UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                                   Form 10-KSB


[X]  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE ACT OF
     1934 For the fiscal year ended June 30, 2003.

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

          For the transition period from __________________ to _____________

     Commission file number: 0-31949


                            Innofone.com Incorporated
                         -------------------------------
                         (Name of Small Business Issuer)

                   Nevada                                       98-0202313
---------------------------------------------             ----------------------
(State or other jurisdiction of incorporation                (I.R.S. Employer
 or organization)                                          Identification No.)


3470 Onley- Laytonsville Rd #118 Olney MD                            20832
---------------------------------------------                      ----------
  (Address of principal executive offices)                         (Zip Code)

Issuer's telephone number:  (301) 774-8294

Securities registered under Section 12(b) of the Exchange Act:  None
                                                                ----

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

                         Common Shares, $ .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 past 12 months (or for such shorter
period that the registrant was required to file such reports),  and (2) has been
subject to such filing requirements for the past 90 days.   [X] Yes  [ ] 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]

The issuer had no revenues for the year ended June 30, 2003.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant as of June 30, 2003, based on the closing trading price of the day of
$0.50 for the issuer's Common Shares, $0.001 par value (the "Common Shares") was
$150,742.00.

The number of shares  outstanding of the issuer's common equity,  as of June 30,
2003, was 301,484.

Transitional Small Business Disclosure Format (Check one):   Yes       No  X
                                                                -----    -----



<PAGE>






(begin boldface)
Certain  statements  in this Annual  Report on Form 10-KSB,  or the Report,  are
"forward-looking  statements." These forward-looking statements include, but are
not  limited  to,  statements  about the  plans,  objectives,  expectations  and
intentions  of  CompuBec  Micro  Distribution  Inc,  a  subsidiary   corporation
(referred  to in this  Report as "we,"  "us" or  "our,")  and  other  statements
contained  in  this  Report  that  are  not  historical  facts.  Forward-looking
statements  in this Report or  hereafter  included in other  publicly  available
documents filed with the Securities and Exchange Commission, or the SEC, reports
to our shareholders and other publicly  available  statements issued or released
by us involve  known and unknown  risks,  uncertainties  and other factors which
could  cause  our  actual  results,  performance  (financial  or  operating)  or
achievements  to differ  from the  future  results,  performance  (financial  or
operating)  or  achievements   expressed  or  implied  by  such  forward-looking
statements. Such future results are based upon management's best estimates based
upon current conditions and the most recent results of operations.  When used in
this Report,  the words "expect,"  "anticipate,"  "intend,"  "plan,"  "believe,"
"seek,"  "estimate" and similar  expressions are generally  intended to identify
forward-looking  statements.  Because these  forward-looking  statements involve
risks and  uncertainties,  there are  important  factors that could cause actual
results  to  differ   materially  from  those  expressed  or  implied  by  these
forward-looking  statements,  including our plans, objectives,  expectations and
intentions and other factors discussed under "Risk Factors."
(end boldface)



                                     PART I
                                     ------


Item 1.  Description of Business.
         ------------------------

Innofone.com, Incorporated ("The Company") used to operates as a holding company
for companies that are involved in the procurement, refurbishing and remarketing
of used electronic  equipment with a focus on used computer equipment.  Innofone
is actively  seeking new investment  opportunities  in creating and or acquiring
assets  involved  in  the  broad  technology  market.Innofone  currently  has  1
employee on staff.

The company has no operating subsidiary,  because of lack of capital it divested
it self of CompuBec Micro Distribution  Inc.("Compubec")in early November 2002.,
As  previously  reported,  our  ex-sole  operating  subsidiary,   Digital  Micro
Distribution Canada Inc., has been sold to Qvest Management Group effective June
11th, 2002. Compubec, Innofone.com Inc's sole subsidiary, plans to specialize in
the disassembly and international distribution of used/refurbished,  end of line
new personal  computers,  servers,  peripherals and components.  Compubec's core
business will act as a clearing house and  distribution  center for the hundreds
of thousands of used off-lease computers, monitors and printers that are surplus
to major Corporations on an annual basis. The ability of Compubec to execute its
business  plan was  dependent  upon  raising  capital  to fund its  startup  and
operational needs which never materialized.

Please see Item 6, "Management's  Discussion and Analysis or Plan of Operation,"
for more information.


Item 2.  Description of Property.
         ------------------------

The Company does not own any real estate. The company is currently negotiating a
lease for new office space.


Item 3.  Legal Proceedings.
         ------------------

The Company does not currently have any pending legal proceedings.



                                        2
<PAGE>





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

Not Applicable.


