`U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

(Mark One)

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

                    For Fiscal Year Ended: December 31, 2004

                                       OR

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

              For the transition period from _________ to ________


                        Commission file number: 333-76630



                           Competitive Companies, Inc.
                 (Name of small business issuer in our charter)


          Nevada                            65-1146821                      7389
(State or other jurisdiction of     (Primary Standard Industrial      (I.R.S. Employer
incorporation or organization)       Classification Code Number)    Identification Number)

3751 Merced Drive, Suite A Riverside, CA                          92503
(Address of principal executive offices)                        (Zip Code)

        Registrant's telephone number, including area code: 951.687.6100

                 3751 Merced Drive, Suite A Riverside, CA 92503
 (Address of principal place of business or intended principal place of business)

                        Corporate Creations Network, Inc
             8275 South Eastern Avenue, Suite 200 Las Vegas NV 89123
                                 1.305.672.0686
            (Name, address and telephone number of agent for service)

Securities registered under Section 12(b) of the Act: NONE

Securities registered under Section 12(g) of the Act:

Common stock, par value $.001 per share
(Title of class)

Preferred Stock
(Title of class)




                                       1




        Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [] No [X]

        Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation SB is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]

       State issuer's revenues for its most recent fiscal year: $1,268,734

        State the aggregate market value of the voting and non-voting common equity
held by non-affiliates computed by reference to the price at which the common
equity was sold, or the average bid and asked prices of such common equity, as
of a specified date within the past 60 days. (See definition of affiliate in
Rule 12b-2 of the Exchange Act.) Not applicable, stock does not trade

        Note: If determining whether a person is an affiliate will involve an
unreasonable effort and expense, the issuer may calculate the aggregate market
value of the common equity held by non-affiliates on the basis of reasonable
assumptions, if the assumptions are stated.

      ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS

        Indicate by check mark whether the issuer has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act
after the distribution of securities under a plan confirmed by a court. Yes [ ]
No [ ]

                    APPLICABLE ONLY TO CORPORATE REGISTRANTS

        State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: as of March 31 2005 there were
5,912,061 shares of common stock outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE

        If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"). The listed
documents should be clearly described for identification purposes (e.g., annual
report to security holders for fiscal year ended December 24, 1990).

No documents are incorporated by reference into this Annual Report on Form 10-KSB.

   Transitional Small Business Disclosure Format (check one): Yes [ ]; No [X]




                                       2




TABLE OF CONTENTS

Part I...................................................................4
Item 1. Description of Business..........................................4
Item 2. Description of Property..........................................14
Item 3. Legal Proceedings................................................14
Item 4. Submission of Matters to a Vote of Security Holders..............14
PART II..................................................................15
Item 5. Market for Common Equity and Related Stockholder Matters.........15
Item 6. Management's Discussion and Analysis or Plan of Operation........19
Item 7. Financial Statements.............................................24
Item 8. Changes In and Disagreements With Accountants on Accounting
        and Financial Disclosure.........................................41
Item 8A. Controls and Procedures.........................................41
PART III.................................................................41
Item 9. Directors, Executive Officers, Promoters and Control Persons;
        Compliance With Section 16(a) of the Exchange Act................41
Item 10. Executive Compensation..........................................43
Item 11. Security Ownership of Certain Beneficial Owners and
         Management......................................................44
Item 12. Certain Relationships and Related Transactions..................44
Item 13. Exhibits and Reports on Form 8-K................................44
Item 14. Principal accountant fees and services..........................45




                                       3




Part I

Item 1. Description of Business.

Competitive Companies, Inc. is the name of the company formed in October 2001
solely to facilitate a December 2001 reorganization which included an
acquisition of the assets of Huntington Telecommunications Partners, LP, a
California limited partnership and a merger with a company formerly known as
Competitive Companies, Inc. - now known as Competitive Companies Holdings, Inc.,
a Nevada corporation originally formed March 1998.

As a result of the reorganization, Competitive Companies owns the assets of
Huntington Partners and has as a wholly owned subsidiary Competitive Holdings.
Competitive Holdings has two wholly owned subsidiaries:

        o Competitive Communications, Inc. which was incorporated under the laws
          of the state of California in February 1996.
        o CCI Residential Services, Inc. which was incorporated under the laws
          of the state of California in January 2000.

We provide telecommunications services primarily to residents of apartment
complexes, and other users, including business and residential, in primary and
secondary metropolitan areas in California, Alabama, and Mississippi. We offer a
set of telecommunications products and services including:

        o Local telephone services
        o Domestic and international long distance services
        o Enhanced voice, data and internet services

In addition, we have developed our own billing and back office systems we call
Hartline that enables us to enter, schedule and track a customer's order from
the point of sale to the installation and testing of service. Apartment complex
customers are serviced completely by our proprietary Hartline system.

We generally price our services at a discount of 5% to 10% below the prices
charged by the traditional local phone companies.

As of March 31, 2005, we were operational in 10 apartment complexes in
California, Mississippi, and Alabama using 8 of our own telephone switches.

Recent developments in our industry, such as court decisions concerning access
fees, increase use of cell phones by apartment dwellers and the like, have
caused us to reevaluate our business plan.





                                       4



Accordingly, we have agreed to enter into a reverse triangular merger
transaction with CA Networks. At the Effective Date, by virtue of the Merger and
without any action on the part of any holder of any capital stock of either our
acquisition subsidiary ["CAC"], us ["CCI"] or CA Networks, Inc. ["CAN"], and
subject to all the terms and conditions of this Agreement, at the Closing, the
CAN agrees to receive from the CAC, and CAC agrees to issue to the shareholders
of the CAN (a "Shareholder") 40,559,999 Shares of Common Stock of CCI ("CCI
Shares") (the "Share Consideration") in exchange for 40,559,999 Shares of Common
Stock of CAN ("CAN's Shares"). Each of CAN's Shares that is issued and
outstanding immediately before the Closing, other than shares with respect to
which the right to dissent has been exercised, shall entitle the holder thereof
to receive one CCI Common Share.


Subsidiaries

Unlike many of our competitors, we operate with both a regulated and
non-regulated company. One of our subsidiaries, Competitive Communications,
Inc., is regulated and our other subsidiary CCI Residential Services, Inc. is
unregulated.

Under the Telecommunications Act of 1996, our regulated subsidiary, Competitive
Communications, can receive significantly discounted prices from the existing or
traditional local phone companies and long distance carriers, thereby reducing
our costs compared to the prices we would have to pay without having this
status. As a regulated telecommunications provider Competitive Communications is
required to negotiate agreements for services from the local exchange carrier,
to file telephone rate tariffs with state public utilities commissions, and is
subject to the state public utilities commission rules regarding
telecommunications carriers. The tariff filing and update requirements and
compliance with commission rules require significant amount of time and cost in
order to ensure compliance with filing and commission rules. Currently
Competitive Communications is a regulated carrier in California and Mississippi.

Our other subsidiary, CCI Residential Services, operating under shared tenant
services provisions within each state, is a non-regulated company and is not
required to file tariffs with state public utilities commissions and does not
have to comply with commission rules regarding local exchange carriers. CCI
Residential Services can sign individual agreements with property owners
allowing for payments to the property owner of a portion of the revenue CCI
Residential receives from the apartment complex residents on the owner's
property, and legally avoid the more onerous rate filing requirements of its
regulated subsidiary and other regulated carriers. As a shared tenant service
provider CCI Residential Services is required by each state's public utilities
commission to provide regulated carriers with equal access to the apartment
complexes it services. CCI Residential Services accounts for approximately 92%
of our revenue through an oral agreement whereby we sell services from
Competitive Communications, our regulated subsidiary, through our unregulated
subsidiary CCI Residential Services.

The remaining 8% of Competitive Companies' revenue was from direct sales to
other residential and business customers. We anticipate that Competitive
Communications direct sales percentage will increase in the future as we
increase our residential and business customer base and move from a re-seller of
the local telephone carriers' services to sharing a portion of the local
telephone carriers' switches. This move will significantly reduce our costs from
the local telephone carrier.

Services

Competitive Communications

Competitive Communications offers the following services in most of its markets:




                                       5





        o Local and long distance services to business and non-apartment complex
          residential customers

        o Calling cards to business and non-apartment complex residential
          customers

        o Local area network connection

        o Resale of traditional phone company services

To offer these services, Competitive Communications generally must secure
certification from a state regulator and typically must file rates or price
lists for the services that it will offer. The certification process varies from
state to state; however, the fundamental requirements are largely the same.
State regulators require new entrants to demonstrate that they have secured
adequate financial resources to establish and maintain good customer service.
New entrants must show that they possess the knowledge and ability required to
establish and operate a telecommunications network. We believe we currently have
all necessary agreements in place.

Services are sold as bundled or unbundled depending on the customer's
preference. Presently services are sold directly by Competitive Communications
to business and residential customers. Competitive Communications also sells
services to CCI Residential Services which then sells these services to
apartment residents under shared tenant services provisions. Under shared tenant
services provisions, CCI Residential Services is not required by the state
public utilities commissions to file tariffs, thus reducing the expenses
associated with tariff filing and other regulatory requirements. Most
Competitive Communications direct sales to business and residential customers
result from direct solicitation, yellow pages advertising, referrals from other
customers, and conversion of customers who leave apartment complexes serviced by
CCI Residential Services. In the future, we plan to add commissioned sales
agents to target small to medium size businesses and residential customers.
Initially, we plan to add these agents in California then subsequently in other
western states as we become an authorized local exchange carrier in those
states. We anticipate that the small to medium size businesses will provide
better gross margins than the residential market since the business customers
normally make more long distance calls, create less bad debt than residential
customers, and are more apt to subscribe to high speed Internet services that we
offer. Presently approximately 92% of Competitive Communications sales is to CCI
Residential Services, and the remaining 8% is from direct sales of telephone and
Internet services to residential and business customers. Presently all of
Competitive Communications direct sales business is from telephone service to
residential and business customers and less than 1% from other sources.

CCI Residential Services

CCI Residential Services provide the following products and services:

        o Local and long distance services to apartment complex customers

        o Calling cards to apartment complex customers

        o Cable/satellite television services to apartment complex customers

        o Wake-up call service

        o Music on hold

To offer these services to apartment complex customers, CCI Residential Services
must sign a contract with the apartment owner. These are multi-year contracts
normally range from 5 to 20 years. They provide for the owner to share in a
percentage of the revenue we receive from servicing the complex. The percentage
received may vary for 0% to 11%, based on the total revenue received, the types
of services provided, the term of the contract and other negotiated factors. If




                                       6




the complex is being built, CCI Residential must plan for, have approved, and
install underground cabling. If the complex is already built, it must survey the
cabling needs and negotiate the use of the cable with the owner. It must secure
state approval to conduct business in the state, establish service from
Competitive Communications if available or with the traditional local phone
companies until Competitive Communications is certified.

Services are sold by CCI Residential Services as bundled or unbundled depending
on the customer's preference. Competitive Communications sells unbundled
telephone, cable television, and Internet services to CCI Residential Services
at or marginally above Competitive Communications' cost. CCI Residential
Services then sells these services to apartment complex customers at competitive
market prices. By having all outside service agreements under Competitive
Communications, we are able and will be able in the future to negotiate better
terms and discounts based on the combined volume of Competitive Communications'
and CCI Residential Services' customer base. When tenants move into an apartment
complex serviced by us, the leasing agent informs them that the complex has a
private telephone service provider and a private cable television provider (in
those locations where we provide the cable television service). The tenant must
contact us in order to activate their telephone and cable television service. If
the tenant prefers to receive service from the local telephone company instead
of us, they may do so. However, their telephone line must be cross-connected
from us to the local telephone company. This may take the telephone company from
a few days to two weeks to accomplish and cost the tenant for the work. If the
tenant selects our service, in most cases we can activate their telephone
service while they are still on the line. On an average more than 59% of the
tenants decide to use our telephone service. Those who do not use our telephone
service can select a local carrier, use their cell phones only or do not have
telephone service. Over 71% of tenants use our cable television service at those
complexes where we offer the service. Those who do not use our services either
use satellite television dishes for service or do not have television service.
Approximately 21% of tenants use our DSL internet service. Presently,
approximately 67% of CCI Residential Services' revenue is from telephone related
service, approximately 24% is from cable television service, and approximately
9% is from Internet service to tenants of apartment complexes. serviced by the
company. We anticipate the percentage of Internet services will increase in the
future as we expand our internet service offering to additional complexes that
we service and penetration increases.

