SECURITIES AND EXCHANGE COMMISSION
                          WASHINGTON, DC 20549

                              FORM 10-QSB

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
                         EXCHANGE ACT OF 1934

             For the quarterly period ended June 30, 2003

                    Commission file number: 0-26813

                         INCALL SYSTEMS, INC.
                         --------------------
        (Exact Name of Registrant as Specified in Its Charter)

        Nevada                                        91-1932068
        ------                                        ----------
(State of Incorporation)                         (IRS Employer ID No.)

        388 Market Street, Suite 500 San Francisco, CA 94111
        ----------------------------------------------------
         Address of Principal Executive Offices - Zip Code

                            (866) 605-8852
                            --------------
         Registrant's telephone number, including area code

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.

                          Yes [X]   No [ ]

As of June 30, 2003 there were  13,212,854  shares of the Issuer's  common stock
outstanding.

<PAGE>











                              inCALL SYSTEMS, INC.
                          (a development stage company)

                    INTERIM CONSOLIDATED Financial Statements

                                  JUNE 30, 2003

                                   (Unaudited)










Balance Sheets .............................................................. 3

INTERIM CONSOLIDATED Statements of Operations ............................... 4

INTERIM CONSOLIDATED Statements of Cash Flows ............................... 5

Notes to INTERIM CONSOLIDATED Financial Statements........................... 6


                                       2
<PAGE>
<TABLE>
<CAPTION>
                               inCALL SYSTEMS, INC.
                          (a development stage company)
                           CONSOLIDATED BALANCE SHEETS

                                                                         June 30,    December 31,
                                                                           2003          2002
                                                                      ------------   ------------
                                                                       (Unaudited)
                                               ASSETS

CURRENT
<S>                                                                   <C>            <C>
     Cash                                                             $       864    $     6,142
     Accounts receivable                                                    5,177         50,589
     Prepaid expenses                                                       2,510          1,945
                                                                      -----------    -----------

                                                                            8,551         58,676
FIXED ASSETS (Note 3)                                                      14,583         80,983
VOIP TECHNOLOGY (Note 4)                                                  450,000        450,000
NOTES RECEIVABLE (Notes 5 and 11)                                         125,000         25,000
INVESTMENT IN TELCO BLUE (Note 6)                                         372,202        240,000
OTHER INTANGIBLE ASSETS                                                      --          180,138
                                                                      -----------    -----------

                                                                      $   970,336    $ 1,034,797
                                                                      ===========    ===========

                          LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)

CURRENT
     Accounts payable and accrued liabilities                         $   252,622    $   530,694
     Deposits held                                                         27,494           --
     Deferred revenue                                                     117,764           --
     Due to related parties (Note 10)                                      13,455         13,361
     Loan payable (Note 8)                                                 31,250           --
     Convertible notes payable (Note 7)                                 1,216,285      1,183,705
                                                                      -----------    -----------

                                                                        1,668,770      1,727,760
                                                                      -----------    -----------
COMMITMENTS AND CONTINGENCIES (Notes 1 and 4)

STOCKHOLDERS' EQUITY
     Capital stock (Note 9)
       Authorized:
         65,000,000 common shares with $0.001par value
         10,000,000 Preferred A shares
       Issued and outstanding: 13,212,854
         (2002 - 12,013,706) common shares                                  2,901          1,702
     Additional paid-in capital                                         2,722,424      2,509,858
     Treasury shares to be reaquired (Note 4)                             (50,000)       (30,000)
     Other comprehensive loss                                            (128,411)      (144,000)
     Deficit accumulated during development stage                      (3,245,348)    (3,030,523)
                                                                      -----------    -----------

                                                                         (698,434)      (692,963)
                                                                      -----------    -----------

                                                                      $   970,336    $ 1,034,797
                                                                      ===========    ===========
</TABLE>
                 The accompanying notes are an integral part of
                these interim consolidated financial statements

                                       3
<PAGE>
<TABLE>
<CAPTION>

                              inCALL SYSTEMS, INC.
                          (a development stage company)
                  INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (Unaudited)
                                                                                                                 October 20,
                                                                                                                    1998
                                                                                                                (inception) to
                                                  Three months ended June 30,      Six months ended June 30,       June 30,
                                                     2003             2002            2003            2002            2003
                                                 ------------    ------------    ------------    ------------    ------------
<S>                                              <C>             <C>             <C>             <C>             <C>
REVENUE
   Software licensing and contract fees          $     27,177    $     15,958    $     72,177    $     15,958    $    361,472
                                                 ------------    ------------    ------------    ------------    ------------

EXPENSES
   Consulting and management fees                      19,979         319,238          83,982         475,928       1,177,181
   Depreciation                                         1,329             265           2,630             526           6,499
   General and administrative                          12,780          21,624          23,019          61,450         151,544
   Impairment of other intangible assets                 --              --              --              --           453,179
   Interest  - cash                                    17,630          15,938          48,830          29,780         137,731
             - non-cash                                  --              --              --              --           183,840
   Investor relations                                    --            35,000            --            35,000         124,751
   Marketing                                             --              --              --            50,000          50,000
   Professional fees                                    2,219          88,096          25,806         119,352         259,023
   Travel                                              51,941          31,873          51,941          50,516         206,724
   Write down of advances to ICCP                        --              --              --              --           532,499
                                                 ------------    ------------    ------------    ------------    ------------

                                                      105,878         512,034         236,208         822,552       3,282,971
                                                 ------------    ------------    ------------    ------------    ------------

OPERATING LOSS                                        (78,701)       (496,076)       (164,031)       (806,594)     (2,921,499)

GAIN ON SALE OF TECHNOLOGY (Note 5)                      --              --              --              --            96,667
GAIN (LOSS) ON SALE OF INVESTMENT (Note 6)               (460)           --              (460)           --           176,873
LOSS ON SETTLEMENT OF LAWSUIT                            --              --              --              --           (74,600)
IMPAIRMENT OF PROMISSORY NOTE (Note 5)                   --              --              --              --          (175,000)
                                                 ------------    ------------    ------------    ------------    ------------

LOSS BEFORE DISCONTINUED OPERATIONS                   (79,161)       (496,076)       (164,491)       (806,594)     (2,897,559)

DISCONTINUED OPERATIONS (Note 11)
   Loss from Malaysia operations                         --           (19,410)           --           (40,444)        (58,948)
   Loss from Singapore operations                        --           (70,576)           --           (95,432)       (238,507)
   Loss on disposal of Singapore operations           (50,334)           --           (50,334)           --           (50,334)
                                                 ------------    ------------    ------------    ------------    ------------

NET LOSS FOR THE PERIOD                          $   (129,495)   $   (586,062)   $   (214,825)   $   (942,470)   $ (3,245,348)
                                                 ============    ============    ============    ============    ============


LOSS PER SHARE FROM CONTINUING OPERATIONS        $      (0.01)   $      (0.04)   $      (0.01)   $      (0.07)
LOSS PER SHARE FROM DISCONTINUED OPERATIONS
                                                        (0.00)          (0.01)          (0.01)          (0.01)
                                                 ------------    ------------    ------------    ------------

BASIC NET LOSS PER SHARE                         $      (0.01)   $      (0.05)   $      (0.02)   $      (0.08)
                                                 ============    ============    ============    ============

WEIGHTED AVERAGE COMMON
   SHARES OUTSTANDING                              12,277,579      11,698,994      12,146,372      11,332,835
                                                 ============    ============    ============    ============
</TABLE>
                 The accompanying notes are an integral part of
                these interim consolidated financial statements