                                     PART II
                                     -------


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

The Company's  common stock is currently  traded on the National  Association of
Securities  Dealers Over the Counter Bulletin Board ("OTC Bulletin Board").  The
common stock had previously traded on the OTC Bulletin Board and was delisted on
September 1, 1999. From September 1, 1999 until the Company's  re-listing on the
OTC  Bulletin  Board  on  March  27,  2001,  its  common  stock  traded  in  the
over-the-counter market in the United States.

The closing  price of The  Company's  common stock on the OTC Bulletin  Board on
September 30, 2003 was $0.52 per share.

The price  ranges of trading in The  Company's  common stock during the last two
fiscal years and the subsequent interim period are as follows:

                2000                        High         Low
                ----                        ----         ---
     7/1/00 - 9/30/00 (delisted)            .703        .250
     10/1/00 - 12/31/00 (delisted)          .516        .156

                2001
                ----
     1/1/01 - 3/31/01 (delisted)            .344        .047
     4/1/01 - 6/30/01                       .1          .012
     7/1/01  - 9/30/01                      .14         .012
     10/1/01 - 12/31/01                     .12         .015

                2002
                ----
     1/1/02 - 3/31/02                       .08         .015
     4/1/02 - 6/30/02                       .06         .011
     7/1/02 - 9/30/02                       .05         .006
    10/1/02 - 12/31/02                      .14         .001

                2003
                ----
     1/1/03 - 3/31/03                       .51         .05
     4/1/03 - 6/30/03                       .50         .10


Please note that  quotations on the OTC Bulletin  Board  represent  inter-dealer
prices,  without  mark-ups,  commissions,  etc., and they may not necessarily be
indicative of actual sales prices.

(b)  As of June 30, 2002, we had 155 shareholders of record.

(c)  We have not paid any cash dividends to date.





                                        3
<PAGE>






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

FORWARD-LOOKING STATEMENTS
--------------------------

The following discussion of the financial condition and results of operations of
the  Company  should  be read in  conjunction  with the  Consolidated  Financial
Statements and Notes thereto for the year ended June 30, 2003 included elsewhere
in this  Report.  This  Annual  Report on Form 10-KSB  includes  forward-looking
statements  within the meaning of Section 21E of the Securities  Exchange Act of
1934. Words such as "may," "plans,"  "expects,"  "anticipates,"  "approximates,"
"believes,"  "estimates,"  "intends," "hopes,"  "potential," or "continue",  and
variations of such words and similar  expressions  are intended to identify such
forward-looking statements. The Company intends such forward-looking statements,
all of which are qualified by this  statement,  to be covered by the safe harbor
provisions for  forward-looking  statements  contained in the Private Litigation
Securities  Reform Act of 1995 and is including  this  statement for purposes of
complying  with  these safe  harbor  provisions.  The  Company  has based  these
statements on its current  expectations  and  projections  about future  events.
These  forward-looking  statements are not guarantees of future  performance and
are subject to risks and uncertainties that could cause actual results to differ
materially from those projected in these statements.  Forward-looking statements
include but are not limited to:

     o    The   Company's   ability  to  raise   financing   and  find  suitable
          acquisitions.

Readers  are  cautioned  not to place undue  reliance  on these  forward-looking
statements,  which reflect  management's  views only as of the date hereof.  The
Company  is not  obligated  to  publicly  update or revise  any  forward-looking
statements, whether as a result of new information,  future events or otherwise.
In light of the risks,  uncertainties  and  assumptions to which the Company and
such  forward-looking   statements  are  subject,  the  forward-looking   events
discussed in this Annual Report on Form 10-KSB might not occur.

The Company  currently does not have sufficient  funds with which to sustain its
operations.  It is has convert  noteholders to equity common stock  shareholders
and the  company  is still  waiting  to see  whether  or not it will  receive  a
dividend  from the  bankruptcy  of its  previously  owned  subsidiary,  Innofone
Canada. Which is highly unlikely.

The company  changed its  authorized  share capital from  100,000,000  shares to
950,000,000 common shares.  This was done in accordance to the companies by-laws
as disclosed in it's latest 8-K dated August 12, 2002.

The company issued shares to the President for salary and expense  reimbursement
due to the company's poor cash flow position.

The Company is currently reviewing and implementing new disclosure controls and
procedures to ensure that they fully comply with the new Securities Exchange Act
Rules 13a-15 and 15d-15.





                                        4
<PAGE>






(a)  Plan of Operations

The  company  is  in  discussions  with  an  several  investors  and  acquistion
candidates.

As reflected in Note 1 of the financial  statements the Company  currently has a
going concern issue as there are  insufficient  assets or prospective cash flows
to fund its liabilities.  While the Company is hopeful that the capital and loan
requirements  can be achieved,  there can be no assurance  that they will be and
consequently,  it cannot be  determined  if the company will be able to meet its
current or future obligations.

