**================================================================================**



**THE SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**



**FORM 10-QSB**



[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF SECURITIES EXCHANGE ACT OF 1934



FOR THE QUARTERLY PERIOD ENDED: June 30, 2003



[   ] TRANSITION REPORT UNDER SECTION 13 OR
  15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934



**Commission File No. 0-16472**



**COMC, INC.**



(Exact Name of Registrant as Specified in its Charter)



**Delaware                              95-4628378**

-------------------------------     -----------------------------------

(State or other jurisdiction of      (I.R.S. Employer Identification No.)

incorporation or organization)



4030 Pike Lane, Suite C

Concord, California 94520

----------------------------------------

(Address of principal executive offices)



(925) 849-1400

---------------------------

(Issuer's telephone number)



Check whether the issuer filed all reports required

to be filed by Section 13 or 15(d) of the Securities Exchange

Act of 1934 during the past 12 months (or for such shorter Period

that the registrant was required to file such reports), and has been

subject to such filing requirements for the past 90 days.



Yes [X] No [  ]



As
  of August 18, 2003 a total of 30,485,328 shares of COMC's common stock

were issued; 26,684,091 shares of COMC's common stock were outstanding, and

3,801,237 shares of COMC's common stock are held in treasury.



Transitional Small Business Disclosure Format. Yes [ 
  ] No [X]





**================================================================================**







---









**COMC Inc., and Subsidiary**



Table of Contents



10QSB



|**PART
        I. Financial Information**
      
      Item 1.
        Financial Statements. Condensed
        Consolidated Balance Sheets
      Condensed Consolidated Statements
        of Operations
      Condensed Consolidated Statements
        of Cash Flows
      Notes to Condensed Consolidated
        Financial Statements
      Item 2. Management Discussion and Analysis
      Item 3. Controls and Procedures
      
      **PART II.  Other Information**
      
      Item 1. Legal Proceedings
      Item 2. Changes in Securities
      Item 3. Defaults Upon Senior Securities
      Item 4. Submission of Matters to a Vote of Security
        Holders
      Item 5. Other Information
      Item 6. Exhibits and Reports on Form 8-K | 3
      4
      5
      6
      14
      16
      
      
17
      17
      17
      17
      17
      17
      17
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------



Signatures



Exhibit Index

Exhibits







---



##### Table of Contents



PART I. FINANCIAL INFORMATION



ITEM 1. Financial Statements

**COMC, Inc. and Subsidiary**

**Condensed Consolidated Balance Sheets**





|                                                                                                                                                                        | **June
        30,**                | **December
        31,**           
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | -----------------------------------
|Assets                                                                                                                                                                  | **2003**                            | **2002**                           
|                                                                                                                                                                        | (unaudited)                         |                                    
|Current:                                                                                                                                                                |                                     |                                    
|Cash
        and cash equivalents                                                                                                                                       | $
                          462,300 | $
                           29,400
|Accounts
        receivable, less allowance for doubtful accounts                                                                                                       |                                     |                                    
|of
        $58,300 and $58,300, respectively                                                                                                                            | 1,165,000                           | 1,404,900                          
|Work
        in process, unbilled                                                                                                                                       | 571,900                             | 592,600                            
|Inventories                                                                                                                                                             | 164,100                             | 144,100                            
|Prepaid
        expenses and other current assets                                                                                                                       | 283,000                             | 107,000                            
|Refundable
        income taxes                                                                                                                                         | -                                   | 400,900                            
|Deferred income taxes                                                                                                                                                   | 50,000                              | 50,000                             
|Total
        Current Assets                                                                                                                                            | 2,696,300                           | 2,728,900                          
|Property
        and Equipment, net                                                                                                                                     | 611,900                             | 724,000                            
|Other
        Assets                                                                                                                                                    | 51,000                              | 71,600                             
|Total
        Assets                                                                                                                                                    | $                3,359,200          | $               3,524,500          
|                                                                                                                                                                        |                                     |                                    
|Liabilities,
        Convertible Redeemable Preferred Stock and Shareholders' (Deficiency) Equity                                                                       |                                     |                                    
|Current
        Liabilities:                                                                                                                                            |                                     |                                    
|Bank
        borrowings                                                                                                                                                 | $
                494,200           | $         
                  27,100
|Accounts
        payable                                                                                                                                                | 1,184,500                           | 1,037,900                          
|Accrued
        expenses                                                                                                                                                | 668,500                             | 613,900                            
|Current
        portion of capital lease obligations                                                                                                                    | 40,900                              | 38,900                             
|Customer
        deposits                                                                                                                                               | 218,800                             | 588,600                            
|Total
        Current Liabilities                                                                                                                                       | 2,606,900                           | 2,306,400                          
|Capital
        Lease Obligations, net of current portion                                                                                                               | 61,300                              | 84,500                             
|Related
        Party Notes Payable                                                                                                                                     | 162,500                             | 250,000                            
|Deferred
        Income Taxes                                                                                                                                           | 50,000                              | 50,000                             
|Total
        Liabilities                                                                                                                                               | 2,880,700                           | 2,690,900                          
|                                                                                                                                                                        |                                     |                                    
|Commitments
        and Contingencies                                                                                                                                   |                                     |                                    
|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                                           | 349,200                             | —                                  
|Series
        B, $.01 par value; 4,000,000 shares authorized; 1,400,000 and 0 shares issued and outstanding, respectively                                              | 293,600                             | —                                  
|Total
        Convertible Redeemable Preferred Stock                                                                                                                    | 642,800                             | —                                  
|                                                                                                                                                                        |                                     |                                    
|Shareholders'
        (Deficiency) Equity:                                                                                                                              |                                     |                                    
|Common
        stock, $.01 par value; 40,000,000 shares authorized; 30,485,328 and 27,433,958 shares issued; 26,684,091 and 23,632,721 shares outstanding, respectively | 304,800                             | 274,300                            
|Additional
        paid-in capital                                                                                                                                      | 16,863,100                          | 16,832,600                         
|Accumulated
        deficit                                                                                                                                             | (15,079,900)                        | (14,021,000)                       
|Treasury
        stock at cost: 3,801,237 and   3,801,237 shares, respectively                                                                                          | (2,252,300)                         | (2,252,300)                        
|Total
        Shareholders' (Deficiency) Equity                                                                                                                         | (164,300)                           | 833,600                            
|Total
        Liabilities & Shareholders' (Deficiency) Equity                                                                                                           | $                3,359,200          | $               3,524,500          