As CCI Residential Services purchases its services from Competitive
Communications, CCI Residential Services does not need or have the same
connection services agreements as Competitive Communications.

Local Telephone Services

Both subsidiaries offer local telephone services, including local telephone
calls as well as other features such as:

        o Call forwarding

        o Call waiting

        o Dial back

        o Caller ID

        o Speed dialing

        o Calling cards

        o Three way calling

        o E-911

        o Voice mail




                                       7




Competitive Communications has negotiated agreements with the major local
telephone carrier in each of its markets to provide discounted telephone
service. In California, as a competitive local exchange carrier Competitive
Communications has signed an agreement with both SBC and Verizon as a re-seller
of services. Under the Telecom Act, this gives us additional discounts over
previous rates.

Long Distance Services

We offer a full range of domestic and international long distance services.
These services include "1+" outbound calling, inbound toll free service, and
such services as calling cards, operator assistance, and conference calling.
Competitive Communications has negotiated an agreement with Qwest Communications
for volume discounts for long distance re-sale. Prior to signing with Qwest we
had previous long distance service providers that were more expensive than Qwest
and provided very poor service. Periodically we review proposals from other long
distance providers to ensure that it is receiving the best possible rates.
Should we find better rates with comparable service, we would either request
revision of the Qwest agreement or select the more cost effective provider and
transition to the new provider.

Internet Services

Commencing in May 2002 we began installing and offering high speed Internet
service to selected apartment complex customers. We offer high speed Internet
access services via Digital Subscriber Line, ("DSL"). After accepting bids from
five other carriers, based on price and service quality, Qwest was selected as
carrier to provide our Internet service telephone lines at selected apartment
complexes that we service. Since Qwest does not provide ubiquitous dial-up and
high-speed internet service in our business and residential market areas, we
also have Internet re-sale agreements with Covad Communications that cover most
of our selected business and residential markets.

Regulated and Non-Regulated Status

Unlike many of our competitors, we operate with both a regulated and
non-regulated business. One of our subsidiaries, Competitive Communications,
Inc., is regulated and our other subsidiary CCI Residential Services, Inc. is
unregulated.

Under the Telecommunications Act of 1996, our regulated subsidiary, Competitive
Communications, can receive significantly discounted prices from the existing or
traditional local phone companies and long distance carriers, thereby reducing
our costs compared to the prices we would have to pay without having this
status. As a regulated telecommunications provider Competitive Communications is
required to negotiate agreements for services from the local exchange carrier,
to file telephone rate tariffs with state public utilities commissions, and is
subject to the state public utilities commission rules regarding
telecommunications carriers. The tariff filing and update requirements and
compliance with commission rules require significant amount of time and cost in
order to ensure compliance with filing and commission rules. Currently
Competitive Communications is a regulated carrier in California and Mississippi.

Our other subsidiary, CCI Residential Services, operating under shared tenant
services provisions within each state, is a non-regulated company and is not
required to file tariffs with state public utilities commissions and does not
have to comply with commission rules regarding local exchange carriers. CCI
Residential Services can sign individual agreements with property owners
allowing for payments to the property owner of a portion of the revenue CCI
Residential receives from the apartment complex residents on the owner's
property, and legally avoid the more onerous rate filing requirements of its
regulated subsidiary and other regulated carriers. As a shared tenant service
provider CCI Residential Services is required by each state's public utilities




                                       8




commission to provide regulated carriers with equal access to the apartment
complexes it services. CCI Residential Services accounts for approximately 92%
of Competitive Holdings' revenue.

Competitive Communications buys or leases telephone-switching equipment and
leases transmission capacity from other carriers and then provides
telecommunications services to our non-regulated subsidiary, CCI Residential
Services, which in turn provides these services to residents of apartment
complexes. Competitive Communications also directly offers these services to
other residential and business customers. During 2003, Competitive
Communications accounted for approximately 8% of Competitive Holdings' revenue.
We anticipate that this percentage will increase in the future as we increase
our residential and business customer base and move from a re-seller of the
local telephone carriers services to sharing a portion of the local telephone
carriers switches.


Hartline Billing and Automated Back Office System 

Our Hartline system enters, schedules, provisions, and tracks a customer's order
from the point of sale to the installation and testing of service. It also
interfaces with trouble management, inventory, billing, collection and customer
service systems.

For our apartment complex customers, our processes are automated. For our
non-apartment complex customers, we intend to automate most of the processes
involved in switching a customer to our networks. Our goal is to accelerate the
time between customer order and service installation, reduce overhead costs and
provide exceptional customer service. To achieve this goal, we are continuing to
develop and enhance our Hartline system to support the growth of our operations
into the non-apartment complex markets.

Regulation

Our telecommunications services business is subject to federal, state and local
regulation.

Federal Regulation

The FCC regulates interstate and international telecommunications services,
including the use of local telephone facilities to originate and end interstate
and international calls. We operate under the 1996 Telecommunications Act, that
allows any entity to enter any telecommunications market, subject to reasonable
state regulation of safety, quality and consumer protection.

With respect to our domestic service offerings, Competitive Communications, Inc.
has filed rates with the FCC stating the rates, terms and conditions for our
interstate services. Our rates are generally not subject to pre-effective review
by the FCC, and can be amended on one day's notice. Our interstate services are
provided in competition with the traditional local phone, regional and national
companies. With limited exceptions, the current policy of the FCC for most
interstate access services dictates that traditional local phone companies
charge all customers the same price for the same service. Thus, the traditional
local phone companies generally cannot lower prices to those customers likely to
contract for their services without lowering charges for the same service to all
customers in the same geographic area, including those whose telecommunications
requirements would not justify the use of such lower prices. The FCC may,
however, alleviate this constraint on the traditional local phone companies and
permit them to offer special rate packages to very large customers, as we have
done in a few cases, or permit other forms of rate flexibility. The FCC has
adopted some proposals that significantly lessen the regulation of traditional
local phone companies that are subject to competition in their service areas and
provide such traditional local phone companies with additional flexibility in
pricing their interstate switched and special access on a central office
specific basis; and is considering expanding such flexibility.




                                        9




Under authority granted by the FCC, we will resell the international
telecommunications services of other common carriers between the United States
and international points. In connection with such authority, our subsidiary,
Competitive Communications, Inc., has filed rates with the FCC stating the
rates, terms and conditions for our international services.

State Regulation

State regulatory agencies have regulatory jurisdiction when our facilities and
services are used to provide intrastate services. A portion of our current
traffic may be classified as intrastate and therefore subject to state
regulation. We expect to offer more intrastate services as our business and
product lines expand and state regulations are modified to allow increased local
services competition. For other than shared tenant services, in order to provide
intrastate services, we generally must obtain a certificate of public
convenience and necessity from the state regulatory agency and comply with state
requirements for telecommunications utilities, including state rate
requirements.

Similar to the FCC, state agencies require us to file periodic reports, pay
various fees and assessments, and comply with rules governing quality of
service, consumer protection, and similar issues. Although the specific
requirements vary from state to state, they tend to be more detailed than the
FCC's regulation because of the strong public interest in the quality of basic
local exchange service. We intend to comply with all applicable state
regulations, and as a general matter do not expect that these requirements of
industry-wide applicability will harm our business. However, new regulatory
burdens in a particular state may affect the profitability of our services in
that state.

Local Regulation

Our networks are subject to numerous local regulations such as building codes
and licensing. Such regulations vary on a city-by-city and county-by-county
basis. If we decide in the future to install our own fiber optic transmission
facilities, we will need to obtain rights-of-way over private and publicly owned
land. Such rights-of-way may not be available to us on economically reasonable
or advantageous terms.

Competition

The telecommunications industry is highly competitive. We believe that the
principal competitive factors affecting our business will be pricing levels and
clear pricing policies, customer service, and to a lesser extent the variety of
services offered. Our ability to compete effectively will depend upon our
continued ability to maintain high quality, market-driven services at prices
generally equal to or below those charged by our competitors. To maintain our
competitive posture, we believe that we must be in a position to reduce our
prices in order to meet reductions in rates, if any, by others. Any such
reductions could reduce our revenues. Many of our current and potential
competitors have financial, personnel and other resources, including brand name
recognition, substantially greater than those, as well as other competitive
advantages over us.

We compete principally with the traditional local phone companies serving that
area, such as SBC, BellSouth or Southwestern Bell. We believe the regional Bell
operating companies' primary agenda is to be able to offer long distance service
in their service territories.

As a recent entrant in the integrated telecommunications services industry, we
have not achieved and do not expect to achieve a significant market share for
any of our services. Recent regulatory initiatives allow newer local phone
companies such as our subsidiary, Competitive Communications, to connect with
traditional local phone companies facilities. Although this provides increased
business opportunities for us, such connection opportunities have been and
likely will continue to be accompanied by increased pricing flexibility for and
relaxation of regulatory oversight of the traditional local phone companies.




                                       10




Traditional local phone companies have long-standing relationships with
regulatory authorities at the federal and state levels. While recent FCC
administrative decisions and initiatives provide increased business
opportunities to telecommunications providers such as us, they provide the
traditional local phone companies with increased pricing flexibility for their
private line and special access and switched access services.

Data/Internet Service Providers

The Internet services market is highly competitive, and we expect that
competition will continue to intensify. Our competitors in this market will
include other Internet service providers, other telecommunications companies,
online services providers and Internet software providers. Many of these
competitors have greater financial, technological and marketing resources than
those available to us.

Employees

As of December 31, 2004, we had 5 full-time staff of which 2 are management, 2
are technical and 1 is administrative, and we have 1 part-time employee. None
of our employees are represented by a collective bargaining agreement. We
believe that we enjoy good relationships with our employees.

RISK FACTORS

We have incurred losses since inception, considered on a pro forma basis after
our recent reorganization, and may incur future losses. We are in default on
major debt obligations. Our poor financial condition raises substantial doubt
about our ability to continue as a going concern. You will be unable to
determine whether we will ever become profitable which subjects you to the risk
of loss on your investment.

Our operating losses for the year ended December 31, 2004 totaled $34,981. We
have never operated at a profit. As of December 31, 2004, we had a stockholders'
deficit of $167,077. As of December 31, 2004, we only had $5,680 in current cash
available to finance our operations and a working capital deficit of $339,177.

In addition we are in default on a $207,450 note payable to GST due April 28,
2004. The note is secured by the telecommunications equipment purchased with the
proceeds from the note. We are also in default on a note payable to Frontier
Communications Services, Inc., bearing interest at 10% and requiring monthly
principal and interest payments of $3,000. Frontier is currently in bankruptcy
and the new creditor has not yet been assigned. This note was originally due on
March 15, 2003, however due to the aforementioned, the required monthly payments
have not been made since December 31, 2002. The note is secured by the
telecommunications equipment purchased with the proceeds from the note.

We anticipate that we will be able to generate sufficient operating cash flow to
finance continued operations during the next 12 months, excluding debt payments.

Our ability to continue as a going concern is dependent on our ability to raise
funds to finance ongoing operations and repay debt; however we may not be able
to raise sufficient funds to do so. Our independent auditors have indicated that
there is substantial doubt about our ability to continue as a going concern over
the next twelve months. Our poor financial condition has led us to revise our
business plan and enter into the Merger Agreement. Because of these factors, an
investor cannot determine if we will remain profitable.

