new customers
in this area.

| | Industry
      and Market Opportunities
| | ---------------------------------------

We believe that we are uniquely positioned to take advantage of the numerous changes and developments
in the communications industry described above, as well as the following anticipated changes and
developments described immediately below:

                       
Innovations in Technology

Technological innovations are increasing both the supply of and demand for high-bandwidth telecommunications
transmission capacity while also driving increased integration in voice and data networks. Innovations
in optics technologies, consisting of both higher quality fiber optic cable and improved transmission
electronics, have increased the capacity and speed of advanced fiber optic networks while decreasing
the unit cost of transmission. This increased capacity and speed, combined with continuing advancements
in microprocessor power, has resulted in the development of bandwidth-intensive applications, growth
in Internet usage and increases in the number of network users.

                       
  Increasing Demand for Communications Services

We believe that
  there is and will continue to be growth in demand for long distance data, Internet,
  voice and video services. The increase in computing power, number of computers
  networked over the Internet, and connection speeds of networked computers are
  driving increases in communications use for Internet and data services. Prices
  for cellular and long-distance voice services have decreased, resulting in increased
  demand for these services. In addition, cost savings and network efficiencies
  are driving demand for more robust voice and data network equipment. We believe
  video conferencing, digital television and other multimedia applications being
  developed will continue to increase demand for bandwidth. In light of this increased
  demand, our projections show an increase in business in 2004.

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                       
  Increasing Specialization Within the Communications Industry.

We believe industry specialization will continue to occur as communications companies focus on their
core competencies and outsource non-core activities. In the interconnect markets, we believe that
equipment manufacturers will increasingly divest their service business units and service providers
will expand beyond their sole equipment manufacturers representation to become more vendor-neutral
and client focused.

| | Sales and
      Marketing
| | -------------------------

We have targeted and built a base of Fortune 1000 corporations as clients. The 1000 largest U.S. companies
that we target as customers generally have annual budgets that range between $1 million and $100
million for the purchase of voice and data products and services to support their regional and national
operations and communications, and to achieve efficiencies and cost savings. Other clients we target
have budgets ranging from $300,000 to $1 million per year and some even smaller.

We believe that long-term relationships based on quality customer service, short response time and
competitive pricing are the most effective way of attaining our business objectives. Presently, we
are balancing the expansion of our client base through a more targeted solicitation of new clients
in our existing geographic markets. Through a proactive campaign we will also cross-market telecommunication
services with our clients in an attempt to capture a larger share of our clients business.
Our plan is to establish cross-marketing agreements with certain local and long distance carriers,
hardware and software development companies, electrical service suppliers and custom data network
consulting firms.

We work with our clients to transition their communications departments from in-house personnel to
outsourcing whenever possible. Unlike certain of our competitors, we focus on large corporations
that have diversified needs and substantial pent up demand to outsource their maintenance and service
requirements.

At December 31, 2003, our officers as well as two sales people are selling our services.

Our client relationships are with senior executives, chief information or technology officers, IT/IS
managers, or customer purchasing departments. With our larger customers, we are often one of a few
preferred vendors. Once on a preferred vendor list, our sales personnel are eligible to work directly
with project managers or in-house consultants for additional work orders. To date, most of our business
has been generated through referrals and personal sales calls.

Professional Services.

We design advanced voice, data and integrated networks. We will continue to expand these services as
client demand for advanced communications solutions continues to grow.

We employ skilled network engineers with an expertise in data as well as integrated voice and
data networking. Our Network Engineering group designs networking solutions, implements those solutions
and provides ongoing operational support utilizing standard technologies. We also provide engineers
on a fee-for-service basis for clients who seek to augment their own resources.

Our network consultants
  coordinate the operational plans of our clients with their existing network
  capacity and capability in order to determine the communications environment
  necessary to meet their business needs. Our consultants provide a complete analysis
  of existing network status and predict the impact of future changes on a network
  and also develop sophisticated Internet applications.

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Network Service

We provide service, maintenance and support for our clients growing data and voice communications
networks, as well as sell and install data and voice communications equipment. We maintain and service
our clients networks primarily through annual maintenance plans or through project-specific
plans based on time and materials. We can remotely monitor and manage the voice and data equipment
and network connectivity of our customers 365 days a year, 24 hours a day, through our advanced network
management center.

We offer our clients
  a variety of voice, telephone and video equipment for the office environment.
  We also install, configure and integrate all of the equipment we purchase on
  behalf of clients, primarily telephones, switches, lines and computer servers.
  The voice systems range from between 15 and 5,000 internal telephone lines.
  This equipment includes PBX and key systems, building wiring, call centers,
  voice mail systems and premise (as opposed to mobile) wireless systems. We have
  the capability to install all connection lines including twisted pair copper
  (Cat V and VI), ISDN, coaxial cable and fiber optic, but often sub-contract
  any electrical wiring activities in connection with the installation of equipment.
  However, we intend to bring more of this electrical activity in-house.

| | Vendor Relationships
| | --------------------

We have agreements
  with the voice and data equipment manufacturers listed immediately below.

| | NorTel Networks: authorized
      Contracted Nortel Networks Reseller;                                                
|- | ----------------------------------------------------------------------------------------------------------------------
| | Shoreline Communications:
      authorized re-seller of their Voice over Internet Protocol (VoIP) product
      line; 
| | Cisco Systems: authorized re-seller of their entire product
      line including switches, hubs and routers;         
| | Bay Networks: authorized
      re-seller of data subsidiary product lines;                                            
| | 3Com: authorized re-seller
      since January 1997, entire product line including NIC cards, hubs
      and routers.

| | Customers
| | ---------

We currently service Bank of America and Wells Fargo, which combined represented 85.5% of 2003 revenues.
In addition, the Company had approximately 200 different customers during the year that on a combined
basis represent over 4,000 customer sites, including ATM locations, across a broad range of industries,
including banking, retail distribution and manufacturing, as well as educational, local and federal
government offices and non-profit institutions. Our clients consist primarily of Fortune 1000 sized
companies. In addition to Bank of America and Wells Fargo Bank, our current customers include Bank
of the West, SBC, Cingular Wireless, McKesson, BioRad Labs, and Expanets.

In the year 2003,
  we have depended on two large customers for the majority of our revenue. A loss
  of either one could have a material effect on our business. From time to time
  we may experience delays in the collection of our accounts receivable from our
  major customers which could result in a cash flow problem and effect the
  viability of the business.

| | Employees
| | ---------

As of December
  31, 2003, we employed 138 employees at a total of four different sales and service
  locations throughout the U.S. Of these, 3 were executive officers, 89 were technicians,
  9 were engineering personnel, 2 were engaged in sales, 34 were engaged in managerial,
  administrative and clerical activities, and 1 was a contract employee on lease
  to our clients. At December 31, 2003, we also had 13 contract employees through
  an outsourcing service. On December 31, 2002, the Company employed 140 persons.
  The Company believes that available workforce will allow us to be able to increase
  the number of technicians and contract employees to meet any additional needs
  that our customers may have. None of our employees are represented by a union
  or collective bargaining agreement, and we have not experienced any work stoppages.

| 
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|7
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| | Competition
| | -----------

The size of a client, the geographic scope and product platform preferences of the target client base
dictates the competition we face. The market for both data network and voice communication services
and products sales is highly competitive on a local, regional and national level. Since we are predominately
a service company focusing on maintenance contracts and installation projects, and based upon the
fact that most of the customers we target are large enough to purchase direct, we seldom compete
with larger equipment distributors on the initial sale of equipment.

We are trained on most of the legacy and current release equipment manufactured by Avaya, NorTel
Networks, NEC and Toshiba for voice networks as well as Cisco Systems, Avaya, Bay Networks and 3Com
for data networks. Maintaining expertise in these systems, while remaining vendor neutral, allows
us to competitively bid for many service contracts. We obtain a competitive advantage based upon
the fact that many of the largest targeted customers operate their systems on multiple-vendor platforms
(for instance Avaya and NorTel voice switches and Cisco and 3Com data hubs and routers at the same
time) which we can service and maintain under one general contract. Many of our competitors are limited
to only one major voice and/or one major data vendor relationship and service.

Our goal as a service company is to continuously expand our geographic service coverage on a regional
level, as well as expand upon our growing expertise within the above highlighted voice and data equipment
platforms.

We face competition
  in our targeted Fortune 1000 sized and municipal clients from Verizon, Electronic
  Data Systems, Williams Communications, IBM Global, Claricom, Inacom, HP and
  AT&T Global and others, including numerous privately held companies. This
  competition covers larger voice and data network design, installation, maintenance
  and monitoring projects and contracts on a national basis. On a regional basis,
  we compete with NetVersant, 3D Datacom, Metro and Xeta Technologies. This competition
  covers cabling and voice service contracts as well as project work for medium
  and large sized clients in California, Texas, Arizona, Nevada, New Mexico, Colorado
  and Utah. In addition, there are many small companies in our geographical coverage
  areas competing for the same business.

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| | Overview
      of the Industry
| | ------------------------------

Telecommunications is the transmission of data, voice or video signals across a distance. Data signals
connect computers through local area networks, wide area networks, and the Internet, or connect peripheral
devices, such as facsimile machines and printers. Voice signals usually connect people in telephone
conversations. Video signals include video conferencing and television signals. Telecommunications
services are typically divided into long distance and local services. The telecommunications industry
includes the configuration, sale, installation and maintenance of communications equipment, and technical
services for the design and operations of communication networks handling voice, data and video traffic.

Recently, the telecommunications industry has been characterized by rapid technological changes, changes
in the industry structure and increased demand for services and equipment. The demand for all types
of telecommunications services is increasing, with growth in high-speed data services, including
the Internet.

Many of the largest equipment and service providers have achieved growth through acquisitions and mergers.
These combinations have provided access to new markets, new products, and economies of scale. Despite
this consolidation, the number of new entrants is increasing and new entrants are gaining market
share from the large and established providers. In this highly competitive environment, telecommunications
providers are increasingly focusing on core competencies and outsourcing non-core activities to other
providers. In the telecommunications equipment market segment, both Avaya and NorTel Networks have
divested their service and maintenance units in the past several years to focus on equipment development
and software sales support. This trend is a significant departure from the traditional integrated
model that has prevailed in the industry since its inception, and has represented an opportunity for us.

| | Convergence
      of Data and Voice Services
| | --------------------------------------------

Telecommunications network designs have traditionally created separate networks using separate equipment
for voice, data and video signals. The evolution from `analog to `digital technologies,
which convert voice and other signals into a stream of 1s and 0s, eliminates
the traditional distinctions between data, voice and video transmission services. High-bandwidth
networks that use advanced packet-switched technology transmit mixed digital voice, data and video
signals over the same network. This enables telecommunications customers to use a single device for
voice, data and video communications. Although these devices are new to the market, customer interest
and acceptance are rapidly growing.

Each evolution, from copper to fiber optic cables, from one to many light signals, from circuit-switching
to packet-switching and from analog to digital signals, has produced significant increases in network
capacity. When considered together, these evolutions have produced enormous increases in the ability
to transfer large amounts of information across vast distances almost instantaneously. With each
new leap in transmission capacity, end-users have come to rely on their ability to access and manipulate
ever-greater amounts of information quickly and easily. This reliance has consistently created demand
that outstrips the available capacity.

| | Equipment
      Manufacturing and Distribution Market
| | -----------------------------------------------------

The telecommunications
  equipment industry in the U.S. has had very limited growth in the last several
  years. The growth of the telecommunications and data networking equipment industry
  stems in part from: (a) the development of new technologies which allow systems
  to provide integrated voice and data services, and (b) from increased corporate
  and household bandwidth demand, which require both established and new carriers
  to expand and upgrade their facilities. Manufacturers distribute telecommunications
  equipment through their own sales forces as well as through interconnect service
  providers as third parties.

| 
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|9
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| | Interconnect
      Services (Communications and Data Solutions) Market
| | ----------------------------------------------------------------------

Businesses seek solutions to the challenges of selecting, maintaining and upgrading information and
communications technologies and services amid rapid technological advances. As a result, the demand
for consultants services in systems integration and communications networks has been growing.
Businesses such as Williams Communications, Norstan, Inc. and International Network Services on a
national level and COMC and its competitors on a regional level, assess customers communications
and information technology needs, evaluate equipment and services options, procure equipment and
services, implement efficient network solutions and manage the combination of technologies.

ITEM
  2. PROPERTIES

Our headquarters are located at 4030 Pike Lane, Suite C, Concord, California. We occupy 7,200 square
feet at this location in Concord, of which approximately 2,400 square feet is dedicated to office
space and 4,800 square feet is dedicated to warehouse space. We pay monthly rent of $6,528 for our
headquarters in Concord under a lease that will expire in November 2007. ICF occupies 14,700 square
feet in a commercial building at 1700 West Burbank, Burbank, California. ICF pays a monthly rent
of $17,238 under the lease for this space in Burbank under a lease that was signed in July 2000 and
expires in July 2005. At the Burbank facility, ICF has sublet to a third party 5,000 square feet
for the remaining term of the lease for a monthly subrental income of $6,250. In addition, at the
Burbank office, an additional 1,946 square feet were sublet for an initial term of one year for a
monthly subrental income of $2,136. This additional sublet expired in the first quarter of 2004 and
the Company has re-occupied this additional 1,946 square foot space. ICF occupies an office in a
commercial building at 2810 S. 24th Street, Suite 111, Phoenix, Arizona, of which 2,209 square feet
is office and warehouse space. ICF pays a monthly rent of $1,590 for this property under a lease
that will expire in October 2004. ICF occupied an office in a commercial building at 2602 S. 24th
Street, Suite 102, Phoenix, Arizona, of which 1,100 square feet was office space. This lease expired
in September 2003. In March 2003, we signed a lease in Houston on a new facility for approximately
$1,000 per month for a one-year term, which was subsequently extended through May 31, 2004 at the
same monthly rental rate. In addition to the above facilities, ICF lease from time to time additional
outside storage rooms on an as needed basis.

The aggregate leased property is currently meeting our needs.

ITEM
  3. CURRENT LEGAL PROCEEDINGS

On May 25, 2003, ICF settled
  all outstanding legal matters with Metropolitan Talent Agency (Metropolitan).
    Metropolitan and ICF agreed to release each other as liable parties in
  the suit and settle outstanding fees for release of writ of attachment for collecting
  on the original judgment of the case.

On August 8, 2001, an ICF
  employee filed a complaint against Starbucks Corporation and Wells Fargo Bank
  (Defendants) in San Francisco Superior Court, claiming that the employee suffered
  wage loss, hospital and medical expenses, general damage and loss of earning
  capacity in unspecified amounts. On March 7, 2002, the defendants filed an amendment
  to the cross-compliant, identifying ICF as fictitiously named cross-defendant
  Roe 1.

|  
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|10
|  
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Kemper Insurance has formally accepted ICFs tender of defense and has hired the law firm of Boornazian,

Jensen and Garthe of Oakland, California to defend ICF on the cross-complaint of Wells Fargo. The

insurance carriers for Wells Fargo and Starbucks have settled the claim brought against them by
ICFs
former employee but Wells is continuing to seek indemnity from ICF under the terms of
a contract
entered into in March, 1999.

It is ICFs position that the March, 1999 contract has no applicability to the claim by the former

employee and that no indemnity is owed. The contractual and insurance coverage issues related to

Well Fargos indemnity claim that are somewhat unclear, and it is likely that Kemper will
seek
to reach a compromise settlement with Wells Fargos carrier rather than litigate the
issue.
There is presently no trial date set for the indemnity claim.

On September 10 and October
  31, 2003, we filed two lawsuits in Contra Costa County Superior Court, California, Case
  Numbers C03-02246 and C03-02803, against several former employees of the Company,
  namely, Charles E. Lincoln, Paul Carpenter, Steven Johnson, Jeffrey Clark, Lynn
  Thompson, Michael Gurasich, Charles Rago, and Ronalee Haggard, and their related
  business entities, Comlectric, Information Technology Squared, and All Business
  Communications, for misappropriation of trade secrets, breach of contract, and
  various business torts. These cases are currently early in the litigation
  process, discovery is ongoing and no trial dates have been set. In Case Number
  c03-002246, a preliminary injunction was granted by the court against the defendants.

On August 8, 2003,
  ICF was sued by a trustee-in-bankruptcy, Suzanne Decker, representing one of
  ICFs customers, E-time Capital, Inc. On August 9, 2001, an involuntary
  petition for Chapter 7 bankruptcy protection was filed against E-time Capital.
  The adversary proceeding against ICF was filed by the trustee in United States
  Bankruptcy Court, No. Dist. Of Cal., Adversary Proceeding No. 03-5440 seeking
  return of a certain payment made by E-time Capital to ICF for services rendered
  by ICF in April, 2001. ICF is contesting the allegations that this single payment
  was a preferential payment from E-time to ICF and subject to return to the bankruptcy
  estate under certain Federal Bankruptcy laws. As the payment sought by the bankruptcy
  trustee is of a de minimus amount, the Company does not believe that
  the outcome of this action will have a material effect on ICF.

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

None. No annual
  meeting has been held since October 4, 2000 and at this point, no date has been
  set for the next meeting.