See accompanying notes to condensed consolidated financial
  statements





-3-

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##### Table of Contents





|**COMC,
          Inc.
          and
          Subsidiary**
        **Condensed
          Consolidated
          Statements
          of
          Operations**
|---------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                               
|                                                                                                                                                               





|                                                             | **Three
        Months Ended June 30,** | **Six
        Months Ended June 30,**
|------------------------------------------------------------ | --------------------------------------- | -------------------------------------
|                                                             | **2003**                                | **2002**                             
|                                                             | (unaudited)                             | (unaudited)                          
|Revenues:                                                    |                                         |                                      
|Data and Voice Service                                       | $
                     2,592,700        | $
                  2,794,600        
|Recruitment Service                                          | 37,100                                  | 132,500                              
|                                                             | 2,629,800                               | 2,927,100                            
|Cost
        of Revenues:                                    |                                         |                                      
|Data and Voice Services                                      | 2,010,300                               | 1,910,700                            
|Recruitment Services                                         | 28,800                                  | 108,100                              
|                                                             | 2,039,100                               | 2,018,800                            
|                                                             |                                         |                                      
|Gross
        Profit                                         | 590,700                                 | 908,300                              
|                                                             |                                         |                                      
|Operating
        Expenses:                                  |                                         |                                      
|Selling,
        General & Administrative                    | 1,185,100                               | 1,754,500                            
|Noncash
        Expenses:                                    |                                         |                                      
|Depreciation & Amortization                                  | 64,300                                  | 80,000                               
|                                                             | 1,249,400                               | 1,834,500                            
|Loss
        from Operations                                 | (658,700)                               | (926,200)                            
|Other
        Income (Expense)                               |                                         |                                      
|Interest Expense                                             | (48,500)                                | (20,400)                             
|Interest Expense, related party                              | (2,000)                                 | (21,500)                             
|Other                                                        | 200                                     | (13,200)                             
|                                                             | (50,300)                                | (55,100)                             
|                                                             |                                         |                                      
|Loss
        Before Provision for Income Taxes               | (709,000)                               | (981,300)                            
|Income Tax Benefit                                           | (7,900)                                 | —                                    
|                                                             |                                         |                                      
|Net
        Loss                                             | $
                      (701,100)       | $
                   (981,300)       
|                                                             |                                         |                                      
|Preferred
        Stock Dividend                             | (5,400)                                 | —                                    
|Net
        Loss Available to Common  Shareholders           | $
                      (706,500)       | $
                   (981,300)       
|Basic
        and Diluted Loss Per Common Share              | $                     (0.03)            | $
                         (0.05)    
|Basic and Diluted Weighted-Average Common Shares Outstanding | 26,684,091                              | 21,722,700                           







See accompanying notes to condensed consolidated financial
  statements













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##### Table of Contents







**COMC, Inc. and Subsidiary**

**Condensed Consolidated Statements of Cash Flows**







|                                                                                                               | **Six Months Ended June 30,** 
|-------------------------------------------------------------------------------------------------------------- | ------------------------------
|                                                                                                               | **2003**                      
|Cash Flows From Operating Activities:                                                                          | (unaudited)                   
|Net
        Loss                                                                                               | $
           (1,053,300)      
|Adjustments
        to reconcile net loss to net cash used in operating activities:                            |                               
|Depreciation
        and amortization                                                                          | 132,100                       
|Amortization
        of deferred finance charge                                                                | —                             
|Issuance
        of common stock for services                                                                  | 56,700                        
|Issuance
        of common stock in exchange for stock options                                                 | 4,300                         
|Issuance
        of convertible redeemable Series A preferred stock for services                               | 32,200                        
|Issuance
        of convertible redeemable Series B preferred stock for services                               | 15,000                        
|Changes
        in operating assets and liabilities:                                                           |                               
|Accounts
        and Work In Process Unbilled                                                                  | 260,600                       
|Inventories                                                                                                    | (20,000)                      
|Prepaid
        expenses and other current assets                                                              | (176,000)                     
|Accounts
        payable                                                                                       | 146,600                       
|Accrued
        expenses                                                                                       | 54,600                        
|Income
        taxes payable/refundable                                                                        | 400,900                       
|Customer
        deposits                                                                                      | (369,800)                     
|Net
        Cash (Used In) Provided By Operating Activities:                                                   | (516,100)                     
|                                                                                                               |                               
|Cash
        Flows From Investing Activities:                                                                  |                               
|Deposits
        and Other assets                                                                              | 20,600                        
|Purchase
        of property and equipment                                                                     | (20,000)                      
|Net
        Cash Provided By (Used In) Investing Activities                                                    | 600                           
|                                                                                                               |                               
|Cash
        Flows From Financing Activities                                                                   |                               
|Sale
        of common stock, net of offering costs                                                            | —                             
|Sale
        of Series A convertible redeemable preferred stock                                                | 312,500                       
|Sale
        of Series B convertible redeemable preferred stock                                                | 215,000                       
|Advances
        from bank loans                                                                               | 6,003,400                     
|Repayments
        on bank loans                                                                               | (5,536,300)                   
|Repayment
        on Related Party Subordinate Notes Payable                                                   | (25,000)                      
|Payments
        on capital lease obligations                                                                  | (21,200)                      
|Net
        Cash Provided By (Used In) Financing  Activities                                                   | 948,400                       
|                                                                                                               |                               
|Net
        Increase (Decrease) in Cash and Cash Equivalents                                                   | 432,900                       
|Cash
        and Cash Equivalents, beginning of period                                                         | 29,400                        
|Cash
        and Cash Equivalents, end of period                                                               | $         462,300             
|Cash
        Paid For:                                                                                         |                               
|Interest                                                                                                       | $
                102,300 ****
|Income
        taxes                                                                                           | $             1,600           
|Non
        Cash Financing Activities:                                                                         |                               
|Accrued
        dividend for Series A and B convertible redeemable Preferred stock                             | $
                    5,600   
|Issuance
        of common stock in exchange for stock options                                                 | $
                    4,300   
|Issuance
        of convertible redeemable series B preferred stock in exchange for related party note payable | $
                  62,500    
|Non
        Cash Investing Activities:                                                                         |                               
|Equipment
        under capital lease                                                                          | $
                         —  