                                       4
<PAGE>
<TABLE>
<CAPTION>

                              inCALL SYSTEMS, INC.
                         (formerly iCall Systems, Inc.)
                          (a development stage company)
                  INTERIM CONSOLIDATED Statements of Cash Flows
                                   (Unaudited)
                                                                                                           October 20, 1998
                                                                                Six Months ended June 30,   (inception) to
                                                                                  2003             2002      June 30, 2003
                                                                               --------------------------  ----------------
<S>                                                                            <C>            <C>            <C>
Cash flows from operating activities
    Net loss for the period from continuing operations                         $  (164,491)   $  (806,594)   $(2,897,559)
    Adjustments  to  reconcile  net  loss  to net  cash  used  in  operating
activities
    - non-cash revenue                                                             (52,236)          --         (212,236)
    - depreciation                                                                   2,630            526          6,499
    - stock-based compensation                                                      25,175        281,125        618,704
    - non-cash expenses                                                             55,248        172,981        438,888
    - accrued interest on convertible notes and loan                                48,830         28,400        137,535
    - write down of advances to ICCP                                                  --             --          532,499
    - gain on sale of technology                                                      --             --          (96,667)
    - loss (gain) on sale of investment                                                460           --         (176,873)
    - loss on settlement of lawsuit                                                   --             --           74,600
    -impairment of promissory note                                                    --             --          175,000
    - impairment of goodwill                                                          --             --          453,179
    - accounts receivable                                                           (2,054)        (2,054)        (5,177)
    - prepaid expenses                                                                (565)          --           (2,510)
    - deposits held                                                                 27,494           --           27,494
    - accounts payable and accrued liabilities                                      22,097         59,371        377,676
                                                                               -----------    -----------    -----------
    Cash flows used in continuing operations                                       (37,412)      (266,245)      (562,403)
    Cash flows used in discontinued operations                                        --          (56,684)      (152,434)
                                                                               -----------    -----------    -----------
CASH FLOWS USED IN OPERATING ACTIVITIES                                            (37,412)      (322,929)      (714,837)
                                                                               -----------    -----------    -----------
Cash flows from investing activities
    - acquisition of fixed assets                                                     --             --          (58,339)
    - cash received on sale of investment                                              927           --              927
    - net cash received on sale of subsidiary                                        6,113           --            6,113
    - advances to ICCP                                                                --             --         (532,500)
                                                                               -----------    -----------    -----------
CASH FLOWS FROM (USED IN) investing activities                                       7,040           --         (583,799)
                                                                               -----------    -----------    -----------
Cash flows from financing activities
    - proceeds from convertible notes payable                                         --             --        1,095,000
    - proceeds from loan payable                                                    25,000        200,000         25,000
    - proceeds from issuance of common shares for cash                                --             --          172,000
    - deposit on treasury shares                                                      --           10,000         (5,955)
    - advances from (repayments to) related parties                                     94           --           13,455
                                                                               -----------    -----------    -----------
Cash flows from financing activities                                                25,094        210,000      1,299,500
                                                                               -----------    -----------    -----------

Increase (DECREASE) in cash                                                         (5,278)      (112,929)           864
Cash, BEGINNING of period                                                            6,142        130,066           --
                                                                               -----------    -----------    -----------

Cash, End of period                                                            $       864    $    17,137    $       864
                                                                               ===========    ===========    ============
</TABLE>

OTHER NON-CASH TRANSACTIONS:
During the six months ended June 30, 2003 11,852  common shares valued at $2,370
were returned to treasury and cancelled. See Notes 6 and 9.

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

                                       5
<PAGE>

                              inCALL SYSTEMS, INC.
                          (a development stage company)
               Notes to INTERIM CONSOLIDATED financial Statements

                                  JUNE 30, 2003
 -------------------------------------------------------------------------------
                                   (Unaudited)


                                                      5
NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION
--------------------------------------------------------------------------------

inCall  Systems,  Inc. was  incorporated  as Altrex  Incorporated on October 20,
1998,  under the laws of the State of Nevada.  The  Company  changed its name to
iCall Systems,  Inc. on January 22, 2001 and to inCall Systems, Inc. on February
8, 2002.

The Company is in its  development  stage and to date its  activities  have been
limited to capital formation and the development of its call center business and
VOIP and related CRM  technology.  By agreement  dated July 30, 2001 the Company
acquired the business assets of 1st Call Pte Ltd, a Singapore-based  call center
provider.  On  November 1, 2001 the  Company  commenced  a call center  business
operation in Singapore  through its new  subsidiary  inCall  Systems Pte Ltd and
during  November  2001  commenced a call center  business  operation in Malaysia
through a new subsidiary  inCall Systems Sdn. Bhd. Due to lack of  profitability
the Malaysian call center was shut down during October 2002 and during  December
2002  management  decided to sell the Singapore  call center which was completed
during the period.  Refer to Note 11. In February 2002 the Company  acquired the
assets  and  VOIP  and   related  CRM   technology   developed   by   Vocalscape
Communications  Inc.  The  Company  is  currently  focusing  its  efforts on the
marketing and licensing of its  intellectual  properties  (software)  originally
developed by Vocalscape Communications Inc. (Refer to Note 4)

The consolidated financial statements have been prepared on the basis of a going
concern,  which  contemplates  the  realization  of assets and  satisfaction  of
liabilities in the normal course of business. At June 30, 2003 the Company has a
working capital deficiency of $1,660,219 and has incurred losses since inception
raising  substantial  doubt as to the  Company's  ability to continue as a going
concern.  The  Company's  continued  operations  are dependent on its ability to
obtain  additional  financing,  settling its outstanding debts and ultimately to
attain profitable operations.

Unaudited Interim Financial Statements
The accompanying  unaudited interim  financial  statements have been prepared in
accordance with generally accepted  accounting  principles for interim financial
information and with the  instructions to Form 10-QSB of Regulation S-B. They do
not  include all  information  and  footnotes  required  by  generally  accepted
accounting  principles for complete  financial  statements.  However,  except as
disclosed  herein,  there  have  been no  material  changes  in the  information
disclosed in the notes to the financial  statements  for the year ended December
31, 2002 included in the  Company's  Annual Report on Form 10-KSB filed with the
Securities and Exchange  Commission.  The interim unaudited financial statements
should be read in conjunction  with those financial  statements  included in the
Form 10-KSB. In the opinion of Management,  all adjustments considered necessary
for a fair presentation, consisting solely of normal recurring adjustments, have
been made.  Operating  results  for the six months  ended June 30,  2003 are not
necessarily  indicative  of the results that may be expected for the year ending
December 31, 2003.

                                      6
<PAGE>

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  and  its
wholly-owned  subsidiaries,  Incall Systems (B.C.) Inc.  incorporated in British
Columbia,  inCall Systems Pte. Ltd  incorporated  in Singapore  which  commenced
operations  on  November 1, 2001,  inCall  Systems  Sdn.  Bhd.  incorporated  in
Malaysia on  December  12,  2001.  All  significant  intercompany  balances  and
transactions are eliminated on consolidation.

Revenue recognition
The Company  generated call center revenue in 2002 from provision of call center
and related  services.  Revenue is recognized when fees are accrued and services
are provided and collection is reasonably assured. Revenue from the licensing of
VOIP technology and related management  services are recorded in accordance with
terms of licensing agreements when collection is reasonably assured.


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

Cash and cash equivalents
Cash  and  cash  equivalents  consists  of cash on  deposit  and  highly  liquid
short-term  interest bearing  securities with maturities at the date of purchase
of three months or less.

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

Investments
The Company  accounts  for  investments  under the  provisions  of  Statement of
Financial   Accounting  Standards  ("SFAS")  No.  115,  Accounting  for  Certain
Investments in Debt and Equity Securities.