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PART II

ITEM
  5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market for Common Equity

Our Common Stock
  is quoted Over The Counter on the electronic Bulletin Board under the symbol
  CINJ or CINJ.OB. The following table sets forth the
  high and low bid quotations for our Common Stock through March 31, 2004. Prior
  to the fiscal quarter ended March 31, 1998, no trading market existed for our
  securities. These quotations have been reported by the National Association
  of Securities Dealers, Inc.

Common Stock

| | **Fiscal
      Quarter
      Ended** |   | **High** |  |   | **Low** | 
| | ------------------------------------ | - | -------- |  | - | ------- | 
| |                                      |   |          |  |  
| | March 31,
      2002                 | $ | 0.7500   |  | $ | .2500   | 
| | June 30,
      2002                  | $ | 0.3000   |  | $ | .1500   | 
| | September
      30, 2002             | $ | 0.1800   |  | $ | .0900   | 
| | December
      31, 2002              | $ | 0.2400   |  | $ | .0400   | 
| | March 31,
      2003                 | $ | 0.0900   |  | $ | .0600   | 
| | June 30,
      2003                  | $ | 0.0700   |  | $ | .0200   | 
| | September
      30, 2003             | $ | 0.1400   |  | $ | .0800   | 
| | December
      31, 2003              | $ | 0.5000   |  | $ | .0800   | 
| | March 31,
      2004                 | $ | 0.4000   |  | $ | .1300   | 

On December 31, 2003, the closing price for our Common Stock on the OTC Bulletin Board was $.45 per
share. On December 31, 2003, there were approximately 2,900 registered holders of record of our Common
Stock. This does not include beneficial shareholders whose Common Stock is held in street name.

In March 2003, the Company raised $312,500 through a private placement of 1,092,657.34 shares of Series

A Convertible Redeemable Preferred Stock for $.286 per share with various accredited investors
(the
Investors). Each investor had the right to increase his purchase by 25% during
a 90-day
period from the purchase date. As of June 30, 2003 this right expired with no new shares
being issued.
In March and June 2003, an additional 55,944.06 and 56,614.93 shares of Series A
Convertible Redeemable
Preferred Stock were issued, valued at $16,000 and $16,200, respectively,
for reimbursement of expenses
in the first and second quarter of 2003. Each share of Series A Preferred
Stock is convertible into
ten shares of common stock. The Series A Redeemable Preferred Stock provides
for payment-in-kind
dividends at a rate of 5%.

In June 2003, the Company
  raised $215,000 through a private placement of 1,075,000 shares of Series B
  Convertible Redeemable Preferred Stock for $.20 per share with various accredited
  investors. Each share of Series B Preferred Stock is convertible into twenty
  shares of common stock. In addition, 250,000 shares of convertible redeemable
  Series B preferred stock were issued in exchange for $62,500 of Related Party
  Note Payable. In addition, the CEO received 75,000 shares of convertible redeemable
  Series B preferred stock, valued at $15,000, as compensation for services rendered
  in connection with the restructuring. In September 2003, an additional 154,000
  shares of Series B Convertible Redeemable Preferred Stock were issued, valued
  at $246,400 for reimbursement of expenses in the third quarter of 2003, including an imputed $215,600 non cash charge relating to the deemed fair
  value of shares issued in excess of reimbursable expenses. In December
  2003, the CEO was awarded 667 shares of convertible redeemable Series B preferred
  stock, valued at $6,000, the Executive Vice President was awarded 667 shares
  of convertible redeemable Series B preferred stock, valued at $6,000 as compensation,
  and the Controller and Principal Accounting Officer was awarded 222 shares of convertible
  redeemable Series B preferred stock, valued at $2,000 as compensation, for services
  rendered. The Series B Redeemable Preferred Stock provides for payment-in-kind
  dividends at a rate of 5%.

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Accrued dividends as of December 31, 2003 on Series A and B Convertible Redeemable Preferred Stock


were $13,400 and $9,200, respectively.

The Company plans
  to file for an increase in the number of authorized shares of common stock.
  As of December 31, 2003, Series A and B Preferred Stock would be convertible
  into 12,052,163 and 31,111,120 shares of common stock, respectively.  Conversion
  is subject to limitations to the extent shares are not available for conversion
  as set forth in the Preferred Stock Purchase Agreements before any issuance
  of common stock pursuant to any outstanding option or warrant exercise.

In the fourth
  quarter of 2003, certain Series A and B shareholders lent ICF, our operating
  subsidiary, $208,900 at 18% interest, convertible into common stock of the Company
  at $.08 per share, at the Noteholders option. Interest is payable on the
  due date of January 2, 2005 with interest also convertible into common stock
  on the same basis as the principal.  During the first quarter of 2004,
  certain Series A and B shareholders have continued to lend funds to ICF under
  those terms. As the fair value of our stock in November and December 2003 exceeded
  the conversion price, we recognized a deemed non cash charge of $193,800 resulting
  from the imputed beneficial conversion discount.

The Company is beginning to make efforts to find an additional equity investor which, if found, will

provide capital for growth. At the present time there are no serious talks taking place with any

investors.

Dividend Policy

We have never
  declared or paid a cash dividend on our Common Stock. We intend to retain all
  earnings for the foreseeable future for use in the operation and expansion of
  our business and, accordingly, we do not contemplate declaring or paying any
  cash dividends on our Common Stock in the near future. Payment of future dividends,
  if any, will be at the discretion of our Board of Directors after taking into
  account various factors, including our financial condition, operating results
  and current and anticipated cash needs. The dividends on the Convertible Redeemable
  Series A and B Preferred stock are pay-in kind and do not involve any cash outlays.

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Sales of Unregistered Securities

At the Board of
  Directors Meeting on November 11, 2001, the Board authorized Management to raise
  up to $3,000,000 of equity from the sale of Common Stock in COMC at a price
  equal to or greater than $.15 per share. At that time, the Company had had net
  operating losses for the preceding three quarters and continued to lose money
  through the end of the calendar year. Prior to the Board Meeting, our Common
  Stock had traded at a weighted average of below $.30 per share. Managements
  negotiations with institutional investors yielded little response and private
  investors negotiated a price of $.15 per share. From February 14, 2002, through
  March 30, 2002, we raised approximately $650,000 through a private placement
  of 4,329,967 shares of our common stock for $0.15 per share with various accredited
  investors (the Investors).

At the Board of Directors Meeting on February 28, 2003, the Board authorized Management to raise up

to $750,000 of equity from the sale of Series A Preferred Stock with a five-year term in COMC at

a price of approximately $.03 per share. At that time, the Company had incurred additional net
losses
for the first nine months of 2002 of $1,552,500 on an unaudited basis and expected to have
a loss
in the fourth quarter of 2002. Prior to the Board Meeting, our Common Stock had traded between
$.06
and $.09 per share in January and February 2003 and as low as $.04 per share in the fourth
quarter
of 2002. Managements negotiations with institutional investors yielded little response
and
private investors negogiated a price of $.286 per share of Series A Redeemable Preferred Stock
with
a five-year term. Each share of Series A Preferred Stock being convertible into ten shares
of common
stock. In March 2003, the Company raised $312,500 through a private placement of 1,092,657.34
shares
of Series A Convertible Redeemable Preferred Stock for $.286 per share with various accredited
investors
(the Investors). Each investor had the right to increase his purchase by
25% during a
90-day period from the purchase date. As of June 30, 2003 this right expired with
no new shares being
issued. In March and June 2003, an additional 55,944.06 and 56,614.93 shares
of Series A Convertible
Redeemable Preferred Stock were issued, valued at $16,000 and $16,200,
respectively, for reimbursement
for expenses in the first and second quarter of 2003. The Series
A Redeemable Preferred Stock provides
for payment-in-kind dividends at a rate of 5%.

In June 2003, the Company
  raised $215,000 through a private placement of 1,075,000 shares of Series B
  Convertible Redeemable Preferred Stock for $.20 per share with various accredited
  investors. Each share of Series B Preferred Stock is convertible into twenty
  shares of common stock. In addition, 250,000 shares of convertible redeemable
  Series B preferred stock were issued in exchange for $62,500 of Related Party
  Note Payable. In addition, the CEO was awarded 75,000 shares of convertible redeemable
  Series B preferred stock, valued at $15,000, as compensation for services rendered
  in connection with the restructuring. In September 2003, an additional 154,000
  shares of Series B Convertible Redeemable Preferred Stock were issued, valued
  at $246,400 for reimbursement of expenses in the third quarter of 2003, including
  an imputed $215,600 non-cash charge relating to the deemed fair value of shares
  issued in excess of reimbursable expenses. In December 2003, the CEO was awarded
  667 shares of convertible redeemable Series B preferred stock, valued at $6,000,
  the Executive Vice President was awarded 667 shares of convertible redeemable
  Series B preferred stock, valued at $6,000 as compensation, and the Controller
  and Principal Accounting Officer was awarded 222 shares of convertible redeemable
  Series B preferred stock, valued at $2,000 as compensation, for services rendered.
  The Series B Redeemable Preferred Stock provides for payment-in-kind dividends
  at a rate of 5%.

The Company plans
  to file for an increase in the number of authorized shares of common stock.
  As of December 31, 2003, Series A and B Preferred Stock would be convertible
  into 12,052,163 and 31,111,120 shares of common stock, respectively. Conversion
  is subject to limitations to the extent shares are not available for conversion
  as set forth in the Preferred Stock Purchase Agreements before any issuance
  of common stock pursuant to any outstanding option or warrant exercise.

|  
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ITEM
  6. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
  OF OPERATIONS

The following
  discussion of the financial condition and our results of operations should be
  read in conjunction with the audited Consolidated Financial Statements and the
  Notes thereto included elsewhere in this report. This discussion contains forward-looking
  statements that involve risks and uncertainties.

Overview

The Company is
  a technology service company in the telecommunications industry with a regional
  service coverage area. We design, implement, and support LAN/WAN computer network
  systems, voice communication network systems, and premise wiring for both data
  and voice. In addition, we distribute and maintain equipment on behalf of major
  telecommunication equipment manufacturers. Service-related revenues, maintenance
  and client outsourcing services, through our wholly owned subsidiary, ICF Communication
  Solutions, Inc. (ICF), now represents 100% of our total revenues.
  Our gross margin varies significantly depending on the percentage of service
  revenues versus revenues from the sale and installation of products (with respect
  to which we obtain a lower margin). For our major customers, we typically provide
  services under contracts with duration of one or more years.

While we do not
  design or take the research and development risk borne by the manufacturers
  of the equipment we service, we continue to invest in the latest training and
  certification for the networks we support. Specifically for data, we support
  products designed by Cisco Systems, Inc., Avaya, Inc., Bay Networks (a division
  of NorTel Networks) and 3Com. For voice products, we support products designed
  by Avaya, Inc. and NorTel Networks Inc.

Recent Events

In 2002 and the
  first half of 2003, there was a downturn in the telecommunications market generally
  and reduced orders from our two key customers have affected the Companys
  operations resulting in lower sales levels and recurring losses.

The Company has
  incurred operating and net losses in 2003 and 2002, and has a capital deficiency at December 31, 2003. The
  Company has limited additional financing available under its current accounts
  receivable financing facility in order to fund any additional cash required
  for its operations or otherwise. These matters raise substantial doubt about
  the Companys ability to continue as a going concern. Management has during
  2002, 2003 and up to the date of this report taken steps to improve the situation,
  including the $500,000 (plus $30,500 in accrued interest) conversion of a shareholder
  note to equity, treated as a capital contribution, the replacement of the Comerica
  line of credit with a new financing arrangement with the Pacific Business Funding,
  a division of Greater Bay Bancorp, the moving of the Companys corporate
  offices from Martinez, California to a smaller facility in Concord, California
  in November 2002, the reduction of the Companys direct sales force, and
  further cuts in overhead costs, the closing of the Companys Birmingham
  facility, the downsizing of the Companys Houston and Phoenix operations,
  and changes in the Companys management. Management is currently discussing
  with Pacific Business Funding additional increase in the line of credit to a
  maximum commitment of $2,500,000. There are no assurances that the Company will
  be successful.

In the fourth
  quarter of 2003, certain Series A and B shareholders lent ICF, our operating
  subsidiary, $208,900 at 18% interest, convertible into common stock of the Company
  at $.08 per share, at the Noteholders option. Interest is payable on the
  due date of January 2, 2005 with interest also convertible into common stock
  on the same basis as the principal.  During the first quarter of 2004,
  certain Series A and B shareholders have continued to lend funds to ICF under
  those terms. As the fair value of our stock in November and December 2003 exceeded
  the conversion price, we recognized a deemed non cash charge of $193,800 resulting
  from the imputed beneficial conversion discount.

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The Company is
  beginning to make efforts to find an additional equity investor which, if found,
  will provide capital for growth. At the present time there are no serious talks
  taking place with any investors.

Any temporary
  lack of available financing could have a materially unfavorable effect on the
  Companys financial position.

Critical Accounting
  Policies:

The preparation
  of financial statements and related disclosures in conformity with accounting
  principles generally accepted in the United States requires management to make
  judgments, assumptions and estimates that effect the amounts reported in the
  Consolidated Financial Statements and accompanying Notes. The Summary of Significant
  Accounting Policies appears in Note 1 to the Consolidated Financial Statements
  and describes the significant accounting polices and methods used in the preparation
  of the Consolidated Financial Statements. Estimates are used for, but are not
  limited to, revenue recognition, the allowance for doubtful accounts, and deferred
  tax assets. Actual results could differ materially from these estimates. The
  following critical accounting policies are impacted significantly by judgments,
  assumptions and estimates used in the preparation of the Consolidated Financial
  Statements.

Revenue recognition.
  The Company derives a portion of its revenue from long-term contracts, which
  require the accurate estimation of the cost, scope and duration of each engagement.
  Revenue and the related costs for these projects are recognized on percentage
  of completion, using the cost incurred to the estimated cost at completion.
  If the Company does not accurately estimate the resources required or the scope
  of work to be performed, or does not manage its projects properly under the
  contracts, then future margins may be significantly and negatively affected
  or losses on existing contracts may need to be recognized. Any such resulting
  reductions in margins or contract losses could be material to the Companys
  results of operations.

Allowance for
  Doubtful Accounts. We perform ongoing credit evaluations of our customers and
  adjust credit limits based upon payment history and the customers current
  credit worthiness, as determined by our review of their current credit information.
  We continuously monitor collections and payments from our customers and maintain
  a provision for estimated credit losses based upon our historical experience
  and any specific customer collection issues that we have identified. While such
  credit losses have historically been within our expectations and the provisions
  established, we cannot guarantee that we will continue to experience the same
  credit loss rates that we have in the past.

Since our revenues
  and accounts receivable are concentrated in Bank of America and Wells Fargo,
  a significant change in the liquidity or financial position of either of these
  customers could have a material adverse impact on the collectability of our
  accounts receivables and our future operating results. A loss of either one
  could have a material effect on our business. From time to time we may experience
  delays in the collection of our accounts receivable from our major customers,
  which could result in a cash flow problem and effect the viability of the business.

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Deferred Tax Assets.
  We evaluate our deferred tax assets for potential recoverability. We have established
  a valuation allowance on our deferred tax asset to the extent that we determine
  that it is more likely than not that some portion or all of the deferred tax
  asset will not be realized. The ultimate realization of the deferred tax assets
  is dependent upon the generation of future taxable income.

Results of
  Operations:

|**Dollars
      in Thousands**
|------------------------------
|                              
|                              
|Net Revenues                  
|                              
|Data &
      Voice Services   
|Recruitment
      Services    
|                              
|Total
      Revenue           

For the twelve
  months ended December 31, 2003 and 2002, our revenues were $11,888,200 and $12,132,800,
  respectively, representing a 2.0% decrease. This decrease was due primarily
  to a 71.5% decrease in Recruitment Services revenue offset by a 1.0% increase
  in Data and Voice Services revenue for the year.

In 2003, revenue
  from our two largest customers accounted for approximately 54.5%, and 31.0%,
  respectively of total revenues. Accounts receivable balances at December 31,
  2003 from these two customers represented approximately 46.6%, and 43.6%, respectively,
  of net accounts receivable. No other customer in 2003 accounted for more than
  10% of total revenues. In 2002, revenues from our two largest customers accounted
  for approximately 44%, and 35%, respectively, of total revenues. Accounts receivable
  balances at December 31, 2002 from these customers represented approximately
  36% and 22%, respectively, of net accounts receivables. No other customer in
  2002 accounted for more than 10% of total revenue.

|**Dollars
      in Thousands** | **Years
      ended December 31:**
|------------------------------ | ----------------------------------
|                               |                                   
|                               |                                   
|                               |                                   
|Gross
      Profits            |                                   
|                               |                                   
|Data &
      Voice Service     |                                   
|Recruitment
      Services     |                                   
|                               |                                   
|Total Gross
      Profits      |                                   

For the twelve
  months ended December 31, 2003 and 2002, cost of revenues were $7,702,300 and
  $8,308,400, respectively, representing a decrease of 7.3%. Conversely, our gross
  profit for the comparable periods was $4,185,900 and $3,824,400, respectively,
  representing an increase of 9.5%. Gross profit for Data and Voice Services were
  $4,151,300 or 35.4% of revenue, for the twelve months ended December 31, 2003
  as compared with $3,723,200 and 32.0%, respectively, for the twelve months ended
  December 31, 2002. The increase in margin was due to a reduced utilization of
  subcontracted technical labor on large projects. Gross profit and margin for
  Recruitment Services were $34,600 and 24.0%, respectively for the twelve months
  ended December 31, 2003 as compared with $101,200 and 20.0%, respectively, for
  the twelve months ended December 31, 2002.