See accompanying notes to condensed consolidated financial
  statements.







-5-

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##### Table of Contents





**COMC Inc., and Subsidiary**



**Notes to Condensed Consolidated Financial Statements**



1.   Summary of Accounting Policies



The Company



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.



Basis of Presentation



The interim consolidated financial statements presented have been prepared
  by COMC, Inc. (the "Company") without audit and, in the opinion of the management, reflect all adjustments of a normal recurring nature (except
  as discussed below) necessary for a fair statement of (a) the results of operations for the three and six months ended June 30, 2003 and 2002, (b) the
  Company's financial position at June 30, 2003 and (c) the cash flows for the six months ended June 30, 2003 and 2002. Interim results are not necessarily
  indicative of results for a full year.



The consolidated balance sheet presented as of December 31, 2002 has
  been derived from the consolidated financial statements that have been audited by the Company's independent public accountants. The consolidated financial
  statements and notes are condensed as permitted by Form 10-QSB and do not contain certain information included in the annual financial statements and
  notes of the Company. The consolidated financial statements and notes included herein should be read in conjunction with the financial statements and
  notes included in the Company's 2002 Annual Report on Form 10-KSB filed on April 17, 2003.



During the quarter ended June 30, 2003, the Company recorded a $349,000
  adjustment to reduce its work-in-process inventory to the lower of cost or net realizable value. The effect of this adjustment was to increase the net
  loss for the three months ended June 30, 2003 by approximately $349,000 or $0.01 per common share, from a net loss of approximately $350,000 to a net
  loss of approximately $700,000. This adjustment was based on a detailed analysis performed during the June 30, 2003 quarter-end closing of the Company’s
  existing work-in-process commenced in prior quarters. During the second quarter, the Company revised its methodology for analyzing open job costs in order
  to more readily identify those job costs which cannot be invoiced to its customers and therefore should be charged to costs and expenses rather than carried
  as an asset in work-in-process.



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 June 30, 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.



Use of Estimates



The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ 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 cost (determined on a first-in, first-out) or market.



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.





-6-

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**COMC Inc., and Subsidiary**



**Notes to Condensed Consolidated Financial Statements**



Table of Contents



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.



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.



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.



Short-Term Debt



The fair value of short-term debt is estimated based on current interest rates available to the Company for debt instruments with similar terms and maturities.



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 June 30, 2003 and December 31, 2002, the fair values of the Company's financial instruments approximate their historical carrying amounts.



Basic and Diluted Earnings and Loss Per Common Share



Under SFAS No. 128, the dilutive effect of stock options is excluded
  from the calculation of basic earnings per share. For the periods ended June 30, 2003 and 2002 all potential common shares were excluded from diluted
  earnings per share as their effects were antidilutive, respectively. As of June 30, 2003 the Series A and B convertible redeemable preferred stock outstanding
  could be converted into an aggregate of 40,052,163 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.



Options outstanding to purchase 3,622,864 shares of common stock at prices between $0.08
  per share and $1.00 per share would not have increased the diluted number of common stock outstanding (using the treasury stock method) as the exercise
  prices were greater than the average market price of the common stock during the three-month and six-month periods ended June 30, 2003.





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.







-7-

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##### Table of Contents





**COMC Inc., and Subsidiary**



**Notes to Condensed Consolidated Financial Statements**



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. The Company estimates the fair value of stock options at the grant date by using the Black-Scholes option pricing-model with the following weighted average assumptions used for grants in 2001: dividend yield of 0; expected volatility of 170%; risk-free interest rate of 5.3% and expected lives of five years for all plan options. There were no options granted in 2002 and the during the six months ended June 30, 2003. Under the accounting provisions of SFAS No. 123, the Company's pro forma net loss and the basic and diluted net loss per common share would have been adjusted to the pro forma amounts below.



|                                                                                              | **For
        the
        Three
        Months
        Ended
        June
        30,** |                   | **For
        the
        Six
        Months
        Ended
        June
        30,**
|--------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------- | ----------------- | -------------------------------------------------------------------------------------
|                                                                                              | **2003**                                                                                | **2002**          |                                                                                      
|                                                                                              |                                                                                         |                   |                                                                                      
|Net
        Loss
        Available
        to Common
        Shareholders:                    |                                                                                         |                   |                                                                                      
|As
        Reported                                                                           | $    (706,500)                                                                          | $     (981,300)   |                                                                                      
|Add:
        Stock-based
        employees
        compensation                               |                                                                                         |                   |                                                                                      
|expense
        included
        in net
        loss                                          | —                                                                                       | —                 |                                                                                      
|Deduct:
        Total
        stock-based
        employee                                    |                                                                                         |                   |                                                                                      
|compensation
        expense
        determined
        under                                 |                                                                                         |                   |                                                                                      
|fair
        value
        based
        method
        for
        all
        awards        | (8,800)                                                                                 | (10,000)          |                                                                                      
|Pro
        forma                                                                             | $    (715,300)                                                                          | $    (991,300)    |                                                                                      
|Basic
        and
        Diluted
         earnings
        (loss)
        per
        share: |                                                                                         |                   |                                                                                      
|As
        reported                                                                           | $          (0.03)                                                                       | $          (0.05) |                                                                                      
|Pro
        forma                                                                             | $          (0.03)                                                                       | $          (0.05) |                                                                                      



Adoption of New Accounting Pronouncements



In June 2002, 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.