In connection with issuance of additional shares of common stock under the terms
of our anticipated reorganization and potential related dilution, the value of
your investment may be reduced.

Recent developments in our industry, such as court decisions concerning access
fees, increase use of cell phones by apartment dwellers and the like, have
caused us to reevaluate our business plan.

Accordingly, we have agreed to enter into a reverse triangular merger
transaction with CA Networks. At the Effective Date, by virtue of the Merger and
without any action on the part of any holder of any capital stock of either our
acquisition subsidiary ["CAC"], us ["CCI"] or CA Networks, Inc. ["CAN"], and
subject to all the terms and conditions of this Agreement, at the Closing, the
CAN agrees to receive from the CAC, and CAC agrees to issue to the shareholders
of the CAN (a "Shareholder") 40,559,999 Shares of Common Stock of CCI ("CCI
Shares") (the "Share Consideration") in exchange for 40,559,999 Shares of Common
Stock of CAN ("CAN's Shares"). Each of CAN's Shares that is issued and
outstanding immediately before the Closing, other than shares with respect to
which the right to dissent has been exercised, shall entitle the holder thereof
to receive one CCI Common Share.




                                       11



This dilution or other dilution incurred in connection with the reorganization
may reduce the value of your investment.

We may not be able to provide our products and services if we do not connect or
continue to connect with the traditional carriers, our primary competitors.

Traditional carriers are established providers of local telephone services to
all or virtually all telephone subscribers within their respective service
areas. Many competitive carriers, including us, have experienced difficulties in
working with the traditional carriers with respect to initiating, connecting,
and implementing the systems used by these competitive carriers to order and
receive network elements and wholesale services and locating the competitive
carriers' equipment in the offices of the traditional carriers. We believe we
have all necessary agreement in place.

As a competitive carrier, we must coordinate with traditional carriers so that
we can provide local service to customers on a timely and competitive basis. The
Telecommunications Act created incentives for regional Bell operating companies
to cooperate with competitive carriers and permit access to their facilities by
denying such companies the ability to provide in-region long distance services
until they have satisfied statutory conditions designed to open their local
markets to competition. The regional Bell operating companies in our markets are
not yet permitted by the FCC to offer long distance services. These companies
may not be accommodating once they are permitted to offer long distance service.
Currently Verizon is permitted to offer both local and long distance service in
some our mutual service areas, but we have not yet noticed any impact on our
markets.

If we cannot obtain the cooperation of a regional Bell operating company in a
region, whether or not we have been authorized to offer long distance service,
our ability to offer local services in such region on a timely and
cost-effective basis will be harmed.

Because many of our competitors have financial, personnel and other resources,
including brand name recognition, substantially greater than ours, we may not be
able to compete effectively, which could reduce our revenues.

The telecommunications industry is highly competitive. Many of our current and
potential competitors have financial, personnel and other resources, including
brand name recognition, substantially greater than ours, as well as other
competitive advantages over us. This could reduce our revenues.

Because our principal competitors are also our suppliers, our revenues may be
reduced.

In each of the markets we target, we will compete principally with the
traditional local phone companies serving that area, such as SBC , BellSouth or
Southwestern Bell. We must purchase telecommunications services we offer from
these or similar carriers. Our suppliers could charge less than we do which
could reduce our revenues.




                                       12




Our management has significant control over stockholder matters, which may
affect the ability of minority stockholders to influence our activities.

Collectively, our officers and directors beneficially own approximately 50% of
our outstanding common stock. In addition, they own 3,125,000 options or
warrants which are exercisable to purchase additional shares of common stock at
an average price of $0.16 during the next five years. They also own 4,000,000
shares of Class A convertible preferred stock which may be converted into
20,000,000 additional shares of common stock for no additional consideration
under certain circumstances in the future, although the Class A stock is to be
cancelled in connection with our anticipated merger. As such, our officers/
directors and their family members control the outcome of all matters submitted
to a vote by the holders of our common stock, including the election of our
directors, amendments to our certificate of incorporation and approval of
significant corporate transactions. Additionally, our officers and directors
could delay, deter or prevent a change in our control that might be beneficial
to our other stockholders.

Because there is not now and may never be a public market for our common stock,
investors may have difficulty in reselling their shares.

Our common stock is currently not quoted on any market. No market may ever
develop for our common stock, or if developed, may not be sustained in the
future. Accordingly, our shares should be considered totally illiquid, which
inhibits investors' ability to resell their shares.

Because our common stock may be considered a penny stock, any investment in our
common stock is considered a high-risk investment and is subject to restrictions
on marketability; you may be unable to sell your shares.

If our common stock becomes tradable in the secondary market, we may be subject
to the penny stock rules adopted by the Securities and Exchange Commission that
require brokers to provide extensive disclosure to its customers prior to
executing trades in penny stocks. These disclosure requirements may cause a
reduction in the trading activity of our common stock, which in all likelihood
would make it difficult for our shareholders to sell their securities.

Because in the future, our stock may trade on the over-the-counter bulletin
board, our stockholders may have greater difficulty in selling their shares when
they want and for the price they want.

The over-the-counter bulletin board is separate and distinct from the Nasdaq
stock market. The bulletin board does not operate under the same rules and
standards as the Nasdaq stock market, including for example order handling
rules. The absence of these rules and standards may make it more difficult for a
stockholder to obtain execution of an order to trade and to obtain the price
they wanted for a trade. This means our shareholders may not be able to sell
their shares when they want for a price they want.

Because stocks traded on the bulletin board are usually thinly traded, highly
volatile, have fewer market makers and are not followed by analysts, our
stockholders may have greater difficulty in selling their shares when they want
and for the price they want.

Investors may have greater difficulty in getting orders filled because it is
anticipated that if our stock trades on a public market, it initially will trade
on the over-the-counter bulleting board rather than on Nasdaq. Investors' orders




                                       13




may be filled at a price much different than expected when an order is placed.
Trading activity in general is not conducted as efficiently and effectively as
with Nasdaq-listed securities.

Investors must contact a broker dealer to trade bulletin board securities.
Investors do not have direct access to the bulletin board service. For bulletin
board securities, there only has to be one market maker.

Bulletin board transactions are conducted almost entirely manually. Because
there are no automated systems for negotiating trades on the bulletin board,
they are conducted via telephone. In times of heavy market volume, the
limitations of this process may result in a significant increase in the time it
takes to execute investor orders. Therefore, when investors place market orders
- an order to buy or sell a specific number of shares at the current market
price - it is possible for the price of a stock to go up or down significantly
during the lapse of time between placing a market order and getting execution.

Because bulletin board stocks are usually not followed by analysts, there may be
lower trading volume than for Nasdaq-listed securities.

Certain Nevada corporation law provisions could prevent a potential takeover of
us which could adversely affect the market price of our common stock or deprive
you of a premium over the market price.

We are incorporated in the State of Nevada. Certain provisions of Nevada
corporation law could adversely affect the market price of our common stock.
Because Nevada corporation law requires board approval of a transaction
involving a change in our control, it would be more difficult for someone to
acquire control of us. Nevada corporate law also discourages proxy contests
making it more difficult for you and other shareholders to elect directors other
than the candidates nominated by our board of directors.

Item 2. Description of Property.

We are headquartered in Riverside, California, where we lease approximately
3,100 square feet of offices and warehouse space for approximately $2,700 per
month. The lease expires in 2006. We generally are provided minimal space at no
charge, from 100 to 200 square feet, for our telecommunications equipment at
each of the apartment complexes where we have systems installed. Our offices are
in good condition and are sufficient to conduct our operations.

We do not intend to renovate, improve, or develop properties. We are not subject
to competitive conditions for property and currently have no property to insure.
We have no policy with respect to investments in real estate or interests in
real estate and no policy with respect to investments in real estate mortgages.
Further, we have no policy with respect to investments in securities of or
interests in persons primarily engaged in real estate activities.

Item 3. Legal Proceedings.

None

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

None




                                       14




PART II

Item 5. Market for Common Equity and Related Stockholder Matters.

Market Information

There is no established public trading market for our securities. No market
exists for our securities and a regular trading market may not develop, or if
developed, may not be sustained. A shareholder in all likelihood, therefore,
will not be able to resell his or her securities should he or she desire to do
so when eligible for public resales. Furthermore, it is unlikely that a lending
institution will accept our securities as pledged collateral for loans unless a
regular trading market develops. Although we have held preliminary discussions
with one market maker concerning the NASD requirements for qualifying our
securities for quotation on the Over-the-Counter Bulletin Board, we have no
plans, proposals, arrangements, or understandings with any person with regard to
the development of a trading market in any of our securities.

Options, Warrants, Convertible Securities

Preferred stock

We are authorized to issue 10,000,000 shares of preferred stock

Class A preferred stock

4,000,000 shares of Class A convertible preferred stock were issued by us to
various founding stockholders and management in December 1999. These 4,000,000
shares are convertible into 20,000,000 shares of common stock. Conversion may
occur at any time, in whole or in part up to the number of shares set forth
below with the achievement of the following events for a period commencing on
the date such event was achieved and ending on December 31, 2010.

The conversion events are as follows:

                                                                     Number of shares of
Event                                                                common stock issued upon conversion

Achieving 100% increase in the combined number of owned                 10,000,000
apartment complex passings plus non-apartment complex
customers

Achieving 10,000 customers in the combined number of owned               5,000,000
apartment complex passings and non-apartment complex customers

Achieving 20,000 customers in the combined number of owned               5,000,000
apartment complex passings and non-apartment complex customers


        o An apartment complex passing is an individual apartment under direct
          contract with it for telephone, television or Internet service.
        o A non-apartment complex customer is a non-apartment residential or
          business customer that is counted once for each major service to which
          they subscribe.

Conversion events are based on customer base existing as of December 9, 1999.
While no Class A convertible preferred shares have been converted to common
stock the 100% increase in the combined number of owned apartment complex
passing plus non-apartment complex customers event has been achieved.




                                       15




It is anticipated that the Class A preferred stock will be cancelled in
connection with the anticipated merger without any conversion shares ever being
issued.

Class B convertible preferred shares

We have reserved for issuance upon the effectiveness of this registration
statement 1,495,436 shares of Class B convertible preferred stock entitling
persons owning the Class B shares the following:

The stock shall convert into such number or fraction thereof shares of common
stock based upon the following:


1- the fraction: [average of opening bid and ask price on the over the counter bulletin board/$3.00]
                                   divided by
the fraction: [average of opening bid and ask price on the over the counter bulletin board/$3.00]


For example, assume average opening bid/ask of $2.00. 1 - 2/3 = 1/3. 1/3 divided
by 2/3 = .5 additional share of common stock issued upon conversion.

If the average opening bid/ask price is more than $3.00 per share, no shares of
common stock shall be issued and the rights of the preferred stockholders will
terminate. Further, under no circumstances will the shares convert into more
than 2,990,872 shares of common stock.

Depending upon the average opening bid/ask price, there will be from zero to
2,990,872 shares of common stock issued in conversion of the Class B convertible
preferred shares.

Class C convertible preferred shares

We have reserved for issuance upon the effectiveness of this registration
statement 1,000,000 shares of Class C convertible preferred stock entitling
persons owning the Class C shares the following:

The stock shall convert into such number or fraction of shares of common stock
based upon the following:

        If the average of the closing bid price for the common stock for first five
        business day period immediately following the closing of the reorganization
        agreement during which the common stock is qualified for quotation on the
        over the counter bulletin board is less than $3.00 per share, the number of
        shares of common stock to be issued upon conversion of the Class C
        preferred stock shall be the product obtained by multiplying the following
        conversion ratio by the 1,000,000 shares of Class C preferred stock held by
        Huntington Partners. The conversion ratio shall be one minus the adjusted
        price divided by the adjusted price. The adjusted price shall be determined
        by dividing the closing bid price for the common stock for first five
        business day period immediately following the closing of the reorganization
        agreement during which the common stock is qualified for quotation on the
        over the counter bulletin board by $3.00. For purposes of determining the
        closing bid price for the common stock for first five business day period
        immediately following the closing of the reorganization agreement during
        which the common stock is qualified for quotation on the over the counter
        bulletin board, purchases of our common stock by us or our affiliates or
        persons controlled by us or our affiliates shall be disregarded. In
        addition, if trades have not been executed on at least three of those five
        days, the adjustment period shall be extended until our common stock shall
        have been traded on at least three days, and the average closing bid price
        for those three trading days shall be the price used in the formula.