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|17
|  
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Selling, general
  and administrative (SG&A) expenses decreased 18.6% to $4,659,300
  for the twelve months ended December 31, 2003 from $5,721,200 for the twelve
  months ended December 31, 2003. We reduced our project management teams to reflect
  the reduced activities of our major customers. We, however, are in position
  to adequately respond to increased levels of activity that are expected in the
  first half of 2004.

Included in our
  annual SG&A expenses are our holding company expenses, which decreased by
  $281,600 to $335,900 for the twelve months ended December 31, 2003 from $617,500
  for the twelve months ended December 31, 2002. The decreased expense was due
  primarily to a decrease in legal and corporate overhead costs. SG&A expenses
  for ICFs operations decreased to $4,316,400 for the twelve months ended
  December 31, 2003 from $5,103,700 for the twelve months ended December 31, 2002.

Depreciation expenses
  were $256,600 and $319,800 for the twelve months ended December 31, 2003 and
  2002, respectively. This decrease was due to reduced purchases of additional
  field service and new office equipment. We expect that depreciation will continue
  to decrease slightly in dollar terms as a result of modest additional investments
  in capital equipment.

|**Dollars
      in Thousands** | **Twelve Months ended
      December 31**
|------------------------------ | -----------------------------------------
|                               |                                          
|                               |                                          
|                               |                                          
|Operating
      (Loss)         |                                          

For the year ended
  December 31, 2003, the Operating Loss decreased by $1,488,000 to $(730,000)
  from an Operating Loss of $(2,218,000) in the comparable fiscal year ended December
  31, 2002.

Aggregate Interest Expense
  increased for fiscal year ended December 31, 2003 to $795,800 from $230,600
  for the fiscal year ended December 31, 2002. Interest Expense for our bank borrowings
  and capital lease financing increased to $259,300 in the fiscal year ended December
  31, 2003 from $109,000 in the fiscal year ended December 31,2002 due to increased
  utilization on our line of credit borrowings plus higher interest rates. 
  Finance fees and charges of  $120,000 in fiscal year ended December
  31, 2003 represents a valuation charge at December 31, 2003 of the warrant to
  purchase 277,777 shares of our common stock, issued to Pacific Business Funding
  in October 2003 in connection with an increase in our financing facility. 
  This warrant has a ten-year term with a exercise price of $.09 per share of
  common stock and a $25,000 put provision. Finance fees and charges in fiscal
  year ended December 31, 2002 consisted mostly of bank fees and charges associated
  with our line of credit, offset by miscellaneous income for the period, which
  resulted in a net expense of $61,000.  Interest Expense - Related Party,
  which includes interest of $4,600 accrued on loans from substantial shareholders
  of the Company, decreased to $7,400 in fiscal year ended December 31, 2003 from
  $60,700 due to a reduction of the interest rate to 4% in 2003 from 8% in 2002
  and the conversion of a portion of the debt to equity in December 2002. Approximately
  $1,400 related to amortization of deferred finance charges in 2002, while $5,000
  was actual interest expense paid on the Related Party Loans. In 2003, we also
  recognized non cash charges of $193,800 resulting from the imputed beneficial
  conversion discount, relating to certain shareholder loans in November and December,
  and $215,600 of imputed non cash finance charges relating to the deemed fair
  value of shares issued in excess of reimbursable expenses.



|  
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|18
|  
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During the fiscal
  year ended December 31, 2003, we recognized a net tax benefit of $7,900, which
  consisted of an additional tax refund of $9,500 less state tax expense of $1,600.
  During the fiscal year ended December 31, 2002, a federal tax refund of $400,900
  was recorded on the Companys balance sheet. In the fiscal year ended December
  31, 2003, we received a federal income tax refund of $410,400 as a result of
  the carryback of the net operating loss in fiscal 2003 to prior tax years. We
  have provided a 100% valuation allowance in our deferred tax assets as we are
  unable to conclude that it is more likely than not that such deferred tax assets
  will be realized.

Net Loss attributable
  to Common Shareholders amounted to $1,540,500 for the fiscal year
  ended December 31, 2003 or $.06 per common share versus a Net Loss attributable
  to Common Shareholders of $2,044,200, or $.10 per common share for
  the fiscal year ended December 31, 2002.

As of December
  31, 2003, Series A and B Preferred Stock would be convertible into 12,052,163
  and 31,111,120 shares of common stock, respectively.  Conversion is subject
  to limitations to the extent shares are not available for conversion as set
  forth in the Preferred Stock Purchase Agreements before any issuance of
  common stock pursuant to any outstanding option or warrant exercise.

Liquidity and
  Capital Resources

The Company has incurred
  operating and net losses in 2003 and 2002, and has a capital deficiency at December 31, 2003. The Company
  has limited additional financing available under its current accounts receivable
  financing facility in order to fund any additional cash required for its operations
  or otherwise. These matters raise substantial doubt about the Companys
  ability to continue as a going concern. Management's plans in regards to the
  foregoing uncertainty are descibed below.

Management has during 2002,
  2003 and up to the date of this report taken steps to improve the situation,
  including the $500,000 (plus $30,500 in accrued interest) conversion of a shareholder
  note to equity, treated as a capital contribution, the replacement of the Comerica
  line of credit with a new financing arrangement with the Pacific Business Funding,
  a division of Greater Bay Bancorp, the moving of the Companys corporate
  offices from Martinez, California to a smaller facility in Concord, California
  in November 2002, the reduction of the Companys direct sales force, and
  further cuts in overhead costs, the closing of the Companys Birmingham
  facility, the downsizing of the Companys Houston and Phoenix operations,
  and changes in the Companys management.

At the Board of Directors
  Meeting on February 28, 2003, the Board authorized Management to raise up to
  $750,000 of equity from the sale of Series A Preferred Stock with a five-year
  term in COMC at a price of approximately $.03 per share. At that time, the Company
  had incurred additional net losses for the first nine months of 2002 of $1,552,500
  on an unaudited basis and expected to have a loss in the fourth quarter of 2002.
  Prior to the Board Meeting, our Common Stock had traded between $.06 and $.09
  per share in January and February 2003 and as low as $.04 per share in the fourth
  quarter of 2002. Managements negotiations with institutional investors
  yielded little response and private investors negotiated a price of $.286 per
  share of Series A Redeemable Preferred Stock with a five-year term. Each share
  of Series A Preferred Stock being convertible into ten shares of common stock.

In March 2003, the Company
  raised $312,500 through a private placement of 1,092,657.34 shares of Series
  A Convertible Redeemable Preferred Stock for $.286 per share with various accredited
  investors (the Investors). Each investor had the right to increase
  his purchase by 25% during a 90-day period from the purchase date. As of June
  30, 2003 this right expired with no new shares being issued. In March and June
  2003, an additional 55,944.06 and 56,614.93 shares of Series A Convertible Redeemable
  Preferred Stock were issued, valued at $16,000 and $16,200, respectively, for
  reimbursement of expenses in the first and second quarter of 2003. Each share
  of Series A Preferred Stock is convertible into ten shares of common stock.
  The Series A Redeemable Preferred Stock provides for payment-in-kind dividends
  at a rate of 5%.

|  
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|19
|  
|  



In June 2003, the Company
  raised $215,000 through a private placement of 1,075,000 shares of Series B
  Convertible Redeemable Preferred Stock for $.20 per share with various accredited
  investors. Each share of Series B Preferred Stock is convertible into twenty
  shares of common stock. In addition, 250,000 shares of convertible redeemable
  Series B preferred stock were issued in exchange for $62,500 of Related Party
  Note Payable. In addition, the CEO received 75,000 shares of convertible redeemable
  Series B preferred stock, valued at $15,000, as compensation for services rendered
  in connection with the restructuring. In September 2003, an additional 154,000
  shares of Series B Convertible Redeemable Preferred Stock were issued, valued
  at $246,400 for reimbursement of expenses in the third quarter of 2003, including
  an imputed $215,600 non cash charge relating to thee deemed fair value of shares
  issued in excess of reimbursable expenses. In December 2003, the CEO  was
  awarded 667 shares of convertible redeemable Series B preferred stock, valued
  at $6,000, the Executive Vice President was awarded 667 shares of convertible
  redeemable Series B preferred stock, valued at $6,000 as compensation, and the
  Controller and Principal Accounting Officer was awarded 222 shares of convertible
  redeemable Series B preferred stock, valued at $2,000 as compensation, for services
  rendered. The Series B Redeemable Preferred Stock provides for payment-in-kind
  dividends at a rate of 5%.

The Company plans
  to file for an increase in the number of authorized shares of common stock.
  As of December 31, 2003, Series A and B Preferred Stock would be convertible
  into 12,052,163 and 31,111,120, shares of common stock, respectively. Conversion
  is subject to limitations to the extent shares are not available for conversion
  as set forth in the Preferred Stock Purchase Agreements before any issuance
  of common stock pursuant to any outstanding option or warrant exercise.

In the fourth
  quarter of 2003, certain Series A and B shareholders lent ICF, our operating
  subsidiary, $208,900 at 18% interest, convertible into common stock of the Company
  at $.08 per share, at the Noteholders option. Interest is payable on the
  due date of January 2, 2005 with interest also convertible into common stock
  on the same basis as the principal.  During the first quarter of 2004,
  certain Series A and B shareholders have continued to lend funds to ICF under
  those terms. As the fair value of our stock in November and December 2003 exceeded
  the conversion price, we recognized a deemed non cash charge of 193,800 resulting
  from the imputed beneficial conversion discount.

In February 2003,
  we entered into a one-year accounts receivable financing facility with Pacific
  Business Funding, a division of Cupertino National Bank, which is part of Greater
  Bay Bancorp, to replace our facility with Comerica. The Agreement with Greater
  Bay Bancorp provides, among its terms, a $1,000,000 financing facility with
  a borrowing formula of 80% of eligible receivables, collateralized with a first
  lien on all assets. The finance fees on this Greater Bay Bancorp facility are
  1.5% per month (18% annual rate) on average daily cash balances with an additional
  administrative fee and an annual commitment fee. There are no financial covenants
  under this facility. On October 10, 2003, the maximum commitment under this
  financing facility was increased to $1,500,000. In connection with this increase,
  we executed a warrant agreement with Pacific Business Funding for 277,777 shares
  of our common stock at an exercise price of $0.09 per share and an expiration
  date of October 14, 2013. The warrant also provides Pacific Business Funding
  a $25,000 put in lieu of exercising the warrant. The warrant is marked-to-market
  on the financial statements, which resulted in us recording an expense of $120,000
  in fiscal year ended December 31, 2003.

In November 2003,
  the Company and Pacific Business Funding discussed an increase in the line of
  credit to a maximum commitment of $1,800,000. On November 20,2003, Pacific Business
  Funding had advanced funds in the aggregate amount of $1,767,600 under the existing
  facility and continued to provide advances in December 2003 in excess of the
  $1,500,000 line. A second amendment to the factoring agreement was executed
  on January 2, 2004 and provided, among other items, an increase to a maximum
  commitment of $1,800,000 and extension of the facility through January 3, 2005.

Management is currently discussing
  with Pacific Business Funding additional increase in the line of credit to a
  maximum commitment of $2,500,000. There are no assurances that the Company will
  be successful.

During the second
  quarter of 2003, we entered into an agreement with our largest vendor
  in connection with an increase in our line of credit for material
  purchases to provide this vendor a second lien on all of the our
  assets.

In December 2002,
  the terms of the remaining subordinated notes in the principal amount of $750,000
  were modified by which a) $500,000 of principal and $30,500 of accrued interest
  were converted to equity in exchange for 1,785,000 shares of the Companys
  common stock, b) the interest rate on the remaining $250,000 principal balance
  was reduced from 8% to 4% and c) the due date on the notes were changed so that
  $25,000 became due by March 31, 2003 and the balance of $225,000 became due
  on January 30, 2004 . In March 2003, the Company paid down $25,000 of the notes.
  In June 2003, 250,000 shares of convertible redeemable Series B preferred stock
  was issued in exchange for $62,500 of Related Party Note Payable. In December
  2003, the remianing $162,500 principal balance due under the Note was extended
  to January 2005 and the interest rate was raised to 6% per annum.

Any temporary
  lack of available financing could have a materially unfavorable effect on the
  Companys financial position. The Companys long-term prospects are
  dependent upon a return to profitability and/or the ability to raise additional
  capital as necessary to finance operations.The
  consolidated financial statements included in this annual report do not include
  any adjustments that might result from the outcome of this uncertainty.

Cash and cash
  equivalents increased to $384,300 at December 31, 2003 compared to $29,400 at
  December 31, 2002.

|  
|--
|20
|  
|  



Cash Flows From
  Operating Activities: For the twelve months ended December 31, 2003, cash used
  in operating activities was $1,997,200 which resulted primarily from our net
  loss for fiscal year 2003 of $1,517,900, reduced by non-cash charges of $936,100,
  increased by our growth in operating assets of $1,488,700 and offset by our
  growth in liabilities of $443,100, and increased by a reduction in customer
  deposits and payables of $369,800. Included in the non-cash charges is a valuation
  charge at December 31, 2003 of $120,000 based on the value of the warrant, issued
  to Pacific Business Funding in connection with an increase in our financing
  facility, and a deemed non cash charge of $193,800 resulting from the imputed
  benefical conversion discount on certain shareholder loans.

Accounts receivable
  from December 31, 2002 to December 31, 2003 increased by $1,932,800.
  Accounts payable from December 31, 2002 to December 31, 2003 also increased
  $139,700 due to increased use of trade credit, and there was a reduction in
  customer deposits at December 31, 2003 of $369,800 as compared with December
  31, 2002.

Cash Flows From
  Investing Activities: For the year ended December 31, 2003, net cash used for
  investing activities was $1,000, as a result of new equipment purchases of $24,100
  and a decrease in deposits of $23,100.

Cash Flows From
  Financing Activities: For the year ended December 31, 2003, net cash provided
  by our financing activities was $2,353,100, as a result of an increase in our
  line of credit of $1,680,600 and by $527,500 in net proceeds from sale of preferred
  stock and loans from Shareholders in the amount of $208, 900, off-set by repayment
  of related party notes payable of $25,000 and payments made on capital lease obligations
  of $38,900.

Our net working capital at
  December 31, 2003 was $486,300, representing an increase of $63,800 over December
  31, 2002.

Since our revenues
  and accounts receivable are concentrated in Bank of America and Wells Fargo,
  a significant change in the liquidity or financial position of any one of these
  customers could have a material adverse impact on the collectability of our
  accounts receivables and our future operating results. A loss of either one
  could have a material effect on our business. From time to time we may experience
  delays in the collection of our accounts receivable from our major customers,
  which could result in a cash flow problem and effect the viability of the business.

|  
|--
|21
|  
|  



The following
  table discloses our contractual commitments relating to lease obligations and
  long-term debt for future periods (See footnotes 4, 6, 7 and 10):

|     | Bank
      Borrowings |           |  |  |  |  |  | Operating
      
      Leases |   | Capital
      Leases |  | Related Party
      Notes Payable |        | Redeemable
      Preferred Stock |   | Year ending
      December 31, | 
|---- | --------------------- | --------- |  |  |  |  |  | ----------------------------- | - | -------------------- |  | --------------------------------- | ------ | -------------------------------- | - | ------------------------------ | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 
|2004 | $                     | 1,707,700 |  |  |  |  |  |                               | $ | 313,400              |  | $                                 | 29,000 |                                  | $ |                               | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 
|2005 |                       |          |  |  |  |  |  |                               |   | 189,600              |  |                                   | 31,700 |                                  |   | 565,200                        | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 
|2006 |                       |          |  |  |  |  |  |                               |   | 83,400               |  |                                   | 18,900 |                                  |   |                               | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 
|2007 |                       |          |  |  |  |  |  |                               |   | 78,500               |  |                                   | 4,900  |                                  |   |                               | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 
|2008 |                       |          |  |  |  |  |  |                               |   |                     |  |                                   |       |                                  |   |                               | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 
|     | $                     | 1,707,700 |  |  |  |  |  |                               | $ | 664,900              |  | $                                 | 84,500 |                                  | $ | 565,200                        | 
|     |                       |           |  |  |  |  |  |                               |   |                      |  |                                   |        |                                  |   |                                | 

Seasonality and
  Inflation

Our business is
  generally not impacted by seasonality, however, the first quarter of the calendar
  and our fiscal year is generally our slowest period. Our management does not
  believe that the effects of inflation will have a material impact on us, nor
  is our management aware of changes in prices of materials or other operating
  costs or in the selling price of our services and products that will materially
  effect us.

ITEM
  7. FINANCIAL STATEMENTS

The financial
  statements are included herein commencing in Part IV of this report.

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

None.