Investments  in securities are accounted for as either  "trading  securities" or
"available for sale" and are stated at quoted market values. Securities that are
not readily  marketable are stated at their  estimated fair values as determined
by the  Company's  management.  The  resulting  unrealized  gains and losses for
trading  securities  are  included in net gain (loss)  from  investments  and in
accordance with SFAS 130 the unrealized  gains and losses for available for sale
securities,  net of tax, are reported within stockholders' equity as a component
of other  comprehensive  income (loss)  unless it is determined  that there is a
permanent  decline in value.  Securities  transactions and any related gains and
losses  are  recorded  on a trade date  basis.  Realized  gains and losses  from
securities transactions are recorded on the identified cost basis.


                                       7
<PAGE>


Fixed assets
Fixed assets are  recorded at cost.  Depreciation  is computed at the  following
rates over the estimated useful lives of the assets:

        Computer equipment                          30% declining balance
        Computer software                           1 year straight-line
        Furniture and fixtures                      6 years straight-line
        Office equipment                            6 years straight-line
        Leasehold improvements                      6 years straight-line

Impairment of long-lived assets
The Company  reviews the carrying  amount of  long-lived  assets for  impairment
whenever  events or changes in  circumstances  indicate that the carrying amount
may not be  recoverable.  The  determination  of any impairment  would include a
comparison of estimated future operating cash flows  anticipated to be generated
during the remaining life of the asset to the net carrying value of the asset.

Goodwill and other intangible assets
In July 2001, the FASB issued  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 will no longer be amortized and will be
tested for impairment  annually.  The Company has adopted the provisions of SFAS
142 for acquisition of goodwill and other intangible assets after June 30, 2001.
The  adoption  of SFAS 142 did not impact  the  results  of  operations  for any
periods  previously  reported.  For the fiscal year ended  December 31, 2002 the
Company recorded an impairment of other intangible  assets of $433,179  relating
to its Singapore call center operations.

Financial instruments
The Company's financial instruments include cash and cash equivalents,  accounts
receivable,  accounts  payable  and due to related  parties.  The fair values of
these  financial  instruments  approximate  their  carrying  values.  Management
believes that the fair value of the convertible  debt  approximates its carrying
value.

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

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 for the six month  period  ended June 30, 2003 and the  required
disclosures have been made below.

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


                                       8
<PAGE>

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 (loss) and
net  income  (loss)  per  share  as if the  Company  had  accounted  for its for
stock-based  employee  compensation  using the fair value provisions of SFAS No.
123 using the assumptions as described in Note 9:
<TABLE>
<CAPTION>
                                                                                    June 30, 2003
                                                                                  ----------------
<S>                                                             <C>                    <C>
                  Net loss                                      As reported            $(214,825)
                  APB 25 compensation expense                   As reported                25,175
                  SFAS 123 compensation expense                 Pro-forma               (125,400)
                                                                                  ----------------
                  Net loss                                      Pro-forma              $(315,050)
                                                                                  ================
                  Pro-forma net loss per share
                       Basis and fully diluted                  Pro-forma                 $(0.02)
                                                                                  ================
</TABLE>

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.

Net loss per common share
Basic earnings per share includes no dilution and is computed by dividing income
available to common stockholders by the weighted average number of common shares
outstanding  for the year.  Dilutive  earnings per share  reflect the  potential
dilution of  securities  that could share in the  earnings of the  Company.  The
accompanying  presentation  is only of basic  loss per share as the  potentially
dilutive factors are anti-dilutive to basic loss per share.

                                       9
<PAGE>

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

Income taxes
The Company follows the liability  method of accounting for income taxes.  Under
this method, future 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.  Future 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  future  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.

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", foreign denominated monetary assets and liabilities are translated
to their United States dollar  equivalents  using  foreign  exchange  rates that
prevailed at the balance  sheet date.  Revenue and expenses  are  translated  at
average rates of exchange during the year. Related  translation  adjustments are
reported as a separate  component  of  stockholders'  equity,  whereas  gains or
losses resulting from foreign  currency  transactions are included in results of
operations.


NOTE 3 - FIXED ASSETS
---------------------------------------------------------------------------

                                                 June 30,    December 31,
                                                   2003          2002
                                               ----------------------------

        Computer equipment and software            $ 21,082      $  72,721
        Furniture and fixtures                            -          3,163
        Office equipment                                  -         25,196
        Leasehold improvements                            -         13,450
                                               ------------------------------
                                                     21,082        114,530
        Less: accumulated depreciation                (6,499)     (33,547)
                                               ------------------------------

                                                   $ 14,583      $  80,983
                                               ==============================

                                       10
<PAGE>


NOTE 4 - ACQUISITION OF VOIP TECHNOLOGY
--------------------------------------------------------------------------------

By agreement  dated  February 5, 2002 and  completed  March 26, 2002 the Company
acquired Voice over Internet Protocol  technology  ("VOIP") and related customer
relations   management   ("CRM")  software  products   developed  by  Vocalscape
Communications Inc. from Bonaventure  Enterprises Inc. (formerly Blackwater Gold
Corp.), a British  Columbia,  Canada company for $600,000 plus related equipment
for  $15,000.  The  consideration  paid was $15,000  cash and 300,000  shares of
common stock of the Company  valued at $2.00 per share.  The Company is required
to pay a royalty of 2% of gross  revenue  reported  by the Company for 24 months
and  thereafter  for 36 months the Company will pay a royalty of 1% of the gross
revenue reported by the Company,  subject to a maximum of $250,000 per year. The
Company has the right to repurchase  the 300,000  shares at a price of $2.20 per
share in the first year and at $2.40 per share in the second  year.  The Company
will  capitalize  the costs of  reacquiring  these shares in excess of $2.00 per
share.  The Company  also is required to  repurchase  each  quarter a minimum of
$10,000 of these  shares from  Bonaventure.  As at June 30, 2003 the Company had
paid $5,955 towards these purchases and is required to pay an additional $44,045
for a total of $50,000  which has been  recorded as an  obligation to repurchase
shares as part of Stockholders' Equity.


NOTE 5 - TECHNOLOGY LICENSE AGREEMENT
--------------------------------------------------------------------------------

During 2002,  through VNI, the Company  entered into an exclusive  International
Distributor  Agreement  with Better Call Home,  Inc.  ("BCH"),  a privately held
Nevada  company  for the rights to market its VOIP  technology  for the  prepaid
calling card  business.  Under the terms of the  agreement  the Company  granted
international  distribution  rights of its Voice over Internet Protocol ("VOIP")
to BCH in exchange for an initial 92.5% equity interest in Better Call Home with
a fair value of $246,667.  Concurrent  with this license,  the Company agreed to
transfer a 75% interest in BCH to a third party in consideration of a promissory
note in the amount of $200,000  which bears  interest at 8% per annum and is due
in full August 4, 2004.  The  Company  realized a gain of $96,667 on the sale of
VOIP technology  being the excess of the fair value of the BCH interest over the
$150,000  carrying value.  The Company  determined that  realization of the full
amount of the note was uncertain and at December 31, 2002 the Company recorded a
write-down  of the note to the  estimated  net  recoverable  amount  of  $25,000
resulting in a loss of $175,000 in 2002.


NOTE 6 - INVESTMENT IN TELCO BLUE INC.
--------------------------------------------------------------------------------

By agreement  dated August 7, 2002 between BCH and  telcoBlue,  Inc.  ("Telco"),
formerly Wave Power.Net Inc.,  Telco acquired a 100% interest in BCH in exchange
for  16,000,000  restricted  common  shares of Telco.  As a result  the  Company
exchanged its remaining  17.5% interest in BCH for 2,800,000  restricted  common
shares  of  Telco  valued  at  $224,000  resulting  in a gain  on sale of BCH of
$177,333.  Concurrent  with this sale Telco  entered into a two-year  management
agreement  with the Company  whereby the Company will provide  services to Telco
related to its VOIP business. In connection with this agreement, Telco issued an
additional 2,000,000 shares of common stock valued at $160,000 and has agreed to
pay an  additional  monthly  fee equal to the  greater of $15,000 or 5% of gross
revenue  generated from use of the VOIP  technology  plus  expenses.  Telco is a
public company  listed on the OTC Bulletin  Board and the 4,800,000  shares held
are subject to Rule 144 resale restrictions.  The Company has accounted for this
investment as available for sale securities.