                                       16




For example, assume average of first 5 days closing bid of $2.00, and no other
adjustments under the formula. The conversion would occur as follows:

        o 1 - 2/3 = 1/3.

        o 1/3 divided by 2/3 = .5.

        o .5 x 1,000,000 = 500,000.

Accordingly, 500,000 shares of common stock would be issued to Huntington
Partners upon conversion of the Class C preferred stock.

If the average of first 5 days closing bid is more than $3.00 per share, no
shares of common stock shall be issued and the rights of the preferred
stockholders will terminate. Further, under no circumstances will the shares
convert into more than 2,000,000 shares of common stock.

Depending upon the average opening bid/ask price, there will be from zero to
2,000,000 shares of common stock issued upon conversion of the Class B
convertible preferred shares.

Options

We have 3,435,000 outstanding non-statutory options to the following:


Name                                  Number of Option   Exercise Price   Number Currently
Officers, Directors & Affiliates:                                           Exercisable

     Jerald Woods                           500,000          $1.00               0
     Judy Kline (1)                       2,625,000          $0.001          2,625,000

     Sub-Total                            3,125,000                          2,625,000


Others:

     Employees                              245,000          $0.001            254,000
     Employees                               70,000          $1.00              28,000

     Sub-Total                              315,000                            282,000

     Total                                3,435,000                          2,907,000


(1) Judy Kline is an employee of Competitive Companies and mother Mr. David
Kline II, Competitive Companies' former Chairman, C.E.O., President, C.O.O. & Director.
As Mr. Kline is over 21 years of age and does not live with his mother, he
disclaims beneficial ownership of the shares underlying Ms. Kline's options.

The general terms to exercise the options for all except Jerald Woods are the
same. Exercise dates and amounts which can be exercised vary. No options may be
exercised until two years after initial grant of the individual option. Options
are normally exercisable over a five-year period as follows: at the end of:

        o First year - 0%,
        o Second year - 40%
        o Third through fifth year - 20% each year.



                                       17




The options granted Mr. Woods require certain levels of performance from them in
order for them to exercise each level.

Sales under Rule 144

In general, under Rule 144 as currently in effect, any of our affiliates and any
person or persons whose sales are aggregated who has beneficially owned his or
her restricted shares for at least one year, may be entitled to sell in the open
market within any three-month period a number of shares of common stock that
does not exceed the greater of (i) 1% of the then outstanding shares of our
common stock, or (ii) the average weekly trading volume in the common stock
during the four calendar weeks preceding such sale. Sales under Rule 144 are
also affected by limitations on manner of sale, notice requirements, and
availability of current public information about us. Non-affiliates who have
held their restricted shares for one year may be entitled to sell their shares
under Rule 144 without regard to any of the above limitations, provided they
have not been affiliates for the three months preceding such sale.

As a result of the provisions of Rule 144, all of the restricted securities
could be available for sale in a public market, if developed. The availability
for sale of substantial amounts of common stock under Rule 144 could reduce
prevailing market prices for our securities.

Penny Stock Considerations

Our shares will be "penny stocks" as that term is generally defined in the
Securities Exchange Act of 1934 to mean equity securities with a price of less
than $5.00. Our shares thus will be subject to rules that impose sales practice
and disclosure requirements on broker-dealers who engage in certain transactions
involving a penny stock.

Under the penny stock regulations, a broker-dealer selling a penny stock to
anyone other than an established customer or accredited investor must make a
special suitability determination regarding the purchaser and must receive the
purchaser's written consent to the transaction prior to the sale, unless the
broker-dealer is otherwise exempt. Generally, an individual with a net worth in
excess of $1,000,000 or annual income exceeding $100,000 individually or
$300,000 together with his or her spouse is considered an accredited investor.
In addition, under the penny stock regulations the broker-dealer is required to:

        o Deliver, prior to any transaction involving a penny stock, a
          disclosure schedule prepared by the Securities and Exchange
          Commissions relating to the penny stock market, unless the
          broker-dealer or the transaction is otherwise exempt;
        o Disclose commissions payable to the broker-dealer and our registered
          representatives and current bid and offer quotations for the
          securities;
        o Send monthly statements disclosing recent price information pertaining
          to the penny stock held in a customer's account, the account's value
          and information regarding the limited market in penny stocks; and
        o Make a special written determination that the penny stock is a
          suitable investment for the purchaser and receive the purchaser's
          written agreement to the transaction, prior to conducting any penny
          stock transaction in the customer's account.

Because of these regulations, broker-dealers may encounter difficulties in their
attempt to sell shares of our common stock, which may affect the ability of
selling shareholders or other holders to sell their shares in the secondary
market and have the effect of reducing the level of trading activity in the
secondary market. These additional sales practice and disclosure requirements
could impede the sale of our securities, if our securities become publicly
traded. In addition, the liquidity for our securities may be decreased, with a
corresponding decrease in the price of our securities. Our shares in all




                                       18




probability will be subject to such penny stock rules and our shareholders will,
in all likelihood, find it difficult to sell their securities.

Holders

As of March 31, 2005, we had 131 holders of record of our common stock.

Dividends

We have not declared any cash dividends on our common stock since our inception
and do not anticipate paying such dividends in the foreseeable future. We plan
to retain any future earnings for use in our business. Any decisions as to
future payments of dividends will depend on our earnings and financial position
and such other facts as the board of directors deems relevant. We are not
limited in our ability to pay dividends on our securities.

Item 6. Management's Discussion and Analysis or Plan of Operation.

SPECIAL INFORMATION REGARDING FORWARD LOOKING STATEMENTS

Some of the statements in this Form 10K-SB are "forward-looking statements."
These forward-looking statements involve certain known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performance
or achievements expressed or implied by these forward-looking statements. These
factors include, among others, the factors set forth above under "Risk Factors."
The words "believe," "expect," "anticipate," "intend," "plan," and similar
expressions identify forward-looking statements. We caution you not to place
undue reliance on these forward-looking statements. We undertake no obligation
to update and revise any forward-looking statements or to publicly announce the
result of any revisions to any of the forward-looking statements in this
document to reflect any future or developments.

Overview

Competitive Companies, Inc. is the name of the company formed in October 2001
solely to facilitate a December 2001 reorganization which included an
acquisition of the assets of Huntington Telecommunications Partners, LP, a
California limited partnership and a merger with a company formerly known as
Competitive Companies, Inc. - now known as Competitive Companies Holdings, Inc.,
a Nevada corporation originally formed March 1998.

As a result of the reorganization, Competitive Companies owns the assets of
Huntington Partners and has as a wholly owned subsidiary Competitive Holdings.
Competitive Holdings has two wholly owned subsidiaries:

        o Competitive Communications, Inc. which was incorporated under the laws
          of the state of California in February 1996.
        o CCI Residential Services, Inc. which was incorporated under the laws
          of the state of California in January 2000.

We provide telecommunications services primarily to residents of apartment
complexes, and other users, including business and residential, in primary and
secondary metropolitan areas in California, Alabama, and Mississippi. We offer a
set of telecommunications products and services including:

        o Local telephone services
        o Domestic and international long distance services
        o Enhanced voice, data and internet services




                                       19




In addition, we have developed our own billing and back office systems we call
Hartline that enables us to enter, schedule and track a customer's order from
the point of sale to the installation and testing of service. Apartment complex
customers are serviced completely by our proprietary Hartline system.

We generally price our services at a discount of 5% to 10% below the prices
charged by the traditional local phone companies.

As of March 31, 2005, we were operational in 10 apartment complexes in
California, Mississippi, and Alabama using 8 of our own telephone switches.

Recent developments in our industry, such as court decisions concerning access
fees, increase use of cell phones by apartment dwellers and the like, have
caused us to reevaluate our business plan.

Accordingly, we have agreed to enter into a reverse triangular merger
transaction with CA Networks. At the Effective Date, by virtue of the Merger and
without any action on the part of any holder of any capital stock of either our
acquisition subsidiary ["CAC"], us ["CCI"] or CA Networks, Inc. ["CAN"], and
subject to all the terms and conditions of this Agreement, at the Closing, the
CAN agrees to receive from the CAC, and CAC agrees to issue to the shareholders
of the CAN (a "Shareholder") 40,559,999 Shares of Common Stock of CCI ("CCI
Shares") (the "Share Consideration") in exchange for 40,559,999 Shares of Common
Stock of CAN ("CAN's Shares"). Each of CAN's Shares that is issued and
outstanding immediately before the Closing, other than shares with respect to
which the right to dissent has been exercised, shall entitle the holder thereof
to receive one CCI Common Share.

Fiscal year ended December 31, 2004 vs. Fiscal year ended December 31, 2003

                                                             2004          2003

REVENUES                                                 $ 1,268,734   $ 1,455,793

COSTS OF REVENUES                                            934,586     1,328,290 

GROSS PROFIT                                                 334,148       127,503

OTHER EXPENSES:
  Employee compensation and benefits                         165,395       258,911
  Occupancy and equipment                                     52,122        56,307
  Interest expense                                            48,051        45,808




                                       20




  Provision for bad debts                                     37,579        34,775
  Professional fees                                           24,609        25,731
  Loss on disposal of assets                                       -         4,081
  Loss from impairment of intangible contract
    revenue rights                                                 -       100,834
  Loss from impairment of equipment                                -       686,245
  Other                                                       41,373        39,077 
     Total other expenses                                    369,129     1,251,769 

NET LOSS                                                 $   (34,981)  $(1,124,266)
                                                         ============  ============


Our revenues decreased 12.8% from $1,455,793 for the period ended December 31, 2003 to
$1,268,734 for the period ended December 31, 2004 due to a rise in cellphone
usage which has adversely effected our retention rate and our new passing sign
up rate.

Our cost of revenues decreased 29.6% from $1,328,290 for the period ended
December 31, 2003 to $934,586 for the period ended December 31, 2004 due to the
fact that our revenues decreased and thus related expenses decreased slightly.
In addition, as a result of an impairment loss in 2003, depreciation and
amortization of approximately $150,000 is no longer included in cost of
revenues.

Our other expenses decreased 33.2% from $552,264 for the period ended December 31,
2003 to $369,129 for the period ended December 31, 2004. This decline was due to
decreases in employee compensation as a result of the resignation of the
Company's Chief Financial officer and the elimination of the salaried sales
employees. In addition, there were losses from impairments of equipment and
intangible assets of $787,079 for the period ended December 31, 2003 and none
for the period ended December 31, 2004.

Our net loss decreased 97% from $1,124,266 for the period ended December 31, 2003 to
($34,981) for the period ended December 31, 2004 due to the foregoing.

Commitments

We lease our operating facility under a non-cancelable operating lease. Future
minimum lease payments required are approximately as follows:

     Years Ending
     December 31,                                       Amounts

        2005                                         $    35,300
        2006                                              32,000

       Total                                         $    67,300
                                                     ===========


We also lease certain equipment used in our operations under various capital
leases. Future minimum lease payments under the leases are as follows:

Years Ending
December 31,                                                  Amounts

   2005                                                      $  27,140




                                       21




   2006                                                         13,955 
   Total minimum lease payments                                 41,095
   Less amount representing interest                            (6,348)
   Present value of future minimum lease payments               34,747
   Less current maturities                                     (21,666)

   Capital lease obligations, net of current maturities      $  13,081
                                                             ==========


Each of the leases contain options which allow us to purchase the equipment for
$1.00 at the end of the lease terms.

