**UNITED
STATES**


**SECURITIES
AND EXCHANGE COMMISSION**


**Washington,
D.C. 20549**





**FORM
10-KSB**








**[
      X ]**
    **ANNUAL
      REPORT UNDER SECTION 13 0R 15(****d****)
      OF THE SECURITIES EXCHANGE ACT OF
1934**





For the
fiscal year ended   **December
31, 2004**





**[  
      ]**
    **TRANSITION
      REPORT UNDER SECTION 13 0R 15(****d****)
      OF THE SECURITIES EXCHANGE ACT OF
1934**





For the
transition period from


Commission
file number  **000-29929**








**COMMUNICATE.COM
      INC.**(Name
      of Small Business Issuer in its charter)








Nevada
      (State
      or other jurisdiction of incorporation or organization)
    88-0346310
      (I.R.S.
      Employer Identification No.)600
      - 1100 Melville Street, Vancouver, British Columbia
      (Address
      of principal executive offices)
    V6E
      4A6
      (Zip
      Code)





Issuer’s
telephone number (604)
697-0136








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


**Title
      of each class**
    **Name
      of each exchange on which registered**None
    N/A








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








Common
      Stock - $0.001 par value(Title
      of Class)





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





Check if
there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B 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 ]**




***Page
- 1***





State
issuer’s revenues for its most recent fiscal year.   **$
3,515,451**





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 price of such common equity, as of a specified date within the
past 60 days: **$7,711,343
as of March 28, 2005 {$0.55 x 14,020,623}**





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the latest practicable date.





**Class**
    **Outstanding
      at March 30, 2005**Common
      Stock - $0.001 par value
    15,321,339





Documents
incorporated by reference:  **None**





Transitional
Small Business Disclosure Format (Check one): **Yes [   ] No [ x ]**








***Page
- 2***








**Forward
Looking Statements**





This
Annual Report on Form 10-KSB for the year ended December 31, 2004, including the
discussion of the business of Communicate.com Inc. (“Communicate”, “CMNN” or the
“Company”), management’s discussion and analysis of financial condition and
results of operations, as well as other sections of this Annual Report contain
“forward-looking” statements within the meaning of United States federal
securities laws. Certain information contained or incorporated by reference in
this Annual Report, including the information set forth as to the future
financial or operating performance of Communicate, constitutes “forward-looking
statements”. These statements may be identified by their use of words like
“plans”, “expect”, “aim”, “believe”, “projects”, “anticipate”, “intend”,
“estimate”, “will”, “should”, “could”, “contemplate”, “target”, “continue”,
“budget”, “may”, “schedule”, and other similar expressions that indicate future
events and trends and identify forward-looking statements. All statements, other
than historical statements of fact, that address expectations or projections
about the future, including statements about Communicate’s strategy for growth,
product development, market position, expenditures and financial results, are
forward-looking statements.





Forward-looking
statements in this Form 10-KSB include but not limited to statements regarding
(1) expectation that revenue will increase during fiscal 2005; (2) expectation
participant base increasing; (3) expectation of future operating expenses
increasing; (4) expectation that the expansion of participant base will cause
wages, marketing and promotional costs to increase; (5) expectation that working
capital needs for fiscal 2005 will be funded through the equity capital markets
and private financings; (6) expectation that an increase in participants will
lead to hiring of additional employees or independent contractors; (7)
expectation of future developments of content, features, and services to be
provided on the website; (8) uncertainty of utilizing deferred tax assets; and
(9) expectation that inflation will not have a material impact on future
operations.





These
forward-looking statements involve a number of risks and uncertainties,
including, but not limited to, those discussed in these paragraphs. Factors that
could cause future results to differ from these expectations include general
economic conditions particularly related to demand for Communicate’s products
and services; changes in business strategy; competitive factors (including the
introduction or enhancement of competitive services); pricing pressures; changes
in operating expenses; fluctuation in foreign currency exchange rates; inability
to attract or retain consulting, sales and/or development talent; changes in
customer requirements; and/or evolving industry standards; and other factors
described in Communicate’s filings with the Securities and Exchange Commission.
The results that Communicate achieves may differ materially from any
forward-looking statements due to these risks and uncertainties. The
forward-looking statements in this Form 10-KSB for the fiscal year ended
December 31, 2004, are subject to risks and uncertainties that could cause
actual results to differ materially from this results expressed in or implied by
the statements contained in this report.





As a
result, the identification and interpretation of data and other information and
their use in developing and selecting assumptions from and among reasonable
alternatives requires the exercise of judgment. To the extent that the assumed
events do not occur, the outcome may vary substantially from anticipated or
projected results, and accordingly, no opinion is expressed on the achievability
of those forward-looking statements. No assurance can be given that any of the
assumptions relating to the forward-looking statements specified in the
following information are accurate. All forward-looking statements are made as
of the date of filing of this Form 10-KSB and Communicate disclaims any duty to
update any such forward-looking statements.





Communicate
may, from time to time, make oral forward-looking statements. Communicate
strongly advises that the above paragraphs and the risk factors described in
this Annual Report and in Communicate’s other documents filed with the United
States Securities and Exchange Commission should be read for a description of
certain factors that could cause the actual results of Communicate to materially
differ from those in the oral forward-looking statements. Communicate disclaims
any intention or obligation to update or revise any oral or written
forward-looking statements whether as a result of new information, future events
or otherwise.





***Page
- 3***





**PART
I**













**Item
1.**  **Description
of Business.**





**General**





Communicate
was incorporated under the laws of the State of Nevada on October 10, 1995 under
the name “Troyden Corporation”. Communicate changed its name on August 21, 2000
to “Communicate.com Inc.” Communicate has an authorized capital of 50,000,000
shares of common stock with 15,321,339 shares currently issued and
outstanding.





Communicate
was organized as a development stage company with the intent to acquire assets
or shares of an entity actively engaged in business that generated revenues in
exchange for Communicate’s securities. On November 10, 2000, pursuant to an
agreement with the principal shareholder of Domain Holdings Inc. (“DHI”),
Communicate acquired a majority interest in DHI. See Item 5. - Market for Common
Equity - Recent Sales of Unregistered Securities.





Communicate’s
principal operating subsidiary, Domain Holdings Inc., an Alberta corporation was
incorporated under the laws of British Columbia on July 4, 1994 under the name
“IMEDIAT Digital Creations Inc.”. DHI changed its name on April 14, 1999 to
Communicate.com Inc. and, on April 5, 2002, changed its name to Domain Holdings
Inc. DHI has an authorized capital of an unlimited number of shares of common
stock with 22,548,738 shares currently issued and outstanding, 21,127,711 (94%)
of which are held by Communicate.





*FrequentTraveller.com
Inc.* On
October 1, 2003, Communicate acquired a 71% controlling interest in
FrequentTraveller.com Inc. (“FT” or “FT.com”), a private Nevada corporation
incorporated on October 29, 2002. As of December 31, 2004, Communicate owned a
54% interest in FT. FT provides travel services to customers online and by
telephone to destinations encompassed by the geographic domain names owned by
Communicate.com, namely Indonesia.com, Malaysia.com and Vietnam.com. FT
commenced limited operations in November 2003. Currently, FT has an authorized
capital of 200,000,000 shares of common stock with 12,936,690 shares issued and
outstanding, 7,000,000 (54%) of which are held by Communicate.





Domain
Holdings Inc. and FrequentTraveller.com Inc. (the “Subsidiaries”) together are
the subsidiaries of Communicate.





Neither
Communicate nor the Subsidiaries have been involved in any bankruptcy,
receivership or similar proceedings. There has been no material
reclassification, merger, consolidation or purchase or sale of a significant
amount of assets not in the ordinary course of Communicate’s
business.





References
in this Annual Report to Communicate include its Subsidiaries, unless otherwise
stated.





**Business
of Communicate and the Subsidiaries**





Communicate’s
sole business currently is that of managing the business of the Subsidiaries.
DHI is in the business of utilizing its exclusive ownership of domain names to
develop internet-related business ventures, and FT is in the business of selling
travel services.





*Online
Business Network.* DHI holds
title to a portfolio of intuitive, generic domains in a variety of categories,
such as Health & Beauty (such as Cologne.com and Perfume.com) and Sports
& Recreation (such as Wrestling.com and Boxing.com). Communicate seeks
opportunities to use these rights to develop, by itself and through alliances
with other entities a network of online businesses which can, among other
things, facilitate the retail ordering of goods and services.. Communicate
believes that operating businesses in the network can share a common platform
and infrastructure, which holds the possibility of creating a scalable,
adaptable and efficient way for online retailers and other business to add
branding and e-commerce channels to their online strategy, while also
capitalizing on the generic domain names’ ability to intuitively attract
customers. Communicate also believes it may be able to create economies of scale
which will allow strategic partners to participate in e-commerce faster and more
cost effectively. Communicate’s business model for these operating businesses
includes multiple revenue streams via revenue-sharing, leasing, web-advertising
and trading of domain names. Communicate has not, to date, established such a
network and will only do so when and if it believes adequate businesses have
shown an interest in establishing a network, and when Communicate has raised
sufficient funds to invest in the establishment of a network.




***Page
- 4***





*Joint
Ventures and Participations.* Communicate
believes that its inventory of generic domain names may be attractive to
established non-Internet businesses that are leaders or near-leaders in their
respective industries. Communicate’s business plan focuses on offering a
long-term, strategic partnership in exchange for commitments which could include
cash, marketing exposure, access to limited products, and business development
activities. Similarly, Communicate seeks to identify end-consumers who purchase
the products and services that compliment the businesses utilizing Communicate’s
inventory of domain names. Since the last quarter of 2000, Communicate has
implemented its business plan by entering into arrangements pursuant to which
Communicate has leased or licensed rights to utilize generic domain names owned
by Communicate to existing entities in return for cash payments and, in some
cases, an equity participation in the entity or a joint venture established to
exploit the name. The Company expects to continue to seek additional
opportunities utilizing its domain names; however, there can be no assurance
that Communicate will be able to locate such opportunities, or if located, it
will be able to enter into arrangements with such entities.





*Sale
and Lease of Domain Names.* Communicate
recognizes opportunities which arise to monetize its ownership of domain names
by selling or leasing the domain names, which may be more valuable than the
exploitation of the ownership value of the names. Communicate has previously
sought opportunities to sell all or a portion of the domain names it holds in
one or a series of transactions and, at the end of fiscal 2001, Communicate and
its Subsidiary DHI entered into a purchase and sales agreement to sell all the
domain name assets of DHI for US$1.5 million, subject to approval from the
shareholders of Communicate and the minority shareholders of DHI. Prior to
obtaining approval from the shareholders of Communicate, on February 27, 2002
the purchaser withdrew its offer to purchase and Communicate and DHI mutually
agreed to release the purchaser from its obligation and to return the funds held
in escrow. Communicate has determined that the value of the domain name assets
is substantially higher than the offer received based on market information and
subsequent negotiations with other potential purchasers and further believes
that by selling the domain names individually rather than as a portfolio
Communicate will maximize the revenue potential of these assets. The carrying
value of the assets was reduced by $1,426,736 to $1,793,264 upon the adoption of
SFAS 142 on January 1, 2002 (See Item 6 - Management’s Discussion and Analysis -
Results of Operation). Communicate will continue to evaluate offers for its
assets. In 2003, Communicate agreed to sell four domain names (automobile.com,
exercise.com, makeup.com, and body.com which was subsequently substituted with
call.com) to Manhatten Assets, Inc. for US$1 million of which the entire amount
had been received by 2004. These sales validated the inherent value of
Communicate’s domain portfolio and improved working capital.





Communicate
is also actively seeking opportunities to lease its domain names to companies
who want to benefit from the availability of advertising and internet traffic
that is generated by generic domain names.





*Advertising
Revenues* .
Communicate entered into an arrangement with Overture Services, Inc.
(“Overture”) in 2001, pursuant to which Communicate is paid a fee for referrals
to sites with connections to Overture. Subsequent growth in Internet advertising
has reaped rewards for Communicate. In 2004, following a new agreement with
Overture, referral advertising revenue now accounts for 91% (approx. 50% in
2003) of all advertising revenue generated by Communicate (See Item 1 - Risk
Factors - Risk Associated with Communicate). Potential domain name sales are now
evaluated against potential foregone advertising revenue. Communicate has
continued to increase its internet advertising revenue by working with Overture
to include traffic outside of North America which previously does not generate
revenue and to include the traffic generated by its portfolio of China domain
names (.cn’s). Although Communicate will continue to seek out similar
opportunities in order to increase internet advertising revenue, it cannot
predict how successful these efforts will be.





*Travel
Sales.* Communicate, through its Subsidiary FT, began selling travel services to
travelers visiting the geographic regions that are encompassed by the
Communicate’s domain names. FT’s business plan is to generate revenues on
products sold for third parties and inventory purchased on account from tour
operators and hotel establishments.





FT’s
travel sites were launched late in 2003 and have conducted limited business in
2004 as FT continued to develop its product mix, identify travel partners and
suppliers for the region, hire and train travel staff, and develop its
administrative and reporting system. FT has not yet become profitable as it is
being developed and is expected to operate at a loss in 2005. Amidst its
development efforts, FT faced events that were particular to the region and
outside its control, such as the recurrences of SARS and avian flu, terror
threats and the Tsunami disaster. However, despite the challenges, Communicate
believes the market is lucrative enough to justify expending further resources
to develop the business model in 2005. Communicate expects to maintain or
increase FT’s revenue in 2005; however, Communicate is unable to forecast with
certainty as the business is dependent on many factors, such as political
events, travel safety and the economy, and may continue to require business
remodeling.