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##### Table of Contents



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 150, "Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity."
  SFAS 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 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. The Company expects that, as a result of adopting SFAS 150 on July 1, 2003, the Company will be 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 is not expected to
  affect the carrying amount of the Company’s shareholders’ deficiency.



2. Future Prospects



The Company has incurred operating and net losses in the first half of 2003 as well as during the years 2002 and 2001. 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 taken steps as of and subsequent to December 31, 2002 to improve the situation, including the $500,000 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 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, a reduction in the Company's work 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.



Any
  temporary
  lack of available
  financing
  could have
  a materially
  unfavorable
  effect on
  the Company's
  financial
  statements.
  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 condensed
  consolidated
  financial
  statements
  included in
  this quarterly
  report do
  not include
  any adjustments
  that might
  result from
  the outcome
  of this uncertainty.



3.   Financings



Lines of Credit



In 2002, the Company (i) raised approximately $650,000 in a private placement of its common stock with various accredited investors, and (ii) secured a $2,000,000 revolving line of credit under a Revolving Credit Loan & Security Agreement with Comerica Bank ("Agreement") that expires in February 2003. The borrowings under the Agreement are limited to no more than 80% of eligible accounts receivable (as defined in the agreement), bear interest at the bank's prime rate plus 2.0% (6.25% as of December 31, 2002) and are collateralized by the Company's accounts receivable, inventories, and property and equipment. The Agreement contains certain restrictive covenants, which require, among other things, that the Company maintain certain financial ratios pertaining to tangible net worth (as defined), debt to tangible net worth (as defined), and current ratio, and maintain certain minimum levels of tangible net worth (as defined) and net income (as defined). The Company was not profitable in 2002 and did not meet the covenants pertaining to net income and current ratio (as defined in the Agreement). The Bank waived the net income covenant and current ratio for the first quarter of 2002, but the Company did not receive a subsequent waiver and was not able to satisfy all financial covenants since then and continued to be in default. On December 6, 2002, the Company received notice that it was still in default on various terms of the Agreement. On February 7, 2003, the Company executed a modification of the Agreement which, provided, among other terms, a reduction in the borrowing base, as defined in the Agreement, to 70%, with a further reduction to 60% in certain situations, a reduction in the credit limit to $750,000, with a further reduction to $550,000 in certain situations, and a modification to the termination date to March 14, 2003. The Company paid off the balance of monies due Comerica on February 27, 2003.



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. Any temporary lack of financing could have a materially unfavorable effect on the Company's financial statements. 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 its operations. Management is currently discussing with Pacific Business an increase in the line of credit and a reduction of the interest rate. There are no assurances that the Company will be successful. See Note 2.



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



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##### Table of Contents



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 $78,000 as of December 31, 2002.



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



|Years Ending December 31,
|-------------------------
|2003                     
|2004                     
|2005                     
|2006                     
|2007                     
|                         





4.   Commitments and Contingencies





Operating Leases



The
  Company leases
  certain offices
  under operating
  leases expiring
  on various
  dates through
  2007. Total
  rent expense
  charged to
  operations
  was $511,200
  in 2002, respectively.
  As of June
  30, 2003,
  the minimum
  future rental
  commitments
  under non-cancelable
  operating
  leases payable
  over the remaining
  terms of the
  operating
  leases are:



|Years
        Ending
        December
        31,
|-------------------------------------------------
|2003                                             
|2004                                             
|2005                                             
|2006                                             
|2007                                             
|                                                 



Rent expense during the six months ended June 30,  2003 was, net of sublease income, $126,400.



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.



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.



The Company has been informed by a competitor that a current sales employee may be in violation of a non-compete agreement. This employee stated in her employment agreement with the Company that she did not have a non-compete agreement with her former employer. ICF does not believe this will have a material effect on the Company.



Employment Agreements



The
  Company's
  current Chairman
  and Chief
  Executive
  Officer is
  an "At
  Will"
  employee at
  an annual
  salary of
  $135,000, which
  is being accrued
  until the
  Company's
  cash position
  improves.





-10-

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**COMC Inc., and Subsidiary**



**Notes to Condensed Consolidated Financial Statements**



Table of Contents



5.
  Transactions with Related Parties



In December 2002, the terms of the remaining subordinated notes in
  the principal amount of $750,000, originally issued as part of the Merger discussed in Note 1, 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.



Related party interest expense associated with the above notes aggregated $60,700 during 2002. In the six months ended June 30, 2003 related party interest expense amounted to $4,500.



In connection with the restructuring of the notes, the note holders received 753,246 options (Note 7) to purchase common stock. The fair value of these options of approximately $361,600 was recorded as a deferred finance charge, and was amortized as interest expense over the life of the related notes, with amortization accelerated when the notes were repaid before maturity. The Company recorded amortization expense of $1,400 during 2002. In the first quarter of 2003, 376,623 of these options were exchanged for 216,370 shares of common stock. This exchange was valued at $.02 per share for each share of common stock.



During the quarter ended June 30, 2003, the CEO received 75,000 shares of convertible redeemable Series B preferred stock, as compensation for services rendered in connection with the restructuring.



6. 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.



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.



Accrued
  dividends as of June 30, 2003 on Series A and B Convertible Redeemable Preferred
  Stock were $4,500 and $1,100, respectively.



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



-11-

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



|Series A                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Series B                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Term

The Series A Preferred Stock have a term of five years from the date of issuance. Redeemable in March 2008.

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.

As of June 30, 2003 accrued dividends on the Series A
Preferred Stock amounted to $4,500.