In connection with the registration of our common stock with the Securities and
Exchange Commission during 2003, we issued 1,495,436 convertible Class B
preferred shares to certain of our shareholders, in the event that the opening
trading price of our common stock in the secondary market does not meet the
following requirements. If the average opening bid price of our common stock is
less than $3.00 per share, we will be obligated to issue additional shares to
holders of 1,495,436 shares of our preferred stock so that the fair market value
of shares held by these stockholders is $3.00 (for example, if the opening bid
price of our common stock is $1.00 per share, we would be obligated to issue an
additional 2,990,872 shares of our common stock).

We issued 1,000,000 shares of our convertible Class C preferred stock to the
previous shareholders of HTP in the event that the average closing bid price of
our common stock is less than $3.00 per share for the first five days of trading
in the secondary market. For example, if the average closing bid price of our
common stock is $1.00 per share, we will be required to issue an additional
2,000,000 shares of our common stock if the aforementioned merger is not
completed.


Liquidity and capital resources

We have incurred losses since inception, considered on a pro forma basis after
our recent reorganization, and may incur future losses. We are in default on a
major debt obligation. Our poor financial condition raises substantial doubt
about our ability to continue as a going concern.

Our operating losses from inception to December 31, 2004 totaled $19,878,150. As
of December 31, 2004, we had a stockholders' deficit of $167,077. As of
December 31, 2004, we only had $5,680 in current cash available to finance our
operations and a working capital deficit of $339,177.

In addition we are in default on a $207,450 note payable to GST due April 28,
2004. The note is secured by the telecommunications equipment purchased with the
proceeds from the note. GST has filed for bankruptcy and is winding up its
business affairs and a new creditor has not been assigned.

We are also in default on a note payable to Frontier Communications Services,
Inc., bearing interest at 10% and requiring monthly principal and interest
payments of $3,000. Frontier is currently in bankruptcy and the new creditor has
not yet been assigned. This note was originally due on March 15, 2003, however
due to the aforementioned, the required monthly payments have not been made
since December 31, 2002. The note is secured by the telecommunications equipment
purchased with the proceeds from the note. We also have debt of $39,363 to a
related party and $6,916 to Ford Motor Credit, which are not in default

We anticipate that we will be able to generate sufficient operating cash flow to
finance continued operations during the next 12 months, excluding debt payments.




                                       22




Our ability to continue as a going concern is dependent on our ability to raise
funds to finance ongoing operations and repay debt; however we may not be able
to raise sufficient funds to do so. Our independent auditors have indicated that
there is substantial doubt about our ability to continue as a going concern over
the next twelve months. Our poor financial condition has led us to revise our
business plan.




                                       23




Item 7. Financial Statements.











                           COMPETITIVE COMPANIES, INC.
                                AND SUBSIDIARIES

                        Consolidated Financial Statements
                    as of December 31, 2004 and for the years
                        ended December 31, 2004 and 2003
                                       and
                        Report of Independent Registered
                             Public Accounting Firm







                                       24







                           COMPETITIVE COMPANIES, INC.
                                AND SUBSIDIARIES

                                TABLE OF CONTENTS
________________________________________________________________________________


                                                                       Page

Report of Independent Registered Public Accounting Firm                  26

Consolidated Financial Statements:

      Consolidated Balance Sheet as of December 31, 2004                 27

      Consolidated Statements of Operations for the years ended
          December 31, 2004 and 2003                                     28

      Consolidated Statements of Stockholders' Equity (Deficit) for
          the years ended December 31, 2004 and 2003                     29

      Consolidated Statements of Cash Flows for the years ended
          December 31, 2004 and 2003                                     30

      Notes to Consolidated Financial Statements                         31


________________________________________________________________________________






                                       25



                     [Letterhead of Kingery & Crouse, P.A.]




REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM


To the Stockholders of Competitive Companies, Inc. and subsidiaries:

We have audited the accompanying consolidated balance sheet of Competitive
Companies, Inc. and subsidiaries (the "Company") as of December 31, 2004, and
the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the years ended December 31, 2004 and 2003. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of the Company as of
December 31, 2004, and the results of its operations and cash flows the years
ended December 31, 2004 and 2003 in conformity with accounting principles
generally accepted in the United States of America. The accompanying financial
statements have been prepared assuming that the Company will continue as a going
concern. As discussed in Note C to the financial statements, the Company has
suffered recurring losses from operations and has been unable to generate
sufficient cash flow to meet a significant debt obligation that was due in April
2004. These factors raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans in regard to these matters are
also described in Note C. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.

/s/ Kingery & Crouse, P.A.

April 14, 2005
Tampa, FL



                                       26




                  COMPETITIVE COMPANIES, INC. AND SUBSIDIARIES

               CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31, 2004
________________________________________________________________________________


ASSETS

CURRENT ASSETS:
Cash                                                         $      5,680
Receivables:
   Accounts, net of allowance for doubtful accounts of
      $86,514                                                     101,951
   Unbilled                                                        22,045
Prepaid expenses and other current assets                           4,023 
      Total current assets                                        133,699

PROPERTY AND EQUIPMENT - NET                                      165,688

OTHER ASSETS                                                       56,347 

TOTAL                                                        $    355,734
                                                             =============

LIABILITIES AND STOCKHOLDERS' DEFICIT

CURRENT LIABILITIES:
Accounts payable                                             $     88,914
Current maturities of long-term debt                              266,851
Current maturities of capital lease obligations                    21,666
Accrued and other liabilities                                      95,445 
      Total current liabilities                                   472,876

LONG-TERM DEBT (net of current maturities)                         36,854

CAPITAL LEASE OBLIGATIONS (net of current maturities)              13,081 
      Total liabilities                                           522,811 

STOCKHOLDERS' DEFICIT:
Preferred stock, $0.001 par value, 10,000,000 shares
  authorized:
    Class A convertible, 4,000,000 shares issued and
      outstanding with a liquidation value of $40,000               4,000
    Class B convertible, 1,495,436 shares issued and
      outstanding with no liquidation value                         1,495
    Class C convertible, 1,000,000 shares issued and
      outstanding with no liquidation value                         1,000
Class A common stock, $0.001 par value, 70,000,000 shares
  authorized; 5,912,061 shares issued and outstanding               5,912
Additional paid-in capital                                     19,698,666
Deficit                                                       (19,878,150)
     Total stockholders' deficit                                 (167,077)

TOTAL                                                        $    355,734
                                                             =============

________________________________________________________________________________

See notes to consolidated financial statements.




                                       27




                  COMPETITIVE COMPANIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
______________________________________________________________________________________


                                                             2004             2003

REVENUES                                                $  1,268,734     $  1,455,793

COSTS OF REVENUES                                            934,586        1,328,290 

GROSS PROFIT                                                 334,148          127,503 

OTHER EXPENSES:
  Employee compensation and benefits                         165,395          258,911
  Occupancy and equipment                                     52,122           56,307
  Interest expense                                            48,051           45,808
  Provision for bad debts                                     37,579           34,775
  Professional fees                                           24,609           25,731
  Loss on disposal of assets                                       -            4,081
  Loss from impairment of intangible assets                        -          100,834
  Loss from impairment of equipment                                -          686,245
  Other                                                       41,373           39,077 
     Total other expenses                                    369,129        1,251,769 

NET LOSS                                                $    (34,981)    $ (1,124,266)
                                                        =============    =============

NET LOSS PER SHARE:
Basic and diluted                                       $      (0.01)    $      (0.19)
                                                        =============    =============

Weighted average number of shares outstanding -
   basic and diluted                                       5,912,000        5,912,000
                                                        =============    =============

______________________________________________________________________________________


See notes to consolidated financial statements.




                                       28





                  COMPETITIVE COMPANIES, INC. AND SUBSIDIARIES

            CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
__________________________________________________________________________________________________________________________________________________________________________________________________________________________

                                              Class A                         Class B                         Class C                                                 Additional
                                          Preferred Stock                 Preferred Stock                 Preferred Stock                   Common Stock               Paid-In
                                      Shares           Amount          Shares         Amount          Shares            Amount         Shares           Amount         Capital            Deficit              Total

Balances, December 31, 2002           4,000,000     $     4,000                -     $       -                 -      $        -       5,912,061      $    5,912     $ 19,701,161     $  (18,718,903)     $       992,170

Net loss                                      -                -               -             -                 -               -               -               -                -         (1,124,266)         (1,124,266)

Balances, December 31, 2003           4,000,000            4,000               -             -                 -               -       5,912,061           5,912       19,701,161        (19,843,169)           (132,096)

Issuance of Preferred Stock                   -                -       1,495,436         1,495         1,000,000           1,000               -               -          (2,495)                   -                   -

Net loss                                      -                -               -             -                 -               -               -               -                -            (34,981)            (34,981)

Balances, December 31, 2004           4,000,000     $      4,000       1,495,436     $   1,495         1,000,000      $    1,000       5,912,061      $    5,912     $ 19,698,666     $    19,878,150     $     (167,077)
                                    ============    =============     ===========    ==========      ============     ===========     ===========     ===========    =============    ================    ================
__________________________________________________________________________________________________________________________________________________________________________________________________________________________


See notes to consolidated financial statements.




                                       29




                  COMPETITIVE COMPANIES, INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
___________________________________________________________________________________

                                                            2004           2003

CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                               $ (34,981)   $ (1,124,266)
  Adjustments to reconcile net loss to net cash
   provided by operating activities:
    Depreciation and amortization                           45,847         196,526
    Amortization of intangible assets                            -         100,833
    Provision for bad debts                                 37,579          34,773
    Loss from impairment of intangible assets and
     equipment                                                   -         787,079
    Loss on disposal of assets                                   -           4,081
    Interest added to notes payable                              -           7,834
  Changes in assets and liabilities, net:
    (Increase) in receivables                              (30,207)         (3,256)
    Decrease (increase) in prepaid expenses and other
     current assets                                          4,940            (305)
    Decrease (increase) in other assets                     11,265          (2,359)
    (Decrease) increase in accounts payable                (17,765)         21,731
    Increase in accrued and other liabilities               14,144           7,417 
NET CASH PROVIDED BY OPERATING ACTIVITIES                   30,822          30,088 

CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment                     (3,613)        (10,086)
    Proceeds from sale of equipment                              -           3,650 
NET CASH USED IN INVESTING ACTIVITIES                       (3,613)         (6,436)

CASH FLOWS FROM FINANCING ACTIVITIES:
    Repayments of long-term debt                            (4,924)         (8,771)
    Repayments of capital lease obligations                (18,912)        (15,964)
CASH USED IN FINANCING ACTIVITIES                          (23,836)        (24,735)

NET INCREASE (DECREASE) IN CASH                              3,373          (1,083)

CASH, BEGINNING OF YEAR                                      2,307           3,390 

CASH, END OF YEAR                                        $   5,680    $      2,307
                                                         ==========   =============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid                                            $  23,169    $     45,808
                                                         ==========   =============
Income taxes paid                                        $       -    $          -
                                                         ==========   =============
___________________________________________________________________________________


See notes to consolidated financial statements.




                                       30




                  COMPETITIVE COMPANIES, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
________________________________________________________________________________

NOTE A - FORMATION AND OPERATIONS OF THE COMPANY

Competitive Companies, Inc. (the "Parent") was originally incorporated under the
laws of the state of Nevada in March 1998, and shortly thereafter acquired all
of the assets and assumed all of the liabilities of Competitive Communications,
Inc. ("CCI"), which was incorporated under the laws of the state of California
in February 1996. CCI is the successor to Western Telephone & Television, which
was founded in 1985.

In January 2000, CCI Residential Services, Inc. ("CCIR") was formed. This
entity, which is a wholly owned subsidiary of the Parent, expands on the
residential services currently being provided by CCI, while CCI is focusing on
developing revenue streams from other services.