***Page
- 5***





**RISK
FACTORS**





Our
business is subject to a number of risks. In addition to competitive risks, we
are engaged in businesses that have only recently been profitable, and there can
be no assurance that the Company’s business strategy will continue to be
profitable. Moreover, we rely upon an inventory of generic domain names for
lease, sale, and other ventures, each of which is a “.com” domain name suffix.
The Internet Corporation for Assigned Names and Numbers (“ICANN”) has
introduced, and has proposed the introduction, of additional new domain name
suffixes, which may be as or more attractive than the “.com” domain name suffix.
New root domain names may have the effect of allowing the entrance of new
competitors at limited cost, which may further reduce the value of our domain
name assets. We do not presently intend to acquire domain names using newly
authorized root domain names to match its existing domain names, although we
have certain .cn (China) root domain names to complement its growth
strategy.





You
should consider each of the following risk factors and the other information in
this Annual Report, including our financial statements and the related notes, in
evaluating our business and prospects. The risks and uncertainties described
below are not the only ones that impact on our business. Additional risks and
uncertainties not presently known to us or that we currently considers
immaterial may also impair our business operations. If any of the following
risks actually occur, our business and financial results could be harmed. In
that case, the trading price of our common stock could decline.





**Risks
associated with Communicate’s industry:**




**1.**
    **Communicate
      operates in a highly regulated industry and compliance failures could
      result in a negative impact on its
business.**





Communicate’s
services are subject to significant regulation at the federal, state and local
levels. Delays in receiving required regulatory approvals or the enactment of
new adverse regulation or regulatory requirements may have a negative impact
upon Communicate and its business.





*Licensing* .
Currently, other than business and operations licenses applicable to most
commercial ventures, Communicate is not required to obtain any governmental
approval for its business operations, although Communicate applies to ICANN and
its contractors to obtain and maintain its domain name assets. There can be no
assurance, however, that governmental institutions will not, in the future,
impose licensing or other requirements on the Company. Additionally, as noted
below, there are a variety of laws and regulations that may, directly or
indirectly, have an impact on Communicate’s business.





*Privacy
Legislation and Regulations* . ** While the
Company is not currently subject to licensing requirements, entities engaged in
operations over the Internet, particularly relating to the collection of user
information, are subject to limitations on their ability to utilize such
information under federal and state legislation and regulation. In 2000, the
Gramm-Leach-Bliley Act required that the collection of identifiable information
regarding users of financial services be subject to stringent disclosure and
“opt-out” provisions. While this law and the regulations enacted by the Federal
Trade Commission and others relates primarily to information relating to
financial transactions and financial institutions, the broad definitions of
those terms may make the businesses entered into by the Company and its
strategic partners subject to the provisions of the Act. This, in turn, may
increase the cost of doing business and make it unattractive to collect and
transfer information regarding users of services. This, in turn, may reduce the
revenues of the Company and its strategic partners, thus reducing potential
revenues and profitability. Similarly, the Children On-line Privacy and
Protection Act (“COPPA”) imposes strict limitations on the ability of Internet
ventures to collect information from minors. The impact of COPPA may be to
increase the cost of doing business on the Internet and reducing potential
revenue sources. The Company may also be impacted by the recently-enacted US
Patriot Act, which requires certain companies to collect and provide information
to United States governmental authorities. A number of state governments have
also proposed or enacted privacy legislation that reflects or, in some cases,
extends the limitations imposed by the Gramm-Leach-Bliley Act and COPPA. These
laws may further impact the cost of doing business on the Internet and the
attractiveness of Communicate’s inventory of domain names.





*Advertising
Regulations* . In
response to concerns regarding “spam” (unsolicited electronic messages),
“pop-up” web pages and other Internet advertising, the federal government and a
number of states have adopted or proposed laws and regulations which would limit
the use of unsolicited Internet advertisements. While a number of factors may
prevent the effectiveness of such laws and regulations, the cumulative effect
may be to limit the attractiveness of effecting sales on the Internet, thus
reducing the value of Communicate’s inventory of domain names.





*Taxation.* Currently, the sale of goods and services on the Internet is not subject to a
uniform system of taxation. A number of states, as well as the federal
government, have considered enacting legislation that would subject Internet
transactions to sales, use or other taxes. Because there are a variety of
jurisdictions considering such actions, any attempt to tax Internet transactions
could create uncertainty in the ability of Internet-based companies to comply
with varying, and potentially contradictory, requirements. The Company cannot
predict whether any of the presently proposed schemes will be adopted, or the
effect any of them would have on the Company.




***Page
- 6***





There are
currently few laws or regulations that specifically regulate communications or
commerce on the Internet. However, laws and regulations may be adopted in the
future that address issues such as user privacy, pricing and the characteristics
and quality of products and services. For example, the Telecommunications Act of
1996 sought to prohibit transmitting various types of information and content
over the Internet. Several telecommunications companies have petitioned the
Federal Communications Commission to regulate Internet service providers and
on-line service providers in a manner similar to long distance telephone
carriers and to impose access fees on those companies. This could increase the
cost of transmitting data over the Internet. Moreover, it may take years to
determine the extent to which existing laws relating to issues such as
intellectual property ownership, libel and personal privacy are applicable to
the Internet. Any new laws or regulations relating to the Internet or any new
interpretations of existing laws could have a negative impact on Communicate’s
business and add additional costs to doing business on the
Internet.





**Risks
associated with Communicate:**




**2.**
    **Communicate’s
      stock price is volatile.**





The stock
markets in general, and the stock prices of internet companies in particular,
have experienced extreme volatility that often has been unrelated to the
operating performance of any specific public company. The market price of
Communicate’s Common Stock is likely to fluctuate in the future, especially if
Communicate’s Common Stock is thinly traded. Factors that may have a significant
impact on the market price of Communicate’s Common Stock include:





a.
    actual
      or anticipated variations in Communicate’s results of
      operations;


b.
    Communicate’s
      ability or inability to generate new
revenues;


c.
    increased
      competition;


d.
    government
      regulations, including internet
regulations;


e.
    conditions
      and trends in the internet industry;


f.
    proprietary
      rights; or


g.
    rumors
      or allegations regarding Communicate’s financial disclosures or
      practices.





Communicate’s
stock price may be impacted by factors that are unrelated or disproportionate to
its operating performance. These market fluctuations, as well as general
economic, political and market conditions, such as recessions, interest rates or
international currency fluctuations may adversely affect the market price of
Communicate’s Common Stock.








**3.**
    **Competition**





Communicate
competes with many companies possessing greater financial resources and
technical facilities than itself in the B2B2C (business-to-business-to-consumer)
market as well as for the recruitment and retention of qualified personnel. In
addition, while Communicate holds title to a wide variety of generic names that
may prove valuable, many of Communicate’s competitors have a very diverse
portfolio of names and have not confined their market to one industry, product
or service, but offer a wide array of multi-layered businesses consisting of
many different customer and industry partners. Some of these competitors have
been in business for longer than Communicate and may have established more
strategic partnerships and relationships than Communicate. In addition, as noted
above, ICANN regularly develops new domain name suffixes that will have the
result of making a number of domain names available in different formats, many
of which may be more attractive than the formats held by
Communicate.





**4.**
    **New
      Products and Services**





Communicate
seeks to develop a portfolio of operating businesses either by itself or by
entering into arrangements with businesses that operate in the product or
service categories that are described by the domain name assets owned by DHI.
Communicate has not, however, identified specific business opportunities and
there can be no assurance that it will do so.





**5.**
    **Dependence
      on One or a Few Major Customers**





Except
for Communicate’s relationship with Overture, Communicate does not currently
depend on any single customer for a significant proportion of its business.
However, as the Company enters into strategic transactions, the Company may
choose to grant exclusive rights to a small number of parties or otherwise limit
its activities that could, in turn, create such dependence. The Company,
however, has no current plans to do so.




***Page
- 7***





**6.**
    **Patents,
      Trademarks and Proprietary Rights**





Communicate
currently does not own any patents, trade names or trade marks and is not a
party to any license or franchise agreements, concessions, royalty agreements or
labor contracts arising from any patents or trade marks. Communicate is party to
certain royalty agreements with strategic partnerships relating to percentages
of third party product sales that occur through Communicate’s online businesses,
which are also known as “affiliate programs”.





All of
Communicate’s online businesses and web sites are copyrighted upon loading.
“Communicate.com” is a registered domain name of DHI. While Communicate will
consider seeking further trademark protection for its online businesses and the
associated domain names, the Company may be unable to avail itself of trademark
protection under United States laws because, among other things, the names are
generic and intuitive. Consequently, the Company will seek trademark protection
only where it has determined that the cost of obtaining protection, and the
scope of protection provided, results in a meaningful benefit to the
Company.





**7.**
    **Since
      Communicate’s success depends upon the efforts of David Jeffs and Cameron
      Pan, key members of its management, Communicate’s failure to retain David
      Jeffs and Cameron Pan will negatively effect Communicate’s
      business.**





Communicate
and it Subsidiaries have twenty-one full-time employees and three consultants.
The Subsidiaries, from time to time, engage computer programmers and website
designers on a temporary basis as needed. Communicate believes that adequate
personnel may be engaged on this basis to meet its currently anticipated needs.
While full-time employees primarily work out of Communicate’s Canadian office in
Vancouver, the consultants are independent contractors and work from their
respective offices and commute as required.





Communciate’s
business is greatly dependent on the efforts of its CEO, David Jeffs and its
CFO, Cameron Pan, and on its ability to attract, motivate and retain key
personnel and highly skilled technical employees. Competition for qualified
personnel is intense and Communicate may not be able to hire or retain qualified
personnel. The loss of David Jeffs and Cameron Pan could have a negative impact
on Communicate’s business, operating results and financial
condition.





**8.**
    **Communicate
      does not expect to pay dividends in the foreseeable
      future.**





Communicate
has never paid cash dividends on its Common Stock and has no plans to do so in
the foreseeable future. Communicate intends to retain earnings, if any, to
develop and expand its business.





**9.**
    **“Penny
      Stock” rules may make buying or selling Communicate’s Common Stock
      difficult, and severely limit its market and
      liquidity.**





Trading
in Communicate’s Common Stock is subject to certain regulations adopted by the
SEC commonly known as the “penny stock” rules. Communicate’s Common Stock
qualifies as penny stocks and are covered by Section 15(g) of the Securities
Exchange Act of 1934, which imposes additional sales practice requirements on
broker/dealers who sell the Common Stock in the aftermarket. The “penny stock”
rules govern how broker-dealers can deal with their clients and “penny stocks”.
For sales of Communicate’s Common Stock , the broker/dealer must make a special
suitability determination and receive from you a written agreement prior to
making a sale to you. The additional burdens imposed upon broker-dealers by the
“penny stock” rules may discourage broker-dealers from effecting transactions in
Communicate’s Common Stock, which could severely limit their market price and
liquidity of its Common Stock. This could prevent you from reselling your shares
and may cause the price of the Common Stock to decline. See “Penny Stock rules”
in Part II Item 5(e) for more details.





**Item
2.**  **Description
of Property.**





Communicate’s
assets consist of a portfolio of “generic” domain names including “Perfume.com”,
“Exercise.com”, “Boxing.com”, “Wrestling.com”, “Cricket.com”, “Leisure.com”,
“Vancouver.com”, “Brazil.com”, “Malaysia.com”, “Indonesia.com”, “Vietnam.com”,
“Call.com”, “Number.com” and “Mouse.com”.




***Page
- 8***





Communicate
and its Subsidiaries operate from their principal office at 600 - 1100 Melville
Street, Vancouver, British Columbia, Canada. Communicate’s telephone number is
(604) 697-0136. Communicate rents the office space on a month-to-month basis and
has a flexible arrangement with its landlord to take up space when and if
required. It is our opinion that this office space will meet our needs for the
foreseeable future.





**Item
3.**  **Legal
Proceedings.**





In
December 1999, DHI commenced a lawsuit in the Supreme Court of British Columbia
(No. C996417) against Paul Green, the former chief executive officer of DHI, for
breach of fiduciary duty for wrongfully attempting to appropriate DHI’s business
opportunities. DHI is seeking an undetermined amount of damages and a
declaration that it had just cause to terminate Paul Green as the CEO in or
about June 1999. No decision has been rendered in this case and DHI cannot
predict whether it will prevail, and if it does, what the terms of any judgment
may be.





On March
9, 2000, Paul Green commenced a separate action in the Supreme Court of British
Columbia (No. S001317) against DHI. In that action, Paul Green claimed wrongful
dismissal and a breach of contract on the part of DHI. Paul Green is seeking an
undetermined amount of damages and, among others, an order of specific
performance for the issuance of a number of shares in the capital of DHI equal
to 18.9% or more of the outstanding shares of DHI. On June 1, 2000, DHI filed a
statement of defence and counterclaim. Management intends to defend this action
vigorously.





On July
14, 2003, Multinational Investment Corp. (“MIC”) commenced a legal action in the
State of Virginia against DHI for breach of contract regarding an agreement to
purchase the domain name www.cricket.com and sought damages of $1.25 million
plus interest at 9% from November 27, 2001, and title to the disputed domain
name. On August 6, 2003 DHI filed its statement of defence and counterclaim
alleging various breaches of contract, and on October 24, 2003, DHI filed an
amended counterclaim, which includes Global Explorations, Inc. (“Global”) as a
party defendant. On January 13, 2004, MIC, Global and DHI entered into a
Settlement Agreement and Mutual Release whereby all parties, including certain
of their officers, agreed to settle their legal actions and mutually release
each other, and on February 10, 2004, a Stipulation of Dismissal was filed into
court dismissing all actions related to this dispute. No money was paid by DHI
in reaching the settlement other than for legal representation.