                                       11
<PAGE>

At December 31, 2002 the Company wrote down the carrying value of its investment
in Telco from $384,000 to $240,000,  recognizing an unrealized  loss of $144,000
which was recorded to other comprehensive loss in 2002.

During the six months  ended June 30,  2003 the Company  received an  additional
4,250,000  shares of Telco valued at $170,000 in  settlement  of all current and
future amounts owing under the management  agreement.  As a result,  the Company
recognized non-cash revenue of $52,236 in the six months ended June 30, 2003 and
has recorded deferred revenue of $117,764.

During the six months  ended June 30, 2003 the Company paid 200,000 of its Telco
shares to an  individual  as a finance  fee for a loan.  Refer to Note 8.  These
shares were valued at $10,000. In addition, the Company sold 15,000 of its Telco
shares on the market for  proceeds of $927 and paid  600,000 of its Telco shares
to an  individual  in  settlement  of an  accounts  payable  of  $42,000.  These
transactions resulted in a realized loss of $460.


NOTE 7 - CONVERTIBLE NOTES PAYABLE
--------------------------------------------------------------------------------
During the year ended  December 31, 2001 the Company  obtained  loans secured by
convertible  notes in the amount of $440,000  with Update Ltd.  ("Update").  The
notes bear simple  annual  interest at 6%, with  principal  and  interest due on
September 20, 2002,  which was extended to April 30, 2004. The notes give Update
the option of converting  into  restricted  common shares at a conversion  price
equal to the lesser of 75% of the  average  closing  price for the five  trading
days  prior to  conversion  or  $1.25  per  share.  In the  event of a  default,
(interest not paid or debenture not paid at maturity)  interest will continue to
accrue on the total  amount  then due at an annual  interest  rate of 12% plus a
collection fee of $10,000.


                                       12
<PAGE>

NOTE 7 - CONVERTIBLE NOTES PAYABLE (cont'd)
--------------------------------------------------------------------------------

The Company also obtained  additional loans secured by convertible  notes for an
additional  $655,000  with  Update of which  $425,000  was  received in 2001 and
$230,000 was received in 2002.  These notes  originally had ten-month terms from
the funding date with simple annual  interest at 6%, payable  monthly,  and have
also been  extended  to April 30,  2004.  The notes  give  Update  the option of
converting  into  restricted  common  shares at a conversion  price equal to the
lesser of 60% of the average  closing  price for the five  trading days prior to
conversion or $1.25 per share. In the event of a default,  (interest not paid or
debenture  not paid at maturity)  interest  will continue to accrue on the total
amount  then due at an  annual  interest  rate of 12% plus a  collection  fee of
$10,000.

All of the notes contain a  restriction  on future  financings  that the Company
shall not issue  common  stock for a price of less than $1.50 per share  without
the  written  permission  of the  Lender  for as long as any  principal  remains
outstanding.  Further,  the Company  pledged all of its assets as collateral for
the loan. The Company also agreed to file a General Security  Agreement ("GSA"),
or  GSA-equivalent,  to  register  this  security  claim.  As at June 30,  2003,
interest of $121,285 has been accrued and is included in the balance owing.


NOTE 8 - LOAN PAYABLE
--------------------------------------------------------------------------------

During the six months ended June 30, 2003 the Company received a loan of $25,000
by way of a  promissory  note.  Under the terms of this note,  the Company  must
repay  $30,000  by April  20,  2003  which  was  extended  to June 25,  2003 for
additional  compensation  of $1,250 for a total of  $31,250  to be  repaid.  The
Company  provided  200,000  of its Telco  shares  valued at  $10,000  as further
consideration for this loan. In addition, the Company has deposited 2,000,000 of
its Telco shares as  collateral  security.  Currently the loan is in default and
the Company is negotiating further repayment terms.


NOTE 9 - CAPITAL STOCK
--------------------------------------------------------------------------------

During the six months  ended June 30, 2003 the  Company  issued  280,000  common
shares in  settlement  of a debt of $42,000.  In  addition,  the Company  issued
931,000  common  shares valued at $148,960 as direct stock awards under its 2003
Stock  Compensation  Plan,  of which  423,000 were issued to two  directors.  In
addition,  11,852  shares  with a fair market  value of $2,370 were  returned to
treasury and cancelled.

Stock options

During 2001 the Company granted  options to acquire a total of 2,200,000  shares
of the Company's  common stock to certain  officers,  directors and employees of
the Company and its subsidiaries.  The options were granted at an exercise price
of $1.00 per share and vest  evenly  over  periods  ranging  from 6 months to 24
months from the date of each grant.

                                       13
<PAGE>

Effective  March 15, 2002,  the Company  adopted a stock  option plan,  the 2002
Stock Option Plan (the  "Plan").  The plan allows for the granting of options to
acquire  shares of the Company's  common stock in an amount not to exceed 25% of
the shares otherwise issued and outstanding. The Plan allows for the granting of
either Incentive Stock Options or Nonqualified Stock Options at a price not less
than 80% of the  market  value of the  Company's  common  stock for terms not to
exceed 10 years.  The vesting of the options granted is at the discretion of the
Company's Board of Directors. The plan permits granting of options to employees,
consultants,  officers  and  employee  directors  of the  Company and any of its
subsidiaries.

During 2002 the Company  granted options to acquire a total of 132,000 shares of
the Company's common stock to certain  officers,  directors and employees of the
Company and its  subsidiaries.  The options were granted at an exercise price of
$1.20 per share and vest evenly over 24 months from the date of each grant.  The
Company also granted options to acquire  100,000 shares of the Company's  common
stock to an employee of the  Company.  The options  were  granted at an exercise
price of $1.02 per share and vest evenly over 18 months from the date of grant.

During  2002 the  Company  granted  options  to  acquire  160,000  shares of the
Company's common stock to a consultant of the Company.  The options were granted
at an exercise price of $1.375 per share. Another consultant was granted options
to acquire  100,000  shares of the  Company's  common  stock.  The options  were
granted at an  exercise  price of $1.36 per share and vest evenly over 12 months
from the date of grant.

Effective June 17, 2003, the Company adopted a stock compensation plan, the 2003
Stock  Compensation  Plan (the "2003 Plan").  The 2003 Plan permits  granting of
options to employees, consultants, officers and directors of the Company and any
of its subsidiaries,  as well as other direct stock awards. The 2003 Plan allows
for the granting of either Incentive Stock Options at a price not less than 100%
of the market value of the Company's common stock or Non-qualified Stock Options
at a price not less than 85% of the market value of the Company's common stock.