CCI, CCIR and their Parent (collectively, "we" "us" "our") provide telephone,
cable television, long distance/interexchange, and dial up and high-speed
internet connections and e-mail services, mainly to customers who live in
multi-tenant residential buildings. Our operations are located in Riverside,
California and substantially all of our customers are California residents.

NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

Our consolidated financial statements are prepared using the accrual method of
accounting.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of the
Parent, Competitive Holdings, Inc., CCI and CCIR. Significant inter-company
balances and transactions have been eliminated in consolidation.

Revenue Recognition

Our revenue recognition policy is consistent with the criteria set forth in
Staff Accounting Bulletin 104 - Revenue Recognition in Financial Statements
("SAB 104") for determining when revenue is realized or realizable and earned.
In accordance with the requirements of SAB 104 we recognize revenue when (1)
persuasive evidence of an arrangement exists; (2) delivery of our services has
occurred; (3) our price to our customer is fixed or determinable; and (4)
collectibility of the sales price is reasonably assured. As such, we recognize
revenues in the month in which we provide services. Services provided but not
billed by the end of the year are reflected as unbilled receivables in the
accompanying consolidated balance sheet.




                                       31




Use of Estimates

The preparation of consolidated financial statements in accordance with
accounting principles generally accepted in the United States of America
requires us to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities
at the date of the financial statements. Estimates that are critical to the
accompanying consolidated financial statements relate principally to our belief
that the carrying values of our long-lived assets are recoverable. It is at
least reasonably possible that our estimates could change in the near term with
respect to this matter.

Allowance for Doubtful Accounts

We evaluate the allowance for doubtful accounts on a regular basis through
periodic reviews of the collectibility of the receivables in light of historical
experience, adverse situations that may affect our customers' ability to repay,
and prevailing economic conditions. This evaluation is inherently subjective as
it requires estimates that are susceptible to significant revision as more
information becomes available. Accounts receivable are determined to be past due
based on how recently payments have been received and those considered
uncollectible are charged against the allowance account in the period they are
deemed uncollectible.

Long-Lived Assets

Statement of Financial Accounting Standards ("SFAS") 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets" requires that long-lived assets,
including certain identifiable intangibles, be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying value of the
assets in question may not be recoverable. Because of certain regulatory
changes, continuing losses from operations, and our inability to generate
sufficient cash flow to meet certain obligations, we evaluated our long-lived
assets and determined that there were events during fiscal 2003 that indicated
that our intangible assets and certain telephone equipment had minimal values.
As such, we charged 2003 operations for impairment losses of $100,834 and
$686,245, respectively, which amounts represented the remaining net book values
of these assets immediately before these impairment charges. At December 31,
2004 we believe our remaining long-lived assets are recoverable.

Property and Equipment

Property and equipment are stated at cost. Major additions are capitalized,
while minor additions and maintenance and repairs, which do not extend the
useful life of an asset, are expensed as incurred. Depreciation and amortization
are computed using the straight-line method over the assets' estimated useful
lives of five to ten years.

Intangible Assets

Prior to their impairment as discussed under long-lived assets above, intangible
contract revenue rights acquired in the acquisition of Huntington
Telecommunication Partners, L.P. ("HTP"), were being amortized on a
straight-line basis over the average remaining terms of the contracts of three
years. As such, the assets would have been fully amortized by December 31, 2004.

Income Taxes

We compute income taxes in accordance with Financial Accounting Standards
Statement No. 109 "Accounting for Income Taxes" ("SFAS 109"). Under SFAS 109,
deferred taxes are recognized for the tax consequences of temporary differences
by applying enacted statutory rates applicable to future years to differences
between the tax bases of assets and liabilities and their financial statement
carrying amounts. Also, the effect on deferred taxes of a change in tax rates is
recognized in income in the period that included the enactment date. Temporary




                                       32




differences between financial and taxable reporting arise primarily from certain
stock based compensation arising from the grant of certain options, differences
in providing for bad debts and depreciation and certain losses from impairment
that are not deductible for tax reporting.

Financial Instruments and Concentrations of Credit Risk

We believe the book value of our cash, accounts and unbilled receivables,
accounts payable and accrued and other liabilities approximates their fair
values due to their short-term nature. In addition, we believe the book values
of our capital lease obligations approximates their fair values as the interest
rates on such obligations approximates rates at which similar types of
arrangements could be currently negotiated by us. It was not practicable to
estimate the fair value of our note payable to stockholder because of a lack of
similar type arrangements in the marketplace, nor was it practicable to estimate
the fair values of our notes payable to GST or Frontier Communications Services,
Inc. because of uncertainties as to the dates the notes will be paid, and/or the
amounts that will ultimately be paid.

Financial instruments that potentially subject us to significant concentrations
of credit risk consist principally of cash, and receivables. With respect to
cash, during the year ended December 31, 2004, we maintained all of our cash in
deposit accounts with one financial institution, which deposit accounts at times
may have exceeded federally insured limits. We have not experienced any losses
in such accounts.

Substantially all of our revenues and receivables arise primarily from nine
agreements to provide telecommunications and cable services to customers in ten
apartment buildings (eight of which are in southern California, one in
Mississippi, and one in Alabama). Three of the agreements have expired and
continue on a month to month basis. The remaining six agreements expire between
2005 and 2009.We perform ongoing credit evaluations of our customers and
generally do not require collateral as we believe we have certain collection
measures in-place to limit the potential for significant losses. Substantially
all of the net receivables included in the accompanying consolidated balance
sheet were recovered subsequent to December 31, 2004.

We purchase a significant portion of our local line capacity from two vendors,
our long distance line capacity from one vendor, and our cable television
capacity from three vendors. We perform ongoing negotiations with other vendors
and believe that given the competitive nature of the industry we could obtain
similar agreements with other vendors.

Advertising

We expense advertising costs as they are incurred. These expenses approximated
$2,000 for each of the years ended December 31, 2004 and 2003.

Loss Per Common Share

We compute net loss per share in accordance with Statement of Financial
Accounting Standards Board Statement No. 128 "Earnings per Share" ("SFAS No.
128") and SEC Staff Accounting Bulletin No. 98 ("SAB 98"). Under the provisions
of SFAS No. 128 and SAB 98, basic net loss per share is computed by dividing the
net loss available to common stockholders for the period by the weighted average
number of common shares outstanding during the periods. Diluted net loss per
share is computed by dividing the net loss for the period by the number of
common and common equivalent shares outstanding during the period. Common stock
equivalents existing at December 31, 2004 and 2003 are not included in the per
share calculations because they are anti-dilutive. Accordingly, basic and
diluted net loss per share is identical for each of the years ending December
31, 2004 and 2003.




                                       33




Stock-Based Compensation

We have adopted Statement of Financial Accounting Standards No. 148 "Accounting
for Stock-Based Compensation - Transition and Disclosure" (SFAS No. 148). This
statement amends FASB statement No. 123, "Accounting for Stock Based
Compensation". It provides alternative methods of transition for an entity that
voluntarily changes to the fair value based method of accounting for employee
stock based compensation. It also amends the disclosure provision of FASB
statement No. 123 to require prominent disclosure about the effects on reported
net income of an entity's accounting policy decisions with respect to
stock-based employee compensation. Until such time that we are required to apply
SFAS 123 [R} (see "Recent Pronouncements"), as permitted by SFAS No. 123 and
amended by SFAS No. 148, we will continue to apply the intrinsic value method
under Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock
Issued to Employees," to account for our stock-based employee compensation
arrangements.

Statement of Cash Flows

For purposes of the statement of cash flows, we consider all highly liquid
investments purchased with an original maturity of three months or less to be
cash equivalents.

Reclassifications

Certain amounts in the 2003 financial statements have been reclassified to
conform to the presentation in the 2004 financial statements.


Recent Pronouncements

FIN 46 - Consolidation of Variable Interest Entities

In January 2003, the Financial Accounting Standards Board ("FASB") issued FIN
46, (revised in December 2003 as FIN46R) "Consolidation of Variable Interest
Entities," which clarifies the application of Accounting Research Bulletin
("ARB") 51, Consolidated Financial Statements, to certain entities (called
variable interest entities) in which equity investors do not have the
characteristics of a controlling financial interest or do not have sufficient
equity at risk for the entity to finance its activities without additional
subordinated financial support from other parties. The disclosure requirements
of this Interpretation are effective for all financial statements issued after
January 31, 2003. The consolidation requirements apply to all variable interest
entities created after January 31, 2003. In addition, public companies must
apply the consolidation requirements to variable interest entities that existed
prior to February 1, 2003 and remain in existence as of the beginning of annual
or interim periods beginning after June 15, 2003. The adoption of FIN 46R had no
impact on our consolidated financial statements as we do not have any variable
interests in variable interest entities.

SFAS 150 - Accounting for Certain Financial Instruments with Characteristics of
Both Liabilities and Equity

In May 2003, SFAS No. 150 "Accounting for Certain Financial Instruments with
Characteristics of Both Liabilities and Equity," was issued to establish new
standards for how an entity classifies and measures certain financial
instruments with characteristics of both liabilities and equity. It requires
that an entity classify a financial instrument that is within its scope as a
liability (or an asset in some circumstances). Many of these instruments were
previously classified as equity. This statement was effective when issued for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective for calendar year public companies for the third quarter of 2003.
The adoption of SFAS 150 had no impact on our consolidated financial statements.





                                       34




SFAS 132 - Employers' Disclosures about Pensions and Other Postretirement
Benefits

In December 2003, FASB Statement No. 132R (revised) was issued which prescribes
the required employers' disclosures about pension plans and other postretirement
benefit plans; but it does not change the measurement or recognition of those
plans. The Statement retains and revises the disclosure requirements contained
in the original Statement 132. It also requires additional disclosures about the
assets, obligations, cash flows, and net periodic benefit cost of defined
benefit pension plans and other postretirement benefit plans. The Statement
generally is effective for fiscal years ending after December 15, 2003. Since we
do not have any types of pension plans or other postretirement benefits, the
adoption of this Statement did not have an effect on our consolidated financial
statements.

SFAS 123(R) Share-Based Payments

In December 2004, FASB Statement Number 123 ("FAS 123 (R)"), Share-Based
Payments. FAS 123 (R) was issued. This statement requires all entities to
recognize compensation expense in an amount equal to the fair value of
shared-based payments such as stock options granted to employees. We will be
required to apply FAS 123 (R) on a modified prospective method. Under this
method, we are required to record compensation expense (as previous awards
continue to vest) for the unvested portion of previously granted awards that
remain outstanding at the date of adoption. In addition, we may elect to adopt
FAS 123 (R) by restating previously issued financial statements, basing the
amounts on the expense previously calculated and reported in the pro forma
disclosures that had been required by FAS 123. FAS 123 (R) is effective for the
first reporting period beginning after December 15, 2005. We have determined that
the adoption of FAS 123 (R) will not have a material impact on our consolidated
financial statements.

SFAS 153 - Exchanges of Nonmonetary Assets an Amendment of APB Opinion No. 29

In December 2004, FASB Statement No. 153 was issued amending APB Opinion No. 29
to eliminate the exception allowing nonmonetary exchanges of similar productive
assets to be measured based on the carrying value of the assets exchanged as
opposed to at their fair values. This exception was replaced with a general
exception for exchanges of nonmonetary assets that do not have commercial
substance. A nonmonetary exchange has commercial substance if the future cash
flows of the entity are expected to change significantly as a result of the
exchange. The provisions of this statement are effective for nonmonetary asset
exchanges occurring in fiscal periods beginning after the June 15, 2005. The
adoption of this statement is not expected to have a material impact on our
consolidated financial statements.

NOTE C - GOING CONCERN

Our consolidated financial statements are prepared using accounting principles
generally accepted in the United States of America applicable to a going
concern, which contemplate the realization of assets and liquidation of
liabilities in the normal course of business. We have incurred losses from
operations and are experiencing difficulty in generating sufficient cash flow to
pay the note payable to GST (see Note F) which was due in April 2004 (the note
has not been paid and is in default).