ITEM
  8A.  CONTROLS AND PROCEDURES

| | (a)       Under
      the supervision and with the participation of our management, including
      our principal executive officer, to the best of her knowledge, and principal
      financial officer, we have evaluated the effectiveness of the design and
      operation of our disclosure controls and procedures pursuant to Exchange
      Act Rule 13a-14(c) promulgated under the Securities Exchange Act of 1934,
      as amended, within 90 days of the filing of this report. Based upon that
      evaluation, the principal executive officer, to the best of her knowledge,
      and principal financial officer have concluded that our disclosure controls
      and procedures are effective.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | (b)       There
      have been no significant changes (including corrective actions with regard
      to significant deficiencies or material weaknesses) in our internal controls
      or in other factors that could significantly affect these controls subsequent
      to the date of their evaluation.                                                                                                                                                                                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     



|  
|--
|22
|  
|  

PART III

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

Officers and Directors

Set forth below
  is information concerning each of our Directors and officers as of March 17,
  2004:

|Name               | Age | Position                                      
|------------------ | --- | ----------------------------------------------
|                   |     |                                               
|Janice B.Fuellhart | 56  | Chairman of the Board,
      Chief Executive  
|                   |     | Officer,
      President                      
|Steven Richman     | 61  | Director                                      
|William M. Burns   | 45  | Director                                      
|Paul E. Graf       | 36  | Director                                      
|Marc DellImmagine | 47  | Controller, Principal
      Accounting Officer
|                   |     |                                               



Janice B. Fuellhart,
  age 56, has been our Chairman and a member of the Board of COMC since February
  28, 2003. Ms. Fuellhart was also appointed Chairman, CEO and President of ICF
  Communication Solutions, Inc., our wholly owned operating subsidiary on February
  28, 2003. Upon the acceptance of Mr. Smiths resignation, Ms. Fuellhart
  was appointed CEO and President of COMC. Previously, Ms. Fuellhart served as
  Executive Chairman of PageOne Communications in London, England and CEO of USA
  Mobile Communications headquartered in Ohio, and President and Chief Operating
  Officer of Cable Systems USA based in Pennsylvania. Ms. Fuellhart is a private
  investor primarily in the telecommunications industry. Ms. Fuellhart received
  a BA degree from Clarion University of Pennsylvania and as well being a recipient
  of an Honorary Doctor of Letters from Clarion University.

Steven Richman,
  age 61, is the principal owner and has served as the Chief Executive Officer
  of Fabric Resources International for more than the past five years. Mr. Richman
  is an active investor in the telecom industry. Mr. Richman was the co-founder
  and an officer of Cable Systems USA, an officer of Cellular Systems USA, and
  a Director of USA Mobile Communications Holdings, Inc., Phonetel, Inc., and
  Cable Systems USA II. Mr. Richman received his BS degree from Cornell University.

William M. Burns, age 45,
  was the Chairman of the Board of COMC until he stepped down from that position
  on February 28, 2003. Mr. Burns became one of our Directors in 1997. Mr. Burns
  was also a co-founder in 1989 of and is now the Executive Vice-President and
  Chief Operating Officer of our wholly owned subsidiary ICF. Mr. Burns has over
  eighteen years of experience in the communications industry, starting ICFs
  predecessor in 1988. Prior to that, Mr. Burns held technical and management
  positions at the PacTel-PacBell Company. Prior to that he was employed at John
  Jackson Enterprises in Sacramento from 1978 through 1986. Mr. Burns attended
  four years of college at Rockland, California.

Paul E. Graf,
  age 36, is a private investor and has served on the Board of Directors of Choice
  Media and various other private enterprises. Mr. Graf was founder, Chairman
  and CEO of Portalvision, Inc.,an internet community software development company
  from August, 1999 until May 2002. Prior to Portalvision, Mr. Graf was a Public
  Equity Portfolio Manager and Venture Capital investor in New York, NY from 1997
  to 1999. Mr. Graf received his BS in Business from Lehigh University in 1989.

Marc DellImmagine,
  age 47, is our Controller and Principal Accounting Officer. Mr. DellImmagine
  is responsible for the financial management, contract management, treasury and
  financial reporting. Prior to joining us in November 2001, Mr. DellImmagine
  spent sixteen years in public accounting with a local CPA firm. Mr. DellImmagine
  has had experience in dealing with a wide array of businesses in various industries.
  Mr. DellImmagine has a BS degree in accounting from Hayward State University.



|  
|--
|23
|  
|  



Board of Directors

Our By-laws provide
  that our Board of Directors shall be composed of five to seven members. George
  Malin resigned from the Board effective November 23, 2003. The Company is in
  the process of filing the vacancy on the Board to comply with its By-Laws. Each
  director has been appointed by the other existing directors as our By-laws allow
  the Board to fill vacancies until the next meeting of stockholders. Our By-laws
  permit the Board of Directors to fill any vacancy and the new director may serve
  until the next meeting of stockholders or until his successor is elected and
  qualified. Since the last filing of our annual report on Form 10K, Christopher
  R. Smith and George Malin have resigned from the Board of the Company.

Committees of
  the Board

Our Executive
  Committee is made up of our entire Board of Directors, while our Audit Committee
  is made up of Paul E. Graf and Steven Richman. The Compensation and Option Committee
  consists of Paul E. Graf and William M. Burns. The Nominating Committee consists
  of Janice B. Fuellhart. These committees meet at least quarterly, just prior
  to our regularly scheduled quarterly Board meetings.

Officers

Officers are elected
  by our Board of Directors and their terms of office are, except to the extent
  governed by employment contracts, at the discretion of the Board. The Chairman
  of the Company is elected by the Board of Directors and all other officers are
  appointed by the CEO. Presently, Janice B. Fuellhart is our Chairman and Chief
  Executive Officer and President of COMC and Chairman, CEO and President of ICF
  Communication Solutions, Inc., our wholly owned operating subsidiary. William
  M. Burns is Executive Vice-President and Chief Operating Officer of ICF Communication
  Solutions, Inc. Marc DellImmagine is our Controller and Principal Accounting
  Officer.

Compliance with
  Section 16(a) of the Securities Exchange Act of 1934

Section 16(a)
  of the Securities Exchange Act of 1934 requires our officers and directors,
  and persons who own more than ten percent of a registered class of our equity
  securities to file reports of ownership and changes in ownership with the Securities
  and Exchange Commission. Officers, directors and greater than ten-percent shareholders
  are required by SEC regulation to furnish us with copies of all Section 16(a)
  forms they file. The Company believes that the individuals are in the process
  of filing all of the appropriate reports with the SEC.

ITEM
  10. EXECUTIVE COMPENSATION

Summary Compensation

The following
  table sets forth the compensation we and/or ICF have paid or accrued to all
  executive officers during the fiscal years ended December 31, 2003, 2002 and
  2001:

|  
|--
|24
|  
|  



|SUMMARY
      COMPENSATION TABLE(1)(2)                 
|-------------------------------------------------------
|                                                       
|**Annual Compensation**                                
|
|
|
|
|Janice
      B. Fuellhart (3)                          
|Chairman,
      Chief Executive Officer,               
|President                                              
|                                                       
|William
      M Burns (4)                              
|Executive
      Vice President, and Board Member       
|                                                       
|                                                       
|Marc
      DellImmagine(5)                            
|Controller
      and PrincipalAccounting 
      Officer
|                                                       
|                                                       
|                                                       
|Christopher
      R. Smith(6)                          
|                                                       
|                                                       
|                                                       
|                                                       

_____________

| | (1)  As
      to any named officer or director or group of executive officers, the above
      compensation does not include the use of an automobile and other personal
      benefits; the total value of which does not exceed the lesser of $50,000
      or 10% of such persons or persons cash compensation.
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                     
| | (2)  Pursuant
      to the regulations promulgated by the Securities and Exchange Commission,
      the table omits columns reserved for types of compensation not applicable
      to us.                                                                                                                          
| |                                                                                                                                                                                                                                                                                                                     

| | (3) | Ms. Janice
      Fuellhart was appointed to the Board of Directors of COMC and ICF on February
      28, 2003 and also appointed Chairman of COMC. Ms. Fuellhart was also appointed
      Chairman, CEO and President of ICF on February 28, 2003. Upon the acceptance
      of Mr. Smiths resignation from COMC, Ms. Fuellhart became President
      and CEO of COMC. Included in the salary amount of $113,600 is $31,800 of
      salary paid in 2003, $56,300 of compensation that has been accrued but not
      paid as of December 31, 2003 and $25,500, which represents the value of
      the 2,100,000 shares of common stock earned by Ms. Fuellhart in 2003. In
      March 2003, the Company issued 2,100,000 shares of common stock, valued
      at $42,000, for services Ms. Fuellhart rendered in connection with assistance
      in financial restructuring provided in the quarter ended March 31, 2003
      and additional services to be provided over the next year. During the quarter
      ended June 30, 2003, Ms. Fuellhart received 75,000 shares of convertible
      redeemable Series B preferred stock, valued at $15,000, as compensation
      for services rendered in connection with the restructuring. In December
      2003, Ms. Fuellhart was awarded 667 shares of convertible redeemable Series
      B Preferred Stock, valued at $6,000, as compensation.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

|  
|--
|25
|  
|  



| | (4)  Mr.
      Burns stepped down as Chairman of the Board on February 28, 2003. Mr. Burns
      was appointed Executive Vice-President and Chief Operating Officer of ICF
      on February 28, 2003. Included in the salary amount of $152,500 is $148,200
      of salary paid in 2003, and $4,300 of compensation which represents the
      value of common stock received by Mr. Burns in 2003. In the first quarter
      of 2003, Mr. Burns relinquished 376,623 out-of-the money options in exchange
      for 216,370 shares of common stock. This exchange was valued at $4,300,
      or $.02 per share for each share of common stock. In December 2003, Mr.
      Burns was awarded 667 shares of convertible redeemable Series B stock, valued
      at $6,000, as compensation.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (5)  Mr.
      DellImmagine has been our Controller and Principal Accounting Officer
      since April 2003 and has been with the Company since November 2001. In December
      2003, Mr. DellImmagine was awarded 222 shares of convertible redeemable
      Series B stock, valued at $2,000, as compensation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (6)  Mr.
      Smith resigned as President and CFO of ICF on February 28, 2003 and on April
      3, 2003, the current Chairman, on behalf of the Board, accepted Mr. Smiths
      offer to the Board to resign as CEO, President and acting CFO of COMC at
      the request of the Chairman, which was accepted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

For discussion
  on options held and employment contracts for executive officers, see Item 11
  below.

Aggregate Option
  Exercises in 2003 and Fiscal Year-End Option Values

No options granted
  to employees, officers and directors were exercised during the year ended December
  31, 2003. In March 2003, William Burns relinquished 376,623 out-of-the money
  options in exchange for 216,370 shares of common stock of COMC.

In December 2003,
  50,000 shares of common stock were awarded to four non-officer employees, 50%
  vested in December 2003 and the remaining 50% vest in December 2004. In addition,
  10,000 shares of common stock were awarded to an employee in January 2005, for
  bonus owed the employee for previous years services.

Fiscal Year-End
  Option Values

Christopher R.
  Smith had options on 2,463,896 shares of common stock and due to past actions,
  the Company feels, based on preliminary legal opinions, that it might have grounds
  for voiding these options.

ITEM
  11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The table below
  sets forth, as of December 31, 2003, information regarding the beneficial ownership
  of our Common Stock based upon the most recent information available to us for:
  (i) each person known by us to own beneficially more than five (5%) percent
  of our outstanding Common Stock after giving effect to all exercisable stock
  options and warrants, (ii) each of our officers and directors and (iii) all
  of our officers, directors and 5% shareholders as a group. Unless otherwise
  indicated in the footnotes, the address for all parties is c/o COMC, Inc., 4030
  Pike Lane, Suite C, Concord, CA 94520.

|  
|--
|26
|  
|  



|Shares
      Owned Beneficially
      and of Record
|---------------------------------------------------
|
|Name                                               
|                                                   
|Janice B.
      Fuellhart(1)                       
|John J. Ackerman                                   
|Steven Richman(2)                                  
|William M.
      Burns (3)                         
|Charles E.
      Lincoln (4)                       
|                                                   
|Marvin P.
      Loeb (5)                           
|Paul E. Graf(6)                                    
|                                                   
|All Five
      Percent Holders,                    
|Officers
      and Directors as a                  
|Group (7
      persons)(7)                         

(1) Includes 2,100,000
  shares of Common Stock the Company issued to Ms. Fuellhart, the Chairman, President
  and CEO of the Company, for services rendered in connection with assistance
  in financial restructuring provided in the quarter ended March 31, 2003 and
  additional services to be provided over the next year. These shares have certain
  service milestones that provide for a clawback of shares if services are terminated.
  Of these shares, 525,000 vested immediately with the remaining balance of 1,575,000
  shares vesting 50% on October 1, 2003 and 50% on March 31, 2004, respectively.

(2) Does not include
  106,250 shares of Common Stock held by Ms. Sandra Richman, Mr. Richmans
  spouse, of which he disclaims beneficial ownership.

(3) Includes 3,246,753
  shares of Common Stock held by a trust of which Mr. Burns is a trustee and beneficiary,
  1,785,000 shares of common stock received, in December 2002, upon conversion
  of $500,000 principal and $30,500 of accrued interest on Subordinated Notes
  held by Burns, and 216,370 of which Mr. Burns received in the first quarter
  of 2003 upon relinquishing 376,623 of out-of-the-money options.

(4) Includes 3,246,753
  shares of Common Stock held by a trust of which Mr. Lincoln is a trustee and
  beneficiary, and 376,623 shares of which Mr. Lincoln has the right personally
  to purchase upon exercise of options that are currently exercisable

(5) Includes 56,127
  shares of Common Stock held by the Marvin P. Loeb Irrevocable Living Trust,
  of which Mr. Loeb is the sole trustee, and by Mr. Loeb as nominee for his children.
  Mr. Loeb disclaims beneficial ownership in such shares.

(6) Includes 150,000
  shares of Common Stock that Mr. Paul Graf has a right to purchase upon exercise
  of options that are currently exercisable.

(7) The Company
  is currently reviewing all of its option agreements.

As of December
  31, 2003, Series A and B Convertible Redeemable Preferred Stock would be convertible
  into 12,052,163 and 31,111,120, respectively, shares of common stock, subject
  to limitations on conversion to the extent shares are not available on conversion
  as set forth in the Preferred Stock Purchase Agreements before any issuance
  of common stock pursuant to any outstanding option or warrant exercise.

|  
|--
|27
|  
|  



After giving effect
  to the conversion of Series A and B Convertible Redeemable Preferred Stock (Preferred)
  into an additional 12,052,163 and 31,111,120 shares of common stock, respectively,
  for a total of 69,872,374 common shares, the table below sets forth, as of December
  31, 2003, information regarding the beneficial ownership of our Common Stock
  based upon the most recent information available to us for: (i) each person
  known by us to own beneficially more than five (5%) percent of our outstanding
  Common Stock after giving effect to all exercisable stock options and warrants,
  (ii) each of our officers and directors and (iii) all of our officers, directors
  and 5% shareholders as a group. Unless otherwise indicated in the footnotes,
  the address for all parties is c/o COMC, Inc., 4030 Pike Lane, Suite C, Concord,
  CA 94520.

Convertible
  Redeemable Series A &B Preferred Shares(Preferred) if and when
  converted and Common Stock (Common) would result into the following
  ownership

|Name****                                |  |  | Converted
      Preferred & 
      Common Shares Owned |  |  | % of Total |  
|--------------------------------------- |  |  | ------------------------------------------------------ |  |  | ---------- | -
|                                        |  |  |                                                        |  |  |            |  
|Janice B.
      Fuellhart(1)            |  |  | 3,613,340                                              |  |  | 5.17       | %
|Peter Graf
      (2)                    |  |  | 12,677,967                                             |  |  | 18.14      | %
|Steven Richman(3)                       |  |  | 7,910,489                                              |  |  | 11.32      | %
|William M.
      Burns (4)              |  |  | 10,261,463                                             |  |  | 14.69      | %
|Charles E.
      Lincoln (5)            |  |  | 3,623,376                                              |  |  | 5.18       | %
|                                        |  |  |                                                        |  |  |            |  
|George Malin                            |  |  | 6,998,251                                              |  |  | 10.02      | %
|Paul E. Graf(6)                         |  |  | 8,142,377                                              |  |  | 11.65      | %
|                                        | 
|All Five
      Percent Holders,         | 
|Officers
      and Directors as a Group | 
|(7 persons)                             |  |  | 53,227,263                                             |  |  | 76.18      | %

(1) Includes 2,100,000
  shares of Common Stock, valued at $42,000, the Company issued in March 2003
  to Ms. Fuellhart, the Chairman, President and CEO of the Company, for services
  rendered in connection with assistance in financial restructuring provided in
  the quarter ended March 31, 2003 and additional services to be provided over
  the next year. These shares have certain service milestones that provide for
  a clawback of shares if services are terminated. Of these shares, 525,000 vested
  immediately with the remaining balance of 1,575,000 shares vesting 50% on October
  1, 2003 and 50% on March 31, 2004, respectively. During the quarter ended June
  30, 2003, Ms. Fuellhart was awarded 75,000 shares of convertible redeemable Series
  B preferred stock, convertible into 1,500,000 shares of common stock, valued
  at $15,000, as compensation for services rendered in connection with the restructuring.
  In December 2003, Ms. Fuellhart was awarded 667 shares of convertible redeemable
  Series B Preferred Stock, valued at $6,000, as compensation.