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.

Voting Rights

Each share of Series A Preferred Stock shall have the
equivalent voting rights of 20 shares of common stock.

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.

In the event the Company raises in excess of $2 million of new equity with rights junior to the Series A Preferred
Stock, the Company has a right to demand that the Series A Preferred Stock is converted into common stock.

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 Company 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. | Term

The Series B Preferred Stock have a term of four years and nine months from the date of issuance. Redeemable in March 2008.

Dividends

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 June 30, 2003 accrued dividends on the Series B
Preferred Stock amounted to $1,100.

Liquidation Preference

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

Each share of Series B Preferred Stock shall have the equivalent voting rights of 20 shares of common stock.

Conversion

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.

In the event the Company raises in excess of $5 million of
new equity with rights junior to the Series B Preferred Stock, the Company has a right to demand that the Series B Preferred Stock is converted into common stock.

Redemption

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.



As
  of June 30,
  2003, Series
  A and B Preferred
  Stock would
  be convertible
  into 12,052,163
  and 28,000,000,
  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.



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##### Table of Contents





**COMC Inc., and Subsidiary**



**Notes to Condensed Consolidated Financial Statements**



7. Shareholders' 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 the remaining
  balance of
  2,126,250
  shares vesting
  50% on October
  1, 2003 and
  50% on March
  31, 2004,
  respectively.
  The 2,835,000
  shares were
  valued at
  $.02 per share,
  or $56,700.
    As
  of June 30,
  2003, 75%
  of this amount
  has been recorded
  as a prepaid
  expense.



8.  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.



In the first half of 2003, revenues from the Company's two largest customers accounted for approximately 49%, and 38%, respectively, of total revenues. Accounts receivable balances at June 30, 2003 from these two customers represented approximately 36% and 39%, respectively, of net accounts receivable. In the first half of 2002, revenues from the Company's two largest customers accounted for approximately 32%, and 29%, respectively, of total revenues. No other customer accounted for more than 10% of total revenue in the six months ended June 30, 2003 and 2002, respectively.



The concentrations of revenues and related receivables as of and for the six months ended June 30, 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.





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##### Table
  of Contents



**COMC
  Inc., and
  Subsidiary**



**Notes
  to Condensed
  Consolidated
  Financial
  Statements**



9.

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.



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 in
  2003 and is
  not actively
  seeking new
  customers
  in this area.





Summarized financial information concerning the operating segments in which the Company operated for the three and six month periods ended June 30, 2003 and June 30, 2002, is shown in the following tables:



|Operating
        Segments                  | **Three
        Months Ended June 30,** |                         | **Six
        Months Ended June 30,**
|------------------------------------------- | --------------------------------------- | ----------------------- | -------------------------------------
|                                            | **2003**                                | **2002**                |                                      
|Revenue:                                    |                                         |                         |                                      
|Data
        & Voice Services               | $
           2,592,700                  | $
          2,794,600   |                                      
|Recruitment
        Services                | 37,100                                  | 132,500                 |                                      
|Corporate                                   | —                                       | —                       |                                      
|                                            | $    2,629,800                          | $   2,927,100           |                                      
|                                            |                                         |                         |                                      
|Income
        (loss) from operations:      |                                         |                         |                                      
|Data
        & Voice Services               | $
              582,400                 | $
             883,900  |                                      
|Recruitment
        Services                | 8,300                                   | 24,400                  |                                      
|Corporate                                   | (1,249,400)                             | (1,834,500)             |                                      
|                                            | $     (658,700)                         | $    (926,200)          |                                      
|                                            |                                         |                         |                                      
|Total
        Assets:                       |                                         |                         |                                      
|Data
        & Voice Services               | $
           3,307,000                  | $
          3,931,800   |                                      
|Recruitment
        Services                | 43,000                                  | 149,300                 |                                      
|Corporate                                   | 9,200                                   | 44,900                  |                                      
|                                            | $    3,359,200                          | $   4,126,100           |                                      
|                                            |                                         |                         |                                      
|Expenditures
        for long lived assets: |                                         |                         |                                      
|Data
        & Voice Services               | $  
                     —              | $        10,700         |                                      
|Recruitment
        Services                | —                                       | —                       |                                      
|Corporate                                   | —                                       | —                       |                                      
|                                            | $                —                      | $         10,700        |                                      
|                                            |                                         |                         |                                      
|Depreciation
        and amortization:      |                                         |                         |                                      
|Data
        & Voice Services               | $
                64,300                | $
               80,000 |                                      
|Recruitment
        Services                | —                                       | —                       |                                      
|Corporate                                   | —                                       | —                       |                                      
|                                            | $         64,300                        | $        80,000         |                                      



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.





13

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##### Table of Contents





Item 2. Management Discussion and Analysis of Financial Condition and Results of

Operations



This report contains certain statements of a forward-looking nature relating to future performance of the Company. Prospective investors are cautioned that such statements are only predictions, and actual events or results may differ materially.



Overview



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.
  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
  highly 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. 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.



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. and NorTel Networks, Inc.



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 affect the amounts reported in the Condensed Consolidated Financial Statements and accompanying Notes. The Summary of Significant Accounting Policies appears in Note 1 to the Condensed Consolidated Financial Statements and describes the significant accounting polices and methods used in the preparation of the Condensed 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 Condensed Consolidated Financial Statements.



Revenue recognition. The Company derives a significant portion of its revenue from short and 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 the 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 accounts receivable are concentrated in a relatively few number of customers, 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.