The  Company's  CEO and President  Frederic  Richardson  is currently  reviewing
several  acquisition  candidates  and funding  sources and hopes to make several
positive  announcements  in the next  shareholder  meeting  to be held  sometime
before yearend.

(b)  Results of Operations

The company had no  operations  in 2003.  Management  is  currently  looking for
outside  directors and new management to help in securing  additional  financing
for  operations  and viable  acquisitions.  To that end  management has retained
Frederic Richardson as its new President, CEO and CFO. The company hopes to make
additional  appointments  to the Board of Directors and management over the next
three months.

(c)  Liquidity and Capital Resources

As  previously  mentioned,  the company has a going  concern  issue as there are
insufficient  assets or  prospective  cash  flows to fund its  liabilities.  The
effect  of  this  on the  company  being  able to meet  its  current  or  future
obligations cannot be determined at this time.


Item 7.  Financial Statements.
         ---------------------

The financial  statements required by this Item 7 are included elsewhere in this
Report and incorporated herein by this reference.


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

There have been no changes in or  disagreements  with our accountants  since the
formation  of the  Company  required  to be  disclosed  pursuant  to Item 304 of
Regulation S-B.


The  company was not in a  financial  position to pay the prior years  auditor's
fees, and consequently,  they refused to provide any further audit services. The
company retained the services of Danziger and Hochman  chartered  accountants to
perform the current years audit.  There were no changes in or disagreements with
either the current or the prior years auditors relating to financial  disclosure
issues. The change of auditors was reported in the 8-K dated August 12, 2002.






                                        5
<PAGE>






                                    PART III
                                    --------


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

COMPLIANCE WITH SECTION 16(a)OF THE EXCHANGE ACT.

(a)  Beneficial Ownership

Name                    Number of Shares     Percentage of Ownership

Frederic Richardson
Director, Officer
                        Failure to File           Late Filings
                             No                        1

Dick Swartzman          Number of Shares     Percentage of Ownership
Director, Officer            0                         0

                        Failure to File           Late Filings
                             No                        0


Max Apple               Number of Shares     Percentage of Ownership
Director, Officer            0                         0

                        Failure to File           Late Filings
                             No                        0

Ed Hutya                Number of Shares     Percentage of Ownership
Director, Officer            0                         0

                        Failure to File           Late Filings
                             No                        0

None of the above  officers and  directors  sold any common stock and  therefore
were not required to file forms relating to the sale of their stock.

The  following  table sets forth the current  names and ages of the directors of
the Company:

Name                    Age     Position      Term        Period Served
----                    ---     --------      ----        -------------

Frederic Richardson     43      Chairman     Annual      Nov 01 to current
Max Apple               61      Director     Annual      Nov 01 to current
Ed Hutya                53      Director     Annual      Nov 01 to current
Dick Swartzman          54      Director     Annual      Nov 01 to current


The  following  table  sets  forth the names and ages of the  Company's  current
executive officers:

Name                    Age     Position      Term        Period Served
----                    ---     --------      ----        -------------
Frederic Richardson     43      Chairman     Annual      Nov 01 to current
Max Apple               61      COO          Annual      Nov 01 to current
Ed Hutya                53      Treasurer    Annual      Nov 01 to current
Dick Swartzman          54      Secretary    Annual      Nov 01 to current




                                        6
<PAGE>






Frederic  Richardson,  the President and director of Innofone since Nov 01 2002,
has extensive experience in the computer  distribution  industry.  He is a board
experience in capital formation and running public companies.  Richardson is the
current  chairman of another public company.  He was the former chairman of life
insurance company that was liquidated by the Pennsyvania Insurance Departmant In
1994.  Without the prior  approval of the Pa insurnace  Department Mr Richardson
can not hold a controlling position with any insurer for the next 5 years.

Mr.  Maxwell W. Apple has been one of our  directors  since  2002,  and has also
served as our  Secretary  since 2002. Mr Apple is a former judge and currently a
member of the Indiana  Bar. He has been  involved in various  business  ventures
which include  owning Nunur  Corporation,  a company which owned  commercial and
residential  properties,  being a partner in French Lick Springs Golf and Tennis
Resort, L.P., and being the sole shareholder of The Paoli Corporation, a company
specializing  in the  manufacturing  of wood products and  operating  lumber dry
kilns. He received his Juris Doctor Degree from the Indiana University School of
Law and also  attended the National  College of the State  Judiciary and Indiana
Judicial College during.