(2) Peter Graf
  and Paul Graf each disclaim any beneficial ownership or control of the others
  shares.

(3) Does not include
  106,250 shares of Common Stock and 174,825 shares of common stock issuable upon
  conversion of Convertible Redeemable Preferred Stock held by Ms. Sandra Richman,
  Mr. Richmans spouse, of which he disclaims any beneficial ownership.

|  
|--
|28
|  
|  



(4) Includes 3,246,753
  shares of Common Stock held by a trust of which Mr. Burns is a trustee and beneficiary,
  1,785,000 shares of common stock was awarded, in December 2002, upon conversion
  of $500,000 principal and $30,500 of accrued interest on Subordinated Notes
  held by Burns, and 216,370 of which Mr. Burns was awarded in the first quarter
  of 2003 upon relinquishing 376,623 of out-of-the money options.. In December
  2003, Mr. Burns was awarded 667 shares of convertible redeemable series B preferred
  stock, valued at $6,000 as compensation.

(5) Includes 3,246,753
  shares of Common Stock held by a trust of which Mr. Lincoln is a trustee and
  beneficiary, and 376,623 shares of which Mr. Lincoln has the right personally
  to purchase upon exercise of options that are currently exercisable.

(6) Includes 150,000
  shares of Common Stock that Mr. Paul Graf has a right to purchase upon exercise
  of options that are currently exercisable. Peter Graf and Paul Graf each disclaim
  any beneficial ownership or control of the others shares.

Shares Available
  for Future Sale

In general, under
  Rule 144 as currently in effect, subject to the satisfaction of certain other
  conditions, a person, including one of our affiliates (or persons whose shares
  are aggregated with an affiliate of ours), who has owned restricted shares of
  Common Stock beneficially for at least one year is entitled to sell, within
  any three-month period, a number of shares that does not exceed the greater
  of 1% of the total number of outstanding shares of the same class or the average
  weekly trading volume of our Common Stock on all exchanges and/or reported through
  the automated quotation system of a registered securities association during
  the four calendar weeks preceding the date on which notice of the sale is filed
  with the Commission. Sales under Rule 144 are also subject to certain manner
  of sale provisions, notice requirements and the availability of current public
  information about us. A person who has not been one of our affiliates for at
  least the three months immediately preceding the sale and who has beneficially
  owned shares of Common Stock for at least two years is entitled to sell such
  shares under Rule 144 without regard to any of the limitations described above.

Transfer Agent

American Stock
  Transfer & Trust Company, 40 Wall Street, New York, New York 10005, acts
  as Transfer Agent for our Common Stock.

Market for Our
  Securities

The Common Stock
  is currently included for quotation on the OTC Bulletin Board under the symbol
  CINJ or CINJ.OB.

ITEM
  12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Certain Relationships
  and Related Transactions

In December 2002,
  the terms of the remaining subordinated related party notes in the principal
  amount of $750,000 were modified by which a) $500,000 of principal and $30,500
  of accrued interest were converted to equity in exchange for 1,785,000 shares
  of the our common stock, b) the interest rate on the remaining $250,000 principal
  balance was reduced from 8% to 4% and c) the due date on the notes were changed
  so that $25,000 became due by March 31, 2003 and the balance of $225,000 became
  due on January 30, 2004 . In March 2003, we paid down $25,000 of the notes.
  In June 2003, 250,000 shares of convertible redeemable Series B preferred stock
  was issued in exchange for $62,500 of Related Party Note Payable. In December
  2003, the remaining $162,500 principal balance due under the Note was extended
  to January 2005, and the interest rate was raised to 6% per annum.

In the fourth quarter of
  2003, certain Series A and B Preferred Stock shareholders lent ICF, our operating
  subsidiary, $208,900 at 18% interest, convertible into common stock of the Company
  at $.08 per share, at the Noteholders option. Interest is payable on the
  due date of January 2, 2005 with interest also convertible into common stock
  on the same basis as the principal.  During the first quarter of 2004,
  certain Series A and B shareholders have continued to lend funds to ICF under
  those terms. As the fair value of our stock in November and December 2003 exceeded
  the conversion price, we recognized deemed non cash charge of $193,800 resulting
  from the imputed beneficial conversion discount.

As of December
  31, 2003 and as of the date of this filing, to the best of managements
  knowledge there are no voting agreements in effect and all previous ones have
  expired or been cancelled.

|  
|--
|29
|  
|  



PART IV

ITEM
  13. EXHIBITS, LIST AND REPORTS ON FORM 8-K

| | (a) Documents
      filed as part of this report
| | ------------------------------------------------
| |                                                 

| | (1)   Financial
      Statements- the financial statements are listed in the Index to Financial
      Statements on page F-1 and are filed as part of this annual report.                                            
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                                                                      
| | (2)   Exhibits-
      the Index to Exhibits following the Signature Page indicates the exhibits
      which are being filed as part of this report and the exhibits which are
      incorporated herein by reference.
| |                                                                                                                                                                                                                      

| | (b) Reports
      on Form 8-K. None.
| | ------------------------------------

ITEM
  14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table sets forth the aggregate fees
  billed to us for fiscal years ended December 31, 2003 and 2002 by BDO Seidman,
  LLP:

|                             |   | 2003    |  | 2002 |       
|---------------------------- | - | ------- |  | ---- | ------
|                             |   |         |  |      |       
|Audit Fees (1)               | $ | 84,800  |  | $    | 77,700
|                             |   |         |  |      |       
|Non-Audit Fees:              |   |         |  |      |       
|Audit
      Related Fees (2) | $ | 9,100   |  | $    | 8,500 
|Tax
      Fees (3)           | $ | 17,000  |  | $    | 10,000
|All
      Other Fees (4)     | $ |        |  | $    |      
|TOTAL FEES PAID TO AUDITOR   | $ | 110,900 |  | $    | 96,200



|(1) | Audit Fees consist of fees billed
      for professional services rendered for the audit of the Companys consolidated
      annual financial statements and review of the interim consolidated financial
      statements included in quarterly reports and services that are normally
      provided by BDO Seidman, LLP in connection with statutory and regulatory
      filings or engagements.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Audit-Related Fees consist of
      fees billed for assurance and related services that are reasonably related
      to the performance of the audit or review of the Companys consolidated
      financial statements and are not reported under Audit Fees.                                                                                                                                    
|(3) | Tax Fees consist of fees billed
      for professional services rendered for tax compliance, tax advice and tax
      planning.                                                                                                                                                                                                                                                                     
|(4) | All Other Fees consist of fees
      for products and services other than the services reported above.                                                                                                                                                                                                                                                                                              

The audit committee has considered the role of
  BDO Seidman, LLP in providing certain tax services and other non-audit services
  to COMC, Inc. and has concluded that such services are compatible with BDO Seidman,
  LLPs independence as our auditors. In addition, since the effective date
  of the SEC rules stating that an auditor is not independent of an audit client
  if the services it provides to the client are not appropriately approved, the
  Audit Committee has and will continue to pre-approve all audit and permissible
  non-audit services provided by the independent auditors.

The Audit Committee has adopted a policy for the
  pre-approval of services provided by the independent auditors, pursuant to which
  it may pre-approve any service consistent with applicable law, rules and regulations.
  Under the policy, the Audit Committee may also delegate authority to pre-approve
  certain specified audit or permissible non-audit services to one or more
  of its members, including the chairman. A member
  to whom pre-approval authority has been delegated must report its pre-approval
  decisions, if any, to the Audit Committee at its next meeting, and any such
  pre-approvals must specify clearly in writing the services and fees approved.
  Unless the Audit Committee determines otherwise, the term for any service pre-approved
  by a member to whom pre-approval authority has been delegated is twelve months.

|  
|--
|30
|  
|  



COMC, Inc.
  and Subsidiary

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS

|Report
      of Independent Certified Public Accountants | F-2              | 
|-------------------------------------------------------- | ---------------- | 
|                                                         |                  | 
|Financial
      Statements                               |                  | 
|                                                         |                  | 
|Consolidated
      Balance Sheets                        | F-3
      - F-4  | 
|Consolidated
      Statements of Operations              | F-5              | 
|Consolidated
      Statements of Shareholders Equity    | F-6              | 
|Consolidated
      Statements of Cash Flows              | F-7              | 
|Notes
      to Consolidated Financial Statements         | F-8
      - F-27 | 

|   
|---
|F-1
|   
|   



Report of Independent Certified Public Accountants

The Board of Directors and Shareholders of COMC, Inc. and Subsidiary

We have audited
  the accompanying consolidated balance sheets of COMC, Inc. and its wholly owned
  subsidiary, ICF Communication Solutions, Inc. (Subsidiary) as of December 31,
  2003 and 2002, and the related consolidated statements of operations, shareholders
  (deficiency) equity, and cash flows for each of the years then ended. These
  financial statements are the responsibility of the Companys management.
  Our responsibility is to express an opinion on these financial statements based
  on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States
of America. Those standards require that we plan and perform the audit 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 consolidated financial statements referred to above present fairly, in all material
respects, the financial position of COMC, Inc. and Subsidiary as of December 31, 2003  and 2002, and the results of their operations and cash flows for each of the years then ended, in conformity
with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared on a going concern basis, which contemplates
the realization of assets and the settlement of liabilities in the normal course of business. As
discussed in Note 2 to the financial statements, the Company has incurred operating and net losses
in 2003 and 2002, and has a capital deficiency at December 31, 2003. Further, the Company has limited additional financing available under its current accounts receivable
financing facility in order to fund any additional cash required for its operations or otherwise.
These matters raise substantial doubt about the ability of the Company to continue as a going concern.
Managements plan in regard to these matters is also described in Note 2. The accompanying financial
statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ BDO Seidman,
  LLP
  San Jose, California
  March 19, 2004

|F-2
|---
|   
|   



COMC, Inc. and
  Subsidiary

****Consolidated
  Balance Sheets

|**December
      31,**                          | **2003** | ****      | ******2002** |  
|----------------------------------------------- | -------- | --------- | ------------ | -
|                                                |          |           |              |  
|Assets                                         
|                                               
|Current:                                       
|Cash and
      cash equivalents                 | $        | 384,300   |              | $
|Accounts
      receivable, less allowance for  
|doubtful
      accounts of $58,300 and $58,300  |          | 3,143,200 |              |  
|Unbilled
      receivables, net                 |          | 787,100   |              |  
|Inventories                                     |          | 117,600   |              |  
|Prepaid expenses
      and other current assets |          | 104,500   |              |  
|Refundable
      income taxes                   |          |          |              |  
|Deferred
      income taxes                     |          |          |              |  
|                                                |          |           |              |  
|Total Current
      Assets                      |          | 4,536,700 |              |  
|                                                |          |           |              |  
|Property
      and Equipment, net               |          | 491,500   |              |  
|                                                |          |           |              |  
|Other Assets                                    |          | 48,500    |              |  
|                                                |          |           |              |  
|                                                | $        | 5,076,700 |              | $
|                                                |          |           |              |  

See accompanying notes to consolidated financial statements.

|F-3
|---
|   
|   
|   



COMC, Inc. and Subsidiary

Consolidated
  Balance Sheets

|2003                                                                                 |   | 2002        |  
|------------------------------------------------------------------------------------ | - | ----------- | -
|                                                                                     |   |             |  
|Liabilities
      and Shareholders (Deficiency) Equity                              |   |             |  
|                                                                                     |   |             |  
|Current
      Liabilities:                                                           |   |             |  
|Bank borrowings                                                                      | $ | 1,707,700   |  
|Accounts
      payable                                                               |   | 1,336,100   |  
|Accrued expenses                                                                     |   | 753,600     |  
|Current portion
      of capital lease obligations                                   |   | 29,000      |  
|Customer
      deposits                                                              |   | 218,800     |  
|Accrued interest
      due related party                                             |   | 5,200       |  
|                                                                                     |   |             |  
|                                                                                     |   |             |  
|Total Current
      Liabilities                                                      |   | 4,050,400   |  
|                                                                                     |   |             |  
|Capital Lease
      Obligations, net of current portion                              |   | 55,500      |  
|Fair Value of Put Warrant                                                            |   | 120,000     |  
|Related Party
      Notes Payable                                                    |   | 565,200     |  
|Deferred
      Income Taxes                                                          |   |            |  
|Convertible
      Redeemable Preferred Stock, Series A, $.01 par value; 2,000,000   
|shares authorized;
      1,205,216.33 and 0 shares issued and outstanding,          
|respectively                                                                         |   | 358,100     |  
|Convertible
      Redeemable Preferred Stock, Series B, $.01 par value; 4,000,000   
|shares authorized;
      1,555,556 and 0 shares issued and outstanding, respectively |   | 562,100     |  
|                                                                                     |   |             |  
|Total Liabilities                                                                    |   | 5,711,300   |  
|                                                                                     |   |             |  
|                                                                                    
|Commitments
      and Contingencies (Notes 4,  6, 8, and 10)                        
|                                                                                    
|Shareholders
      (Deficiency) Equity :                                           
|Common stock,
      $.01 par value; 40,000,000 shares                               
|authorized;
      30,510,328 and 27,433,958 shares issued;                          
|26,709,091
      and 23,632,721 shares outstanding                                   |   | 305,100     |  
|Additional
      paid-in capital                                                     |   | 16,874,100  |  
|Accumulated
      deficit                                                            |   | (15,561,500 | )
|Treasury
      stock at cost; 3,801,237 and 3,801,237 shares, respectively           |   | (2,252,300  | )
|                                                                                     |   |             |  
|Total Shareholders
      (Deficiency) Equity                                       
|                                                                                     |   | (634,600    | )
|                                                                                     |   |             |  
|                                                                                     | $ | 5,076,700   |  
|                                                                                     |   |             |  
|                                                                                     |   |            

See accompanying notes to consolidated financial statements.

|F-4
|---
|   
|   



**COMC,
  Inc. and Subsidiary**

**Consolidated
  Statements of Operations**

|2003                                                               |   | 2002       |  
|------------------------------------------------------------------ | - | ---------- | -
|                                                                   |   |            |  
|Revenues:                                                          |   |            |  
|Data and
      voice services                                      | $ | 11,744,100 |  
|Recruitment
      services                                         |   | 144,100    |  
|                                                                   |   |            |  
|                                                                   |   | 11,888,200 |  
|                                                                   |   |            |  
|Cost of Revenues:                                                  |   |            |  
|Data and
      voice services                                      |   | 7,592,800  |  
|Recruitment
      services                                         |   | 109,500    |  
|                                                                   |   |            |  
|                                                                   |   | 7,702,300  |  
|                                                                   |   |            |  
|Gross Profit                                                       |   | 4,185,900  |  
|                                                                   |   |            |  
|Operating Expenses:                                                |   |            |  
|Selling General and Administrative                                 |   | 4,659,300  |  
|Depreciation and Amortization                                      |   | 256,600    |  
|                                                                   |   |            |  
|                                                                   |   | 4,915,900  |  
|                                                                   |   |           
|                                                                   |   |            |  
|Loss from Operations                                               |   | (730,000   | )
|                                                                   |   |            |  
|Other Income (Expense):                                            |   |            |  
|Third party:                                                      
|Interest
      expense                                             |   | (259,300   | )
|Financing
      fees and charges                                   |   | (120,000   | )
|Interest
      income                                              |   | 300        |  
|                                                                   |   |            |  
|                                                                   |   | (379,000   | )
|                                                                   |   |            |  
|Related
      party:                                               |   |            |  
|Interest
      expense                                             |   | (7,400     | )
|Imputed
      beneficial conversion discount                       |   |           
|upon issuance of convertible debt                                  |   | (193,800   | )
|Imputed
      finance charge relating
      to                     |   |            |  
|the issuance of series B preferred                                 |   | (215,600   | )
|                                                                   |   |            |  
|                                                                   |   | (416,800   | )
|                                                                   |   |            |  
|Total Other Income (Expense)                                       |   | (795,800   | )
|                                                                   |   |            |  
|Loss Before Provision for Income Taxes                             |   | (1,525,800 | )
|Income Tax Benefit                                                 |   | (7,900     | )
|                                                                   |   |            |  
|Net Loss                                                           |   | (1,517,900 | )
|                                                                   |   |            |  
|Preferred
      Stock Dividend                                     |   | (22,600    | )
|                                                                   |   |            |  
|Net Loss
      Attributable to Common Shareholders                 | $ | (1,540,500 | )
|                                                                   |   |            |  
|Basic and
      Diluted (Loss) per Common Share                    | $ | (0.06      | )
|                                                                   |   |            |  
|Basic and
      Diluted Weighted-Average Common Shares Outstanding |   | 26,074,410 |  
|                                                                   |   |            |  

See accompanying notes to consolidated financial statements.