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 asset is dependent upon the generation of future taxable income.



|Results of Operations: |                             |                 |                           |                |             
|---------------------- | --------------------------- | --------------- | ------------------------- | -------------- | ------------
|                       | Three Months Ended June 30, |                 | Six Months Ended June 30,
|Dollars in Thousands   | 2003                        | 2002            |                           | 2003           | 2002        
|                       |                             |                 |                           |                |             
|Net Revenues           |                             |                 |                           |                |             
|Data & Voice Services  | $    2,592,700              | $   2,794,600   |                           | $    5,089,000 | $  6,022,500
|Recruitment Services   | 37,100                      | 132,500         |                           | 88,600         | 260,000     
|Total Revenues         | $    2,629,800              | $     2,927,100 |                           | $    5,177,600 | 6,282,500   



Our
  revenues were
  $2,629,800
  and $2,927,100
  for the three
  months ended
  June 30, 2003
  and 2002,
  respectively,
  representing
  a decrease
  of 10.2%.
  This decrease
  was due primarily
  to a 7.2%
  decrease in
  Data and Voice
  Services revenue
  for the period,
  and a 72%
  decrease in
  Recruitment
  Services revenue.
  Compared with
  revenue of
  $2,548,000
  generated
  in the first
  quarter ended
  March 31,
  2003, our
  second quarter
  revenue increased
  3.2%. Data
  and Voice
  Services continued
  to show the
  effects of
  a significant
  decline in
  project work
  relating to
  one of our
  larger existing
  clients. We
  are not actively
  seeking new
  business in
  our Recruitment
  Services Division.





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##### Table of Contents



Our
  revenues were
  $5,177,600
  and $6,282,500
  for the six
  months ended
  June 30, 2003
  and 2002,
  respectively,
  representing
  a decrease
  of 17.6%.
  This decrease
  was due primarily
  to a 15.6%
  decrease in
  Data and Voice
  Services revenue
  for the period,
  and an 66.0%
  decrease in
  Recruitment
  Services revenue.
  Data and Voice
  Services continued
  to show the
  effects of
  a significant
  decline in
  project work
  relating to
  one of our
  larger existing
  clients. We
  are not actively
  seeking new
  business in
  our Recruitment
  Services Division.



|Dollars
        in Thousands  | **Three
        Months Ended June 30,** |          | **Six
        Months Ended June 30,**
|----------------------------- | --------------------------------------- | -------- | -------------------------------------
|                              | **2003**                                | **2002** |                                      
|Gross
        Profits         |                                         | Margin   |                                      
|Data
        & Voice Services | $582,400                                | 22.5%    | $883,900                             
|Recruitment
        Services  | 8,300                                   | 22.4%    | 24,400                               
|Total
        Gross Profits   | $590,700                                | 22.5%    | $908,300                             



Cost of revenues was $2,039,100 and $2,018,800 for the three months ended June 30, 2003 and 2002, respectively, representing marginal an increase of 1.0%. Our Gross profit for the comparable periods was $590,700 and $908,300, respectively, representing a decrease of 35.0%. Gross profit and margin for Data and Voice Services was $582,400 and 22.5%, respectively, for the three months ended June 30, 2003 as compared with $883,900 and 31.6%, respectively, for the three months ended June 30, 2002. The decrease in margin was mainly due to write down of work in process based on estimated net realizable value, which was partially off-set by less use of more expensive subcontracted labor on out-of-area projects. Gross profit and margin for Recruitment Services were $8,300 and 22.4%, respectively for the three months ended June 30, 2003 as compared with $24,400 and 18.4%, respectively for the three months ended June 30, 2002. The increase in margin was due to a lower percentage of permanent placement revenue as compared to the prior period, which had a lower contribution margin.



Cost of revenues was $3,713,400 and $4,164,300 for the six months ended June 30, 2003 and 2002, respectively, representing a decrease of 10.8%. Conversely, our Gross profit for the comparable periods was $1,464,200 and $2,118,400, respectively, representing a decrease of 30.9%. Gross profit and margin for Data and Voice Services was $1,446,800 and 28.4%, respectively, for the six months ended June 30, 2003 as compared with $2,077,400 and 34.5%, respectively, for the six months ended June 30, 2002. The decrease in margin was mainly due to write down of work in process based on estimated net realizable value, which was partially off-set by the less use of more expensive subcontracted labor on out-of-area projects. Gross profit and margin for Recruitment Services were $17,400 and 19.6%, respectively for the three months ended June 30, 2003 as compared with $41,000 and 15.8%, respectively for the six months ended June 30, 2002. The increase in margin was due to a lower percentage of permanent placement revenue as compared to the prior period, which had a lower contribution margin.



Selling, general and administrative ("SG&A") expenses decreased 32.5% from $1,754,500 for the three months ended June 30, 2002 to $1,185,100 for the three months ended June 30, 2003. This also compares with $1,112,100 of similar expense in the previous quarter ended March 31, 2003. The decrease in year over year comparable quarters was due to a reduction in

workforce and to other cost reductions that we instituted in response to the overall softness in the economy.



Also included in our SG&A expenses are our holding company expenses, which decreased by $123,700 from $183,700 for the three months ended June 30, 2002 to $60,000, for the three months ended June 30, 2003. Our prior quarter holding company expenses were $170,000 for the period ended March 31, 2003. The decrease in expense was due to reduced filing and legal fees incurred in the

quarter. SG&A expenses for ICF's operations decreased from $1,754,500 for the three months ended June 30, 2002 to $1,392,700 for the three months ended June 30, 2003.



SG&A expenses decreased 31.2% from $3,328,300 for the six months
  ended June 30, 2002 to $2,291,200 for the six months ended June 30, 2003. The decrease was due to a reduction in workforce and to other cost reductions
  that we instituted in response to the overall softness in the economy.

Depreciation and amortization expenses were $64,300 and $80,000 for
  the three months ended June 30, 2003 and 2002, respectively. This decrease was due to minimal purchases of field service and office equipment. We expect
  that depreciation will continue to decrease in dollar terms as a result of a reduction in investments in capital equipment required to support the business.
  Also included in our SG&A expenses are our holding company expenses, which decreased by $219,900 from $387,000 for the six months ended June 30, 2002
  to $167,100, for the six months ended June 30, 2003. The decrease in expense was due to reduced filing and legal fees incurred.