Mr. Edward A. Hutya has been one of our directors  since 2002. He also served as
our vice president  until  September  2002. He is currently the president of the
Center  of  Independent   Living  and  a  consultant  to  Riverside   Healthcare
foundation,  two  not-for-profit  organizations.  Mr.  Hutya  has many  years of
experience in the operations and acquisitions of health care properties.  During
his  tenure as  president  of several  not-for-profit  corporations,  Mr.  Hutya
directed  corporate  development  for the  acquisition  of housing  and  nursing
facilities for the elderly and special populations.  Mr. Hutya also selected and
hired  management   companies  which  operated  nursing  homes.   Prior  to  his
involvement  with  not-for-profit   organizations,   Mr.  Hutya  specialized  in
financing,  including equipment,  vehicles, real estate and governmental leasing
and  financing.  Mr. Hutya received a degree in Economics from the University of
Connecticut in 1965,  and  participated  in graduate work in Urban  Economics at
American University.

Dick  Swartzman  has  been a  director  seen  2002 He has been a  Washington  Dc
Attorney specailizing in litigation for over 20 years.


Item 10.  Executive Compensation.
          -----------------------

COMPENSATION OF OFFICERS.
-------------------------

The Officers have not received any compensation  during the last fiscal year and
will not  receive  compensation  until the  Company  is in a  position  to award
compensation. The company has not made any arrangements to negotiate any fees at
this time. The company will pay all operating personnel in stock until cash flow
can sustain salaries.

COMPENSATION OF DIRECTORS.
--------------------------

There  has not been  any  compensation  paid to the  directors  of the  company.
Although the company plans to in the coming months.






                                        7
<PAGE>






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

(a)  Security ownership of certain beneficial owners.

<TABLE>
<CAPTION>
     (1)                          (2)                            (3)                       (4)
                               Name and                       Amount and
Title of Class        Address of Beneficial Owner     Nature of Beneficial Owner     Percent of Class
--------------        ---------------------------     --------------------------     ----------------
<S>                   <C>                             <C>                                 <C>
Common shares         Frederic Richardson              50,000 Direct                      16.6%
                      3470 Olney Rd.
                      Olney, MD 20832

Common shares         Sarah Suul Simon Trust          100,000 Direct                      33.2%
                      3470 Olney Rd.
                      Olney, MD  20832

Common shares         Ephone Telecom, Inc.            100,000 Direct                      33.2%
                      c/o 1801 Goldmine Rd.
                      Brookeville, MD  20833
</TABLE>

(b)  Security ownership of management.


<TABLE>
<CAPTION>
     (1)                       (2)                            (3)                       (4)
                            Name and                       Amount and
Title of Class     Address of Beneficial Owner     Nature of Beneficial Owner     Percent of Class
--------------     ---------------------------     --------------------------     ----------------
<S>                <C>                             <C>                                    <C>
Common shares      Frederic Richardson             50,000 Direct                          16.6%
                   3470 Olney Rd.
                   Olney, MD 20832
</TABLE>


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

None.


                                     PART IV
                                     -------


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

a)   Exhibit Index

Exhibit No.                               Description
-----------    -----------------------------------------------------------------

3.1#           Certificate of Incorporation of the Registrant and all amendments
               thereto (originally filed as Exhibit 2.1)

3.2*           Bylaws  of the  Registrant,  as  currently  in effect (originally
               filed as Exhibit 3.01(i))

3.3#           Specimen  Common  Stock  Certificate (originally filed as Exhibit
               3.1)





                                        8
<PAGE>






10.1+          Agreement  and Plan  of Reorganization  by and among the Company,
               Digital Micro Distribution Canada, Inc. and Sumit Majumdar dated
               August 31, 2001

10.2*          1997 Compensatory  Stock Option Plan (originally filed as Exhibit
               10.04)

10.3*          1997  Employee  Stock  Option  Plan  (originally filed as Exhibit
               10.05)


# Filed as an exhibit to the Company's  Registration Statement on Form 10-SB, as
amended, file no. 0-31949, originally filed on November 14, 2000.

* Incorporated  by reference from the Company's  registration  statement on Form
SB-2, as amended, file no. 333-94497, originally filed January 12, 2001.

+ Incorporated by Reference from the Company's Current Report on Form 8-K, file
no. 0-31949, filed on September 25, 2001.


b)   There were no Forms 8-K's filed  during the last quarter of the Fiscal Year
     April 1, 2002 to June 30th 2002.


                       DOCUMENTS INCORPORATED BY REFERENCE
                       -----------------------------------

The Company is currently subject to the reporting requirements of the Securities
Exchange  Act of  1934,  as  amended  (the  "Exchange  Act")  and in  accordance
therewith files reports,  proxy  statements and other  information with the SEC.
Such reports, proxy statements and other information may be inspected and copied
at the public  reference  facilities  of the SEC at Judiciary  Plaza,  450 Fifth
Street,  N.W.,  Washington  D.C.  20549;  at its New York Regional  Office,  233
Broadway, New York, NY 10279; and at its Chicago Regional Office, 175 W. Jackson
Boulevard,  Suite 900,  Chicago,  IL 60604,  and copies of such materials can be
obtained from the Public Reference Section of the SEC at its principal office in
Washington,  D.C.,  at  prescribed  rates.  In addition,  such  materials may be
accessed  electronically at the Commission's site on the World Wide Web, located
at http://www.sec.gov. We intend to furnish our shareholders with annual reports
containing  audited  financial  statements and such other periodic reports as we
may determine to be appropriate or as may be required by law.
