The following table summarizes information about stock options outstanding as at
June 30, 2003:
<TABLE>
<CAPTION>
                                                                                                     Weighted Average
                                                                               Weighted Average         Remaining
                                                         Number of options      Exercise Price       Contractual Life
                                                       ---------------------- -------------------- ---------------------

<S>                                                               <C>                   <C>                 <C>
           Balance, December 31, 2000                                     -             $      -                     -
                Granted                                            2,200,000                 1.00
                Exercised/expired/cancelled                               -                    -
                                                       ---------------------- -------------------- ---------------------
           Balance, December 31, 2001                              2,200,000                   -             9.56 years

                Granted                                              492,000                 1.25
                Exercised/expired/cancelled                               -                    -
                                                       ---------------------- -------------------- ---------------------
           Balance, December 31, 2002                              2,692,000                 1.05            7.48 years

                Granted                                                    -                    -
                Exercised/expired/cancelled                      (1,360,000)                    -
                                                       ---------------------- -------------------- ---------------------
           Balance, June 30, 2003                                  1,332,000            $    1.02            7.99 years
                                                       ====================== ==================== =====================
</TABLE>

                                       14
<PAGE>

Stock-based compensation
The Company  accounts for  stock-based  employee  compensation  arrangements  in
accordance  with the  provisions of APB No. 25 and complies with the  disclosure
provisions of SFAS No. 123. 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.  In addition,  the Company has adopted the
provisions of FIN 44.

The 2,200,000 options were granted to employees,  officers and directors at less
than market value of the Company's  common stock with a total  intrinsic  value,
being  the  excess of the  quoted  market  price of the  common  stock  over the
exercise price at the date the options are granted,  of $410,000.  In accordance
with  the  provisions  of ABP  No.  25,  this  additional  compensation  will be
recognized  over the  vesting  period of the  options of which  $21,875 has been
recorded in the six months ended June 30, 2003 and $406,354 has been recorded to
date. During the six months ended June 30, 2003 1,000,000 of these options which
were fully vested were cancelled.

The 132,000  options were granted to  employees,  officers and directors at less
than market value of the Company's  common stock with a total  intrinsic  value,
being  the  excess of the  quoted  market  price of the  common  stock  over the
exercise  price at the date the options are granted,  of $13,200.  In accordance
with  the  provisions  of ABP  No.  25,  this  additional  compensation  will be
recognized  over the vesting period of the options of which $3,300 been recorded
in the six months ended June 30, 2003 and $7,700 has been recorded to date.





                                       15
<PAGE>


NOTE 9 - CAPITAL STOCK (cont'd)
--------------------------------------------------------------------------------

In addition,  the Company has recorded $150,400 of compensation expense relating
to the  160,000  options  granted  during  2002  to a  consultant  which  vested
immediately,  and $54,250 of a total of $93,000 of compensation  relating to the
100,000 options  granted to a consultant  which vest evenly over a period of one
year.  These options were valued using the  Black-Scholes  option  pricing model
with the following weighted average assumptions: risk free interest rates of 4%;
dividend  yield of 0%;  volatility  factors of the expected  market price of the
Company's common stock of 97% and a weighted average expected life of the option
of 1 year.  During  the six  months  ended  June 30,  2003  these  options  were
cancelled.

In addition,  the Company  granted  100,000  options to an employee at an amount
equal  to the  market  value  of the  Company's  common  stock  resulting  in no
intrinsic  value. In accordance with the provisions of ABP No. 25, no additional
compensation  is  required  to be  recognized  over the  vesting  period  of the
options. During the six months ended June 30, 2003 these options were cancelled.


NOTE 10 - RELATED PARTY TRANSACTIONS
--------------------------------------------------------------------------------

During the six months  ended June 30, 2003  consulting  fees  totalling  $50,000
(2002 - $77,013) were paid to officers and directors of the Company. At June 30,
2003 $13,455 (2002 - $46,316) is owing to these parties.  In addition,  net cash
advances of $0 (2002 - $15,061) were received from a director.

Refer to Note 9.

NOTE 11 - DISCONTINUED OPERATIONS
--------------------------------------------------------------------------------

Malaysian Call Center

During 2002 the Company  shut down its  Malaysian  call  center  operations  and
terminated it strategic  alliance  agreement with Hewlett Packard  Malaysia Sdn.
Bhd. The remaining  assets of the call center were  transferred  to creditors in
settlement of  outstanding  debts and the  remaining  debts were written off and
have been included in the results of discontinued operations.  Accordingly,  the
Company has disclosed the results of operations of this division as discontinued
operations.

Singapore Call Center

During  December,  2002  the  Company  made a  strategic  decision  to sell  the
Singapore  Call  Center and change its  business  core  business  focus from the
operation  of call  centers to that of a  developer  and  licensor  of  Customer
Relations  Management  (CRM)  software based on the  intellectual  properties it
acquired from the assets it purchased in February  2002  developed by Vocalscape
Communications  Inc.  Accordingly,  effective  December 31, 2002 the Company has
disclosed  the  results  of  operations  of  this   subsidiary  as  discontinued
operations.

By agreement dated April 2, 2003 and completed May 7, 2003 the Company agreed to
sell its 100% interest in inCall Singapore in  consideration  for the payment of
$12,000, payment of certain liabilities, forgiveness of debt owed to the Company
of $199,004 plus the issuance of a promissory note for $788,000.  The promissory
note is  exchangeable  for  equity in a public  company  to be  acquired  by the


                                       16
<PAGE>

purchaser in a future reverse merger.  The Company valued the promissory note at
$100,000 due to the  uncertainly of  realization of the face amount.  During the
six months  ended June 30,  2003 the  Company  recorded  a loss on  disposal  of
$50,334 upon completion of this sale.

The comparative  financial statements have been restated to reflect the revenues
and expenses of the Singapore call centers as discontinued operations.


NOTE 12 - INCOME TAXES
--------------------------------------------------------------------------------

The Company's has net operating loss carryforwards at June 30, 2003 which may be
available to offset future taxable income.  These  carryforwards will expire, if
not utilized,  beginning in 2015.  The potential tax benefit of these losses has
not been  recorded as a full  deferred tax asset  valuation  allowance  has been
provided due to the uncertainty regarding the realization of these losses.


NOTE 13 - SUBSEQUENT EVENTS
--------------------------------------------------------------------------------

During July,  2003,  the Company  completed an  agreement  to  license/sell  its
interactive  chat  technology  for  $600,000.  Under  the  terms of the  12-year
license/purchase  agreement, the Company will receive a minimum of $100,000 cash
and a promissory note for $500,000.  The Company  received $25,000 cash with the
remaining  balance of $75,000 payable by May 15, 2006. Should the $75,000 not be
paid by May 15, 2006 then the buyer will pay  $125,000 by May 15,  2009.  In the
event the  $125,000 is not paid by May 15, 2009 then the buyer will pay $225,000
by May 15, 2012.

The Company has agreed to exchange  the  promissory  note for shares  should the
chat  technology  become the asset of a company  listed on a  recognized  public
exchange.







                                       17
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS

OVERVIEW

inCall  Systems,  Inc. was  incorporated  as Altrex  Incorporated on October 20,
1998,  under the laws of the State of Nevada.  The  Company  changed its name to
iCall Systems,  Inc. on January 22, 2001 and to inCall Systems, Inc. on February
8, 2002.

inCall Systems, Inc. is primarily in the business of developing, maintaining and
licensing  computer  software  and services  related to the  Customer  Relations
Management  (CRM)  industry.  During 2002, the Company was  evaluating  software
systems it could  implement in its call centers in Malaysia and  Singapore.  The
goal was to acquire certain technologies the Company was currently licensing. By
acquiring the  technologies,  the Company could reduce its costs by  eliminating
the monthly licensing fees it paid. During the evaluation  process,  the Company
identified   that  the  assets  and   intellectual   properties   of  Vocalscape
Communications  Inc. would meet its  requirements and then proceeded to purchase
those assets from their then owner Blackwater Gold Corp. on March 26, 2002.

The  Company  deployed  the  acquired  technology  in its Asian call  centers as
planned in May of 2002. At the time of the technology purchase,  the Company had
not intended to bring the  technology  products  (software) to market but simply
amortize the cost of the acquisition through the saving of third party licensing
fees.