Depreciation
  and amortization
  expenses were
  $132,100 and
  $158,400 for
  the six months
  ended June
  30, 2003 and
  2002, respectively.
  This decrease
  was due to
  minimal purchases
  of field service
  and office
  equipment.
  We expect
  that depreciation
  will continue
  to decrease
  in dollar
  terms as a
  result of
  a reduction
  in investments
  in capital
  equipment
  required to
  support the
  business.



Depreciation and amortization expenses were $64,300 and $80,000 for the six months ended
  June 30, 2003 and 2002, respectively. This decrease was due to minimal purchases of field service and office equipment. We expect that depreciation will
  continue to decrease in dollar terms as a result of a reduction in investments in capital equipment required to support the business



|Dollars
        in Thousands | **Three
        Months Ended June 30,** |                        | **Six
        Months Ended June 30,**
|---------------------------- | --------------------------------------- | ---------------------- | -------------------------------------
|                             | **2003**                                | **2002**               |                                      
|Operating
        Loss       | $
            (658,700)                 | $
           (926,200) |                                      



Operating Loss decreased to a loss of $658,700 for the three months ended June 30, 2003 from a loss of $926,200 for the three months ended June 30, 2002.



Operating Loss decreased to a loss of $959,100 for the six months ended June 30, 2003 from a loss of $1,368,300 for the six months ended June 30, 2002.



There was no interest income for the three and six months ended June 30, 2003 and 2002.



Interest expense increased for the three months ended June 30, 2003 to $50,500 from$41,900 for the three months ended June 30, 2002., due to increased borrowing.  Our related party interest expenses declined from $21,500 to $2,000, for the quarters ended June 30, 2002 and 2003. We did experience an increase in comparable borrowing under our working capital line of credit, which resulted in

an increase in interest expense from $20,400 to $48,500, respectively, for the quarters ended June 30, 2002 and 2003.



Other Income (Expense) is comprised 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 $200 and $13,200, respectively, for the three months ended June 30, 2003 and 2002.



Other
  Income (Expense)
  is comprised
  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 $200 and
  $36,600, respectively,
  for the six
  months ended
  June 30, 2003
  and 2002.



During the six months ended June 30, 2003 and 2002, the Company provided
  a valuation allowance on all of the deferred tax asset associated with the losses incurred during the periods, respectively, as management is unable to
  conclude that it is more likely than not that such deferred tax assets will be realized.  During the three-month and six-month periods ended June
  30, 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. An income
  tax benefit of 204,400 was received for the three months ended June 30, 2002 due to losses for the quarter.  An income tax refund was received in
  July 2002.



Net Loss Available to Common Shareholders decreased from $981,300, or ($0.05) per share, for the three months ended June 30, 2002 to $706,500, or ($0.03) per share, for the three months ended June 30, 2003.



Net
  Loss Available
  to Common
  Shareholders
  decreased
  from $1,300,600,
  or ($0.06)
  per share,
  for the six
  months ended
  June 30, 2002
  to $1,058,900,
  or ($0.04)
  per share,
  for the six
  months ended
  June 30, 2003.





15

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##### Table of Contents



Liquidity
  and Capital Resources



Cash and cash equivalents increased to $462,300 at June 30, 2003 compared to $29,400 at December 31, 2002. The increase was mainly attributable to the sale of Series A convertible redeemable preferred stock for cash proceeds of $312,500 during the three months ended March 31, 2003 and the sale of Series B convertible redeemable preferred stock of $215,000 during the three months ended June 30, 2003. In addition, on June 28, 2003, COMC received a federal income tax refund of $410,408.



Cash Flows From Operating Activities. For the six months ended June 30, 2003, cash consumed by operating activities was $516,100 which resulted primarily from our net loss for the first six months of $1,053,300, decreased by non-cash charges of $240,300, adecline in operating assets of $465,500, anincrease in liabilities, of $201200, offset by a decrease in customer deposits of $369,800.



Accounts receivable and work in process unbilled decreased by $260,600 due to increased collection activity and write down of work in process based on estimated net realizable value in the second quarter of 2003. Net increase in payables and accruals amounted to $201,000 primarily due to an increase in accrued payroll for executive salaries and account payables.



Cash Flows From Investing Activities. There were no significant investing activities during the six months ended June 30,  2003.



Cash
  Flows From
  Financing
  Activities.
  Net cash provided
  by financing
  activities
  during the
  six months
  ended June
  30, 2003 was
  $948,400.
  The cash generated
  arose from
  $527,500 of
  proceeds from
  the issuance
  of Series
  A and B convertible
  redeemable
  preferred
  stock and
  from increased
  bank borrowings
  in the amount
  of $467,100
  offset by
  $25,000 of
  debt repayment
  on related
  party notes
  payable and
  $21,200 on
  capital lease
  obligations.



Our long-term liabilities include $162,500 in Related Party Notes Payable. Interest is accruing at 4% per annum on these Notes and is being paid monthly.



Our net working capital at June 30, 2003 was a positive $89,400, a
  decrease of $333,100 from December 31, 2002. We have incurred operating and net losses in the first half of 2003 as well as during the years 2002 and
  2001. We have limited additional financing available under our current accounts receivable financing facility in order to fund any additional cash required
  for our operations or otherwise. These matters raise substantial doubt about our ability to continue as a going concern. Management has taken steps as
  of and subsequent to December 31, 2002 to improve the situation, including the $500,000 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 Greater Bay Bancorp, the moving of our corporate offices
  from Martinez, California to a smaller facility in Concord, California in November 2002, the reduction of our direct sales force, a reduction in our work
  force and further cuts in overhead costs, the closing of our Birmingham facility, the downsizing of our Houston and Phoenix operations, and changes in
  our management. Any temporary lack of available financing could have a materially unfavorable effect on our financial statements. Our long-term prospects
  are dependent upon a return to profitability and/or the ability to raise additional capital as necessary to finance operations. The condensed consolidated
  financial statements included in this quarterly report do not include any adjustments that might result from the outcome of this uncertainty.