                                        9
<PAGE>





SIGNATURES
----------

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


                                              INNOFONE.COM INCORPORATED


Dated:  September 30, 2003                    By: /s/ Frederic Richardson
                                                  ------------------------
                                                  Frederic Richardson
                                                  President and Director












































                                       10
<PAGE>




















                           INNOFONE.COM, INCORPORATED
                           --------------------------

                              Financial Statements
                        (Stated in United States Dollars)

                                  June 30, 2003



































                                       F-i
<PAGE>
















                           INNOFONE.COM, INCORPORATED
                           --------------------------

                                      INDEX
                                      -----

                                  June 30, 2003

                                                                       PAGE
                                                                       ----


AUDITORS' REPORT                                                         1


FINANCIAL STATEMENTS

         Balance Sheet - Statement I                                     2

         Statement of Shareholders' Deficiency and
             Comprehensive Loss - Statement II                           3

         Statement of Operations - Statement III                         4

         Statement of Cash Flows - Statement IV                          5


NOTES TO FINANCIAL STATEMENTS                                          6 - 14


















                                      F-ii
<PAGE>














                                AUDITORS' REPORT
                                ----------------



To the Board of Directors and Shareholders of:
INNOFONE.COM, INCORPORATED


We have audited the accompanying balance sheet of INNOFONE.COM,  INCORPORATED as
                                                  ---------------------------
at June 30, 2003,  and 2002,  and the  statements of  operations,  shareholders'
deficiency,  and comprehensive  loss and cash flows for each of the years in the
two-year  period  ended  June  30,  2003.  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 audit.

We conducted our audit in accordance with auditing standards  generally accepted
in the  United  States of  America.  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  financial  statements  present  fairly,  in all material
respects,  the  financial  position of the company as at June 30, 2003 and 2002,
and the results of its  operations and their cash flows each of the years in the
two-year period ended June 30, 2003, in conformity  with  Accounting  principles
generally accepted in the United States of America.

The company has a going  concern  problem as  discussed in Note 1 and may not be
able to fund its liabilities.









Toronto, Ontario
October 7, 2003                                            Chartered Accountants




                                       F-1
<PAGE>




<TABLE>
<CAPTION>
INNOFONE.COM, INCORPORATED                                                    Statement I
Balance Sheet
(Stated in United States Dollars)
As at June 30, 2003
=========================================================================================

                                                           2003                2002
-----------------------------------------------------------------------------------------


ASSETS

<S>                                                  <C>                 <C>
     Investment in 908651 Alberta Ltd.               $      210,000      $      210,000
=========================================================================================


LIABILITIES
     Current
        Accounts payable and accrued liabilities     $      316,572      $      212,572
        Due to officers and directors                          -                104,000
        Convertible debt (note 3)                              -                500,000
        Note payable (note 4)                                  -                150,000
-----------------------------------------------------------------------------------------
                                                            316,572             966,572
-----------------------------------------------------------------------------------------

SHAREHOLDERS' DEFICIENCY

     CAPITAL STOCK (note 5)
        Common shares                                     4,870,700           4,841,522
        Preferred shares                                      1,250               1,250
        Additional paid-in capital                        8,550,112           7,719,593
-----------------------------------------------------------------------------------------
                                                         13,422,062          12,562,365

     (DEFICIT) - Statement II                           (13,528,634)        (13,318,937)
-----------------------------------------------------------------------------------------
                                                           (106,572)           (756,572)
-----------------------------------------------------------------------------------------

                                                     $      210,000      $      210,000
=========================================================================================
</TABLE>


ON BEHALF OF THE BOARD:


/s/ Frederic Richardson          Director
---------------------------------










                            {See accompanying notes.}
                                       F-2
<PAGE>




<TABLE>
<CAPTION>
INNOFONE.COM, INCORPORATED                                                                                            Statement II
Statement of Shareholders' Deficiency and Comprehensive Loss
(Stated in United States Dollars)
For The Year Ended June 30, 2003
==================================================================================================================================

                                                                                                       Accumulated
                                                                         Additional                       other
                                                 Common     Preferred     paid-in                     comprehensive
                                                 shares       shares      capital        Deficit      income (loss)      Total
----------------------------------------------------------------------------------------------------------------------------------