|F-5
|---
|   
|   



COMC, Inc. and Subsidiary

Consolidated
  Statements of Shareholders (Deficiency) Equity

|                                    | Common Stock |            | Additional |   |          | Treasury
      Stock |   |            |  |  
|----------------------------------- | ------------ | ---------- | ---------- | - | -------- | -------------------- | - | ---------- |  | -
|
|                                    |              |            |            |   |          |                      |   |            |  |  
|Balances,
      January 1, 2002     |              | 21,193,991 |            | $ | 211,900  |                      | $ | 15,727,500 |  | $
|                                   
|Proceeds
      from issuance of    
|common stock
      in private      
|placement
      (net)               |              | 4,329,967  |            |   | 43,400   |                      |   | 581,100    |  |  
|                                   
|Issuance
      of shares for debt  
|conversion
      - related party    |              | 1,785,000  |            |   | 17,800   |                      |   | 512,700    |  |  
|                                   
|Issuance
      of shares for       
|services                            |              | 125,000    |            |   | 1,200    |                      |   | 11,300     |  |  
|                                    |              |            |            |   |          |                      |   |            |  |  
|Net loss                            |              |           |            |   |         |                      |   |           |  |  
|                                    |              |            |            |   |          |                      |   |            |  |  
|Balances,
      December 31, 2002   |              | 27,433,958 |            |   | $274,300 |                      | $ | 16,832,600 |  | $
|                                   
|Issuance
      of shares for option
|conversion
      - related party    |              | 216,370    |            |   | 2,200    |                      |   | 2,100      |  |  
|                                   
|Issuance
      of shares for       
|services                            |              | 2,860,000  |            |   | 28,600   |                      |   | 39,400     |  |  
|                                    |              |            |            |   |          |                      |   |            |  |  
|Net loss                            |              |           |            |   |         |                      |   |           |  |  
|                                    |              |            |            |   |          |                      |   |            |  |  
|Preferred Stock Dividend            |              |           |            |   |         |                      |   |           |  |  
|                                    |              |            |            |   |          |                      |   |            |  |  
|Balances,
      December 31, 2003   |              | 30,510,328 |            | $ | 305,100  |                      | $ | 16,874,100 |  | $
|                                    |              |            |            |   |          |                      |   |            |  |  

See accompanying notes to consolidated financial statements.

|F-6
|---
|   
|   



COMC, Inc. and Subsidiary

Consolidated
  Statements of Cash Flows

|2003                                                                            |   | 2002        |  
|------------------------------------------------------------------------------- | - | ----------- | -
|                                                                                |   |             |  
|Cash
      Flows From Operating Activities:                                     |   |             |  
|Net
      (Loss)                                                                | $ | (1,517,900  | )
|Adjustments
      to reconcile net (loss) to net cash                          
|provided
      by (used in) operating activities:                              
|Amortization
      of deferred finance charge                                   |   |            |  
|Depreciation
      and amortization                                             |   | 256,600     |  
|Issuance
      of common stock for interest                                     |   |            |  
|Issuance
      of common stock for services                                     |   | 53,800      |  
|Issuance
      of common stock for options                                      |   | 4,300       |  
|Imputed beneficial conversion discount                                          |   | 193,800     |  
|Fair
      Value of Put Warrants                                                |   | 120,000     |  
|Issuance
      of Conv. Redeemable Series A Preferred Stock for expenses        |   | 32,200      |  
|Issuance
      of Conv. Redeemable Series B Preferred Stock for                
|services
      and expenses (including $215,600 imputed finance charge)         |   | 275,400     |  
|Provision
      for doubtful accounts                                           |   |            |  
|Deferred
      income tax                                                       |   |            |  
|Changes
      in operating assets and liabilities:                             
|Accounts
      and unbilled receivable                                          |   | (1,932,800  | )
|Inventories                                                                     |   | 26,500      |  
|Prepaid
      expenses and other current assets                                 |   | 16,700      |  
|Accounts
      payable                                                          |   | 298,200     |  
|Accrued
      expenses                                                          |   | 139,700     |  
|Income
      taxes refundable                                                   |   | 400,900     |  
|Customer
      deposits                                                         |   | (369,800    | )
|Accrued
      interest due related party                                        |   | 5,200       |  
|                                                                                |   |             |  
|Net
      Cash (Used in) Provided ByOperating Activities                        |   | (1,997,200  | )
|                                                                                |   |             |  
|Cash
      Flows From Investing Activities:                                    
|Deposits                                                                        |   | 23,100      |  
|Purchase
      of property and equipment                                        |   | (24,100     | )
|                                                                                |   |             |  
|Net
      Cash Used In Investing Activities                                     |   | (1,000      | )
|                                                                                |   |             |  
|Cash
      Flows From Financing Activities                                     
|Proceeds
      from sale of common stock, net                                   |   |            |  
|Sale
      of Series A Conv. Redeemable Preferred Stock                         |   | 312,500     |  
|Sale
      of Series B Conv. Redeemable Preferred Stock                         |   | 215,000     |  
|Advances
      from bank loans                                                  |   | 12,150,600  |  
|Repayments
      of bank loans                                                  |   | (10,470,000 | )
|Loans
      due to Shareholders                                                 |   | 208,900     |  
|Repayment
      of Related Party Subordinated Notes Payable                     |   | (25,000     | )
|Payments
      of capital lease obligations                                     |   | (38,900     | )
|                                                                                |   |             |  
|Net
      Cash Provided By (Used in) Provided By Financing Activities           |   | 2,353,100   |  
|                                                                                |   |             |  
|Net
      Increase (Decrease) in Cash and Cash Equivalents                      |   | 354,900     |  
|Cash
      and Cash Equivalents, beginning of period                            |   | 29,400      |  
|                                                                                |   |             |  
|Cash
      and Cash Equivalents, end of period                                  | $ | 384,300     |  
|                                                                                |   |             |  
|Cash
      Paid For:                                                           
|Interest                                                                        | $ | 256,200     |  
|Income
      taxes                                                              | $ | 1,600       |  
|Noncash
      Financing Activities:                                            
|Accrued
      dividend on Series A and B convertible redeemable Preferred Stock | $ | 22,600      |  
|Issuance
      of common stock for debt conversion                              | $ |            |  
|Issuance
      of convertible redeemable Series B preferred                     |   |             |  
|stock
      in exchange for related party note payable                          | $ | 62,500      |  
|Noncash
      Investing Activities:                                             |   |             |  
|Equipment
      under capital lease                                             | $ |            |  

See accompanying notes to
  consolidated financial statements.

|F-7
|---
|   
|   



COMC, Inc.
  and Subsidiary

**Notes
  to Consolidated Financial Statements**

1.  
  Summary of The Company Accounting Policies

COMC, Inc. and Subsidiary (the Company) is a technology service company in the telecommunications industry
with a regional service coverage area. The Company designs, implements, supports, and manages LAN/WAN
computer network systems, voice communication network systems, and  premise wiring for
both data and voice. In addition, the Company provides customers with  permanent and temporary
technical professional  recruitment and placement services. The Company is  redirecting
its business focus away from the  recruitment and placement services in 2003 and is  not
actively seeking new customers in this area.

Principles of Consolidation

The accompanying consolidated financial statements  include the accounts of the Company and
its wholly  owned subsidiary, ICF Communication Solutions, Inc. (ICF). All significant intercompany
accounts and  transactions have been eliminated.

On August 17, 1998, the Company consummated the acquisition of ICF Communication Systems, Inc. (ICF).
Under the terms of the Agreement and Plan of Merger dated July 24, 1998, ICF merged with and into
a wholly owned subsidiary of the Company that had been especially organized for purposes of this
transaction (the Merger). In connection with the Merger, ICFs name was changed to ICF Communication
Solutions, Inc. In consideration for the Merger, the two principals of ICF received an aggregate
payment valued at approximately $14,000,000, as follows: $1,500,000 in cash at the closing of the
 transaction; $3,500,000 in promissory notes of which $162,500 remain outstanding as of December 31, 2003, and 6,493,506 shares of the Companys common stock valued at $9,000,000 or $1.386 per
share. The Company agreed to use its best efforts to register the shares of common stock issued in
connection with the Merger.

Uses 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 revenues and expenses during the reporting period. Actual
  results could differ materially from those estimates.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months
or less to be cash equivalents.

Inventories

Inventories, consisting of various parts and equipment for sale, are stated at lower of costs (determined
on a first-in, first-out) or market.

|F-8
|---
|   
|   



COMC, Inc.
  and Subsidiary

Notes to
  Consolidated Financial Statements

Property and Equipment

Property and equipment are stated at cost. Depreciation is computed on the straight-line method over
the estimated useful lives of the assets, which range from five to seven years. Leasehold improvements
are amortized on the straight-line method over the term of the lease or the useful life of the asset,
whichever is shorter.

Long-Lived Assets

Long-lived assets are assessed for possible impairment whenever events or changes in circumstances
indicate that the carrying amounts may not be recoverable, or whenever management has committed to
a plan to dispose of the assets. Such assets are carried at the lower of book value or fair value
as estimated by management based on appraisals, current market value, comparable sales value, and
undiscounted future cash flows as appropriate. Assets to be held and used affected by such impairment
loss are depreciated or amortized at their new carrying amount over the remaining estimated life;
assets to be sold or otherwise disposed of are not subject to further depreciation or amortization.

Revenue Recognition

Revenues and related costs for short-term projects (i.e. projects with duration of less than one month)
are recognized as the projects are completed. Revenues generated by contracts of longer duration
(typically covering periods of two-to-three months) are recognized principally on the percentage-of-completion
method in the ratio that cost incurred bears to estimated cost at completion. Projects costs comprise
time and materials. Out-of-pockets costs are not billed separately, rather, such costs are included
in the contract price. Profit estimates are revised periodically based on changes in facts; any losses
on contracts are recognized immediately. Revenue from claims is insignificant.

Revenue and related costs for recruitment services are recognized as services are provided.

Advertising Costs

The cost of advertising
  is expensed as incurred. Advertising costs for the years ended December 31,
  2003 and 2002, were approximately $5,600 and $14,400, respectively.

Income Taxes

Income taxes are
  calculated using the liability method of accounting for income taxes specified
  by Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting
  for Income Taxes." Deferred income taxes are recognized for the tax consequences
  of temporary differences between the financial statements and income tax bases
  of assets, liabilities and carryforwards using enacted tax rates. Valuation
  allowances are established when necessary, to reduce deferred tax assets to
  the amount expected to be realized. Realization is dependent upon future pre-tax
  earnings, the reversal of temporary differences between book and tax income,
  and the expected tax rates in effect in future periods.

|F-9
|---
|   
|   



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

Fair Value of
  Financial Instruments

The following methods and assumptions were used by the Company in estimating its fair value disclosures
for financial instruments:

Cash and Cash Equivalents

The carrying amount reported on the balance sheet for cash and cash equivalents approximates fair value.

Long-Term Debt
  and Related Party Notes Payable

The fair value of long-term debt and related party notes payable are estimated based on current interest
rates available to the Company for debt instruments with similar terms and maturities.

As of December 31, 2003  and 2002, the fair values of the Companys financial instruments approximate their historical carrying
amounts.

Stock-Based Compensation

SFAS No. 123, Accounting for Stock-Based Compensation, encourages entities to recognize compensation
costs for stock-based employee compensation plans using the fair value-based method of accounting
defined in SFAS No. 123, but allows for the continued use of the intrinsic value based method of
accounting prescribed by Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued
to Employees. The Company continues to use the accounting prescribed by APB Opinion No. 25 and as
such is required to disclose pro forma net income and earnings per share as if the fair value-based
method of accounting had been applied. For stock options and certain warrants issued to nonemployees,
the Company applies SFAS No. 123, using the Black-Scholes option-pricing model.

SFAS No. 123, Accounting
  for Stock-Based Compensation, requires the Company to provide pro forma information
  regarding net income (loss) and earnings (loss) per share as if compensation
  cost for the Companys stock option plan had been determined in accordance
  with the fair value based method prescribed in SFAS No.123. There were no options
  granted in 2003 and 2002. Under the accounting provision of SFAS No. 123. The
  companys proforma net loss and the basic and diluted net loss per common
  share would have been adjusted to the proforma amounts below.

|F-10
|----
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

|                                                                                                            | For the Year
      Ended December 31, | 
|----------------------------------------------------------------------------------------------------------- | ------------------------------------- | 
|
|Net Loss
      Attributable Common Shareholders:                                                            |                                       | 
|As Reported                                                                                                 |                                       | 
|Add:
      Stock-based employees Compensationexpense
      included in net loss, net of related tax effects |                                       | 
|                                                                                                            |                                       | 
|Deduct: Total
      stock-based employee compensation                                                       |                                       | 
|expense determined under fair value based                                                                   |                                       | 
|method
      for all awards, net of related tax effects                                                     |                                       | 
|                                                                                                            |                                       | 
|Pro forma                                                                                                   |                                       | 
|                                                                                                            |                                       | 
|                                                                                                            |                                       | 
|Basic and
      diluted earnings (loss) per share:                                                          |                                       | 
|As reported                                                                                                 |                                       | 
|Pro forma                                                                                                   |                                       | 
|                                                                                                            |                                       | 
|                                                                                                            |                                       | 
|                                                                                                            |                                       | 

Earnings Per
  Share

The Company applies the provisons
  of SFAS No. 128, "Earnings Per Share".  SFAS No. 128 provides
  for the calculation of basic and diluted earnings per share. Basic earnings
  per share includes no dilution and is computed by dividing income available
  to common shareholders by the weighted average number of common shares outstanding
  for the period .  Diluted earnings per share reflect the potential dilution
  of securities that could share in the earning of an entity.  Anti-dilution
  provisions of SFAS No. 128 require consistency between diluted per-common-share
  amounts and basic per-common-share amounts in loss periods. Had the Company
  recognized net income in fiscal 2003, incremental shares attributable to the
  assumed exercise of 3,446,141 outstanding options and warrants would have increased
  diluted shares outstanding by 665,451 shares.  Options to purchase 433,500
  shares of common stock at prices between $0.30 per share and $1.00 per share
  were not included in the computation of diluted earnings per share because the
  exercise prices were greater than the average market price of the common stock.

As of December 31, 2003
  the Series A and B convertible redeemable preferred stock outstanding could
  be converted into an aggregate of 43,163,283 shares of common stock, subject
  to limitations on conversion to the extent shares are not available on conversion
  as set forth in the Preferred Stock Purchase Agreements.

|    
|----
|F-11
|    
|    



**COMC, Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

Adoption of New
  Accounting Pronouncements

In June 2002, the Financial
  Accounting Standards Board (the "FASB") issued SFAS No. 146, Accounting
  for Costs Associated with Exit Activities, which addresses financial accounting
  and reporting for costs associated with exit activities. SFAS No. 146 requires
  that a liability for a cost associated with an exit or disposal activity be
  recognized and measured initially at fair value only when the liability is incurred.
  SFAS No. 146 is effective for exit or disposal activities initiated after December
  31, 2002. The adoption of this Statement did not have a material impact on the
  Companys consolidated financial position or results of operations.

In November 2002,
  the FASB issued Interpretation No. 45 (FIN 45), Guarantors Accounting
  and Disclosure Requirements for Guarantees, including Indirect Guarantees of
  Indebtedness of Others, which clarifies disclosure and recognition/measurement
  requirements related to certain guarantees. The disclosure requirements are
  effective for financial statements issued after December 31, 2002 and the recognition/measurement
  requirements are effective on a prospective basis for guarantees issued or modified
  after December 31, 2002. The adoption of this Interpretation did not have a
  material impact on the Companys consolidated financial position or results
  of operations.

|    
|----
|F-12
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

In December 2002, the FASB issued SFAS No. 148,  Accounting for Stock-Based Compensation - Transition
and Disclosure. This Statement amends SFAS No. 123 to provide alternative methods of transition
for a voluntary change to the fair value based method of accounting for stock-based employee compensation.
Additionally, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require prominent
disclosures in both annual and interim financial statements about the method of accounting for stock-based
employee compensation and the effect of the method used on reported results. SFAS No. 148 is effective
for financial statements for fiscal years ended after December 31, 2002. Management has elected to
continue to follow the intrinsic value method in accounting for the Companys stock-based employee
compensation arrangement as defined by APB 25.

In January 2003, the FASB issued Interpretation No. 46 (FIN 46) Consolidation of Variable Interest
Entities, which addresses consolidation by business enterprises of variable interest entities
that either: (1) do not have sufficient equity investment at risk to permit the entity to finance
its activities without additional subordinated financial support, or (2) the equity investors lack
an essential characteristic of a controlling financial interest. The Company does not have any entities
that will require disclosure or new consolidation as a result of adopting the provisions of FIN 46.

In May 2003, the
  FASB issued SFAS No. 150, Accounting for Certain Financial Instruments
  with Characteristics of both Liabilities and Equity. SFAS No. 150 requires
  that certain financial instruments, which have characteristics of both liabilities
  and equity, must now be accounted for as liabilities. The financial instruments
  affected include mandatory redeemable stock, certain financial instruments that
  require or may require the issuer to buy back some of its shares in exchange
  for cash or other assets, and certain obligations that can be settled with shares
  of stock. SFAS No. 150 is effective for all financial instruments entered into
  or modified after May 31, 2003, and otherwise is effective at the beginning
  of the first interim period beginning after June 15, 2003. As a result of adopting
  SFAS No. 150 on July 1, 2003, the Company was required to include the carrying
  value of its convertible redeemable preferred stock as part of total liabilities
  in the Companys balance sheet. This presentation did not affect the carrying
  amount of the Companys shareholders deficiency.