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





No matter
was submitted to a vote of security holders, through the solicitation of proxies
or otherwise, during the fourth quarter of the fiscal year covered by this
report.








**PART
II**





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





**(a)**  **Market
Information**





Communicate’s
common stock has been quoted on the NASD OTC Bulletin Board since May 11, 2000
under the symbol “CMNN”(formerly “TRYD”). The table below gives the high and low
bid information for each fiscal quarter for the past two years. The bid
information was obtained from the OTC Bulletin Board and reflects inter-dealer
prices, without retail mark-up, mark-down or commission, and may not represent
actual transactions.








High
      & Low BidsPeriod
      ended
    High
    Low
    Source28
      March 2005
    $0.63
    $0.43
    OTC
      Bulletin Board31
      December 2004
    $0.73
    $0.41
    OTC
      Bulletin Board30
      September 2004
    $0.61
    $0.22
    OTC
      Bulletin Board30
      June 2004
    $0.44
    $0.28
    OTC
      Bulletin Board21
      March 2004
    $0.70
    $0.20
    OTC
      Bulletin Board31
      December 2003
    $0.25
    $0.16
    OTC
      Bulletin Board30
      September 2003
    $0.50
    $0.14
    OTC
      Bulletin Board30
      June 2003
    $0.17
    $0.02
    OTC
      Bulletin Board31
      March 2003
    $0.07
    $0.03
    OTC
      Bulletin Board




***Page
- 9***





**(b)**  **Holders
of Record**





Communicate
has approximately 250 registered holders of common stock.





**(c)**  **Dividends**





Communicate
has declared no dividends on its common stock in fiscal 2004. Communicate has no
current plans to declare or pay any dividend on its common stock.





**(d)**  **Recent
Sales of Unregistered Securities**





There was
no issuance of shares of common stock in the capital of Communicate during the
period covered by this Form 10-KSB with the exception of the
following:





On
January 5, 2004, the Board of Directors authorized the issuance of 50,000 shares
of common stock to two employees of DHI in lieu of cash for bonuses earned and
accrued in 2003. Communicate relied on an exemption from registration under
Section 4(2) of the Securities Act of 1933 in issuing the shares. These shares
are restricted securities and are subject to resale restrictions under Rule
144.





On July
22, 2004, Communicate issued 580,000 shares of common stock to Cameron Pan for
the exercise of Mr. Pan’s stock option. See Executive Compensation below for
more information. Communicate relied on an exemption from registration under
Section 4(2) of the Securities Act of 1933 in issuing the shares. These shares
are restricted securities and are subject to resale restrictions under Rule
144.





**(e)**  **Penny
Stock Rules**





Trading
in Communicate’s common stock is subject to the “penny stock” rules. The SEC has
adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than $5.00 per share, subject to
certain exceptions. These rules require that any broker-dealer who recommends
Communicate’s common stock to persons other than prior customers and accredited
investors, must, prior to the sale, make a special written suitability
determination for the purchaser and receive the purchaser’s written agreement to
execute the transaction. Unless an exception is available, the regulations
require the delivery, prior to any transaction involving a penny stock, of a
disclosure schedule explaining the penny stock market and the risks associated
with trading in the penny stock market. In addition, broker-dealers must
disclose commissions payable to both the broker-dealer and the registered
representative and current quotations for the securities they offer. The
additional burdens imposed upon broker-dealers by such requirements may
discourage broker-dealers from effecting transactions in Communicate’s common
stock, which could severely limit their market price and liquidity of
Communicate’s common stock.





The
“penny stock” rules also imposes additional sales practice requirements on
broker/dealers who sell penny stock. These rules require a one page summary of
certain essential items. The items include the risk of investing in penny stocks
in both public offerings and secondary marketing; terms important to in
understanding of the function of the penny stock market, such as “bid” and
“offer” quotes, a dealers “spread” and broker/dealer compensation; the
broker/dealer compensation, the broker/dealers duties to its customers,
including the disclosures required by any other penny stock disclosure rules;
the customers rights and remedies in causes of fraud in penny stock
transactions; and, the NASD’s toll free telephone number and the central number
of the North American Administrators Association, for information on the
disciplinary history of broker/dealers and their associated
persons.





**Item
6.**  **Management’s
Discussion and Analysis.**





Communicate
is in the business of developing and commercializing its portfolio of domain
names, many of which generate meaningful amounts of Internet traffic, which
Communicate attributes to, among other things, their generic descriptive nature
of a product or services category.





Management
believes that it can develop and sustain a business based on the lease, sale and
other exploitation of domain names because, in part, of its ownership of a
substantial number of generic, intuitive domain names which attract significant
numbers of visitors to websites utilizing those names. Moreover, because there
are a limited number of potential domain names, Communicate believes that the
value of these names may be significant and may allow Communicate to achieve
both strategic relationships with leading participants in key Internet
businesses and businesses that desire to expand using the Internet, as well as
independent operations.




***Page
- 10***





Communicate
acquired a number of .cn domain names through a lottery-allocation in 2003 to
enhance its travel business (e.g. airfare.cn, hostels.cn and rooms.cn) and
trade-directory business (e.g. naturalgas.cn, fertilizer.cn, minerals.cn and
gemstones.cn) which are being planned and developed. Management believes the
acquired domain names in addition to those already owned by Communicate will
increase its overall Internet through-traffic, which would benefit both its
retail business and advertising business, with moderate spending on
advertising.





Communicate,
for the immediate future, does not anticipate independently developing
technologies, processes, products or otherwise engaging in research, development
or similar activities. Instead, such activities will be engaged in pursuant to
arrangements with its strategic partners.








***Page
- 11***





Selected
Financial Data





The
following selected financial data was derived from Communicate’s audited
financial statements. The information set forth below should be read in
conjunction with the Company’s financial statements and related notes included
elsewhere in this report.





For
      the Years Ended
    
    December
      31, 2004
    
    December
      31, 2003STATEMENTS
      OF OPERATIONS DATADomain
      Name Advertising and Leasing
    
    $
    603,556
    
    $
    305,560Domain
      Name Sales
    
    
    950,000
    
    
    400,000eCommerce
      Sales
    
    
    1,961,895
    
    
    525,275Total
      Revenues
    
    $
    3,515,451
    
    $
    1,230,835Cost
      of Domain Name Sales
    
    
    361,801
    
    
    122,315eCommerce
      Direct Costs
    
    
    1,562,754
    
    
    396,412Total
      Cost of Revenues
    
    $
    1,924,555
    
    $
    518,727Gross
      Profit
    
    $
    1,590,896
    
    $
    712,108Marketing
    
    
    ($
      117,500
    )
    
    ($
      6,945
    )General
      and Administrative
    
    
    (373,998
    )
    
    (188,836
    )Management
      Fees and Salaries
    
    
    (631,367
    )
    
    (244,711
    )Professional
      and Consulting Fees
    
    
    (32,148
    )
    
    (58,398
    )Depreciation
    
    
    (3,867
    )
    
    (3,057
    )Total
      Expenses
    
    
    ($
      1,158,880
    )
    
    ($
      501,947
    )Operating
      Income (Loss)
    
    $
    432,016
    
    $
    210,161Gain
      on Debt Settlement
    
    
    12,010
    
    
    --Non-Controlling
      Interest Share of Loss
    
    
    41,718
    
    
    9,077Gain
      in Change in Non-Controlling Interest
    
    
    12,353
    
    
    30,555Income
      Before Income Taxes
    
    $
    498,097
    
    $
    249,793Income
      Taxes
    
    
    177,323
    
    
    109,865Tax
      Loss Recovered
    
    
    (177,323
    )
    
    (109,865
    )Net
      Income for the Year
    
    $
    498,097
    
    $
    249,793Basic
      Earnings per Share
    
    $
    0.03
    
    $
    0.02Weighted
      Average Number of Shares Outstanding
    
    
    14,973,334
    
    
    14,691,339





***Page
- 12***








For
      the Years Ended
    
    December
      31, 2004
    
    December
      31, 2003BALANCE
      SHEET DATACurrent
      Assets
    
    $
    1,076,592
    
    $
    424,295Fixed
      Assets
    
    
    26,394
    
    
    9,618Intangible
      Assets Held for Resale
    
    
    1,503,725
    
    
    1,764,714Total
      Assets
    
    $
    2,606,711
    
    $
    2,198,627Accounts
      Payable and Accrued Liabilities
    
    $
    665,195
    
    $
    536,214Loan
      Payable - Current
    
    
    --
    
    
    52,930Loan
      Payable - Non-Current
    
    
    --
    
    
    250,000Total
      Liabilities
    
    $
    665,195
    
    $
    839,144Non-Controlling
      Interest
    
    $
    --
    
    $
    2,345Common
      Stock
    
    $
    6,331
    
    $
    5,701Additional
      Paid in Capital
    
    
    3,133,886
    
    
    3,066,516Accumulated
      Deficit
    
    
    (1,198,701
    )
    
    (1,696,798
    )Accumulated
      Other Comprehensive Income (Loss)
    
    
    --
    
    
    (18,281
    )Total
      Stockholders’ Equity
    
    $
    1,941,516
    
    $
    1,357,138Total
      Liabilities and Stockholders’ Equity
    
    $
    2,606,711
    
    $
    2,198,627





**Results
of Operation**





Communicate
did not generate any significant revenues or expenses until the acquisition of a
majority interest in DHI in November 2000. Prior to that date, Communicate was a
development stage company that focused on identification of potential business
acquisitions. Consequently, the results of operation discussed below describe
the business activities after the acquisition of control of DHI on November 10,
2000 and of FT on October 1, 2003.





REVENUES





*Domain
Name Sales* - During
the twelve months ended December 31, 2004, Communicate received $600,000 for the
three remaining domain names sold to Manhatten Assets Inc. in 2003 and received
$350,000 in the fourth quarter for the sale of a sports domain name to Peninsula
Investments. The domain names sold previously were identified as non-essential
to the business of Communicate, and management believed the proceeds from the
sales would enhance the liquidity of Communicate’s balance sheet. As noted in
the past, the trading of domain names is difficult to predict, and management
cannot reasonably forecast this line of revenue for 2005. Currently, management
has identified the remaining sports domain names not having been developed as
opportunities for trade or divestiture.





During
the twelve months ended December 31, 2003, Communicate entered into an agreement
to sell four domain names to Manhatten Assets Inc. and received an up-front
option payment of $200,000 and later a purchase price payment of $200,000 for a
total of $400,000 in 2003.





*Web
Advertising and Leasing* - During
the twelve months ended December 31, 2004, Communicate generated advertising and
leasing revenue of $603,556 which represented an increase of $297,996 or 97.5%
from 2003. This increase in both dollar and percentage terms was better than
expected as Internet advertising spending had exceeded consensus estimates in
2004. Of the advertising and leasing revenue, Overture accounted for 91% of the
revenue. While management acknowledges the risk of concentration of revenue with
one customer, management believes Overture, wholly owned by Yahoo Inc., is a
suitable business partner for generating advertising revenue. However, if a
change becomes necessary, management has identified other potential advertising
partners. Management will continue to evaluate other opportunities for domain
names and will act accordingly should better opportunities arise. Management
believes advertising revenue will increase in 2005 by 30% to 40% based on
indications from 2005 first quarter results. The forecast in increasing
advertising revenue depends upon expected traffic to be generated by domain
names, and while that traffic has been fairly consistent over the past
years management cannot guarantee the level of traffic in light of technological
and business climate changes.




***Page
- 13***





During
the twelve months ended December 31, 2003, Communicate generated advertising
revenue of $305,560 which represented a decrease of $60,120 or 16.4% from 2002.
The decrease was largely as a result of two factors: 1) the redeployment of
perfume.com and cologne.com as product sales sites in May 2003 accounted for a
decrease of approximately $60,000, and 2) the end of a leasing contract without
further renewal or new leasing on certain sports domain names at the end of the
third quarter accounted for a decrease of approximately $17,000. If not for
these two factors, advertising and leasing revenue would have increased by
approximately $17,000 or 4.7% from 2002.





*eCommerce
Sales* - During
the twelve months ended December 31, 2004, Communicate generated eCommerce sales
of $1,961,895 representing an increase of $1,436,621 or 273%. Fragrance sales
accounted for $1.66 million or an increase of 249% from 2003. The sports product
business, since its launch in late June 2004, has sold $56,824 of karate
products. Management maintains its belief that sales will continue to increase
because Communicate’s websites offer consumers a positive shopping experience at
competitive prices. Management also believes that Communicate will experience
increased sales as a result of consumers’ increased adoption of the Internet for
purchases as well as repeat sales to Communicate’s growing customer base.
Management continues to improve the user experience by improving its websites.
Communicate has also been using both email marketing and affiliate relationships
to generate new and repeat business. In order to generate new leads Communicate
has invested in the improvement of search ranking results and has purchased
clicks. Additionally, management has been adding to its list of suppliers in
order to expand product offerings and to provide competitive prices. As a result
of management’s efforts, both sales and profit margin have increased in 2004 at
a better rate than projected. Management believes it can continue to increase
its sales volume for 2005. Currently, based on the results of the first quarter
of 2005, sales, other than travel, have nearly doubled over the first quarter of
2004.