In June of 2002, the Company realized the software  products it had acquired had
a large global market and decided to begin initial marketing research and at the
same   time   activated   the   Company's   interactive   chat   technology   at
www.vocalconnect.com and began a small marketing campaign.

In July of 2002,  the Company  then  licensed its Voice over  Internet  Protocol
(VoIP)  technology to a private  company called Better Call Home, Inc. of Nevada
in exchange for equity.

During  the third and fourth  quarter  of 2002,  the  Company  had  considerable
interest from other licensee's and distributors for its intellectual  properties
and in December the Company decided to change its corporate focus from operating
call  centers to the  licensing of its  technologies.  In  implementing  its new
corporate direction, the Company began the process of selling its call center in
Singapore  and  signed  a  share  purchase   agreement   with   Intercontinental
Communications, Inc., a private company incorporated in the State of Nevada.

Under   the   terms   of  the   share   purchase   agreement,   Intercontinental
Communications,  Inc. paid cash of $12,000 and have paid certain  liabilities of
the Singapore call center and have issued a promissory  note to inCall  Systems,
Inc. with a face value of $788,000.  inCall Systems, Inc. has agreed to exchange
the  promissory  note for equity should  Intercontinental  Communications,  Inc.
shares become listed on a recognized public exchange.

                                       18
<PAGE>


On  July  15,  2003,  the  Company  signed  an  agreement  to  license/sell  its
interactive  chat  technology  for  $600,000.  Under  the  terms of the  12-year
license/purchase  agreement,  inCall  Systems will receive a minimum of $100,000
cash and a promissory note for $500,000.  The Company received $25,000 cash with
the remaining balance of $75,000 payable by May 15, 2006. Should the $75,000 not
be paid by May 15, 2006 then the buyer will pay $125,000 by May 15, 2009. In the
event the  $125,000 is not paid by May 15, 2009 then the buyer will pay $225,000
by May 15, 2012.

 inCall Systems has agreed to exchange the promissory note for shares should the
chat  technology  become the assets of a company  listed on a recognized  public
exchange.

RESULTS OF OPERATIONS

The  following  discussion  should  be read in  conjunction  with the  condensed
consolidated  financial  statements and segment data and in conjunction with the
Company's  10-KSB  filed May 21,  2003.  Results for interim  periods may not be
indicative of the results for the full year.

By agreement dated November 22, 2000 between the Company and the shareholders of
The Internet Call Centre Pte Ltd ("ICCP"), the Company agreed to acquire all the
issued and outstanding  shares of ICCP in exchange for the issuance of 6,500,000
restricted  common shares,  subject to certain  conditions and completion of due
diligence.  The  Company  subsequently  determined  not  to  proceed  with  this
acquisition,  the agreement was not  consummated  and the share exchange did not
occur.  During October 2001, the parties mutually agreed to formally rescind the
November 22, 2000 acquisition  agreement.  As a result of this  rescission,  the
Company did not carry out any operations until November 2001.

ICCP was a private Singapore company, which was facilitating real-time sales and
customer service for companies doing business on the Internet.  During 2001, the
Company  advanced a total of $532,500 to ICCP to develop its business,  however,
as the Company subsequently determined not to proceed with this acquisition, the
agreement  was not  consummated  and the share  exchange  did not occur.  During
October 2001, the parties  mutually agreed to formally  rescind the November 22,
2000 acquisition agreement.

The Company was assigned the accounts receivables of ICCP on October 26, 2001 of
approximately  $70,000 as part of the rescission  agreement and recognized those
accounts receivables in the fourth quarter 2001.

On July 30, 2001,  the Company  purchased the assets of privately  held 1st Call
Pte Ltd, an 81 seat  Singapore  based call center  provider of  outsourced  call
center  services in Asia, in exchange for 478,261  shares of  restricted  common
stock of the Company valued at $1.50 per share for a purchase price of $717,391.

                                       19
<PAGE>


This acquisition  established the Company's call center facilities and telephony
expertise in Asia to service  clients in preparation for planned USA call center
acquisitions.  1st  Call  provides  its  clients  a  range  of  inbound/outbound
telephony,  Internet  interactive  chat, email and technical help desk services.
The 1st Call client list included Cisco Systems,
Hewlett-Packard, MCI WorldCom Asia, Microsoft Singapore, and Oracle Singapore.
The business  operations and assets of 1st Call were initially  integrated  with
the  operations  of ICCP.  During  the fourth  quarter  of 2001,  the assets and
operations were relocated to separate  premises as part of the terms of the ICCP
rescission.  Accordingly,  no revenue or expenses  relating to the operations of
1st Call have been included in the financial statements of the Company until the
fourth quarter of 2001.

On November 1, 2001,  iCALL  Systems  formed a new Singapore  subsidiary  called
inCall  Systems Pte Ltd and secured new office  premises.  The Company has moved
all the assets of 1st Call Pte Ltd into the new office premises to operate under
the name of inCall.  Mr. Chin Tiong Seah, who was managing director of 1st Call,
is the managing director of inCall Systems.  All of the 1st Call permanent staff
accepted  employment  with inCall  Systems.  All of the existing  contracts  and
customers  of 1st  Call  been  have  transferred  to  over  to  inCall  Systems.
Additionally,  certain  accounts  of ICCP have also  elected to  transfer  their
business to the services of inCall Systems.

July 10, 2003, the Company completed the transaction of selling its wholly-owned
Singapore subsidiary,  inCall Systems Pte Ltd, which operates the Company's call
center.   The  purchaser  of  the  Singapore   subsidiary  is   Intercontinental
Communications, Inc., a private Nevada corporation.

The selling  price of the call center was  $800,000  paid in the form of $12,000
cash and a 24-month  promissory note for $788,000  carrying an 8% interest rate.
The Company has agreed to exchange the  promissory  note for equity in the event
that Intercontinental Communications shares become listed on a recognized public
exchange.  Intercontinental  Communications  has also  agreed to sign a two-year
consulting  contract  with  the  Company  to make  for a  smooth  transition  of
operations in Singapore.

On July 14,  2003 the Company  received  4,250,000  shares of common  stock from
telcoBlue, Inc. as payment in meeting its contractual obligations to the Company
under the terms of their  agreements.  The shares were issued in satisfaction of
the 24 month  management  agreement  that  called  for  telcoBlue  to pay inCall
Systems, Inc. $15,000 per month and expenses paid on behalf of telcoBlue.


HEWLETT-PACKARD STRATEGIC ALLIANCE

On September 6, 2001, the Company signed a 4-year strategic  alliance  agreement
with  Hewlett-Packard  Sales (Malaysia) Sdn. Bhd. ("HP"). Under the terms of the
agreement,  HP Services  Division  will provide its clients  with the  Company's


                                       20
<PAGE>


integrated suite of Internet customer service solutions and will incorporate the
Company's  capabilities  into HP's  Customer  Interaction  Centers.  HP has also
committed to contract the Company to provide first level  technical  support for
HP products  sold in Malaysia,  which will  generate  immediate  revenue for the
Company.  In addition  the HP agreement  will provide the Company with  facility
space, computer and office equipment, and a ready to operate call center located
in the HP data center building in Malaysia. The Company will provide technology,
processes and management staff to operate the call center.

Additionally,  HP has agreed to contract  the Company to handle  level 1 support
calls for HP products sold in Malaysia. On December 12, 2001, the Company formed
a new Malaysian  subsidiary  called inCall  Systems Sdn. Bhd. and moved into new
office   premises   in   Hewlett-Packard's   building.   In   conjunction   with
Hewlett-Packard  the Company  began  construction  of its  Malaysian  based call
center.