2. Future Prospects

The Company has incurred
  operating and net losses in 2003 and 2002, and has a capital deficiency at December 31, 2003. The Company
  has limited additional financing available under its current accounts receivable
  financing facility in order to fund any additional cash required for its operations
  or otherwise. These matters raise substantial doubt about the Companys
  ability to continue as a going concern. Management has during 2002 and 2003
  taken steps to improve the situation, including the $500,000 (plus $30,500 in
  accrued interest) conversion of a shareholder note to equity, treated as a capital
  contribution, the replacement of the Comerica line of credit with a new financing
  arrangement with the Pacific Business Funding, a division of Greater Bay Bancorp,
  the moving of the Companys corporate offices from Martinez, California
  to a smaller facility in Concord, California in November 2002, the reduction
  of the Companys direct sales force, and further cuts in overhead costs,
  the closing of the Companys Birmingham facility, the downsizing of the
  Companys Houston and Phoenix operations, and changes in the Companys
  management.

|    
|----
|F-13
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

Any temporary lack of available
  financing could have a materially unfavorable effect on the Companys financial
  position. The Companys long-term prospects are dependent upon a return
  to profitability and/or the ability to raise additional capital as necessary
  to finance operations.The
  consolidated financial statements included in this annual report do not include
  any adjustments that might result from the outcome of this uncertainty.

|3. Property
      and Equipment                                                          
|-----------------------------------------------------------------------------------------
|                                                                                         
|Property
      and equipment consisted of the following as of December 31, 2003 and 2002:
|
|
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         

|    
|----
|F-14
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

4.       
  Financings

Lines of Credit

In February 2003,
  the Company entered into a one-year accounts receivable financing facility with
  Pacific Business Funding, a division of Cupertino National Bank, which is part
  of Greater Bay Bancorp, to replace its facility with Comerica. The Agreement
  with Greater Bay Bancorp provides, among its terms, a $1,000,000 financing facility
  with a borrowing formula of 80% of eligible receivables, collateralized with
  a first lien on all assets. The finance fees on this Greater Bay Bancorp facility
  are 1.5% per month (18% annual rate) on average daily cash balances with an
  additional administrative fee and an annual commitment fee. There are no financial
  covenants under this facility. On October 10, 2003, the maximum commitment under
  this financing facility was increased to $1,500,000. In connection with this
  increase, the Company executed a warrant agreement with Pacific Business Funding
  for 277,777 shares of the Companys common stock at an exercise price of
  $0.09 per share and an expiration date of October 14, 2013. The warrant also
  provides Pacific Business Funding a $25,000 put in lieu of exercising the warrant. 
  The Company recognized $120,000 in other expenses for the warrant based on the
  estimated fair value of the warrant as of December 31, 2003.  The Company
  estimated the fair value of the warrant by using the Black-Scholes valuation
  model with the following assumptions:  dividend yield of 0%; expected volatility
  of 131%; risk free interest rate of 4.29%; and the contractual life of the warrant.

As the puttable
  warrant may require cash settlement, the Company has classified the instrument
  as a liability in accordance with SFAS No. 150.

On November 20,
  2003, Pacific Business Funding had advanced funds in the aggregate amount of
  $1,767,600 under the existing facility and continued to provide advances in
  December 2003 in excess of the $1,500,000 line. A second amendment to the factoring
  agreement was executed on January 2, 2004 and provided, among other items, an
  increase to a maximum commitment of $1,800,000 and extension of the facility
  through January 3, 2005.

In the first quarter
  of 2004, the Company's largest supplier, increased the Company's line of credit
  to $500,000 and has a second lien on all of the Companys assets.

Debt Financing

From 1998 through
  2002, the Company acquired twelve vehicles for a total purchase price of $216,000
  under capital lease arrangements with the vehicles as security. The loans bear
  interest at rates ranging from 0.9% to 9.7%. Accumulated depreciation related
  to these vehicles was $111,200 and $78,000 as of December 31, 2003 and 2002,
  respectively.

|    
|----
|F-15
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

Annual maturities of the debt financing discussed above for years ending December 31, are as follows:

| | 2004 |  | $ | 29,000 | 
| | ---- |  | - | ------ | 
| | 2005 |  |   | 31,700 | 
| | 2006 |  |   | 18,900 | 
| | 2007 |  |   | 4,900  | 
| |      |  |   |       
| |      |  | $ | 84,500 | 
| |      |  |   |       

5.  
  Accrued Expenses

|Accrued expenses
      consisted of the following as of December
      31, 2003 and 2002:
|-----------------------------------------------------------------------------------------
|
|
|
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         
|                                                                                         

6.  
  Commitments Operating Leases and Contingencies

The Company leases
  certain offices under operating leases expiring on various dates through 2007.
  Total rent expense charged to operations was $233,100 and $511,200 in 2003 and
  2002, respectively. As of December 31, 2003, the minimum future rental commitments
  under non-cancelable operating leases payable over the remaining terms of the
  operating leases are:

|
|
|
|
|
|
|
|
|
|

Legal Matters

On May 25, 2003, ICF settled
  all outstanding legal matters with Metropolitan Talent Agency (Metropolitan).
    Metropolitan and ICF agreed to release each other as liable parties in
  the suit and settle outstanding fees for release of writ of attachment for collecting
  on the original judgment of the case.

On August 8, 2001, an ICF
  employee filed a complaint against Starbucks Corporation and Wells Fargo Bank
  (Defendants) in San Francisco Superior Court, claiming that the employee suffered
  wage loss, hospital and medical expenses, general damage and loss of earning
  capacity in unspecified amounts. On March 7, 2002, the defendants filed an amendment
  to the cross-compliant, identifying ICF as fictitiously named cross-defendant
  Roe 1.

|    
|----
|F-16
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

Kemper Insurance has formally accepted ICFs tender of defense and has hired the law firm of Boornazian,

Jensen and Garthe of Oakland, California to defend ICF on the cross-complaint of Wells Fargo. The

insurance carriers for Wells Fargo and Starbucks have settled the claim brought against them by
ICFs
former employee but Wells is continuing to seek indemnity from ICF under the terms of
a contract
entered into in March, 1999.

It is ICFs position that the March, 1999 contract has no applicability to the claim by the former

employee and that no indemnity is owed. The contractual and insurance coverage issues related to

Well Fargos indemnity claim that are somewhat unclear, and it is likely that Kemper will
seek
to reach a compromise settlement with Wells Fargos carrier rather than litigate the
issue.
There is presently no trial date set for the indemnity claim.

On September 10 and October
  31, 2003, the Company filed two lawsuits in Contra Costa County Superior Court,
  California, Case Numbers C03-02246 and C03-02803, against several former employees
  of the Company, namely, Charles E. Lincoln, Paul Carpenter, Steven Johnson,
  Jeffrey Clark, Lynn Thompson, Michael Gurasich, Charles Rago, and Ronalee Haggard,
  and their related business entities, Comlectric, Information Technology Squared,
  and All Business Communications, for misappropriation of trade secrets, breach
  of contract, and various business torts. These cases are currently early in
  the litigation process, discovery is ongoing and no trial dates have been set.
  In Case Number c03-002246, a preliminary injunction was granted by the court
  against the defendants.

On August 8, 2003,
  ICF was sued by a trustee-in-bankruptcy, Suzanne Decker, representing one of
  ICFs customers, E-time Capital, Inc. On August 9, 2001, an involuntary
  petition for Chapter 7 bankruptcy protection was filed against E-time Capital.
  The adversary proceeding against ICF was filed by the trustee in United States
  Bankruptcy Court, No. Dist. Of Cal., Adversary Proceeding No. 03-5440 seeking
  return of a certain payment made by E-time Capital to ICF for services rendered
  by ICF in April, 2001. ICF is contesting the allegations that this single payment
  was a preferential payment from E-time to ICF and subject to return to the bankruptcy
  estate under certain Federal Bankruptcy laws. As the payment sought by the bankruptcy
  trustee is of a de minimus amount, the Company does not believe that
  the outcome of this action will have a material effect on the Company.

|    
|----
|F-17
|    
|    



**COMC,
  Inc. and Subsidiary`**

**Notes
  to Consolidated Financial Statements**

Employment Agreements

In 2001, the Company
  amended the employment agreement with its current Chief Operating Officer (COO).
  The term of the employment agreement is the earlier of the due date of the Subordinated
  Note, repayment in full, or the sale or transfer of the note by the COO. The
  COOs salary was raised from an annual salary of $135,000 to $150,000 effective
  January 1, 2004. See Note 7.

The Companys
  current Chairman and Chief Executive Officer (CEO) is an At
  Will employee at an annual salary of $135,000.  The Company started
  paying the CEO her annual salary in September 2003, and had, as of December 31, 2003 accrued $56,300 in salary for the period April through August 2003. The CEOs salary was
  increased effective January 1, 2004 to an annual salary of $150,000.

7. Transactions With Related Parties

In December 2002, subordinated
  related party notes in the principal amount of $250,000, originally issued as
  part of the Merger discussed in Note 1, were modified by which the interest
  rate on the remaining $250,000 principal balance was reduced from 8% to 4%,
  and the due date on the notes were changed so that $25,000 became due by March
  31, 2003 and the balance of $225,000 became due on January 30, 2004. In March
  2003, the Company paid down $25,000 of the notes. In June 2003, 250,000 shares
  of convertible redeemable Series B preferred stock was issued in exchange for
  $62,500 of Related Party Note Payable. In December 2003, the balance of the
  Note in the principal amount of $162,500 was extended to January 2005 and the
  interest rate was raised to 6% per annum.

Interest expense associated
  with the above notes aggregated $2,800 during the fiscal year ended December
  31, 2003. In the fiscal year ended December 31, 2002, the interest expense amounted
  to $60,700.

In December 2003,
  the COO was awarded 667 shares of convertible redeemable Series B stock, valued
  at $6,000, as compensation.

In March 2003,
  the Company issued 2,100,000 shares of common stock, valued at $42,000, for
  services that the CEO rendered in connection with assistance in financial restructuring
  provided in the quarter ended March 31, 2003 and additional services to be provided
  over the next year. During the quarter ended June 30, 2003, the CEO received
  75,000 shares of convertible redeemable Series B preferred stock, valued at
  $15,000, as compensation for services rendered in connection with the restructuring.
  In December 2003, the CEO was awarded 667 shares of convertible redeemable Series
  B Preferred Stock, valued at $6,000, as compensation.

In the fourth
  quarter of 2003, certain Series A and B Convertible Redeemable Preferred shareholders
  lent ICF, $208,900 at 18% interest, convertible into common stock of the Company
  at $.08 per share of common stock, at the Noteholders option. Interest
  is payable on the due date of January 2, 2005 with interest also convertible
  into common stock on the same basis as the principal. Interest expense associated
  with the above Loans from shareholders was accrued and aggregated $4,600 during
  the fiscal year ended December 31, 2003. As the fair value of the Companys
  stock in November and December exceeded the conversion price, the Company recognized
  a deemed non cash charge of $193,800 resulting from the imputed
  beneficial conversion discount.

|    
|----
|F-18
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

8. Defined Contribution Plan

In April 1997, the Company amended its defined contribution plan (the Plan) such that all employees
were eligible to participate in the Plan after completing three months of service and attaining the
age of 21. To be entitled to an allocation of employer contributions, a participant must complete
1,000 hours of service during the Plan year and must be employed by the Company on the last day of
the Plan year. Employees electing to participate in the Plan may contribute up to 20% of their annual
compensation. Contributions to the Plan are limited to the maximum amount allowable under the provisions
of the Internal Revenue Code. The Company may choose to make contributions to the Plan at  its
discretion. During the years ended December 31, 2003 and 2002, there were no Company matched employee
contributions.

9. Income Taxes

The components
  of the provision (benefit) for income taxeswere
  as follows for the years ended December 31, 2003 and 2002:

| |         | Current |   | Deferred |   | Total |  
| | ------- | ------- | - | -------- | - | ----- | -
|
|
| | State   |         | $ | 1,600    |   | $     | 
| | Federal |         |   | (9,500   | ) |       | 
| |         |         |   |          |   |       |  
| |         |         | $ | (7,900   | ) | $     | 
| |         |         |   |          |   |       |  

| |         | Current |   | Deferred |   | Total |  
| | ------- | ------- | - | -------- | - | ----- | -
|
|
| | State   |         | $ |         |   | $     | 
| | Federal |         |   | (404,400 | ) |       | 
| |         |         |   |          |   |       |  
| |         |         | $ | (404,400 | ) | $     | 
| |         |         |   |          |   |       |  

Previous management
  did not file state tax returns for fiscal years 2001 and 2002. These returns
  are being finalized. Since the Company has losses in both of these years, there
  is no tax due except for any minimum tax and penalties, which will not have
  a material impact on the Company and any adjustment will be minimal.

|    
|----
|F-19
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

The components of deferred tax assets and liabilities were as follows as of December 31, 2003 and 2002

| | 2003                                     |  | 2002 |  
| | ---------------------------------------- |  | ---- | -
| | Deferred
      tax assets (liabilities): |  |      |  
| | Allowance
      for uncollectible        |  |     
| | accounts                                 |  |      | $
| | Accrued
      vacation                   |  |      |  
| | Net operating loss carry forwards        |  |      |  
| | Other                                    |  |      |  
| |                                          |  |      |  
| | Gross Deferred
      Tax Asset           |  |      |  
| | Less: Valuation
      allowance          |  |      |  
| |                                          |  |     
| | Deferred
      Tax liability:            |  |     
| | Depreciation                             |  |      |  
| |                                          |  |      |  
| | Net Deferred
      Tax Asset             |  |      | $
| |                                          |  |      |  

In assessing the
  realizability of deferred tax assets, management considers whether it is more
  likely than not that some portion or all of the deferred tax assets will not
  be realized. The ultimate realization of deferred tax assets is dependent upon
  the generation of future taxable income during the periods in which those temporary
  differences become deductible. Management considers the scheduled reversal of
  deferred tax liabilities, projected future taxable income and prior taxes paid
  in making this assessment.

The actual tax expense (benefit) differs from the expected tax expense (benefit), computed by applying
the Federal corporate tax rate of 34% to income before income taxes, as follows:

| | 2003                                     |  | 2002 |  
| | ---------------------------------------- |  | ---- | -
|
| | Expected
      statutory tax (benefit)   |  |      | $
| | Net tax effect
      of permanent        |  |     
| | differences                              |  |      |  
| | State income
      taxes, net of federal |  |     
| | tax
      effect                         |  |      |  
| | Change in
      valuation allowance      |  |      |  
| | Other                                    |  |      |  
| |                                          |  |      |  
| | Income
      tax (benefit)               |  |      | $
| |                                          |  |      |  

10. Convertible Redeemable
  Preferred Stock

In March 2003, the Company
  raised $312,500 through a private placement of 1,092,657.34 shares of Series
  A Convertible Redeemable Preferred Stock for $.286 per share with various accredited
  investors (the Investors). Each investor had the right to increase
  his purchase by 25% during a 90 day period from the purchase date. As of June
  30, 2003 this right expired with no new shares being issued. In March and June
  2003, an additional 55,944.06 and 56,614.93 shares of Series A Convertible Redeemable
  Preferred Stock were issued, valued at $16,000 and $16,200, respectively, for
  services rendered and reimbursement for expenses in the first and second quarter
  of 2003.

|    
|----
|F-20
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

In June 2003,
  the Company raised $215,000 through a private placement of 1,075,000 shares
  of Series B Convertible Redeemable Preferred Stock for $.20 per share with various
  accredited investors. In addition, 250,000 shares of convertible redeemable
  Series B preferred stock were issued in exchange for $62,500 of Related Party
  Note Payable. In addition, the CEO received 75,000 shares of convertible redeemable
  Series B preferred stock, valued at $15,000, as compensation for services rendered
  in connection with the restructuring. In September 2003, an additional 154,000
  shares of Series B Convertible Redeemable Preferred Stock were issued, valued
  at $246,400 for reimbursement of expenses in the third quarter of 2003. As the
  deemed fair value of the 154,000 shares of series B convertible redeemable preferred
  stock issued in September exceeded the expenses to be reimbursed, the Company
  recognized a non cash charge of $215,600 in connection with the stock
  issuance. In December 2003, the CEO was awarded 667 shares of convertible redeemable
  Series B Preferred Stock, valued at $6,000, as compensation. In December 2003,
  the COO was awarded 667 shares of convertible redeemable Series B stock, valued
  at $6,000, as compensation. In December 2003, the Controller and Principal Accounting
  Officer was awarded 222 shares of convertible redeemable Series B stock, valued
  at $2,000, as compensation.

Accrued dividends as of December 31, 2003 on Series A and B Convertible Redeemable Preferred Stock


were $13,400 and $9,200, respectively.