Travel
sales continue to be difficult to forecast as events both naturally occurring
and man-made continue to arise in the Southeast Asia region encompassed by
Communicate’s subsidiary’s travel websites - Vietnam.com, Malaysia.com and
Indonesia.com. Management believes FT’s travel sales results undeservedly have
been under planned revenue of $150,000 per quarter. During the twelve months
ended December 31, 2004, FT generated revenues of $247,078 and a net loss of
$125,938. This rate of loss of roughly $10,000 a month is expected to continue
until at least the second quarter of 2005. FT’s management has reorganized its
operations and moved its sales office to Bellingham, Washington while
maintaining a shared office in Malaysia to focus on two identifiable key markets
of Malaysia/Singapore and North America. Management also has identified a low
lead-to-conversion ratio where numerous enquiries are not being followed up
properly or in a timely manner and has been working to develop its sales
management system by adopting technology tools owned by Communicate. The system
is expected to be in place in the second quarter of 2005 when improvements can
be expected to contribute to increasing sales. Management notes, however, that
while incremental improvements can be applied to the travel business, events
that are similar to those that have occurred in the Southeast Asia region can
reoccur or can manifest themselves into other events that are outside the
control of Communicate and may adversely affect its travel business in 2005 and
beyond.





2004
    
    2003Type
    $
    Margin
    $
    MarginFragrances
    1,657,993
    21.7%
    474,811
    16.8%Sports
    56,824
    16.6%
    0
    Not
      meaningfulTravel
    247,078
    16.8%
    7,096
    Not
      meaningfulTotal
    1,961,895
    
    481,907








During
the twelve months ended December 31, 2003, Communicate generated product sales
of $474,811 through its own in-house developed fragrance and bodycare websites
launched on or around May 15, 2003. The monthly revenue from the sites will be
cyclical in nature consistent with other fragrance retailers whether online or
in physical stores. During the twelve months ended December 31, 2003,
Communicate generated travel sales and commission of $7,086 through FT.com which
was “soft” launched in November 2003.





*Consulting
Revenue* - During
the twelve months ended December 31, 2004, Communicate did not generate any
consulting revenue. Communicate do not expect to generate any meaningful
consulting revenue in 2005.




***Page
- 14***





During
the twelve months ended December 31, 2003, Communicate generated consulting
revenue of $43,368 for Internet business strategy planning and third-party
website development work.








MARKETING
EXPENSE. During the twelve months ended December 31, 2004, Communicate spent
$117,500 on marketing expenses, an increase of $110,555 or 1,500% from the
$6,945 spent in 2004. As a percentage of eCommerce sales, marketing expense
represented roughly 6.0% of sales. While Communicate has stated that its generic
domain names have potential to become strong brands with minimal spending on
advertising, it also recognizes the increasing reliance of online shoppers on
search engines and directory sites to find products. Even though Communicate’s
websites’ search rankings performed adequately, management believes targeted
keywords advertising at opportune time would bring additional traffic to its
retail sites. Management is pleased with the results of its marketing campaign
which began in earnest in June 2004 where a budget of up to 10% of product sales
can be spent on online advertising and marketing. Management expects to maintain
its marketing efforts in 2005 as budgeted.





GENERAL
AND ADMINISTRATIVE EXPENSES. During the twelve months ended December 31, 2004,
Communicate’s general and administrative expenses were $373,998, an increase of
$185,162 or 98% from 2003. The increase can be attributed to: 1) an increase in
merchant account processing fee reflecting the increase in eCommerce sales; 2)
an increase in office overhead, such as rent and telecommunication charges; 3)
an increase in investor relations activities; and 4) an increase arising from
exchange rate appreciation of the Canadian currency. Management has managed to
lower general and administrative expenses as a percentage to total revenue to
10.6% from the 15.3% in 2003. For 2005, management will target to keep general
and administrative expenses at not more than 15% of total revenue, down from its
2004 target of not more than 20% of total revenue. Management notes, however,
exchange rate fluctuations and other inflationary pressures may cause actual
results to be higher than target.





During
the twelve months ended December 31, 2003, Communicate’s general and
administrative expenses were $188,836, an increase of $58,710 or 45% from 2002.
The increase is attributable to four factors: 1) an increase in merchant account
processing fee of approximately $20,000 related to credit card processing for
product sales; 2) an increase in rent and other overhead costs of approximately
$12,000 as new hires are added; 3) an increase in foreign exchange costs as
overhead are paid primarily in Canadian dollars which has appreciated
substantially against the United States currency; and 4) offset by a decrease in
interest expense of $16,300.








MANAGEMENT
FEES AND SALARIES. During the twelve months ended December 31, 2004,
Communicate’s management fees and salaries were $631,367, an increase of
$386,656 or 158% from 2003. Included in the amount are: 1) executive
compensation including bonuses which had increased to $228,000 in 2004 from
$144,000 in 2003; 2) staff salaries for Communicate and its subsidiaries which
were $310,894, an increase of $210,183 or 209% from 2003; and 3) an accrued
bonus of $92,473. The increase reflects wages and salaries increases, staff
incentive bonuses and new hiring in 2004 as Communicate has progressed from
having 10 employees and consultants in 2003 to 20 staff currently. Another
important factor is the strength of the Canadian currency relative to the US
currency. While the executives are paid in US currency, all staff wages and
salaries are paid in Canadian currency which has appreciated over 20% in 2004
relative to US currency. Overall, management has managed to lower management
fees and salaries as a percentage of total revenue to 18.0% from the 19.9% in
2003. In 2005, management expects to temper its rate of hiring by monitoring
both revenue and profit growth and to adjust staffing need accordingly; however,
management also notes that pressure for salary increase has been felt as demand
for skilled workers increased in the local labor market. For 2005, management
will target to keep management fees and salaries at not more than 25% of total
revenue.





During
the twelve months ended December 31, 2003, Communicate’s management fees and
salaries were $244,711, an increase of $77,072 or 46% from 2002. The increase is
attributable to increased hiring and accrued incentive bonuses of $17,000 for
the employees.





PROFESSIONAL
FEES. During the twelve months ended December 31, 2004, Communicate’s
professional fees which consist of legal and audit costs were $32,148, a
decrease of $26,250 or 45% from 2003. Management expects these expenses to
increase in 2005 as expenditures to ensure compliance with regulations will
increase and as Communicate’s volume of business continues to increase.





During
the twelve months ended December 31, 2003, Communicate’s professional fees were
$58,398, a decrease of $50,990 or 47% from 2003 as Communicate continued to
resolve outstanding legal matters.




***Page
- 15***








GAIN ON
DEBT SETTLEMENT. During the twelve months ended December 31, 2004, all accrued
leased obligations were written off as management believed these debts had
been extinguished. Management cannot forecast into 2005 and will decide if other
write-offs are warranted at the end of 2005.





During
the twelve months ended December 31, 2003, there was no gain nor loss on the
settlement of debt or lawsuits. Management cannot reasonably predict gains or
losses resulting from debt settlement and contingent matters but will report any
material matters as they arise.





NON-CONTROLLING
INTEREST SHARE OF LOSS IN SUBSIDIARY. During the twelve months ended December
31, 2004, Communicate recorded a non-controlling interest share of loss in FT of
$41,718, an increase of $32,641 or 360% from the $9,077 recorded in 2003.
Management expects to record such non-controlling interest share of loss in 2005
until FT can earn a profit.





GAIN
(LOSS) ON CHANGE IN INTEREST IN SUBSIDIARIES. During the twelve months ended
December 31, 2004, Communicate recorded a gain of $12,353 as compared to a gain
of $30,555 in 2003. The gain in 2004 resulted from FT.com issuing common shares
to third parties at a value above its book value. FT.com raised $51,726 through
such efforts in 2004, and management expects FT.com to raise an additional
$100,000 in 2005 at a price above its book value which would result in further
dilution gain for Communicate. Any dilution gain however could be offset by
further investment in FT by Communicate to maintain its interest in FT at a
price which has yet to be determined.





During
the twelve months ended December 31, 2003, Communicate recorded a gain of
$30,555 as a compared to a loss of $15,471 in 2002. The gain in 2003 resulted
from FT.com issuing common shares to third parties at a value above its book
value subsequent to the Company’s investment in FT.com. The loss in 2002
resulted from Communicate purchasing common shares from an ex-employee at a
nominal value which was greater than the book value of DHI.





**Liquidity
and Capital Resources**





At
December 31, 2004 Communicate had working capital of $411,397 thus eliminating
the working capital deficit of $164,849 reported on December 31, 2003. The
improvement resulted from positive cashflow generated from operations. During
the year ended December 31, 2004, Communicate generated net income of $498,097,
an increase of $248,304 or 99% from 2003. The positive cashflow from operations
enabled Communicate to purchase new computer servers and other equipment to
handle its growth, to purchase additional domain names to increase its
advertising and travel business. Communicate also used cash on hand and cash
generated from common stock issuance to pay off the remaining balance of a note
payable of $300,000 to become free of debt other than normal trade payables.
Despite the adverse effect of a strengthening Canadian currency, Communicate
managed to increase its cash balance by $671,889 to $1,064,928 by the end of
2004. Since inception, Communicate has accumulated a deficit of $1,198,701 and
has a stockholders’ equity of $1,941,516.





At
December 31, 2003 Communicate had current liabilities in excess of current
assets, resulting in a working capital deficit of $164,849, a reduction of
$492,855, or 75% from December 31, 2002. The improvement resulted from the
conversion of a $375,000 demand note to a term note set to expire in June 2005
and from positive cashflow generated from operations. During the year ended
December 31 2003, Communicate generated net income of $249,793 as compared to a
net loss of $1,278,600 in 2002. The net loss in 2002 included a non-cash charge
of $1,426,740 to reduce the carrying value of intangible assets in accordance
with SFAS 142. Excluding the non-cash charge, Communicate generated a net income
of $148,136 in 2002.





Since
November 2000 Communicate has worked to improve its liquidity position. While
Management believes it has made significant progress in enhancing its liquidity,
there is no certainty that the improvements can continue in view of changing
market conditions, technological innovations and legal and regulatory
requirements.





Communicate
believe it has the necessary cash requirements for the next 12 months without
having to raise additional funds. Communicate may seek to explore other business
opportunities which may require additional cash beyond what is available.
Communicate expects to seek any such additional funds by way of equity and/or
debt financing, and through the sale of non-strategic domain name assets.
However, Communicate may not be able enter into arrangements with its lenders or
raise required funds from financings. If Communicate is unable to raise adequate
funds for operations from the implementation of its business plan, or through
debt or equity financing, Communicate will approach its current shareholders for
loans to cover such outlays.




***Page
- 16***





Communicate
does not anticipate purchasing any plant or significant equipment in the
immediate future.


**Critical
Accounting Policies**
 
 Communicate’s
discussion and analysis of its financial condition and results of operations,
including the discussion on liquidity and capital resources, are based upon its
financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these
financial statements requires management to make estimates and judgements that
affect the reported amounts of assets, liabilities, revenues and expenses, and
related disclosure of contingent assets and liabilities. Actual results could
differ from those estimates. On an on going basis, management re-evaluates its
estimates and judgments, including but not limited to, those related to revenue
recognition and collectibility of accounts receivable. Critical accounting
policies identified are as follows:
 
 Revenue
Recognition
 
 Communicate
recognizes web advertising revenue net of service costs, in accordance with
Emerging Issues Task Force Issue 99-19 (“EITF 99-19”), “ *Reporting
Revenue Gross as a Principal Versus Net as an Agent* ”. Web
advertising revenue consists primarily of commissions earned from the referral
of visitors to Communicate’s websites to other parties. The amount and
collectibility of these referral commissions is subject to uncertainty;
accordingly revenues are recognized when the amount can be determined and
collectibility can be reasonably assured.
 
 Communicate
recognizes on-line sales of products and associated costs of goods sold upon
shipment of products and determination that collection is reasonably assured.
eCommerce revenues are derived primarily from the sale of fragrances and other
beauty products and sporting equipment. The Company does not record inventory as
an asset because all products sold are delivered to the customer on a
“just-in-time” basis.
 
 Communicate
recognizes revenues from the sales of travel products, including tours, airfares
and hotel reservations, upon receipt as sales are non-refundable. All costs
relating to travel related sales are accrued at that time.
 
 
 Foreign
Currency Transaction/ Balances
 
 Communicate’s
functional currency is the United States dollar. The financial statements of the
Company are translated to United States dollars in accordance with SFAS No. 52
“Foreign Currency Translation”. Monetary
assets and liabilities are re-measured using the foreign exchange rate that
prevailed at the balance sheet date. Revenue and expenses are translated at
weighted average rates of exchange during the year and stockholders’ equity
accounts and certain other historical cost balances are translated by using
historical exchange rates. Resulting re-measurement gains or losses are reported
on the consolidated income statement. Foreign
currency transactions are primarily undertaken in Canadian dollars. The Company
has not entered into derivative instruments to offset the impact of foreign
currency fluctuations.
 
 Intangible
Assets
 
 Communicate
has adopted the provision of the Statement of Financial Accounting Standards No.
142 (“SFAS 142”), “Goodwill and Intangible Assets”, which revises the accounting
for purchased goodwill and intangible assets. Under SFAS 142, goodwill and
intangible assets with indefinite lives are no longer amortized and are tested
for impairment annually. The determination of any impairment would include a
comparison of estimated future operating cash flows anticipated during the
remaining life with the net carrying value of the asset as well as a comparison
of the fair value to book value of Communicate.
 
 Communicate’s
intangible assets, which consist of its portfolio of generic domain names, has
been determined to have an indefinite life and management has determined, based
upon projected cash flows and market capitalization, that there is no impairment
of the carrying value of its intangible assets at December 31,
2004.


**Uncertainties
Relating to Forward-Looking Statements**





Management’s
discussion and analysis of Communicate’s financial condition and the results of
its operations and other sections of this report, contain forward looking
statements, that are based upon the current beliefs and expectations of
Communicates’ management, as well as assumptions made by, and information
currently available to, Communicates’ management. Because these statements
involve risks and uncertainties, actual actions and strategies and the timing
and expected results may differ materially from those expressed or implied by
the forward-looking statements. As well, Communicates’ future results,
performance or achievements could differ materially from those expressed in, or
implied by, any forward-looking statements. Future events and actual results
could differ materially from those set forth in or underlying the
forward-looking statements.