Management's plans include the closing of a merger with CA Networks, Inc. a
development stage company (see Note I) with a similar business plan as ours
except that they intend to offer cellular services. Subsequent to this merger we
anticipate the merged companies will have better access to additional debt or
equity capital and/or that our combined operations will experience increased
operating margins through the negotiation of better line usage charges and
through the sharing of operating overhead.

Our ability to continue as a going concern is dependent on our ability to
generate sufficient cash from operations to meet our cash needs and/or to raise
funds to finance ongoing operations and repay debt. However, there can be no
assurance that we will be successful in our efforts to raise additional debt or
equity capital and/or that our cash generated by our operations will be adequate
to meet our needs. These factors, among others, indicate that we may be unable
to continue as a going concern for a reasonable period of time.




                                       35




Our consolidated financial statements do not include any adjustments relating to
the recoverability and classification of recorded asset amounts or the amounts
and classification of liabilities that might be necessary should we be unable to
continue as a going concern.

NOTE D - PROPERTY AND EQUIPMENT-NET

Property and equipment consists of the following at December 31, 2004:

                                                               Amounts
 Telecommunications equipment and computers (including
     equipment leased under capital leases of $63,180)       $  411,621
  Vehicles                                                       26,069
  Furniture, fixtures and improvements                           21,290 
  Subtotal                                                      458,980
  Less accumulated depreciation and amortization               (293,292)

 Property and equipment-net                                  $  165,688
                                                             ===========

Accumulated depreciation and amortization includes $21,842 of accumulated
amortization of leased equipment. Amortization expense of such equipment was
$9,026 during each of the years ended December 31, 2004 and 2003.

NOTE E - STOCKHOLDERS' EQUITY (DEFICIT)

Stock Options

The Board of Directors has reserved 7,500,000 shares of our common stock for
issuance under our Incentive and Non-Statutory Stock Option Plan (the "Plan").
Generally, incentive options are granted at an exercise price equal to the fair
value of our common stock (as determined by the Board of Directors) at the date
of grant, require two-years of continued employment before exercise and have 20%
vesting schedules. Through December 31, 2004, we had granted 5,040,000 shares at
exercise prices from $ .001 to $1.00 per share. The status of our stock options
is summarized below:

                                                                 Weighted
                                                  Number of      Average
                                                   Shares     Exercise Price

Options outstanding at December 31, 2002          5,040,000     $   0.224
   Exercised
   Canceled                                               -             - 

Options outstanding at December 31, 2003          5,040,000     $   0.224

   Granted                                                -             -
   Exercised                                              -             -
   Canceled                                       1,605,000             - 

Options outstanding at December 31, 2004          3,435,000     $   0.224
                                                 ===========    ==========





                                       36




Options becoming exercisable during the years ended:

   Currently                                2,907,000    $  0.015
   December 31, 2005                           14,000    $  1.000
   December 31, 2006                          114,000    $  1.000
   December 31, 2007                          100,000    $  1.000
   December 31, 2008                          100,000    $  1.000
   December 31, 2009                          200,000    $  1.000

Total options exercisable                   3,435,000    $  0.167
                                           ===========

Each of the options expires on the earlier of the date specified in the option
agreement, or the tenth anniversary of the date of grant. Any incentive option
not subject to this provision is designated as being a non-statutory option.
Whenever an outstanding option is terminated (other than by exercise), the
shares of common stock relating to such option are to be restored to the Plan
and be available for the grant of other options under the Plan.

We account for our stock-based compensation using the intrinsic value method
prescribed by Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees". Had our compensation expense for stock-based compensation
plans been determined based upon fair values at the grant dates for awards under
this plan in accordance with SFAS No. 123, "Accounting for Stock-Based
Compensation," our net loss and pro forma net loss per share amounts would have
been as follows:

                                                    2004            2003

   Net loss as reported                          $ (34,981)    $ (1,124,266)
   Deduct total stock-based employee
     compensation expense determined under
     fair value based method for all awards,
     net of related tax effects                     (2,940)         (87,018)

   Pro forma net loss                            $ (37,921)    $ (1,211,284)
                                                 ==========    =============

   Loss per share, basic and diluted:
     As reported                                 $    (.01)    $      (0.19)
                                                 ==========    =============

     Pro forma                                   $    (.01)    $      (0.20)
                                                 ==========    =============

Convertible Class A Preferred Stock

It is anticipated that the Class A preferred stock will be cancelled in
connection with the anticipated merger discussed at Note I. In the event such
merger is not consummated, the holders of our Series A voting, convertible,
preferred stock have the right to convert each share of such preferred stock to
five shares of our Class A common stock (on a pro rata basis based on us
achieving one or all of the following "future events") at anytime until December
31, 2010:

o Upon us achieving a 100% increase in the combined number of owned apartment
  complex passings plus non apartment complex customers, 50% of the shares available for conversion
o Upon us achieving 10,000 customers, 25% of the shares are eligible for
  conversion and
o Upon us achieving 20,000 customers, 25% of the shares are eligible for
  conversion.




                                       37




Again, assuming the merger discussed at Note I is not consummated, on January 1,
2011, any remaining preferred shares outstanding will convert to Class A, Common
Treasury Stock at the conversion factor stated above. The preferred shares rank
senior to the common stock and have a liquidation preference of $0.01 per share
over such stock.

Convertible Class B Preferred Stock

We have issued 1,495,436 convertible Class B preferred shares to certain of our
shareholders. In the event that the opening trading price of our common stock in
the secondary market does not meet the following requirements we may be
obligated to issue additional shares to these shareholders. If the average
opening bid price of our common stock is less than $3.00 per share (if and when
our shares begin to trade publicly), we will be obligated to issue additional
shares to those holders so that the fair market value of shares held by these
stockholders is $3.00 (for example, if the opening bid price of our common stock
is $1.00 per share, we would be obligated to issue an additional 2,990,872
shares of our common stock).

Convertible Class C Preferred Stock

On December 28, 2001, primarily to expand our customer base, we acquired all of
the assets and assumed all of the liabilities of HTP (a California limited
partnership) in exchange for 1,000,000 shares of our common stock. In addition
to such consideration, at that time, we agreed to issue additional shares to the
shareholders of HTP if the average closing bid price of our common stock was
less than $3.00 per share for the first five days of trading subsequent to any
registration of such shares with the Securities and Exchange Commission. For
example, if the average closing bid price of our common stock is $1.00 per
share, we will be required to issue an additional 2,000,000 shares of our common
stock to these shareholders. As a result, at the time of the business
combination, we also issued 1,000,000 shares of our convertible Class C
preferred stock to these shareholders to convey such rights. In accordance with
the provisions of SFAS No. 141, "Business Combinations" the cost of the
additional Class C shares that may be issued was not and has not been included
in the determination of the purchase price because the number of shares that may
ultimately be issued as a result of this contingency is not determinable beyond
a reasonable doubt.

NOTE F- LONG-TERM DEBT

Long-term debt consists of the following at December 31, 2004:

Note payable to Frontier Communications Services, Inc., bearing
interest at 10% and requiring monthly principal and interest
payments of $3,000. Frontier is currently in bankruptcy and the
new creditor has not yet been assigned. This note was originally
due on March 15, 2003, however due to the aforementioned, the
required monthly payments have not been made since December 31,
2002. The note is secured by the telecommunications equipment
purchased with the proceeds from the note.                           $  49,976

Unsecured note payable to stockholder, with interest at 8%, and
monthly principal and interest payments of $683 through February
23, 2011.                                                               39,363

Note payable, bearing interest at 2.9% with monthly principal and
interest payments of $393 through August 6, 2006. The note is
secured by the vehicle purchased with the proceeds from the note.        6,916

Note payable to GST, which initially required interest at 10%
with monthly interest payments of $1,729 through its maturity
date of April 28, 2004. The note is secured by the
telecommunications equipment purchased with the proceeds from the
note. The note has not been paid. As a result thereof, pursuant
to the note payable, effective April 28, 2004, the interest rate
was increased to a default rate of 15% per annum. In addition, we
will be responsible for any costs that our creditor incurs to
collect payment on the note.                                           207,450 




                                       38




Subtotal                                                               303,705
Less current maturities                                               (266,851)

Long-term debt                                                       $  36,854
                                                                     ==========

Scheduled maturities of long-term debt as of December 31, 2004 are as follows:

Years Ending
December 31,                                                    Amounts

  2005                                                       $   266,851
  2006                                                             8,393
  2007                                                             6,138
  2008                                                             6,648
  2009                                                             7,200
  Thereafter                                                       8,475 

  Total                                                      $   303,705
                                                             ============

NOTE G - INCOME TAXES

During the years ended December 31, 2004 and 2003, we recognized losses for both
financial and tax reporting purposes. Accordingly, no provisions for income
taxes and/or deferred income taxes payable have been provided for in the
accompanying consolidated financial statements. The significant components of
the net deferred income tax assets and liabilities as of December 31, 2004
(assuming an effective income tax rate of 39%) are approximately as follows:

Net current deferred income tax asset:                       Amounts

Allowance for doubtful accounts                           $   34,500
Less valuation allowance                                     (34,500)

Current deferred income tax asset                         $        -
                                                          ===========

Net non-current deferred income tax asset:

Net operating loss carryforwards                          $  775,400
Accumulated depreciation                                    (113,800)
Impairment of long-lived assets                              273,400 
Subtotal                                                     935,000
Less valuation allowance                                    (935,000)

Non-current deferred income tax asset - net               $        -
                                                          ===========


At December 31, 2004, we had total net operating loss carryforwards of
approximately $1,946,500 for income tax purposes. The significant difference
between our deficit and net operating loss carryforwards are primarily
attributable to the effect of permanent differences arising from the grant of
certain preferred shares. Assuming that additional contingent stock issuances




                                       39




discussed at Note H or other future stock issuances do not trigger a "change in
control", these carryforwards will be available to offset future taxable income
in various years ended December 31, 2024. The current and non-current deferred
income tax assets, and related benefits for income taxes are not recorded in the
accompanying consolidated financial statements because we established a
valuation allowance to fully reserve such assets, as their realization did not
meet the required asset recognition standard established by SFAS 109. The
valuation allowance decreased approximately $68,900 during the year ended
December 31, 2004.

NOTE H - OTHER COMMITMENTS

Operating Lease

We lease our operating facility under a non-cancelable operating lease. Future
minimum lease payments required are approximately as follows:

Years Ending
December 31,                                             Amounts

   2005                                               $    35,300
   2006                                                    32,000 

  Total                                               $    67,300
                                                      ============

Rent expense approximated $33,000 for each of the years ended December 31, 2004
and 2003.

Capital Leases

We also lease certain equipment used in our operations under various capital
leases. Future minimum lease payments under the leases are as follows:

Years Ending
December 31,                                                    Amounts

   2005                                                      $    27,140
   2006                                                           13,955 
   Total minimum lease payments                                   41,095
   Less amount representing interest                              (6,348)
   Present value of future minimum lease payments                 34,747
   Less current maturities                                       (21,666)

   Capital lease obligations, net of current maturities      $    13,081
                                                             ============

Each of the leases contains options which allow us to purchase the equipment for
$1.00 at the end of the lease terms.




                                       40




NOTE I - SUBSEQUENT EVENTS

On April 11, 2005 we signed a Merger Agreement and Plan of Reorganization with
CA Networks, Inc. ("CAN"), a development stage company with no revenues or
operations. CAN intends to be a provider of local telephone, long distance and
cellular service.

On the date of the transaction (the "Effective Date") we will issue 40,599,999
shares of our common stock to the shareholders of CAN in exchange for the
40,599,999 outstanding shares of CAN. In effect, each of CAN's shares that are
issued and outstanding immediately before the Effective Date, other than shares
with respect to which the right to dissent has been exercised, shall entitle the
holder thereof to receive one share of our common stock.