During October 2002, the Company shut down its Malaysian call center  operations
and terminated it strategic  alliance  agreement with Hewlett  Packard  Malaysia
Sdn.  Bhd.  The  remaining  assets  and  liabilities  of the  call  center  were
transferred to creditors in settlement of outstanding debts resulting in no gain
or loss on disposal of this division. Accordingly, the Company has disclosed the
2002 results of operations of this division as discontinued operations.

VOCALSCAPE ACQUISITION

During  February  2002, the Company  completed the  acquisition of the assets of
privately held Vocalscape Networks Inc. (www.vocalscape.com). The acquisition of
Vocalscape's  Voice  over  Internet  Protocol  (VoIP)  and  electronic  Customer
Relationship  Management  (eCRM)  solutions  was a major  milestone  for  inCall
Systems'  strategic  plan for  rapid  growth.  In  September  of 2001,  TMC Labs
bestowed its  Innovation  award and Editor's  Choice award to  Vocalscape's  own
VocalConnect citing, "[VocalConnect] is designed to help bring resolution to the
'abandoned  shopping  cart  syndrome'  prevalent  in  e-commerce.  It does so by
allowing the customer to either request a Web chat session or click on the phone
button to speak directly to a Customer Service Representative."

inCall  Systems   acquired  the  assets  of  Vocalscape   from  Blackwater  Gold
Corporation  (BWG) for a combination  of stock and cash.  Under the terms of the
agreement,  inCall Systems paid $15,000 cash and 300,000 shares, valued at $2.00
per inCall share,  issued under Rule 144 and carrying a 24-month legend.  inCall
may  repurchase  the shares at $2.20 per share for the first 12 months and $2.40
per share  during  months 13 to 24.  Royalties  are payable to  Blackwater  Gold
Corporation  by inCall  Systems at the rate of 2% of gross  revenue  reported by
inCall  Systems for a 24 month period,  followed by 1% of gross revenue for a 36
month period (the maximum cumulative royalties paid in any inCall Systems fiscal
year  shall  not  exceed  $250,000.00).  inCall  Systems,  Inc.  also  agreed to
repurchase  $10,000 worth of inCall  Systems,  Inc. shares per quarter for eight
quarters.


                                       21
<PAGE>

As of the  filing  of this  10-QSB,  inCall  Systems,  Inc.  was  behind  in its
obligation  to Blackwater  Gold  Corporation  and is currently in  renegotiation
discussions  with  the  company.   inCall  Systems,   Inc  has  a  good  working
relationship  with Blackwater  Gold  Corporation and it is not expected that the
current  negotiations  with  Blackwater Gold  Corporation  will have any adverse
effect on inCall Systems, Inc.'s ongoing business.

New  technologies  like  Vocalscape's  eCRM  products  are in the early stage of
market  adoption.  The  Company has chosen a strategy  of  leveraging  its newly
acquired technology through bundling agreements in order to increase penetration
and awareness in the market. These key strategic  partnerships,  which allow the
Company to bundle its  technology  with that of its partners,  serve to increase
product awareness while at the same time generating revenue at a minimal cost.


ARTICULATE ACQUISITION

June 23,  2002,  the Company  completed  the  acquisition  of the  business  and
customer  contracts of  Articulate  Customer Care Sdn.  Bhd.  ("Articulate"),  a
Malaysian based call center provider of outsourced customer interactive services
for Asia.

Under the terms of the  acquisition  agreement,  Articulate  received  shares of
inCall  Systems  common stock in exchange for 100% of the customer  contracts of
Articulate.  Some of Articulate's  blue chip customers  include American Express
and ExxonMobil. The Company has recorded the acquisition of these contracts as a
marketing expense.

During October 2002, the Company shut down its Malaysian call center operations.
The remaining  assets and  liabilities  of the call center were  transferred  to
creditors in settlement  of  outstanding  debts  resulting in no gain or loss on
disposal of this  division.  Accordingly,  the Company  has  disclosed  the 2002
results of operations of this division as discontinued operations.

DISTRIBUTION AGREEMENTS

On September 9, 2002, inCall Systems, Inc.'s wholly owned subsidiary, Vocalscape
Networks Inc., entered into a distribution agreement with Better Call Home, Inc.
(BCH) a Nevada  corporation.  Under terms of the agreement,  ninety-two and five
tenths  percent  (92.5%) of the  outstanding  shares of BCH's  common  stock was
transferred to Vocalscape  Networks Inc. in exchange for the right to distribute
Vocalscape products.  In consideration for such rights,  Vocalscape will receive
good and  marketable  title to  seventeen  point five  percent  (17.5%) of BCH's
issued  and  outstanding  common  stock  free  of all  encumbrances  whatsoever.
Vocalscape Networks Inc. received 4,800,000 shares of common stock of telcoBlue,
Inc. for common stock in exchange for the seventeen  point five percent  (17.5%)
of BCH's issued and outstanding common stock


                                       22
<PAGE>


Vocalscape  Networks Inc. sold 750,000 shares of Better Call Home,  Inc. to O.B.
Services  Inc., a Colorado  corporation  and Creative  Communications  Corp.,  a
Colorado  corporation.  A  promissory  note  for  $200,000,  designated  for the
purchase of such shares,  was received by Vocalscape  Networks  Inc.  August 28,
2002 and became effective September 9, 2002.

Interest of 8% and any accrued unpaid charges on the note are payable  annually,
in  arrears,  on the last day of each  calendar  year,  commencing  with a short
calendar  year for 2002.  The  principal  balance,  interest and accrued  unpaid
charges under the note are due and payable on the final  maturity date of August
4, 2004.

On November 28, 2002,  Vocalscape  Networks  Inc.,  the  Company's  wholly owned
Canadian  subsidiary,  transferred  all its assets to its parent inCall Systems,
Inc. The assets  included  Vocalscape's  management  agreement  with Better Call
Home,  Inc.,  the shares  owned in  telcoBlue,  Inc.,  the  promissory  note for
$200,000,  and all other  assets  including  but not limited to  trademarks  and
websites.  Subsequently,  the Company  determined  that  realization of the full
amount of the note was uncertain  and at year-end  December 31, 2002 the Company
recorded a write-down  of the note to the estimated  net  recoverable  amount of
$25,000 resulting in a loss of $175,000.

On September 9, 2002, inCall Systems, Inc.'s wholly owned subsidiary, Vocalscape
Networks Inc., entered into a 2-year management  agreement with telcoBlue,  Inc.
(telcoBlue),  a public Delaware corporation listed on the OTCBB. Under the terms
of  the  agreement,   Vocalscape  Networks  Inc.  will  provide  telcoBlue  with
day-to-day   contractual  management  for  the  development  and  deployment  of
telcoBlue's  Voice over Internet Protocol (VoIP) technology for pre-paid calling
cards.  Vocalscape  Networks Inc.  will receive  $15,000 per month is fees along
with 5% of  telcoBlue's  gross  revenues or 25% of the  Company's  gross profit,
which ever is greater. If telcoBlue does not have the financial means to pay the
monthly  consulting fee, it may issue common shares to Vocalscape  Networks Inc.
at $0.25 per share for management fees.

During October 2002, the Company shut down its Malaysian call center  operations
and terminated it strategic  alliance  agreement with Hewlett  Packard  Malaysia
Sdn.  Bhd.  The  remaining  assets  and  liabilities  of the  call  center  were
transferred to creditors in settlement of outstanding debts resulting in no gain
or loss on disposal of this division. Accordingly, the Company has disclosed the
2002 results of operations of this division as discontinued operations.

On April 2,  2003,  the  Company  entered  an  agreement  with  Intercontinental
Communications,  Inc. to sell 100% interest in its Singapore call center.  Under
the terms of the share purchase agreement, Intercontinental Communications, Inc.
paid cash of $12,000 and have paid certain  liabilities  of the  Singapore  call
center and have issued a promissory  note to inCall  Systems,  Inc.  with a face
value of $788,000.  inCall  Systems,  Inc. has agreed to exchange the promissory
note for equity  should  Intercontinental  Communications,  Inc.  shares  become
listed on a recognized public exchange.