**Item
7.**  **Financial
Statements**




See
audited financial statements for the period ended December 31, 2004 and 2003
attached as an Exhibit to this Form 10-KSB.





**Item
8.**  **Changes
in and Disagreements with Accountants on Accounting and Financial
Disclosure.**





There are
no changes in and disagreements with Communicate’s accountants on accounting and
financial disclosure.





Communicate’s
principal independent accountant from October 1, 2000 to the current date is
Labonte & Co., #610 - 938 Howe Street, Vancouver, British Columbia V6Z 1N9.
Effective January 1, 2004, LaBonte & Co. merged with Dale Matheson
Carr-Hilton Chartered Accountants pursuant to which the name of Communicate’s
principal independent accountant changed to Dale Matheson Carr-Hilton LaBonte
(“DMCL”) and is located at 1140 West Pender St., Vancouver, British Columbia,
Canada.





**Item
8A. Controls and Procedures.**





Communicate
maintains disclosure controls and procedures that are designed to ensure that
information required to be disclosed in Communicate’s Securities Exchange Act of
1934 reports is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms, and that such information is
accumulated and communicated to Communicate’s management, including its chief
executive officer and chief financial officer, as appropriate, to allow timely
decisions regarding required disclosure. Based on their most recent evaluation,
which was completed within 90 days of the filing of this Form 10-KSB,
Communicate’s Chief Executive Officer and Chief Financial Officer believe
Communicate’s disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) are effective to ensure that information required to be
disclosed by Communicate in this report is accumulated and communicated to
Communicate’s management, including its principal executive officer and
principal financial officer, as appropriate, to allow timely decisions regarding
required disclosure. Based upon the foregoing, Communicate’s chief executive
officer and chief financial officer concluded that Communicate’s disclosure
controls and procedures are effective in connection with the filing of this
Annual Report on Form 10-KSB for the year ended December 31, 2004.





There
were no significant changes in Communicate’s internal controls or other factors
that could significantly affect these controls subsequent to the date of their
evaluation, including any significant deficiencies or material weaknesses of
internal controls that would require corrective action.





**Item
8B. Other Information**





During
the fourth quarter of the year covered by this Form 10-KSB, Communicate had no
information to be disclosed as required on a Form 8-K.





***Page
- 17***





**PART
III**





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





**(a)**  **Identify
Directors and Executive Officers**





Each of
our directors is elected by the stockholders to a term of one year and serves
until his or her successor is elected and qualified. Each of our officers is
appointed by the board of directors to a term of one year and serves until his
successor is duly appointed and qualified, or until he is removed from office.





Communicate’s
executive officers and directors are identified below.








**Directors
      and Officers**OfficeNames
    Communicate
    The
      Subsidiaries
    AgeDavid
      M Jeffs
      (Appointed
      July 23, 2002.)
    Director,
      Chief Executive Officer and President
    Director
    35J
      Cameron Pan
      (Appointed
      August 1, 2002)
    Chief
      Financial Officer and Corporate Secretary
    Chief
      Financial Officer and Corporate Secretary
    42




*David
Jeffs* ● Mr.
David Jeffs (35) was a consultant to Domain Holdings Inc. from November 2000 and
was responsible for revenue generating initiatives. Prior to consulting for
Domain Holdings Inc., Mr. Jeffs was the President and Director of a private
corporation trading in consumer goods products since 1997. Mr. Jeffs is an under
graduate of University of British Columbia majoring in Economics.




*Cameron
Pan* ● Mr.
Pan (42) **** has
worked in corporate finance in both public practice and investment banking,
specializing in the technology industry. Mr. Pan was a Vice President, Corporate
Finance of Marleau, Lemire Securities from 1993 to 1995 and the CFO for Memorex
Computers in the United States from 1995 to 1997. Mr. Pan is a Chartered
Accountant who has worked for Deloitte & Touche from 1998 to 1999 and
Coopers & Lybrand from 1986 to 1993 and is a graduate of Simon Fraser
University in British Columbia in 1992 with bachelor’s degrees in accounting and
finance.





**(b)**  **Identify
Significant Employees**





Communicate
does not have any significant employees. However, Communicate has retained the
following independent consultants that management believes each make a
significant contribution to Communicate’s business operations.





*David
Jeffs* - Chief
Executive Officer





*Cameron
Pan* - Chief
Financial Officer





**(c)**  **Family
Relationships**





There are
no family relationships among the directors, executive officers or persons
nominated or chosen by Communicate to become directors or executive
officers.





**(d)**  **Involvement
in Certain Legal Proceedings**





(1)
    No
      bankruptcy petition has been filed by or against any business of which any
      director was a general partner or executive officer either at the time of
      the bankruptcy or within two years prior to that
time.





(2)
    No
      director has been convicted in a criminal proceeding and is not subject to
      a pending criminal proceeding (excluding traffic violations and other
      minor offences).





(3)
    No
      director has been subject to any order, judgement, or decree, not
      subsequently reversed, suspended or vacated, of any court of competent
      jurisdiction, permanently or temporarily enjoining, barring, suspending or
      otherwise limiting his involvement in any type of business, securities or
      banking activities.





(4)
    No
      director has been found by a court of competent jurisdiction (in a civil
      action), the Securities Exchange Commission or the Commodity Futures
      Trading Commission to have violated a federal or state securities or
      commodities law, that has not been reversed, suspended, or
      vacated.




***Page
- 18***





**(e)**  **Compliance
with Section 16(a) of the Exchange Act.**





All
reports were filed with the SEC on a timely basis and Communicate is not aware
of any failures to file a required report during the period covered by this
annual report.





**(f)**  **Audit
Committee Financial Expert**





Communicate
has no financial expert. Management believes the cost related to retaining a
financial expert at this time is prohibitive. Further, because of Communicate’s
limited operations, management believes the services of a financial expert are
not warranted.





**(g)**  **Identification
of Audit Committee**





Communicate
does not have a separately-designated standing audit committee. Rather,
Communicate’s audit committee is comprised of all of its directors and officers.
David Jeffs and Cameron Pan are the only members of Communicate’s audit
committee, neither of who meet the independent requirements for an audit
committee member. Communicate’s audit committee is responsible for: (1)
selection and oversight of our independent accountant; (2) establishing
procedures for the receipt, retention and treatment of complaints regarding
accounting, internal controls and auditing matters; (3) establishing procedures
for the confidential, anonymous submission by our employees of concerns
regarding accounting and auditing matters; (4) engaging outside advisors; and,
(5) funding for the outside auditory and any outside advisors engagement by the
audit committee. Communicate has adopted an audit committee charter. See Exhibit
99.2 - Audit Committee Charter for more information.





**(h)**  **Disclosure
Committee and Charter**





Communicate
has a disclosure committee and disclosure committee charter. Communicate’s
disclosure committee is comprised of all of its officers and directors. The
purpose of the committee is to provide assistance to the chief executive officer
and the chief financial officer in fulfilling their responsibilities regarding
the identification and disclosure of material information about Communicate and
the accuracy, completeness and timeliness of Communicate’s financial reports.
See Exhibit 99.3 - Disclosure Committee Charter for more information.





**(i)**  **Code
of Ethics**





Communicate
has adopted a code of ethics that applies to all its executive officers and
employees, including its CEO and CFO. A copy of Communicate’s adopted code of
ethics is attached to this annual report. See Exhibit 99.1 - Code of Ethics for
more information. Also, Communicate’s code of ethics has been posted on its
website at www.cmnn.com. Communicate undertakes to provide any person with a
copy of its code of ethics free of charge. Please contact Adam Rabiner at
604-648-0536 to request a copy of Communicate’s code of ethics. Management
believes Communicate’s code of ethics is reasonably designed to deter wrongdoing
and promote honest and ethical conduct; provide full, fair, accurate, timely and
understandable disclosure in public reports; comply with applicable laws; ensure
prompt internal reporting of code violations; and provide accountability for
adherence to the code.




***Page
- 19***





**Item
10. Executive Compensation.**





**SUMMARY
COMPENSATION TABLE**





Long-term
      compensation***Annual
      compensation***
    **Awards**
    ***Payouts***Name
      and principal position
      (a)
    Year
      (b)
    (1)
      Salary
      ($)
      (c)
    (1)
      Bonus
      ($)
      (d)
    Other
      annual compen-sation
      ($)
      (e)
    Restricted
      stock awards
      ($)
      (f)
    Securities
      underlying options/
      SARs
      (#)
      (g)
    LTIP
      Payouts
      ($)
      (h)
    All
      other compen-sation
      ($)
      (i)David
      Jeffs, CEO
      Jul
      2002 - Present
    2002
      2003
      2004
    72,000
      72,000
      96,000
    50,000
      none
      18,000
    none
      none
      none
    none
      none
      none
    none
      none
      none
    none
      none
      none
    none
      none
      noneR
      Leigh Jeffs, CEO
      Feb
      2002 - July 2002
    2002
      2003
      2004
    10,000
      n/a
      n/a
    none
      n/a
      n/a
    none
      n/a
      n/a
    none
      n/a
      n/a
    None
      n/a
      n/a
    none
      n/a
      n/a
    none
      n/a
      n/aCameron
      Pan, CFO
      Aug
      2000-Feb 2002; Jul 2002 - Present.
    2002
      2003
      2004
    68,000
      72,000
      96,000
    50,000
      none
      18,000
    none
      none
      none
    none
      none
      none
    none
      none
      none
    none
      none
      none
    None
      none
      none


(1)  Paid by
DHI.





Prior to
Mr. David Jeffs’ appointment as President in July 2002, Mr. David Jeffs worked
as a consultant and was paid consulting fees of $5,333 in 2000, $40,000 in 2001,
and $42,000 from January to July 2002. Mr. David Jeffs also received a bonus of
$50,000 during 2002 and settled for 500,000 restricted common shares in the
Company in lieu of cash ( *See
Item 5 - Market for Common Equity and Related Stockholder Matters - Recent Sale
of Unregistered Securities* ). As at
the end of 2004, there was no significant balance owing to Mr. David Jeffs by
the Company.





In July
1, 2000, DHI agreed with Mr. Pan to pay him an annual salary of CDN$72,000.
Prior to Communicate’s acquisition of DHI on November 10, 2000, DHI had paid Mr.
Pan a salary of $44,720 during fiscal 2000. On Dec 31, 2000, Mr. Pan agreed to
reduce his annual salary to CDN$60,000 until the financial position of
Communicate improved. Communicate increased Mr. Pan’s salary to CDN$6,200 per
month on June 1, 2001 and accrued a performance bonus of $50,000 to Mr. Pan at
the end of 2001. Upon termination of Mr. Pan’s employment for whatever reason he
would be entitled to at least 6 months’ severance based on his then current pay.
Mr. Pan resigned in February 2002, and accordingly the Company accrued a
severance allowance of $36,000 to Mr. Pan based on a monthly salary of $6,000.
While Mr. Pan consulted for the Communicate from February to July 2002, Mr. Pan
was reappointed as CFO at the end of July 2002. As at the end of 2004, there was
no significant balance owing to Mr. Pan by the Company





Except
for the consulting agreements with Mr. David Jeffs and Mr. Cameron Pan, there
are no other employment or contractor agreements between Communicate or the
Subsidiaries and any named executive officer, and there are no employment
agreements or other compensating plans or arrangements with regard to any named
executive officer which provide for specific compensation in the event of
resignation, retirement, other termination of employment or from a change of
control of Communicate or from a change in a named executive officer’s
responsibilities following a change in control.





Since
Communicate’s incorporation, no stock options, stock appreciation rights, or
long-term incentive plans have been granted, exercised or repriced with the
exception of the following:





On July
23, 2002, the Company granted to Mr. Pan 580,000 stock purchase options to
acquire one share of common stock in the capital of Communicate per option at a
price of $0.10 per share for a period of two year. On July 22, 2004, Mr. Pan
exercised his stock options in full and acquired 580,000 shares. See the table
below for more information.







**Aggregate
Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR
Values**





Name
    Shares
      Acquired on Exercise
      (#)
    Value
      Realized
      ($)
    Number
      of Securities Underlying Unexercised Options/SARs at FY-End
      (#)
      
      Exersiable
      / Unexercisable
    Value
      of Unexercised In-th-Money Options/SARs at FY-End
      ($)
      
      Exersiable
      / UnexercisableCameron
      Pan
    580,000
    58,000
    nil
      / nil
    nil
      / nil





Also, the
Company is considering issuing compensation in the form of options or other
equity incentives to its key personnel.




***Page
- 20***





Currently,
there are no arrangements between Communicate and any of its directors or
between the Subsidiaries and any of its directors whereby such directors are
compensated for any services provided as directors.





**Item
11. Security Ownership of Certain Beneficial Holders and
Management.**





**Security
Ownership of Certain Beneficial Owners (more than 5%)**





Based
solely on reports filed with the Securities and Exchange Commission, the Company
is not aware of any person who holds 5% or more of the equity securities of the
Company.




**Security
Ownership of Management**







**Title
      of Class**
    **Name
      and Address of Beneficial Owner**
    **Amount
      and Nature of Beneficial Owner**
    **Percent**
      **of
      Class**[1]Common
      Stock
    David
      Jeffs
      600
      - 1100 Melville Street
      Vancouver,
      BC V6E 4A6
    669,900
    4.4%Common
      Stock
    Cameron
      Pan
      600
      - 1100 Melville Street
      Vancouver,
      BC V6E 4A6
    630,816
    4.1%Common
      Stock
    Directors
      and Executive Officers as a group
    1,300,716
    8.5%





[1] Based on
15,321,339 shares of common stock issued and outstanding as of March 28,
2005.