<S>                                           <C>           <C>         <C>           <C>            <C>            <C>
BALANCE, June 30, 2000                        $ 4,702,250   $   2,500   $ 4,818,938   ($ 11,773,282) ($      6,235) ($  2,255,829)

Net loss                                                                                ( 1,819,095)                  ( 1,819,095)
Other comprehensive income, net of tax:
   Write-off of foreign current translation
   adjustment on bankruptcy of Canadian
   subsidiary                                                                                                6,235          6,235
Issuance of stock for marketing services               30                     5,970                                         6,000
Convertible notes converted to stock                3,852                 1,536,748                                     1,540,600
Stock options exercised                               430                    65,570                                        66,000
Compensatory value of stock options (note 6)                                 24,240                                        24,240
Issuance of stock for legal services                1,403                   197,584                                       198,987
Issuance of stock by subscription agreement
   net of share issue cost of $50,000               1,000                   449,002                                       450,002
Conversion of preferred stock,
   including deemed distribution of $62,500        63,750     ( 1,250)                      (62,500)                         -
----------------------------------------------------------------------------------------------------------------------------------
BALANCE, June 30, 2001                          4,772,715       1,250     7,098,052    ( 13,654,877)                  ( 1,782,860)

Stock options exercised                               475                      (427)                                           48
Convertible notes converted to stock                  520                   415,480                                       416,000
Issuance of stock for Digital Micro
   Distribution Canada Inc.                        67,000                                                                  67,000
Issuance of stock for equipment                       146                     7,154                                         7,300
Convertible notes converted to stock                  666                   199,334                                       200,000
Net earnings                                                                                335,940                       335,940
----------------------------------------------------------------------------------------------------------------------------------
BALANCE, June 30, 2002                          4,841,522       1,250     7,719,593     (13,318,937)                    ( 756,572)

Convertible note converted to stock                 2,300                   647,700                                       650,000
Issuance of shares for legal services                 500                     1,887                                         2,387
Issuance of shares for consulting services         26,378                   180,932                                       207,310
Net loss                                                                                   (209,697)                     (209,697)
----------------------------------------------------------------------------------------------------------------------------------

Balance, June 30, 2003                        $ 4,870,700   $   1,250   $ 8,550,112  ($  13,528,634)  $       -     ($    106,572)
==================================================================================================================================
</TABLE>







                            {See accompanying notes.}
                                       F-3
<PAGE>




<TABLE>
<CAPTION>
INNOFONE.COM, INCORPORATED                                                      Statement III
Statement of Operations
(Stated in United States Dollars)
For the Year Ended June 30, 2003
=============================================================================================

                                                               2003                2002
---------------------------------------------------------------------------------------------


<S>                                                     <C>                  <C>
SALES                                                    $         -         $         -
=============================================================================================

EXPENSES
      Forgiveness of debt                                          -               (294,908)
      Net gain on sale of Digital Micro Distribution
         Canada Incorporated                                       -               (143,000)
      Selling, general and administrative                       209,697             101,968
---------------------------------------------------------------------------------------------

                                                                209,697            (335,940)
---------------------------------------------------------------------------------------------


NET INCOME (LOSS) FOR THE YEAR                          ($      209,697)     $      335,940
=============================================================================================



BASIC NET INCOME (LOSS) PER SHARE (note 8)              ($         1.37)     $          NIL
=============================================================================================



WEIGHTED AVERAGE NUMBER OF
      COMMON SHARES OUTSTANDING                                 152,682          79,738,604
=============================================================================================
</TABLE>






















                            {See accompanying notes.}
                                       F-4
<PAGE>




<TABLE>
<CAPTION>
INNOFONE.COM, INCORPORATED                                                      Statement IV
Statement of Cash Flows
(Stated in United States Dollars)
For The Year Ended June 30, 2003
============================================================================================

                                                              2003                2002
--------------------------------------------------------------------------------------------


<S>                                                    <C>                  <C>
CASH FLOWS FROM OPERATING ACTIVITIES
     Net earnings (loss) for year                      ($      209,697)     $      335,940

     Changes in non-cash working capital components
         - Prepaid expenses and deposits                          -                    225
         - Accounts payable and accrued liabilities           (104,000)            (19,938)
--------------------------------------------------------------------------------------------

                                                              (313,697)            316,227
--------------------------------------------------------------------------------------------

FINANCING ACTIVITIES
     Bank indebtedness                                            -                   (546)
     Due to officers and directors                             104,000            (180,470)
     Issuance of capital stock                                 859,697             690,348
     Convertible debt                                         (650,000)           (616,000)
--------------------------------------------------------------------------------------------

                                                               313,697            (106,668)
--------------------------------------------------------------------------------------------

INVESTING ACTIVITIES
     Investment in 908651 Alberta Ltd.                            -               (210,000)
     Capital assets                                               -                    441
--------------------------------------------------------------------------------------------