We have been dependent on two large customers for the majority of our revenue to date. A loss of either one could have a material effect on our liquidity. While from time to time we may experience delays in the collection of our accounts receivable from our major customers, due to the quality of our major customers, the collect ability of accounts receivable has not been a problem.



The
  following
  table discloses
  our contractual
  commitments,
  as of June
  30, 2003,
  relating to
  lease obligations
  and long-term
  debt and redeemable
  preferred
  stock for
  future periods
  (See footnotes
  3, 4, 5 and
  6):



|Years Ending December 31,
|-------------------------
|2003                     
|2004                     
|2005                     
|2006                     
|2007                     
|2008                     
|                         



Item 3. Controls and Procedures



(a)       Under the supervision and with the participation of our management,

including our principal executive officer and principal financial

officer, we conducted an evaluation of our disclosure controls and

procedures, as such term is defined under Rule 13a-14(c) promulgated

under the Securities Exchange Act of 1934, as amended (the "Exchange

Act"), within 90 days of the filing date of this report. Based on

their evaluation, our principal executive officer and principal

financial officer 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 the evaluation referenced in

paragraph (a) above.





16

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##### Table of Contents



Part II. OTHER INFORMATION



Item 1. Legal proceedings



The Company settled a legal proceeding during the second quarter of 2003. The Company is currently involved in one other separate legal proceeding.



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-complaint,
  identifying ICF Communications Solutions, Inc. (ICF) as fictitiously named cross-defendant Roe 1.  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.



The Company has been informed by a competitor that a current sales employee may be in violation of a non-compete agreement. This employee has stated in her employment agreement with the Company that she did not have a non-compete agreement with her former employer. ICF does not believe this will have a material effect on the Company.



Mr. Christopher R. Smith, who was employed by the Company as Chief Executive Officer and President, and served on the Companys Board of Directors, until his resignation effective April 14, 2003. As of April 3, 2003, according to the Companys records, Mr. Smith owned 872,950 shares of the Companys common stock. The Company is reviewing its rights and obligations under Mr. Smiths option agreement dated August 10, 1999, which provided an option to purchase 2,463,869 common shares at an exercise price of $0.08 per share.





Item 2. Changes in Securities



At
  the Board
  of Directors
  Meeting on
  February 28,
  2003, our
  Board authorized
  management
  to raise up
  to $750,000
  of equity
  from the sale
  of Series
  A Preferred
  Stock in COMC.
  In March 2003,
  we raised
  approximately
  $312,500 through
  a private
  placement
  of 1,092,657.34
  shares of
  Series A Preferred
  Stock for
  $.286 per
  share convertible
  in ten shares
  of common
  stock with
  various accredited
  investors
  (the"Investors").
  The offering
  to the Investors
  was exempt
  from the regulation
  requirements
  of the Securities
  Act of 1933
  pursuant to
  Regulation
  D, Rule 506.
  In March and
  June 2003,
  an additional
  55,944.06
  and 56,614.93
  shares of
  Series A Preferred
   Stock
  was issued,
  valued at
  $16,000 and
  $16,200, respectively,
  for services
  rendered and
  as a reimbursement
  for expenses
  in the first
  and second
  quarter of
  2003.



At
  the Board
  of Directors
  Meeting on
  May 8, 2003,
  our Board
  authorized
  management
  to raise part
  of the $750,000
  of equity
  previously
  authorized
  at the February
  28, 2003 meeting.
  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
  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 Companys
  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.



Item 3. Defaults Upon Senior Securities



None



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



Not Applicable



Item 5. Other Information



At
  the February
  6, 2002 Board
  of Directors
  Meeting, Mr.
  John Ackerman
  stepped down
  as Chairman
  of the Board
  of COMC and
  was replaced
  by Mr. William
  M. Burns.
  Mr. Christopher
  Smith was
  named the
  CEO of ICF
  as well as
  holding that
  position
  with COMC.
  In November
  2002, and
  April of 2003,
  Paul Bakker
  and Patrick
  Guarino, respectively,
  resigned from
  the board
  of the Company.



Until the acceptance of his resignation, that was offered to the Board on February 28, 2003 and subsequently accepted by the current Chairman, Mr. Smith was Chief Executive Officer and President and Acting Chief Financial Officer of COMC. Mr. Smith previously held officer positions at ICF until February 28, 2003 when Ms. Fuellhart became Chairman, President and Chief Executive Officer and Mr. Burns became Executive Vice President and Chief Operating Officer, respectively, of ICF.



In April 2003, Mr. Christopher Smith resigned as a director of the Company.



On May 8, 2003 George Malin was elected a director of COMC to fill a vacancy.



Item 6. Exhibits and Reports on Form 8-K



(a)  Exhibits



(1) Certificate of Incorporation, 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")



(2)
    By-laws, incorporated herein by reference to the Proxy Statement



(b)  No reports on Form 8-K
  were filed during the quarter for which this report is filed.



17

---





**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 hereunto duly authorized.



COMC, INC.



By: /s/ Janice B. Fuellhart

-------------------------------

Janice B. Fuellhart, Chairman





Dated:
   August
  18, 2003





---





EXHIBIT INDEX



10.10 
  stockpur.htm">SERIES
  B PREFERRED
  STOCK PURCHASE
  AGREEMENT



31.1   
  dx31-1.htm">
  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 2002

dx31-2.htm">



32.1   
  dx32-1.htm">Certification
  pursuant to
  18 U.S.C.
  Section 1350,
  as adopted
  pursuant to
  Section 906
  of the Sarbanes-Oxley
  Act of 2002







32.2 
  dx32-1.htm">
    Certification
  pursuant to
  18 U.S.C.
  Section 1350,
  as adopted
  pursuant to
  Section 906
  of the Sarbanes-Oxley
  Act of 2002

dx32-2.htm">