**Changes
in Control**





Communicate
is not aware of any arrangement that may result in a change in control of
Communicate.





**Item
12. Certain Relationships and Related Transactions.**





**Relationships
with Insiders**





No member
of management, executive officer or security holder has had any direct or
indirect interest in any transaction to which Communicate or each of the
Subsidiaries was a party, other than the payment of expenses or salary to such
person.





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





**(a)**  **Index
to and Description of Exhibits.**








**Exhibit**
    **Description**
    **Status****Exhibit
      A**
    Audited
      Financial Statements as of December 31, 2004 for the period October 10,
      1995 (inception) to December 31, 2004.
    Included**3.1**
    Articles
      of Incorporation filed as an exhibit to Communicate’s Form 10-SB filed on
      June 5, 2000.
    Filed**3.2**
    Bylaws
      filed as an exhibit to Communicate’s Form 10-SB filed on June 5,
      2000.
    Filed**3.3**
    Certificate
      of Amendment to Articles of Incorporation filed as an exhibit to
      Communicate’s Form 10-KSB filed on April 12, 2001
    Filed**10.1**
    Purchase
      Agreement, dated November 8, 2000, between Communicate.com Inc. and Brian
      Liew filed as an exhibit to Communicate’s Form 10-QSB filed on June 30,
      2000.
    Filed
   ***Page
- 21***
   **10.2**
    Loan
      and Security Agreement between Pacific Capital Markets Inc. and
      Communicate.com Inc. filed as an exhibit to Communicate’s Form 10-QSB
      filed on June 30, 2000.
    Filed**10.3**
    Form
      of Share Exchange Agreement, dated November 29, 2000, between
      Communicate.com Inc. and certain shareholders of Domain Holdings Inc. (fka
      Communicate.com Inc.) filed as an exhibit to Communicate’s Form 8-K filed
      on March 30, 2001.
    Filed**10.4**
    Letter
      Agreement, dated January 26, 2001, between Domain Holdings Inc. (fka
      Communicate.com Inc.) and Sierra Systems Group Inc. filed as an exhibit to
      Communicate’s Form 8-K filed on March 30, 2001.
    Filed**10.5**
    Loan
      Agreement dated October 10, 2001, between Siden Investments Ltd. and
      Communicate.com Inc. and Domain Holdings Inc. (fka Communicate.com Inc.)
      filed as an exhibit to Communicate’s Form 10-QSB filed on November 14,
      2003.
    Filed**10.6**
    Option
      Agreement dated October 10, 2001, between Siden Investments Ltd. and
      Communicate.com Inc. filed as an exhibit to Communicate’s Form 10-QSB
      filed on November 14, 2003.
    Filed**31**
    Certifications
      pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
    Included**32**
    Certification
      pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
      the Sarbanes-Oxley Act of 2002.
    Included**99.1**
    Code
      of Ethics
    Filed**99.2**
    Audit
      Committee Charter
    Filed**99.3**
    Disclosure
      Committee Charter
    Filed








**Item
14.   Principal Accounting Fees and Services**




**(1)
  Audit Fees and Related Fees**






The
aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for Communicate’s audit of annual
financial statements and for review of financial statements included in
Communicate’s Form 10-QSB’s or services that are normally provided by the
accountant in connection with statutory and regulatory filings or engagements
for those fiscal years was:




2004 -
$19,724 - Dale Matheson Carr-Hilton LaBonte


2003 -
$16,790 - Dale
Matheson Carr-Hilton LaBonte







**(2)
  Tax Fees**






The
aggregate fees billed in each of the last two fiscal years for professional
services rendered by the principal accountant for tax compliance, tax advice,
and tax planning was:




2004 -
$922 - Dale Matheson Carr-Hilton LaBonte


2003 -
$3,220 - Dale
Matheson Carr-Hilton LaBonte







**(3)
  All Other Fees**






The
aggregate fees billed in each of the last two fiscal years for the products and
services provided by the principal accountant, other than the services reported
in paragraphs (1) and (2) was:




2004 - $
nil - Dale
Matheson Carr-Hilton LaBonte


2003 - $
nil - Dale
Matheson Carr-Hilton LaBonte





***Page
- 22***




**(4)**  Communicate’s
audit committee’s pre-approval policies and procedures described in paragraph
(c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee
pre-approve all accounting related activities prior to the performance of any
services by any accountant or auditor.






**(5)**  The
percentage of hours expended on the principal accountant’s engagement to audit
Communicate’s financial statements for the most recent fiscal year that were
attributed to work performed by persons other than the principal accountant’s
full time, permanent employees was nil.














***Page
- 23***








**SIGNATURES**








In
accordance with Section 13 or 15(d) of the Securities and Exchange Act of 1934,
Communicate.com Inc. has caused this report to be signed on its behalf by the
undersigned duly authorized person.








**COMMUNICATE.COM
INC.**




By:*/s/
David Jeffs*


******


Name:  **David
Jeffs**


Title **:**  **Director
and CEO**


Dated:  **March
30, 2005**








Pursuant
to the requirements of the Securities Exchange Act of 1934, the following
persons on behalf of Communicate.com Inc. and in the capacities and on the dates
indicated have signed this report below.








**Signature**
    **Title**
    **Date***/s/
      David Jeffs*
    President,
      Principal Executive Officer,
      and
      sole member of the Board of Directors
    March
      30, 2005*/s/
      Cameron Pan*
    Corporate
      Secretary, Treasurer
      and
      Chief Financial Officer
    March
      30, 2005











***Page
- 24***


















**Exhibit
31**

















***Page
- 25***







**COMMUNICATE.COM
INC** **.**


**CERTIFICATIONS
PURSUANT TO**


**SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002**






**CERTIFICATION**






I, David
Jeffs, certify that:






1.  
I have reviewed this annual report on Form 10-KSB of Communicate.com Inc.;






2.  
Based on my knowledge, this annual report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this annual report;






3.  
Based on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this annual report;






4.  
The registrant’s other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:






a)  
designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;






b)  
evaluated the effectiveness of the registrant’s disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the “Evaluation Date”); and






c)  
presented in this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;






5.  
The registrant’s other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant’s auditors and the audit committee of
registrant’s board of directors (or persons performing the equivalent function):






a)  
all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant’s ability to record, process,
summarize and report financial data and have identified for the registrant’s
auditors any material weaknesses in internal controls; and






b)  
any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant’s internal controls; and






6.  
The registrant’s other certifying officers and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.






Date:
March 30, 2005




*/s/
David Jeffs*


David
Jeffs


Chief
Executive Officer










***Page
- 26***







**COMMUNICATE.COM
INC** **.**


**CERTIFICATIONS
PURSUANT TO**


**SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002**






**CERTIFICATION**






I,
Cameron Pan, certify that:






1.  
I have reviewed this annual report on Form 10-KSB of Communicate.com Inc.;






2.  
Based on my knowledge, this annual report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this annual report;






3.  
Based on my knowledge, the financial statements, and other financial information
included in this annual report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this annual report;






4.  
The registrant’s other certifying officer and I are responsible for establishing
and maintaining disclosure controls and procedures (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:






a)  
designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;






b)  
evaluated the effectiveness of the registrant’s disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the “Evaluation Date”); and






c)  
presented in this annual report our conclusions about the effectiveness of the
disclosure controls and procedures based on our evaluation as of the Evaluation
Date;






5.  
The registrant’s other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant’s auditors and the audit committee of
registrant’s board of directors (or persons performing the equivalent function):






a)  
all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant’s ability to record, process,
summarize and report financial data and have identified for the registrant’s
auditors any material weaknesses in internal controls; and






b)  
any fraud, whether or not material, that involves management or other employees
who have a significant role in the registrant’s internal controls; and






6.  
The registrant’s other certifying officers and I have indicated in this annual
report whether or not there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.






Date:
March 30, 2005






*/s/
Cameron Pan*


Cameron
Pan


Chief
Financial Officer







***Page
- 27***














**Exhibit
32**

















***Page
- 28***







**CERTIFICATION
PURSUANT TO**


**18
U.S.C. SECTION 1350,**


**AS
ADOPTED PURSUANT TO**


**SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002**








In
connection with the Annual Report of Communicate.com Inc. (“Communicate”) on
Form 10-KSB for the period ending December 31, 2004 as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, David Jeffs,
President and Chief Executive Officer of Communicate and a member of the Board
of Directors, certify, pursuant to s.906 of the Sarbanes-Oxley Act of 2002,
that:






(1)
  The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and




(2)
  The information contained in the Report fairly represents, the financial
condition and result of operations of the Company.








*/s/
David Jeffs*


David
Jeffs


Chief
Executive Officer






March 30,
2005







***Page
- 29***







**CERTIFICATION
PURSUANT TO**


**18
U.S.C. SECTION 1350,**


**AS
ADOPTED PURSUANT TO**


**SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002**








In
connection with the Annual Report of Communicate.com Inc. (“Communicate”) on
Form 10-KSB for the period ending December 31, 2004 as filed with the Securities
and Exchange Commission on the date hereof (the “Report”), I, Cameron Pan,
Secretary, Treasurer, and Chief Financial Officer of Communicate, certify,
pursuant to s.906 of the Sarbanes-Oxley Act of 2002, that:






(1)
  The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and




(2)
  The information contained in the Report fairly represents, the financial
condition and result of operations of the Company.








*/s/
Cameron Pan*


Cameron
Pan


Chief
Financial Officer






March 30,
2005










***Page
- 30***














**Exhibit
A**













***Page
- 31***













**COMMUNICATE.COM
INC.**





**CONSOLIDATED
FINANCIAL STATEMENTS**





**DECEMBER
31, 2004**



















**REPORT OF INDEPENDENT REGISTERED ACCOUNTING
FIRM**





**CONSOLIDATED BALANCE SHEETS**





**CONSOLIDATED STATEMENTS OF
OPERATIONS**





**CONSOLIDATED STATEMENT OF STOCKHOLDERS’
EQUITY**





**CONSOLIDATED STATEMENTS OF CASH FLOWS**





**NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS**











***Page
- 32***





****


****REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM**


To the
Stockholders and Board of Directors of Communicate.com Inc.

We have
audited the consolidated balance sheets of Communicate.com Inc. as at December
31, 2004 and 2003 and the consolidated statements of operations, stockholders’
equity and cash flows for the years then ended. These financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

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

In our
opinion, these consolidated financial statements present fairly, in all material
respects, the financial position of the Company as at December 31, 2004 and 2003
and the results of its operations and its cash flows and the changes in
stockholders’ equity for the periods then ended.



*“Dale
Matheson Carr-Hilton LaBonte”*

CHARTERED
ACCOUNTANTS


Vancouver,
B.C.
March 23,
2005**


****


****


****


****


***Page
- 33***


****


**COMMUNICATE.COM
INC.**





**CONSOLIDATED BALANCE SHEETS**





December
      31,
      2004
    
    
    December
      31,
      2003**ASSETS****CURRENT
      ASSETS**Cash
      and cash equivalents
    
    $
    1,064,928
    
    $
    393,039Accounts
      receivable
    
    
    9,373
    
    
    27,968Advances
      receivable
    
    
    2,291
    
    
    1,221Prepaid
      expenses
    
    
    -
    
    
    2,0671,076,592
    
    
    424,295**FIXED
      ASSETS**
    
    
    26,394
    
    
    9,618**INTANGIBLE
      ASSETS**(Note
      2)
    
    
    1,503,725
    
    
    1,764,714$
    2,606,711
    
    $
    2,198,627**LIABILITIES
      AND STOCKHOLDERS’ EQUITY****CURRENT
      LIABILITIES**Accounts
      payable and accrued liabilities
    
    $
    665,195
    
    $
    536,214Loan
      payable (Note 4)
    
    
    -
    
    
    52,930665,195
    
    
    589,144**LOAN
      PAYABLE**(Note
      4)
    
    
    -
    
    
    250,000665,195
    
    
    839,144**NON-CONTROLLING
      INTEREST**
    
    
    -
    
    
    2,345**STOCKHOLDERS’
      EQUITY**Capital
      stock(note
      5)Authorized50,000,000
      Common shares, $0.001 par valueIssued
      and outstanding15,321,339
      (2003 - 14,691,339) Common shares
    
    
    6,331
    
    
    5,701Additional
      paid in capital
    
    
    3,133,886
    
    
    3,066,516Accumulated
      deficit
    
    
    (1,198,701
    )
    
    (1,696,798
    )Accumulated
      other comprehensive income (loss)
    
    
    -
    
    
    (18,281
    )1,941,516
    
    
    1,357,138$
    2,606,711
    
    $
    2,198,627











The
accompanying notes are an integral part of these consolidated financial
statements.