                                       23
<PAGE>


On July 14, 2003,  the Company  received  4,250,000  shares of common stock from
telcoBlue,  Inc. as payment to meets its  obligations  to the Company  under the
terms of their  agreements.  The shares  were issued in  satisfaction  of the 24
month management agreement that called for telcoBlue to pay inCall Systems, Inc.
$15,000 per month.

On  July  15,  2003,  the  Company  signed  an  agreement  to  license/sell  its
interactive  chat technology with  Vocalscape  Networks,  Inc., a private Nevada
corporation,  for  $600,000.  Under  the terms of the  12-year  license/purchase
agreement, inCall Systems will receive a minimum of $100,000 cash up to $225,000
and a  promissory  note  for  $500,000.  The  cash  component  of the  agreement
increases  every 36 months over the term of the  agreement.  inCall  Systems has
agreed to exchange the promissory  note for equity should  Vocalscape  Networks,
Inc. shares become listed on a recognized public exchange.

OPERATIONS

Revenues  for the six months  ending June 30,  2003 were  $72,177 as compared to
$15,958  for the  same  period  during  2002.  The  increases  in  revenues  are
attributable  implementing  the Company's  new  strategic  direction of software
licensing  verses  the  operating  of  call  centers.  Revenues  were  primarily
generated from the licensing of the Company's  software  products and consulting
revenues generated through such licenses.

Consulting  consisted of compensation  for officers and directors of the Company
who  focused on seeking  suitable  acquisition  companies,  developing  business
plans,  financial  pro formas and fund  raising  activities,  and various  other
consultants  and  programmers  contracted  to  assist  the  Company.  Consulting
expenses for six months  ending June 30, 2003 were $83,982  compared to $475,928
for the same period in 2002. The decrease in consulting expenses arose primarily
from the Company  depending  less on  consultants  in line with its new business
focus of software licensing, and less stock based compensation.

General and Administrative expenses consist primarily of rent, phone and fax and
other office expenses.  General and  Administrative  expenses for the six months
ended June 30,  2003 were  $23,019  compared  to $61,450  for the same period in
2002. The decrease in General and  Administrative  expenses arose primarily from
the Company reducing office space and streamlining operations.

Marketing  expenses  for the six months  ending June 30, 2003 was $0 compared to
$50,000 for the same period in 2002. The decrease is primarily  attributable  to
the Company's new business  focus of software  licensing and having the licensee
pay marketing expenses for licensed products.

Interest  for the six  months  ended June 30,  2003 was  $48,830  consisting  of
accrued interest on the Company's  convertible notes compared to $29,780 for the
same period in 2002. The increase in interest in due to additional  notes signed
during 2002.

Total  Operating  Expenses for the six months ended June 30, 2003 were  $236,208
resulting in an Operating Loss of $164,031  compared to $822,552 in expenses for
the same period in 2002  resulting in an Operating  Loss of $806,594.  Basic Net



                                       24
<PAGE>


Loss per share amounted to $0.02 for the six months ended June 30, 2003 compared
to $0.08 per  share  for the same  period in 2002.  The  decrease  in  expenses,
operating  losses are  attributed to the  Company's  new business  direction and
streamlining of operations.

LIQUIDITY AND CAPITAL RESOURCES

In six  months  ended  June  30,  2003,  the  Company  has  financed  operations
principally  through cash generated by software  licensing and  consulting,  and
shareholder loans.

Net cash used in Operating  Activities was $23,957 for the six months ended June
30, 2003 compared to $322,929 for the same period in 2002 and consisted  accrued
interest on convertible  notes,  stock based compensation and non cash expenses.
The decrease  Operating  Activities are attributed to the Company's new business
direction and streamlining of operations.

Net cash provided by financing  activities  was $11,639 for the six months ended
June 30,  2003  compared  to  $210,000  for the same  period in 2002.  Net cash,
provided by financing  activities  for the six months  ended June 30, 2003,  was
attributable  to  proceeds  generated  from  loans.  The  decreases  in net cash
provided by financing  activities  are  attributed to the Company's new business
direction and streamlining of operations.

The Company  anticipates  that its current  cash and cash  equivalents  and cash
generated  from  operations,  if any,  will not be  sufficient  to  satisfy  its
liquidity requirements for at least the next 12 months. The Company will require
additional  funds prior to such time and will seek to sell additional  equity or
debt  securities or seek  alternative  sources of  financing.  If the Company is
unable to obtain  this  additional  financing,  it may be required to reduce the
scope of its planned sales and marketing and product development efforts,  which
could harm its business, financial condition and operating results. In addition,
the Company may require  additional funds in order to fund more rapid expansion,
to develop  new or enhanced  services or products or to invest in  complementary
businesses,  technologies,  services or products.  Additional funding may not be
available on favorable terms, if at all.

ITEM 3. CONTROLS AND PROCEEDURES

Based on their most recent evaluation, which was completed within 90 days of the
filing of this Form 10-QSB,  the Company's Chief Executive Officer and Treasurer
believe the Company'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 the Company in this report is accumulated and communicated to
the  Company's  management,   including  its  principal  executive  officer  and
principal financial officer, as appropriate, to allow timely decisions regarding
required disclosure. There were no significant changes in the Company's internal
controls  or other  factors  that  could  significantly  affect  these  controls
subsequent to the date of their evaluation and there were no corrective  actions
with regard to significant deficiencies and material weaknesses.


                                       25
<PAGE>


                                   SIGNATURES

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

                         INCALL SYSTEMS, INC.

                         BY:  /s/ MARC CRIMENI
                              --------------------------------------------
                         Name and Title:  MARC CRIMENI - DIRECTOR AND CEO
                         Dated:   SEPTEMBER 26, 2003


                         BY:  /s/ ROBERT HARRIS
                              ---------------------------------------------
                         Name and Title:   ROBERT HARRIS - TREASURER
                         Dated:   SEPTEMBER 26, 2003


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On May 9, 2002,  a complaint  was filed  against the  Company,  Signature  Stock
Transfer,  Inc.,  inCall  Systems,  Inc.,  Kevin Nichols and Jane Doe Nichols v.
Jeffrey Bunch and Tracy Bunch, for declaratory  judgment,  injunctive relief and
money damages,  filed in the Superior Court of Washington,  Spokane County.  The
complaint  is based upon two  shareholders  both  claiming  ownership of certain
common  shares of the  Company.  The  plaintiffs  purport to be the recorded and
beneficial owners of these share certificates.

Even though the Company did not feel it was a legitimate party to the complaint,
it signed a  settlement  agreement  between  all  parties  involved in the legal
proceeding on December 9, 2002.  The Company felt it was in its best interest to
settle the  litigation  in lieu of lengthy  court  proceedings  and rising legal
costs.  The Company has agreed to issue  149,200  shares of its common  stock in
settlement of the litigation.


                                       26
<PAGE>


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

        None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        None.

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

        None.

ITEM 5. OTHER INFORMATION

        None.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) All exhibits  required to be filed herein are  incorporated  by reference to
Registrant's  Form 10-KSB,  previously filed with the Commission on May 21, 2003
and  Registrants  From 10-QSB files June 16, 2003 and the 10-QSB/A filed on June
17, 2003.









                                       27
<PAGE>


(b) The Company filed the following  reports on Form 8-K during the three months
ended June 30, 2003.

SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.

                                inCall Systems, Inc.

Dated: September 26, 2003       /s/ Marc Crimeni
                                ----------------------------------
                                Marc Crimeni
                                CEO, President /Director