                                                                  -               (209,559)
--------------------------------------------------------------------------------------------


INCREASE IN CASH                                                 NIL                  NIL


CASH, BEGINNING OF YEAR                                          NIL                  NIL
--------------------------------------------------------------------------------------------


CASH, END OF YEAR                                       $        NIL        $         NIL
============================================================================================
</TABLE>










                            {See accompanying notes.}
                                       F-5
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to the Financial Statements
June 30, 2003
================================================================================


1.   BASIS OF PRESENTATION
     ---------------------

     Going Concern Issue
     -------------------

     These financial  statements have been prepared on a going concern basis and
     do not include any adjustments to the measurement and classification of the
     recorded  asset amounts and  classification  of  liabilities  that might be
     necessary should the Company be unable to continue as a going concern.  The
     company has experienced  several  continuous years of operating losses. The
     Company's  ability to realize its assets and discharge its  liabilities  in
     the normal  course of business is dependent  upon  continued  support.  The
     Company  is  also  dependent  on  an  infusion  of  equity  from  potential
     shareholders.  The Company is  currently  attempting  to obtain  additional
     financing from its existing  shareholders and other strategic  investors to
     continue  its  operations.  However,  there  can be no  assurance  that the
     Company will obtain sufficient additional funds from these sources.

     The  conditions  cause  substantial  doubt about the  Company's  ability to
     continue as a going  concern.  A failure to  continue,  as a going  concern
     would require that stated amounts of assets and liabilities be reflected on
     a liquidation basis that could differ from the going concern basis.

     Bulletin Board Listing
     ----------------------

     In January 2001, the Company  completed a  Registration  Statement that has
     been filed with the United  States  Securities  and Exchange  Commission in
     order for the  Company's  shares to be  eligible  for trading in the United
     States on the National Association of Securities Dealings  over-the-counter
     Bulletin Board.


2.   SIGNIFICANT ACCOUNTING POLICIES
     -------------------------------

     These  financial  statements have been prepared by management in accordance
     with accounting  principles  generally  accepted in the United States,  the
     more significant of which are outlined below.

     Use of Estimates
     ----------------

     The  preparation of financial  statements in conformity  with United States
     generally  accepted  accounting  principles  requires  management  to  make
     estimates and  assumptions  that affect the reported  amounts of assets and
     liabilities and disclosure of contingent assets and liabilities at the date
     of the  financial  statements  and the  reported  amounts of  revenues  and
     expenses during the year. Actual results could differ from those estimates.




                                       F-6
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2003
================================================================================


     Foreign Currency Translation
     ----------------------------

     The Company's  reporting  currency is the United States dollar  because the
     Company is a United States  corporation  and it is trading  publicly in the
     United States.  The  statements of operations  are  translated  into United
     States  dollars using the average  exchange rate for the year.  The balance
     sheets  are  translated  into  United  States  dollars  using the  year-end
     exchange rate.

     Stock Option Plans
     ------------------

     The Company applies the fair value based method of accounting prescribed by
     SFAS No. 123, Accounting for Stock-Based Compensation in accounting for its
     stock  options  granted  to both  employees  and  non-employees.  As  such,
     compensation  expense is  recorded  on the date of grant  based on the fair
     value of the award and is recognized over the service period.

     Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of
     -----------------------------------------------------------------------

     The  Company  accounts  for  long-lived   assets  in  accordance  with  the
     provisions  of SFAS No. 121,  Accounting  for the  Impairment of Long-Lived
     Assets and  Long-Lived  Assets to be Disposed of. This  statement  requires
     that long-lived assets and certain identifiable intangibles be reviewed for
     impairment  whenever events or changes in  circumstances  indicate that the
     carrying  amount  of an asset  may not be  recoverable.  Recoverability  of
     assets to be held and used is  measured  by a  comparison  of the  carrying
     amount of an asset to future net cash flows expected to be generated by the
     asset.  If such assets are considered to be impaired,  the impairment to be
     recognized  is measured by the amount by which the  carrying  amount of the
     assets  exceeds the fair value of the assets.  Assets to be disposed of are
     reported  at the lower of the  carrying  amount or fair value less costs to
     sell.


3.   CONVERTIBLE DEBT
     ----------------

     As part of an  agreement  dated  January 12, 2001 with ePhone  Telecom Inc.
     ("ePhone"),  the Company  received a set-up fee of $500,000,  which was due
     for repayment on April 19, 2001, and  subsequently  extended to January 19,
     2002.  For  accounting  purposes,  the  set-up  fee was  recognized  in the
     financial  statements as a loan.  ePhone also had the right to convert into
     an equivalent amount of shares of the Company based on a price of $0.25 per
     share in the event the set-up fee was not repaid.  The market  value of the
     Company's  shares  of common  stock at the date of  signing  the  marketing
     agreement  was less  than the  conversion  price.  Therefore,  there was no
     embedded  beneficial  conversion  option.  Each  share  would  also  have a
     non-detachable warrant to convert into common stock at a price of $0.75.