In connection with this transaction, we have also agreed to file a registration
statement with the Securities and Exchange Commission within sixty days of the
Effective Date to register the shares of restricted common stock issued to CAN's
shareholders who own less than 5% of the total outstanding shares of the merged
entity.

The parties have agreed to defer the effective date of the Merger Agreement
until the following has occurred:

        o The December 31, 2004 Form 10K-SB has been filed with the SEC.

        o The boards of directors of both companies have ratified the Merger
          Agreement.






                                       41




Item 8. Changes In and Disagreements With Accountants on Accounting and
Financial Disclosure.

None

Item 8A. Controls and Procedures

The Corporation maintains disclosure controls and procedures designed to ensure
that information required to be disclosed in reports filed under the Securities
Exchange Act of 1934, as amended, is recorded, processed, summarized and
reported within the specified time periods. As of the end of the period covered
by this report, the Corporation's Chief Executive Officer and Chief Financial
Officer evaluated the effectiveness of the Corporation's disclosure controls and
procedures. Based on the evaluation, which disclosed no significant deficiencies
or material weaknesses, the Corporation's Chief Executive Officer and Chief
Financial Officer concluded that the Corporation's disclosure controls and
procedures are effective as of the end of the period covered by this report.
There were no changes in the Corporation's internal control over financial
reporting that occurred during the Corporation's most recent fiscal quarter that
have materially affected, or are reasonably likely to materially affect, the
Corporation's internal control over financial reporting.


PART III

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

The board of directors elects our executive officers annually. A majority vote
of the directors who are in office is required to fill vacancies. Each director
shall be elected for the term of one year, and until his successor is elected
and qualified, or until his earlier resignation or removal.

Our directors and executive officers are as follows:

NAME               AGE      TITLE                                   SERVED SINCE


Jerald Woods        55      V.P. & Director                             1997

David Hewitt        57      Director                                    2001

Judy Kline          66      Director , Secretary & Acting Chief.        2004
                            Accounting Officer

The following is a brief summary of the business experience of these individuals:

Jerald Woods has been Vice President and Director since 1998. From 1994 to 2000
he was an officer and director of APMSAFE.COM (American Privacy Management,
Inc.). From 1988 to 1994 he was chairman and director for American Digital
Communications, Inc. From 1984 to 1989 he hosted and produced "Breakthroughs in
Technology," an investment program specializing in high technology companies. He
currently is President of JLW Communications Services. He also serves as a
director for Pico Medical located in Bethesda, Maryland.




                                       42




David Hewitt has been a Director since December 2001. From 1994 to date, he has
been Co-Founder and President of Huntington Partners, Inc. From 1989 to 1992, he
was Co-Founder and Managing Director of Trilateral Company, a real estate firm.
He has an MBA with Distinction from Amos Tuck School of Business Administration
at Dartmouth College and an AB from University of Rochester.

Judy Kline has replaced David Kline as Director effective December 2004. Since
inception in 1996, Judy Kline has been Customer Service Manager of Competitive
Communications, Inc., a wholly owned subsidiary of Competitive Companies, Inc.
From 1985 to 1996 she served in the same capacity at Western Telephone &
Television, the forerunner of Competitive Communications, Inc. From 1978 to 1984
she was Assistant Controller at Sav-On Drugs in Anaheim, California. She has
been active in many philanthropic organizations including the Assistance League
of Long Beach and Nightingales of Memorial Hospital. In 2001 she was elected to
the board of directors of CCI Residential Service, Inc., a wholly owned
subsidiary of Competitive Communications, Inc.

David "DK" Kline II resigned as officer and director in December 2004. Michael
Godfree resigned as director in February 2005.

Election of Directors

Our bylaws provide that the board of directors shall consist of five members
until changed by amendment to the articles of incorporation or by amendment to
the applicable section of the bylaws, adopted by the majority of the voting
power of the corporation.

Significant Employees

David Bower, MIS Manager, has been with us since inception in 1996. In 1996 he
was promoted from senior Analyst to MIS Manager and is responsible for
maintaining and upgrading the Hartline billing system, liaison with telephone
providers, technical support on our telephone, cable television, and internet
services, and technical assistance to customer service. From 1994 to 1996 he
served as Programmer/Analyst and Programmer at Western Telephone & Television,
the forerunner of Competitive Communications, Inc. From 1990 to 1994 he was a
Computer Analyst/Data Entry Specialist at Pot O' Gold Inc., Irvine, California.

In 2001, Mr. Bower was elected to the board of directors of Competitive
Communications, Inc., a wholly owned subsidiary of Competitive Companies, Inc.
In 1995, he received a Bachelor of Arts in Mathematics from the University of
California, Riverside.

Legal Proceedings

No officer, director, or persons nominated for such positions, promoter or
significant employee has been involved in legal proceedings that would be
material to an evaluation of our management.

Section 16(a) of the Securities Exchange Act of 1934, as amended

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the
Company's directors and executive officers, and persons who beneficially own
more than 10% of a registered class of the Company's equity securities, to file
reports of beneficial ownership and changes in beneficial ownership of the
Company's securities with the SEC on Forms 3 (Initial Statement of Beneficial
Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5
(Annual Statement of Beneficial Ownership of Securities). Directors, executive
officers and beneficial owners of more than 10% of the Company's Common Stock
are required by SEC regulations to furnish the Company with copies of all
Section 16(a) forms that they file. Except as otherwise set forth herein, based
solely on review of the copies of such forms furnished to the Company, or
written representations that no reports were required, the Company believes that
directors, executive officers and greater than 10% beneficial owners complied
with all Section 16(a) filing requirements applicable to them during fiscal year
2004 except in that as our stock did not trade in 2004 no reports were filed.




                                       43




Item 10. Executive Compensation.

The following table sets forth summary information concerning the compensation
received for services rendered to us during the years ended December 31, 2004
and 2003, respectively by the Chief Executive Officer. No other executive
officers received aggregate compensation during our last fiscal year which
exceeded, or would exceed on an annualized basis, $100,000. Other annual
compensation consists of health and life insurance premiums and automobile lease
payments.

Summary Compensation Table

Annual Compensation


    Name and                                          All Other Annual
Principal Position            Year      Salary     Bonus    Compensation

David Kline II                2004     $     0               $      0
 President                    2003     $     0               $      0
 Chief Executive Officer &
  President

No other annual compensation, including a bonus or other form of compensation;
and no long-term compensation, including restricted stock awards, securities
underlying options, LTIP payouts, or other form of compensation, were paid to
David Kline II during these periods.

Compensation of Directors

We have not agreed to pay our directors who are not officers or employees any
stated salary, but by resolution of the board a fixed sum and expense of
attendance, if any, may be allowed for attendance at each regular and special
meeting of the board or our committees. On the date of appointment to the board,
each board member or employee board member shall be granted an option to
purchase at the fair market value an aggregate of 5,000 shares of Class A common
stock. The option shall vest and become exercisable at the rate of 20% per year
after the expiration of the first year following the date on which the option is
granted and shall be exercisable in full only after the expiration of five 5
years following the date the option was granted.

Executive Bonus Plan (ExBP)

The ExBP Plan for Competitive Communications was adopted in April 1996. The plan
is intended to enables us to recruit, reward, retain and motivate employees and
to attract and retain outside directors, agents and consultants on a basis
competitive with industry practices. Under the plan, 6% of
pre-tax-pre-charitable contribution (PT-PC) for executive officers and an
additional 6% PT-PC for non-executive officers will be paid as cash bonuses no
less often than annually.

The ExBP Plan will be administered by the board of directors or the compensation
committee of the board of directors. The committee has sole authority and
discretion under the ExBP Plan to designate eligible participants and determine
the conditions and limitations applicable to such awards, if any. The awards may
be granted singly or together with other awards, or as replacement of, in
combination with, or as alternatives to, grants or rights under the ExBP Plan or
other employee benefit plans. Awards under the ExBP Plan may be issued based on
past performance, as an incentive for future efforts or contingent upon the
future performance. No amounts have been awarded under the Plan




                                       44




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

The following table sets forth the ownership, as of December 31, 2004, of our
common stock by each person known by us to be the beneficial owner of more than
5% of our outstanding common stock, our directors, and our executive officers
and directors as a group. To the best of our knowledge, the persons named have
sole voting and investment power with respect to such shares, except as
otherwise noted. There are not any pending or anticipated arrangements that may
cause a change in control. The business address of all individuals and entities
is 3751 Merced Drive, Suite A Riverside, CA 92503.




Name                                      Number of Shares          Percentage

Larry Halstead                                 315,000                  5.3

David Kline II                               1,750,000                 29.6

Jerald Woods                                   188,600                  3.2

Huntington                                   1,000,000                 16.7
Telecommunications Partners, L.P. (1)

All directors and named executive            1,188,600                 22.9
officers (as a group of 3 persons)

(1) Mr. David Hewitt, a director, is the president of the corporate general
partner of Huntington Telecommunications Partners, L.P.

This table is based upon information derived from our stock records. Unless
otherwise indicated in the footnotes to this table and subject to community
property laws where applicable, we believe that each of the shareholders named
in this table has sole or shared voting and investment power with respect to the
shares indicated as beneficially owned. Applicable percentages are based upon
5,192,061 shares of common stock outstanding at December 31, 2004.

Item 12. Certain Relationships and Related Transactions.

None

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

(a) List of documents filed as part of this Report:

    None

(b) Exhibits:

    The following exhibits listed are filed as part of this Report:

31.1 Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer and Chief
     Financial Officer, Judy Kline

32.1 Section 1350 Certification, Judy Kline




                                       45





Item 14. Principal accountant fees and services

The following table sets forth fees billed to us by our auditors during the
fiscal years ended December 31, 2004 and December 31, 2003 for: (i) services
rendered for the audit of our annual financial statements and the review of our
annual financial statements, (ii) services by our auditor that are reasonably
related to the performance of the audit or review of our financial statements
and that are not reported as Audit Fees, (iii) services rendered in connection
with tax compliance, tax advice and tax planning, and (iv) all other fees for
services rendered.

                                   December 31, 2004     December 31, 2003

(i)       Audit Fees                   $ 24,000             $  33,110
(ii)      Audit Related Fees                  -                     -
(iii)     Tax Fees                            -                   558
(iv)      All Other Fees                      -                     -
                       Total fees      $ 24,000             $  33,668
                                       ========             =========

        AUDIT FEES. Consists of fees billed for professional services rendered for
the audit of our consolidated financial statements and review of the interim
consolidated financial statements included in annual reports and services that
are normally provided by our accountants in connection with statutory and
regulatory filings or engagements.



POLICY ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT
SERVICES OF INDEPENDENT AUDITORS

The Company currently does not have a designated Audit Committee, and
accordingly, the Company's Board of Directors' policy is to pre-approve all
audit and permissible non-audit services provided by the independent auditors.
These services may include audit services, audit-related services, and tax
services and other services. Pre-approval is generally provided for up to one
year and any pre-approval is detailed as to the particular service or category
of services and is generally subject to a specific budget. The independent
auditors and management are required to periodically report to the Company's
Board of Directors regarding the extent of services provided by the independent
auditors in accordance with this pre-approval, and the fees for the services
performed to date. The Board of Directors may also pre-approve particular
services on a case-by-case basis.




                                       46




                                   Signatures


In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

Competitive Companies, Inc.

Title                            Name          Date              Signature
Principal Executive Officer      Judy Kline    April 29, 2005    /s/ Judy Kline
Principal Accounting Officer     Judy Kline    April 29, 2005    /s/ Judy Kline
Principal Financial Officer      Judy Kline    April 29, 2005    /s/ Judy Kline

        Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.


SIGNATURE               NAME            TITLE           DATE
/s/ Judy Kline          Judy Kline      Director        April 29, 2005
/s/ Jerald Woods        Jerald Woods    Director        April 29, 2005
/s/ David Hewitt        David Hewitt    Director        April 29, 2005



                                       47`