The rights, preferences and privileges of the Series A and B Preferred stockholders are as follows:

|Series
      A                                                                                                                                                                                                                                                                                   |  | Series B                                                                                                                                                                                                                                                                                        
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|Term                                                                                                                                                                                                                                                                                             |  | Term                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|The Series A Preferred
      Stock have a term of five years from the date of issuance. Redeemable in
      March 2008.                                                                                                                                                                          |  | The Series B Preferred
      Stock have a term of four years and nine months from the date of issuance.
      Redeemable in March 2008.                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|Dividends                                                                                                                                                                                                                                                                                        |  | Dividends                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|The holders of Series
      A Preferred Stock are entitled to receive a 5% cumulative dividend, payable
      in stock. The Series A Preferred stockholders are entitled to receive a
      minimum of two-year dividends regardless if they are forced to convert or
      voluntarily convert. |  | The holders of Series
      B Preferred Stock are entitled to receive a 5% cumulative dividend, payable
      in stock. The Series B Preferred stockholders are entitled to receive a
      minimum of two-year dividends regardless if they are forced to convert or
      voluntarily convert.
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|As of December 31,
      2003 accrued dividends on the Series A Preferred Stock amounted to $13,400.                                                                                                                                                                                             |  | As of December 31,
      2003 accrued dividends on the Series B Preferred Stock amounted to $9,200.                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|Liquidation Preference                                                                                                                                                                                                                                                                           |  | Liquidation Preference                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|In the event the
      Company is liquidated or sold, the Series A Preferred stockholders will
      be entitled to receive the par value of their shares plus any accumulated
      dividends prior to any distribution to the holders of common stock. Pari
      passu with Series B.         |  | In the event the Company
      is liquidated or sold, the Series B Preferred stockholders will be entitled
      to receive the par value of their shares plus any accumulated dividends
      prior to any distribution to the holders of common stock. Pari passu with
      Series A.        
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|Voting Rights                                                                                                                                                                                                                                                                                    |  | Voting Rights                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|Each share of Series
      A Preferred Stock shall have the equivalent voting rights of 20 shares of
      common stock.                                                                                                                                                                         |  | Each share of Series
      B Preferred Stock shall have the equivalent voting rights of 20 shares of
      common stock.                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|Conversion                                                                                                                                                                                                                                                                                       |  | Conversion                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                 |  |                                                                                                                                                                                                                                                                                                 
|The Series A Preferred
      stockholders have the right, at any time, to convert their shares into common
      stock.  Each share of Series A Preferred Stock is convertible into
      10 shares of common stock.                                                                             |  | The Series B Preferred
      stockholders have the right, at any time, to convert their shares into common
      stock. Each share of Series B Preferred Stock is convertible into 20 shares
      of common stock.                                                                             

|    
|----
|F-21
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

|Redemption                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | Redemption                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|The Series A Preferred
      stockholders have the right to demand the Company to redeem the Series A
      Preferred Stock five years after the date of issuance.  After a two-year
      period, the Company has the right, at any time, without penalty, to redeem
      the Series A Preferred Stock.  If the Comany exercises its right, the
      Series A Preferred stockholders will have 10 business days to make a decision
      to either convert their Series A Preferred Stock into common stock or have
      their shares redeemed. |  | The Series B Preferred
      stockholders have the right to demand the Company to redeem the Series B
      Preferred Stock four years and nine months after the date of issuance. After
      a two-year period, the Company has the right, at any time, without penalty,
      to redeem the Series B Preferred Stock. If the Company exercises its right,
      the Series B Preferred stockholders will have 10 business days to make a
      decision to either convert their Series B Preferred Stock into common stock
      or have their shares redeemed.

|    
|----
|F-22
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

As of December
  31, 2003, Series A and B Preferred Stock would be convertible into 12,052,163
  and 31,111,120 shares of common stock, respectively.  Conversion is subject
  to limitations to the extent shares are not available for conversion as set
  forth in the Preferred Stock Purchase Agreements.

11. Shareholders Common Stock Equity

During February and March, 2002, the Company raised approximately $650,000 through a private placement
of 4,329,967 shares of its common stock for $0.15 per share with various accredited investors.

In December 2002,
  the Company issued 125,000 shares of common stock for services valued at $12,500.
  In December 2002, the Company issued 1,785,000 shares of common stock in exchange
  for the conversion of $500,000 in notes payable and $30,500 in accrued interest
  to equity.

In March 2003, the Company issued 2,100,000 shares of common
  stock for services to the Chairman, President and CEO of the Company, and 735,000
  shares of common stock to a financial advisor for services rendered in connection
  with assistance in financial restructuring provided in the quarter ended March
  31, 2003 and additional services to be provided over the next year. These shares
  have certain service milestones that provide for a clawback of shares if services
  are terminated. Of these shares, 708,750 vested immediately with a remaining
  balance of 2,126,250, of which 50% vested on October 1, 2003 and 50% will vest
  on March 31, 2004, respectively. The 2,835,000 shares were valued at $.02 per
  share, or $56,700. As of December 31, 2003, 37.5% of this amount has been recorded
  as a prepaid expense. See Note 7.

In December 2003, four
  employees received a stock award of, in total, 50,000 share of common stock
  valued at $22,500.  25,000 of these shares vested in December 2003 and
  the remaining 25,000 shares vest in December 2004.  As of December 31,
  2003 the Company had recognized an expense of $11,200 associated with these
  shares.

In January 2004, an additional
  10,000 shares of common stock was awarded to an employee.

|    
|----
|F-23
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

Stock Option Plan

In November 1999,
  the Company adopted a Stock Option Plan  (The Plan). The Plan is restricted
  to employees, officers,  and consultants of the Company. Options granted
  under the  Plan vest over five years and are exercisable over ten
  years. Non-statutory options are granted at prices not less  than
  85% of the estimated fair value of the stock on the  date of grant
  as determined by the Board of Directors. Incentive options are granted at prices
  not less than 100%  of the estimated fair value of stock on the date
  of grant. However, options granted to shareholders who own greater  than
  10% of the outstanding stock are established at no less  than 110%
  of the estimated fair value of the stock on the  date of the grant.
  No options granted to employees, officers and directors were exercised during
  the year ended December 31, 2003 and December 31, 2002.

A summary of the status of the Companys outstanding stock options as of December 31, 2003
and 2002, and changes during the years then ended is presented in the following table:

|                                     | Options Outstanding | 
|------------------------------------ | ------------------- | 
|
|Balances,
      January 1, 2002      |                     | 
|Granted                              |                     | 
|Cancelled                            |                     | 
|                                     |                     | 
|Balances,
      December 31, 2002    |                     | 
|Granted                              |                     | 
|Relinquished                         |                     | 
|Cancelled                            |                     | 
|                                     |                     | 
|Balances,
      December 31, 2003    |                     | 
|                                     |                     | 
|Exercisable
      at year-end        |                     | 
|                                     |                     | 
|                                     |                     | 
|Weighted-average
      fair value of |                     | 
|options
      granted during 2003    |                     | 
|                                     |                     | 
|Weighted-average
      fair value of |                     | 
|options
      granted during 2002    |                     | 
|                                     |                     | 

In March 2003,
  the Chief Operating Officer relinquished 376,623 out-of-the money options in
  exchange for 216,370 shares of common stock of COMC valued at $4,300.Options granted under
  the Plan were for employees of the Company. Options granted outside the Plan
  during 1999 were pre-plan and issued to officers and directors of the Company.
  Options granted outside the Plan during 2000 were granted to investors in connection
  with a private placement. The Company is currently reviewing all of its option
  agreements.

|    
|----
|F-24
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

|The following table
      summarizes information about stock options outstanding as of December 31,
      2003:
|---------------------------------------------------------------------------------------------------------------
|                                                                                                               

|                                               | Options Outstanding |  | Options
      Exercisable |          
|---------------------------------------------- | ------------------- |  | ------------------------- | ---------
|**Range
      of
      Exercise
      Prices**
|                                               |                     |  |                           |          
|$0.01-0.10                                     |                     |  |                           | 3,188,364
|0.11-0.30                                      |                     |  |                           | 175,000  
|0.31-0.50                                      |                     |  |                           | 55,000   
|0.51-1.00                                      |                     |  |                           | 203,500  
|                                               |                     |  |                           |          
|                                               |                     |  |                           | 3,621,864
|                                               |                     |  |                           |          

12. Concentration
  of Credit Risk

Financial instruments, which potentially subject the Company to concentration of credit risk, consist  principally
of cash and cash equivalents, and trade  receivables. The Company places its cash and cash  equivalents
with high quality financial institutions  and, by policy, limits the amounts of credit
exposure to  any one financial institution.

The Companys
  accounts receivable are principally derived from one industry and two customers,
  which represents a substantial risk.

In 2003, revenue
  from the Companys two largest customers accounted for approximately 54%,
  and 31%, respectively of total revenues. Accounts receivable balances at December
  31, 2003 from these two customers represented approximately 47%, and 44%, respectively,
  of net accounts receivable. No other customer in 2003 accounted for more than
  10% of total revenues.

In 2002, revenues from the Companys two largest customers accounted for approximately 44%, and
35%, respectively, of total revenues. Accounts receivable balances at December 31, 2002 from these
customers represented approximately 36%,  and 32%, respectively, of net accounts receivables.
No other customer in 2002 accounted for more than 10% of total revenue.

The concentrations of revenues and related receivables as of and for the year ended December 31, 2003
as described above expose the Company to a relatively greater degree of risk of loss than would be
the case with greater customer diversification.

13. Segment Information

The Company operates in two industry segments: Data and Voice Services and Recruitment Services.

The revenue components of
  the Data and Voice Services  segment consist primarily of (1) designing,
  implementing,  supporting, and managing LAN/WAN computer network systems,  voice
  communication network systems, and premise wiring for  both data and
  voice; and (2) distributing and maintaining  equipment on behalf of
  major telecommunication equipment  manufacturers.

|    
|----
|F-25
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

The revenue components
  of the Recruitment Services segment consist primarily of providing customers
  with permanent and temporary technical professional recruitment and placement  services
  to fill their internal staffing needs. The Company is redirecting its business
  focus away from the recruitment and placement services and is not actively seeking
  new customers in this area.

Summarized financial
  information concerning the operating segments in which the Company operated
  as of December 31, 2003 and 2002, and for each of the years then ended is shown
  in the following tables:

|    
|----
|F-26
|    
|    



**COMC,
  Inc. and Subsidiary**

**Notes
  to Consolidated Financial Statements**

|                                          | December 31, | 
|----------------------------------------- | ------------ | 
|Operating
      Segments                 
|                                          |              | 
|Revenue:                                  |              | 
|Data and
      Voice Services             |              | 
|Recruitment
      Services                |              | 
|Corporate                                 |              | 
|                                          |              | 
|                                          |              | 
|                                          |              | 
|Income (loss)
      from operations:      |              | 
|Data and
      Voice Services             |              | 
|Recruitment
      Services                |              | 
|Corporate                                 |              | 
|                                          |              | 
|                                          |              | 
|                                          |              | 
|Total assets:                             |              | 
|Data and
      Voice Services             |              | 
|Recruitment
      Services                |              | 
|Corporate                                 |              | 
|                                          |              | 
|                                          |              | 
|                                          |              | 
|Expenditures
      for long-lived assets: |              | 
|Data and
      Voice Services             |              | 
|Recruitment
      Services                |              | 
|Corporate                                 |              | 
|                                          |              | 
|                                          |              | 
|                                          |              | 
|Depreciation
      and amortization:      |              | 
|Data and
      Voice Services             |              | 
|Recruitment
      Services                |              | 
|Corporate                                 |              | 
|                                          |              | 
|                                          |              | 
|                                          |              | 

The accounting
  policies of the reportable segments are the same as those described in the summary
  of significant accounting policies. There are no inter-segment sales. Long-term
  assets are made up of property and equipment and other assets. Corporate services,
  consisting of general and administrative services are provided to the segments
  from a centralized location. In addition, substantially all of the sales and
  recruiting workforce is contained in the Data and Voice Services segment. Costs
  associated with the sales and recruiting workforce are allocated to the Recruitment
  Services segment based generally on forecasted revenues.

|    
|----
|F-27
|    
|    



SIGNATURES

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

|                            | COMC,
      INC.                   
|--------------------------- | -----------------------------------
|                            |                                    
|                            | By: /s/ Janice
      B. Fuellhart  
|                            |                                    
|                            | Janice B.
      Fuellhart, Chairman
|                            |                                    
|Dated: April
      12, 2004 |                                    

Pursuant to the
  requirements of the Securities Exchange Act of 1934, this

Report has been
  signed below as of March 30, 2004 by the following persons on behalf of Registrant
  and in the capacities indicated.

| | /s/
      Janice B. Fuellhart      
| | -----------------------------------
| |                                    
| | Janice B.
      Fuellhart, Chairman
| |                                    
| | /s/ Steven
      Richman           
| |                                    
| | Steven
      Richman, Director     
| |                                    
| | /s/ Matt
      Burns               
| |                                    
| | William M.
      Burns, Director   
| |                                    
| | /s/ Paul
      Graf                
| |                                    
| | Paul E. Graf,
      Director       

|   
|---
|A-1
|   
|   



EXHIBITS

|2.01  |  | Letter Agreement with
      Complete Communications, Inc. dated as of June 3, 1996.(1)                                                                  
|----- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------
|      |  |                                                                                                                                                         
|2.02  |  | Agreement of Merger
      dated July 19, 1996 between the Company and ICF.(2)                                                                           
|      |  |                                                                                                                                                         
|2.03  |  | Agreement and Plan of
      Merger between COMC, Inc., an Illinois corporation and the Company.(3)                                                      
|      |  |                                                                                                                                                         
|3.01  |  | Certificate of Incorporation.(3)                                                                                                                        
|      |  |                                                                                                                                                         
|3.02  |  | By-laws.(3)                                                                                                                                             
|      |  |                                                                                                                                                         
|10.01 |  | Loan Agreement between
      COMC and Mr. Burns dated August 10, 1999.(4)                                                                               
|      |  |                                                                                                                                                         
|10.02 |  | Loan Agreement between
      COMC and Mr. Lincoln dated August 10, 1999.(4)                                                                             
|      |  |                                                                                                                                                         
|10.03 |  | Stock Purchase Agreement
      by and among COMC, Mr. Ackerman and Mr. Smith dated August 10, 1999.(4)                                                  
|      |  |                                                                                                                                                         
|10.04 |  | Contributing Agreement
      by and between COMC and Mr. Ackerman dated August 10, 1999.(4)                                                             
|      |  |                                                                                                                                                         
|10.05 |  | Stock Option Agreement
      by and between COMC and Mr. Burns dated August 10, 1999.(4)                                                                
|      |  |                                                                                                                                                         
|10.06 |  | Stock Option Agreement
      by and between COMC and Mr. Lincoln dated August 10, 1999.(4)                                                              
|      |  |                                                                                                                                                         
|10.07 |  | Stock Option Agreement
      by and between COMC and Mr. Smith dated August 10, 1999.(4)                                                                
|      |  |                                                                                                                                                         
|10.08 |  | Stock Option Agreement
      by and between COMC and Gramercy dated August 10, 1999.(4)                                                                 
|      |  |                                                                                                                                                         
|10.09 |  | Registration Rights
      Agreement by and between COMC, Messrs. Burns, Lincoln and Smith dated August
      10, 1999.(4)                               
|      |  |                                                                                                                                                         
|10.10 |  | Form of Stock Purchase
      Agreement between COMC and Investors                                                                                       
|      |  |                                                                                                                                                         
|10.11 |  | Form of Registration
      Rights Agreement between COMC and Investors                                                                                  
|      |  |                                                                                                                                                         
|10.12 |  | Form of Amendment to
      William M. Burns Loan and employment agreement with COMC                                                                     
|      |  |                                                                                                                                                         
|10.13 |  | Form of Amendment to
      Christopher R. Smith employment agreement with COMC                                                                          
|      |  |                                                                                                                                                         
|16.01 |  | Letter dated February
      23, 2000 from Hollander, Lermer and Co. LLP to the office of the Chief Accountant,
      Division of Corporation Finance.(6)
|      |  |                                                                                                                                                         
|16.02 |  | Letter dated February
      21, 2000 from Deloitte and Touche LLP to the Commission.(6)                                                                 
|      |  |                                                                                                                                                         
|(1)   |  | Incorporated herein
      by reference to the Companys Information Statement dated September
      15, 1996                                            
|      |  |                                                                                                                                                         
|(2)   |  | Incorporated
      herein by reference to the Companys Form 8-K filed August 31, 1998.                                                                 
|      |  |                                                                                                                                                         

|   
|---
|A-2
|   
|   



|(3) |  | Incorporated herein
      by reference to the Companys definitive proxy statement for the 2000
      Annual Meeting of Stockholders, filed with the Commission on October 23,
      2000, pursuant to Regulation 14A of the Securities Exchange Act of 1934,
      as amended (the Proxy Statement).
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |  |                                                                                                                                                                                                                                                                                                        
|(4) |  | Incorporated herein
      by reference to the Current Report on Form 8-K dated October 15, 1999.                                                                                                                                                                                                       
|    |  |                                                                                                                                                                                                                                                                                                        
|(5) |  | Incorporated herein
      by reference to the Companys 10-QSB, filed with the Commission on
      May 16, 2000.                                                                                                                                                                                       
|    |  |                                                                                                                                                                                                                                                                                                        
|(6) |  | Incorporated herein
      by reference to the Current Report on Form 8-K dated February 25, 2000.                                                                                                                                                                                                      

|   
|---
|A-3
|   
|   



EXHIBIT INDEX

31.1    Certification
  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
  Sarbanes-Oxley Act of 2002

31.2   Certification
  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
  Sarbanes-Oxley Act of 200232.1   Certification
  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002

32.2    Certification
  pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
  Sarbanes-Oxley Act of 2002