***Page
- 34***





**COMMUNICATE.COM
INC.**


**CONSOLIDATED STATEMENTS OF OPERATIONS**


**YEARS
ENDED DECEMBER 31**





2004
    
    2003**REVENUES**Domain
      name leasing and advertising
    
    $
    603,556
    
    $
    305,560Domain
      name sales (Note 11)
    
    
    950,000
    
    
    400,000eCommerce
      sales
    
    1,961,895
    
    
    525,275Total
      revenues
    
    3,515,451
    
    
    1,230,835**COST
      OF REVENUES**Cost
      of domain name sales and commissions
    
    
    361,801
    
    
    122,315eCommerce
      direct costs
    
    1,562,754
    
    
    396,412Total
      cost of revenues
    
    1,924,555
    
    
    518,727**GROSS
      PROFIT**
    
    1,590,896
    
    
    712,108**EXPENSES**Marketing
    
    
    117,500
    
    
    6,945General
      and administrative
    
    
    373,998
    
    
    188,836Management
      fees and salaries
    
    
    631,367
    
    
    244,711Professional
      fees
    
    
    32,148
    
    
    58,398Depreciation
    
    3,867
    
    
    3,0571,158,880
    
    
    501,947**INCOME
      BEFORE OTHER ITEMS**
    
    
    432,016
    
    
    210,161**GAIN
      ON DEBT SETTLEMENT**
    
    
    12,010
    
    
    -**NON-CONTROLLING
      INTEREST SHARE OF LOSS IN SUBSIDIARY**
    
    
    41,718
    
    
    9,077**DILUTION
      GAIN IN****F**REQUENT
      TRAVELLER.COM****(Note 3)
    
    
    12,353
    
    
    30,555**INCOME
      BEFORE INCOME TAXES**
    
    
    498,097
    
    
    249,793**INCOME
      TAXES (Note 8)**Current
    
    
    177,323
    
    
    109,865Recovery
      of deferred tax assets
    
    (177,323
    )
    
    (109,865
    )**NET
      INCOME FOR THE YEAR**
    $
    498,097
    
    $
    249,793**EARNINGS
      PER SHARE:**Basic****
    
    $
    0.03
    
    $
    0.02Fully
      diluted****
    $
    0.03
    
    $
    0.01**WEIGHTED
      AVERAGE NUMBER OF COMMON**
      **SHARES
      OUTSTANDING:**Basic
    
    
    14,973,334
    
    
    14,691,339Fully
      diluted
    
    16,973,334
    
    
    24,914,672























The
accompanying notes are an integral part of these consolidated financial
statements.










***Page
- 35***








**COMMUNICATE.COM
INC.**





**CONSOLIDATED STATEMENT OF STOCKHOLDERS’
EQUITY**


**FOR
THE YEARS ENDED DECEMBER 31, 2004 AND 2003**














Common
      shares
    
    Additional
    
    
    Accumulated
    
    
    Accumulated
      other comprehensive
    
    
    Total
      Stockholder’sNumber
      of shares
    
    Amount
    
    
    Paid-In
      Capital
    
    
    Deficit
    
    
    income (loss)
    
    
    EquityBalance,
      December 31, 2002
    
    
    14,691,339
    
    $
    5,701
    
    $
    3,066,516
    
    $
    (1,946,591
    )
    $
    25,539
    
    $
    1,151,165Currency
      translation adjustment
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    (43,820
    )
    
    (43,820
    )Net
      income, year ended December 31, 2003
    
    
    -
    
    
    -
    
    
    -
    
    
    249,793
    
    
    -
    
    
    249,793Balance,
      December 31, 2003
    
    
    14,691,339
    
    
    5,701
    
    
    3,066,516
    
    
    (1,696,798
    )
    
    (18,281
    )
    
    1,357,138Issuance
      of 50,000 common shares at $0.20 per share
    
    
    50,000
    
    
    50
    
    
    9,950
    
    
    -
    
    
    -
    
    
    10,000Issuance
      of 580,000 common shares at $0.10 per share
    
    
    580,000
    
    
    580
    
    
    57,420
    
    
    -
    
    
    -
    
    
    58,000Currency
      translation adjustment
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    18,281
    
    
    18,281Net
      income, year ended December 31, 2004
    
    
    -
    
    
    -
    
    
    -
    
    
    498,097
    
    
    -
    
    
    498,097Balance,
      December 31, 2004
    
    
    15,321,339
    
    $
    6,331
    
    $
    3,133,886
    
    $
    (1,198,701
    )
    $
    -
    
    $
    1,941,516











The
accompanying notes are an integral part of these consolidated financial
statements.
















***Page
- 36***





**COMMUNICATE.COM
INC.**





**CONSOLIDATED STATEMENTS OF CASH FLOWS**





**YEARS
ENDED DECEMBER 31**


2004
    
    2003**CASH
      FLOWS FROM OPERATING ACTIVITIES**Net
      income for the year
    
    $
    498,097
    
    $
    249,793Adjustments
      to reconcile net income to net cash
      From
      operating activities-
      non-controlling interest share of losses
    
    
    (41,718
    )
    
    (9,077
    )-
      dilution gain in Frequent
      Traveller.com
    
    
    (12,353
    )
    
    (30,555
    )-
      non-cash cost of domain name sales
    
    
    301,801
    
    
    82,315-
      depreciation
    
    
    3,867
    
    
    3,057-
      accounts and advances receivable
    
    
    17,525
    
    
    (5,081
    )-
      prepaid expenses
    
    
    2,067
    
    
    (4,613
    )-
      accounts payable and accrued liabilities
    
    
    126,051
    
    
    117,904**CASH
      FROM********OPERATING
      ACTIVITIES**
    
    
    895,337
    
    
    403,743**CASH
      FLOWS FROM INVESTING ACTIVITIES**-
      purchase of computer equipment
    
    
    (20,643
    )
    
    --
      purchase of domain names
    
    
    (40,812
    )
    
    --
      acquisition of subisidiary, net of cash
    
    
    -
    
    
    2,589**CASH
      FLOWS USED IN INVESTING ACTIVITIES**
    
    
    (61,455
    )
    
    2,589**CASH
      FLOWS FROM FINANCING ACTIVITIES**-
      issuance of common stock
    
    
    68,000
    
    
    --
      issuance of common stock by Frequent
      Traveller.com
    
    
    51,726
    
    
    50,000-
      loan proceeds (repayments)
    
    
    (300,000
    )
    
    (75,000
    )**CASH
      FLOWS USED IN FINANCING ACTIVITIES**
    
    
    (180,274
    )
    
    (25,000
    )**EFFECT
      OF EXCHANGE RATE CHANGES**
    
    
    18,281
    
    
    (43,820
    )**INCREASE
      IN CASH AND CASH EQUIVALENTS**
    
    
    671,889
    
    
    337,512**CASH
      AND CASH EQUIVALENTS, BEGINNING OF YEAR**
    
    
    393,039
    
    
    55,527**CASH
      AND CASH EQUIVALENTS, END OF YEAR**
    
    $
    1,064,928
    
    $
    393,039**SUPPLEMENTAL
      CASH FLOW INFORMATION**(Refer
      to Note 9)











The
accompanying notes are an integral part of these consolidated financial
statements.













***Page
- 37***





**COMMUNICATE.COM
INC.**


**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**


**December
31, 2004 and 2003**













**NOTE
1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION**





The
Company’s subsidiary Domain Holdings Inc. (“DHI”) owns a portfolio of generic
domain names. DHI’s current business strategy is to develop or to seek partners
to develop its domain names to include content, commerce and community
applications. DHI has developed websites that sell fragrance and beauty care
products to North American consumers. DHI is developing other sites with the
goal of facilitating business transactions both at the wholesale level and at
the consumer level. DHI sells advertising services on its domains held for
development and seeks to acquire other domains to complement its retail strategy
or its advertising strategy. DHI has an in-house development team that develops
its corporate websites.





On
October 1, 2003 the Company acquired a 71% controlling interest in
FrequentTraveller.com Inc. (“FT”), a Nevada private company incorporated on
October 29, 2002. FT is a full service travel agency that caters to
Internet-based customers seeking tours and other travel services. As at December
31, 2004, the Company owns 54% of the outstanding shares of FT. (Refer
to Note 3.)











**NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**





**Basis
of presentation**





The
accompanying financial statements are presented in United States dollars and are
prepared in accordance with accounting principles generally accepted in the
United States.





**Principles
of Consolidation**





The
financial statements include the accounts of the Company, the 94% interest in
its subsidiary, DHI, and the 54% interest in FT. All significant intercompany
balances and transactions are eliminated on consolidation.





**Revenue
recognition**





Revenue
from the sale and lease of domain names, whose carrying values are recorded as
intangible assets, consists primarily of funds earned for the transfer of rights
to domain names that are currently in the Company’s control. Collectibility of
revenues generated is subject to a high level of uncertainty; accordingly
revenues are recognized only as received. Lease payments paid in advance are
recorded as deferred revenue.





Web
advertising revenue consists primarily of commissions earned from the referral
of visitors to the Company’s sites to other parties. The amount and
collectibility of these referral commissions is subject to uncertainty;
accordingly revenues are recognized when the amount can be determined and
collectibility can be reasonably assured. In accordance with EITF 99-19 the
Company records web advertising revenue net of service costs.





Revenues,
and associated costs of goods sold, from the on-line sales of products,
currently consisting primarily of fragrances and other beauty products, are
recorded upon shipment of products and determination that collection is
reasonably assured. The Company does not record inventory as an asset because
all products sold are delivered to the customer on a “just-in-time”
basis.





Revenues
from the sales of travel products, including tours, airfares and hotel
reservations, are non-refundable upon receipt of payment and are accordingly
recognized as received. All costs relating to travel related sales are accrued
at that time.





**Stock-based
compensation**





In
December 2002, the Financial Accounting Standards Board issued Financial
Accounting Standard No. 148, “Accounting for Stock-Based Compensation -
Transition and Disclosure” (“SFAS No. 148”), an amendment of Financial
Accounting Standard No. 123 “Accounting for Stock-Based Compensation”
(“SFAS No. 123”). The purpose of SFAS No. 148 is to: (1) provide alternative
methods of transition for an entity that voluntarily changes to the fair value
based method of accounting for stock-based employee compensation, (2) amend the
disclosure provisions 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, and (3) to require disclosure of those
effects in interim financial information. The disclosure provisions of SFAS No.
148 were effective for the Company commencing December 31, 2002 and the required
disclosures have been made below.








***Page
- 38***




**COMMUNICATE.COM
INC.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
31, 2004 and 2003**





**NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)**





The
Company has elected to continue to account for stock-based employee compensation
arrangements in accordance with the provisions of Accounting Principles Board
Opinion No. 25, “Accounting for Stock Issued to Employees”, (“APB No. 25”) and
comply with the disclosure provisions of SFAS No. 123 as amended by SFAS No. 148
as described above. In
addition, in accordance with SFAS No. 123 the Company applies the fair value
method using the Black-Scholes option-pricing model in accounting for options
granted to consultants. Under APB
No. 25, compensation expense is recognized based on the difference, if any, on
the date of grant between the estimated fair value of the Company’s stock and
the amount an employee must pay to acquire the stock. Compensation expense is
recognized immediately for past services and pro-rata for future services over
the option-vesting period.





The
following table illustrates the pro forma effect on net income and net income
earnings per share as if the Company had accounted for its stock-based employee compensation using the fair value provisions of SFAS No.
123 using the assumptions as described in Note 5:





Year
      ended
      December
      31, 2004
    Year
      ended
      December
      31, 2003Net
      income for the year
    As
      reported
    $
      498,097
    $
      249,793SFAS
      123 compensation expense
    Pro-forma
    (13,924)
    (24,911)Net
      income for the year
    Pro-forma
    $
      484,173
    $
      224,882Pro-forma
      basic net income per share
    Pro-forma
    $
      0.03
    $
      0.01Pro-forma
      diluted net income per share
    Pro-forma
    $
      0.03
    $
      0.01





The
Company accounts for equity instruments issued in exchange for the receipt of
goods or services from other than employees in accordance with SFAS No. 123 and
the conclusions reached by the Emerging Issues Task Force in Issue No. 96-18,
“Accounting for Equity Instruments That Are Issued to Other Than Employees for
Acquiring or in Conjunction with Selling Goods or Services” (“EITF 96-18”).
Costs are measured at the estimated fair market value of the consideration
received or the estimated fair value of the equity instruments issued, whichever
is more reliably measurable. The value of equity instruments issued for
consideration other than employee services is determined on the earlier of a
performance commitment or completion of performance by the provider of goods or
services as defined by EITF 96-18.





The
Company has also adopted the provisions of the Financial Accounting Standards
Board Interpretation No.44, Accounting for Certain Transactions Involving Stock
Compensation - An Interpretation of APB Opinion No. 25 (“FIN 44”), which
provides guidance as to certain applications of APB 25. FIN 44 is generally
effective July 1, 2000 with the exception of certain events occurring after
December 15, 1998.





**Income
taxes**


The
Company follows the liability method of accounting for income taxes. Under this
method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
balances .deferred tax assets and liabilities are measured using enacted or
substantially enacted tax rates expected to apply to the taxable income in the
years in which those differences are expected to be recovered or settled. The
effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the date of enactment or
substantive enactment. A valuation allowance is provided for deferred tax assets
if it is more likely than not that the Company will not realize the future
benefit, or if the future deductibility is uncertain.





**Use
of estimates**


The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States requires management to make estimates
and assumptions that affect the reported amounts of intangible assets, stock
based compensation, disclosure of contingent assets and liabilities at the date
of the financial statements and for the periods that the financial statements
are prepared. Actual amounts could differ from these estimates.








***Page
- 39***




**COMMUNICATE.COM
INC.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
31, 2004 and 2003**


**NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)**





**Foreign
currency transactions**


The
financial statements are presented in United States dollars. In accordance with
Statement of Financial Accounting Standards No. 52, “Foreign Currency
Translation”, the foreign currency financial statements of the Company’s
subsidiaries are re-measured into U.S. dollars. Monetary assets and liabilities
are re-measured using the foreign exchange rate that prevailed at the balance
sheet date. Revenue and expenses are translated at weighted average rates of
exchange during the year and stockholders’ equity accounts and certain other
historical cost balances are translated by using historical exchange rates.
Resulting re-measurement gains or losses are reported on the consolidated income
statement.





