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Technology Stocks : Communications Research Inc. (CRHI)

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To: Sidney Reilly who started this subject8/12/2004 6:30:22 PM
From: Sidney Reilly   of 37
 
Form 10QSB for COMMUNICATIONS RESEARCH INC

12-Aug-2004

Quarterly Report

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS

For the three month period ending June 30, 2004, our revenues increased $ 36,598, a 237% increase in the amount from the comparable three month period ending in fiscal 2003. This follows a 70% increase in revenues reported in March 31, 2004, for a half year revenue increase of 160%.

We show operating income running at a loss of $48,392 for the Second Quarter of 2004 while we operated at a loss of $20,219 in the comparable period ending in 2003.

Total operating expenses for the three months ended June 30, 2004 was $61,554 compared to $35,037.00 for the first quarter ended in 2003 or an increase of approximately 78% for the three months ended June 30, 2003. The increase during the first and second quarter ending June 30, 2004 is the result of increased operating costs due to adding new employees and ramping up on new projects, and for expenses related to a private offering of our shares. Increasing project work and new billings are being realized as projected.

LIQUIDITY AND CAPITAL RESOURCES

We have incurred cumulative losses during our development stage. At June 30, 2004 we have an accumulated deficit of $1,551,979 and the report of our independent auditor on our audited financial statements at December 31, 2003 contained a going concern modification. A major factor in this deficiency is an item carried on the Company books of $807,038 as Additional Paid in Capital which was transferred from the books of the former parent company, prior to the Spin Off from Visual Telephone International in which capital raised by that corporation was shown incorrectly on the books of this company. The company will continue its effort to correct the current figures to be representative of actual liabilities and assets.

We will continue to incur losses during the foreseeable future and have yet to achieve revenues sufficient to offset direct expenses and corporate overhead. Our core business of Consulting Engineering has again seen a significant increase in bookings of 250% for the current quarter and we expect this to continue well into the future with new regional and national clients. New clients added, with work completed in the third quarter include the Essex County Courts, Video Arraignment System that initially provides video arraignment between the new Essex Count Correction Facility and Essex County Court Building. The system will be expanded to other county and municipal court locations. The company, additionally, completed the consulting for Ingersoll-Rand's new Corporate Headquarters for all Cable Television distribution, media and video conference systems and consulting for all communications infrastructure (telephone/data/video), intercom, page, master clock, auditorium media and special systems for Ramsey Junior High School, Ramsey, New Jersey.

The programming phase of upgrading the TeleWriter Corporation's TeleWriter-AGS (Advanced Graphics System) software for computing collaboration, has been completed. In house Quality Control and Beta site testing has commenced on the software. The release date of September is still being held firm. The company has used a portion of the proceeds it has raised through a Regulation S offering of the Company's shares to fund the Fall and Winter show schedule, rap up on hiring TeleWriter Corporation Employees and promotion of the software to the existing client base and into the corporate, educational and commercial market.

With the expansions done in the first quarter of 2004, our internal systems should be current for at least two years before new upgrades are needed. While we are taking measures to expand our revenues, improve our liquidity and hold our expenses to a minimum, we cannot guaranty being successful in our efforts. The company will be using revenues from the Regulation S Offerings it has engaged into, to fund the final packaging, initial marketing and roll out of the new TeleWriter-AGS System. Our failure to secure necessary capital when needed could have a material adverse effect on our financial condition and results of operations in future periods.

biz.yahoo.com
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