**Earnings
per share**


Basic
earnings per share is computed by dividing earnings for the period by the
weighted average number of common shares outstanding for the period. Fully
diluted earnings per share reflects the potential dilution of securities by
including other potential common stock, including convertible preferred shares,
in the weighted average number of common shares outstanding for a period and is
not presented where the effect is anti-dilutive.





**Comprehensive
income(loss)**


Comprehensive
income(loss) is defined as the change in equity from transactions, events and
circumstances, other than those resulting from investments by owners and
distributions to owners. Comprehensive income(loss) to date consists only of the
cumulative net loss resulting from translation of the foreign currency financial
statements of DHI.





**Intangible
assets**


The
Company has adopted the provision of the Statement of Financial Accounting
Standards No. 142 (“SFAS 142”), “Goodwill and Intangible Assets”, which revises
the accounting for purchased goodwill and intangible assets. Under SFAS 142,
goodwill and intangible assets with indefinite lives are no longer amortized and
are be tested for impairment annually. The determination of any impairment would
include a comparison of estimated future operating cash flows anticipated during
the remaining life with the net carrying value of the asset as well as a
comparison of the fair value to book value of the Company.





The
Company’s intangible assets, which consist of its portfolio of generic domain
names, has been determined to have an indefinite life and management has
determined, based upon projected cash flows and market capitalization, that
there is no impairment of the carrying value of its intangible assets at
December 31, 2004.





**Website
development costs**


The
Company has adopted the provisions of EITF 00-2 "Accounting for Web Site
Development Costs" and AICPA SOP 98-1 “Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use” whereby costs incurred in the
preliminary project phase are expensed as incurred; costs incurred in the
application development phase are capitalized; and costs incurred in the
post-implementation operating phase are expensed as incurred. The Company has
not currently incurred any significant development costs relating to its
operational websites.





**Comparative
figures**


Certain
of the comparative figures have been reclassified to conform to the current
year’s presentation.








**NOTE
3 - ACQUISITION OF FREQUENT TRAVELLER.COM (“FT”)**





By
agreement dated October 1, 2003 the Company acquired 350,000 common shares of
FT, representing 71% of the outstanding shares of FT, in consideration for
settlement of a $35,000 debt owing to the Company by FT for previous consulting
work provided. Subsequent to October 1, 2003, FT issued 113,637 shares of its
common stock to non-controlling interests for total proceeds of $50,000
resulting in a gain on dilution of $30,555 in 2003. In 2004, FT issued 350,000
shares to the Company in settlement of advances of $35,000 and issued 334,578
shares to non-controlling interests for total proceeds of $51,726 resulting in a
net gain on dilution of $12,353 in 2004. On November 16, 2004, FT declared a
nine share for every one share stock dividend. As of December 31, 2004, FT has
12,936,690 common shares issued and outstanding and the Company owns
7,000,000 common shares representing 54% of FT’s issued and outstanding common
shares (See Note 6).








***Page
- 40***




**COMMUNICATE.COM
INC.**
 **NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
 **December
31, 2004 and 2003**
  
  **NOTE
3 - ACQUISITION OF FREQUENT TRAVELLER.COM (“FT”) -
(cont’d)**
 ****
 This
business combination has been accounted for using the purchase method of
accounting. The purchase price has been allocated as follows:
 
 Assets
      acquired at fair value:Cash
    
    $
      2,589Other
      assets
    
    
    1,547Non-Controlling
      Interest
    
    
    5,785Intangible
      assets - domain name
    
    
    48,91858,839Liabilities
      assumed at fair value:Accounts
      payable and accrued liabilities
    
    
    (16,359
    )Shareholder’s
      loan
    
    
    (7,480
    )Purchase
      price
    
    $
    35,000Components
      of the purchase price:Accounts
      Payable
    
    $
    35,000Total
      purchase price
    
    $
    35,000
 
 **NOTE
4 - LOAN PAYABLE**
 
 In
connection with the acquisition of DHI, the Company entered into a Loan and
Security Agreement dated November 10, 2000 with Pacific Capital Markets Inc.
(“PCMI”), a British Columbia corporation. Under the terms of the agreement, PCMI
agreed to loan the Company up to $1,500,000 to satisfy its obligation pursuant
to the DHI purchase agreement dated November 10, 2000. Amounts loaned by PCMI
are secured by a promissory demand note (subsequently amended to a promissory
note due June 28, 2005), bearing interest at the Royal Bank of Canada United
States dollar prime rate plus 2%. The principal balance of the note was repaid
during 2004. As at December 31, 2004 the outstanding loan balance was nil. (2003
- $300,000), and a total of $18,305 (2003 - $41,731) of interest was incurred
for the year ended December 31, 2004, $7,791 of which is recorded as an account
payable at year end.




**NOTE
5 - CAPITAL STOCK**





The
authorized capital of the Company consists of 50,000,000 Common Shares with a
par value of $.001.





During
the year ended December 31, 2004, the Company issued 50,000 shares of restricted
common stock of the Company to two employees in satisfying bonuses of $10,000
granted and recorded by DHI in 2003 and issued 580,000 shares of restricted
common stock to an officer under an option agreement (see Stock Options
below).





**Stock
options**


The
Company does not have a formal Stock Option Plan, however, options may be
granted with terms and conditions at the discretion of the Company’s board of
directors.





On July
24, 2002 the Company granted an officer 580,000 stock options at an exercise
price of $0.10 per share. The options vest evenly over two years commencing July
24, 2002. No compensation expense will be recorded upon vesting of these options
in accordance with the provisions of APB No. 25 as the exercise price of the
options awarded approximated the market price of the Company’s common shares as
at the date of the award. In July 2004 the officer exercised his option for
$58,000, and accordingly, the Company issued 580,000 shares of restricted common
stock.





***Page
- 41***





**COMMUNICATE.COM
INC.**
**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
**December
31, 2004 and 2003**


**NOTE
5 - CAPITAL STOCK - (cont’d)**





In
accordance with the provisions of SFAS No. 123, for stock options granted to
officers, directors and employees, the Company has provided pro forma
information regarding net income (loss) and net income (loss) per share as if
the Company had accounted for these stock options using the fair value method.
The fair value of the options vested in the period was estimated at the date of
grant using the Black-Scholes option pricing model with the following weighted
average assumptions: risk free interest rate of 4%; dividend yield of 0%;
volatility factor of the expected market price of the Company's common stock of
205% and a weighted average expected life of the option of 2 years.





For
purposes of the pro-forma disclosures, the estimated fair value of the options
of $49,823 is amortized to expense over the vesting period. In accordance with
the provisions of SFAS 148, the Company’s pro-forma information relating to the
granting and vesting of stock options has been shown in Note 2.








**NOTE
6 - RELATED PARTY TRANSACTIONS**





During
the year ended December 31, 2004 consulting fees and bonuses totalling $228,000
(2003 - $144,000) were incurred and paid to the executives of the Company. In
July 2004, $76,000 of prior year’s consulting fees and non-interest bearing
notes were repaid to an officer.





During
the year ended December 31, 2004 commissions totalling $60,000 from the sales of
domain names were paid to a principal of PCMI. (See Note 11.)





During
the year ended December 31, 2004, taking into account FT’s nine-for-one stock
dividend, two officers each invested $2,000 to each acquire 500,000 common
shares in FT, and one officer converted $16,176 of debt to acquire 1,617,600
common shares in FT. Collectively, these officers own 3,617,600 common shares
representing a 28% minority interest in FT. (See Note 3.)





**NOTE
7 - FINANCIAL INSTRUMENTS**





**Interest
rate risk exposure**


The
Company has limited exposure to any fluctuation in interest rates.





**Foreign
exchange risk**


The
Company is subject to foreign exchange risk for sales and purchases denominated
in foreign currencies. Foreign currency risk arises from the fluctuation of
foreign exchange rates and the degree of volatility of these rates relative to
the United States dollar. The Company does not actively manage this
risk.





**Concentration
of credit risk**


Financial
instruments, which potentially subject the Company to concentrations of credit
risk, consist primarily of cash and cash equivalents and trade accounts
receivable. The Company limits its exposure to credit loss by placing its cash
and cash equivalents on deposit with high credit quality financial institutions.
Receivables arising from sales to customers are generally not significant
individually and are not collateralized. Management continually monitors the
financial condition of its customers to reduce the risk of loss.





**Fair
values of financial instruments**


The
Company’s financial instruments include cash and cash equivalents, accounts
receivable, bank indebtedness, accounts payable and accrued liabilities and loan
payable. The fair values of these financial instruments approximate their
carrying values.





***Page
- 42***


****


****


****COMMUNICATE.COM
INC.**
**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
**December
31, 2004 and 2003****


****


**NOTE
8 - INCOME TAXES**





The
Company’s subsidiary, DHI is subject to Canadian federal and British Columbia
provincial taxes in Canada and the Company is subject to United States federal
and state taxes.





The
Company’s subsidiary, DHI is subject to Canadian federal and British Columbia
provincial taxes in Canada and the Company and FT are subject to United States
federal and state taxes.





As at
December 31, 2004 the Company and its subsidiaries have  net
operating loss carryforwards of approximately $3,500,000 that
result in deferred tax assets. The majority of the loss carryforwards will
expire, if not utilized, through 2025 with the majority expiring by 2006. The
Company’s subsidiary DHI also has approximately $1,500,000 in undepreciated
capital costs relating to fixed assets that have not been amortized for tax
purposes. These costs may be amortized in future as necessary to reduce taxable
income. M anagement
believes that t he
realization of the benefits from these deferred tax assets appears uncertain due
to the Company’s limited profitable operating history and current business
plans. Accordingly, a full deferred tax asset valuation allowance has been
provided and no deferred tax asset benefit has been recorded.





A
reconciliation of current income taxes at statutory rates with the reported
taxes is as follows:





Year
      ended
      December
      31, 2004
    Year
      ended December 31, 2003Income
      before income taxes
    $
      498,097
    $
      249,793Current
      income taxes
    177,323
    109,865Recognized
      benefits of non-capital losses
    (177,323)
    (109,865)Total
      current income taxes
    $
      -
    $
      -





The tax
effects of temporary differences that give rise to significant components of
future income tax assets and liabilities are as follows:


2005
    2003Future
      income tax assets (liabilities):Operating
      losses available for future periods
    $
      1,260,000
    $
      1,475,000Un-amortized
      capital assets
    539,000
    494,000Intangible
      assets
    (535,000)
    (628,000)1,264,000
    1,341,000Valuation
      allowance
    (1,264,000)
    (1,341,000)Net
      future income tax asset
    $
      -
    $
      -


**NOTE
9 - SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS**





Year
      ended
      December
      31, 2004
    Year
      ended
      December
      31, 2003Cash
      paid during the year for:Interest
    
    $
      10,384
    $
      42,465Income
      taxes
    
    $ -
    $ -





On
January 7, 2004, 50,000 shares were issued in settlement of $10,000 of DHI’s
bonus payable. (Refer to Note 5.)




***Page
- 43***


****
 ****COMMUNICATE.COM
INC.**
**NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS**
**December
31, 2004 and 2003****


**NOTE
10 - CONTINGENCIES**





The
former Chief Executive Officer of DHI commenced a legal action against DHI on
March 9, 2000 for wrongful dismissal and breach of contract. He is seeking, at a
minimum, 18.39% of the outstanding shares of DHI, specific performance of his
contract, special damages in an approximate amount of $30,000, aggravated and
punitive damages, interest and costs. On June 1, 2000, Communicate.com filed a
Defence and Counterclaim against this individual claiming damages and special
damages for breach of fiduciary duty and breach of his employment contract. The
outcome of these legal actions is currently not determinable and as such the
amount of loss, if any, resulting from this litigation is presently not
determinable.





**NOTE
11 - DOMAIN NAME SALES**





On July
3, 2003, DHI entered into agreements to sell automobile.com, body.com,
exercise.com and makeup.com to Manhattan Assets Corp. for a total sales price of
$1,000,000. Upon entering into the agreements, DHI received a non-refundable
$50,000 payment for each of the four domain names totalling $200,000 and granted
Manhatten Assets the option to purchase the four domain names for $200,000 each,
with payments due beginning on November 3, 2003 and every three-months
thereafter until August 3, 2004. If any of the payments are not made on the
specified date, Manhattan Assets forfeits its rights to purchase under the
agreement. In September 2004, pursuant to an amendment between the parties to
the July 3, 2003 agreement of sale, DHI agreed to substitute call.com in place
of body.com. As of December 31, 2004, Manhatten Assets has paid $1,000,000 to
DHI under the terms of the contract and the Company has paid $100,000 in
commissions on the $1,000,000. (See Note 7.)





DHI
retains a perpetual royalty right to each of the domain names sold commencing on
the fourth month after each sale. The royalty is calculated and payable monthly
as the greater of 5% of net revenues arising from the sale of products and
services marketed on webpages hosted on the domain names, or $2,500, commencing
January 2005. No value is ascribed to the perpetual royalty upon sale or
transfer of a domain name right as future royalty amounts are not readily
determinable and collectability is not reasonably assured





**Sale
of Rugby.com**


On
October 29, 2004, the Company sold the domain name rugby.com to Peninsula
Investments of North Carolina for $350,000 and realized a profit on the sale of
approximately $258,000.





**NOTE
12 - SUBSEQUENT EVENTS**
 
 On March
22, 2005, the Company entered into an agreement to purchase from an unrelated
third party a portfolio of domain names and $100,000 cash in exchange for
275,000 restricted common shares issued from treasury. The closing for the
transaction is expected to be on or before April 15, 2005.






***Page
- 44***