                                       F-7
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2003
================================================================================


3.   CONVERTIBLE DEBT (continued)
     ----------------------------

     The  Company  was not in a position  to repay the set-up fee on January 19,
     2003,  and all debt was converted  for 2,000,000  common shares on April 4,
     2003.


4.   NOTE PAYABLE
     ------------

     On October 4, 2000, the Company raised  $150,000  through a subscription of
     10% unsecured promissory notes, which were due October 4, 2001. The capital
     amount of the notes  shall be  payable on demand in whole or in part in the
     event that the Company  makes a  distribution  of its  securities  worth at
     least $500,000 by private placement or otherwise. The notes are convertible
     into  shares  of common  stock.  The notes  also  include a  non-detachable
     warrant to purchase  one share of common  stock of the  Company  with a par
     value of  $0.001  at a price  of $1.00  per  share.  The fair  value of the
     warrants  at the  issuance  date  was  nominal.  The  market  value  of the
     Company's shares of common stock at the subscription date was less than the
     conversion price.  Therefore,  there was no embedded beneficial  conversion
     option.

     The Company was not in a position to repay the promissory  notes on October
     4, 2002 and the promissory note was converted into 300,000 common shares on
     April 4, 2003.

























                                       F-8
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2003
================================================================================


5.   CAPITAL STOCK
     -------------

     The number of  outstanding  shares of the  Company  as at June 30,  2003 is
     computed as follows:

<TABLE>
<CAPTION>
                                                               Common            Preferred
     =======================================================================================
<S>                                                        <C>                    <C>
     Outstanding Shares as at June 30, 2000                  20,750,000           2,500,000

     Shares issued in exchange for legal fees                 1,403,333                -
     Options exercised in exchange for marketing costs           30,000
     Options exercised                                          430,000                -
     Promissory notes converted to common stock               3,851,500                -
     Common stock subscribed                                  1,000,004                -
     Preferred stock to be converted to common stock          3,750,000          (1,250,000)
     ---------------------------------------------------------------------------------------

     Outstanding Shares as at June 30, 2001                  31,214,837           1,250,000

     Shares issued in exchange for equipment                    146,000
     Options exercised                                          475,000
     Shares issued to DMD CANADA shareholders                67,000,000
     Shares issued on conversion of debt                      1,186,668
     ---------------------------------------------------------------------------------------

     Outstanding Shares as at June 30, 2002                 100,022,505           1,250,000

     Shares issued in exchange for consulting fees           23,357,826
     Shares issued in exchange for legal fees                   500,000
     Reverse stock split:  175 shares for one share        (123,172,444)
     Share issuance on conversion of debt                     2,300,000
     Share issuance on exchange for consulting fees           3,021,800
     Reverse stock split:  20 shares for one share           (5,728,203)
--------------------------------------------------------------------------------------------

     Outstanding shares as at June 30, 2003                     301,484           1,250,000
===========================================================================================
</TABLE>











                                       F-9
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2003
================================================================================


5.   CAPITAL STOCK (continued)
     -------------------------

     The Company's  authorized  capital stock consists of 950,000,000  shares of
     common stock and 25,000,000 shares of preferred stock each with a par value
     of $0.001  per share.  The  Company is in the  process  of  increasing  the
     authorized  capital for its common shares.  The 1,250,000  shares of issued
     preferred  stock are voting,  convertible  as  described  further  below to
     shares of common stock on a 3 for 1 basis at the option of the holder based
     on  certain  revenue  targets  being  met  and  participate  equally  as to
     dividends  with  each  share of  common  stock.  If after  five  years  the
     performance  criteria have not been met, the remaining  shares of preferred
     stock  are  convertible  into  one  half of a share of  common  stock.  Any
     dividends  declared  and paid by the Company  would be declared and paid in
     United States dollars.

     The remaining  1,250,000  shares of preferred  stock can be converted  into
     3,750,000  shares of  common  stock  when the  Company  reaches  $7,000,000
     Canadian in cumulative revenue. For accounting purposes,  the conversion of
     the shares of  preferred  stock  includes  both a  non-performance  element
     (equal  to one  half of the  share  of  preferred  stock  converted)  and a
     performance  element (equal to the balance).  If and when additional shares
     of common stock are issued based upon meeting the performance criteria, the
     fair value of any such additional shares of common stock will be recognized
     as a deemed distribution  against equity in the period when the performance
     criteria is met. Until these targets are met, the shares of preferred stock
     remain outstanding with all rights and restrictions continuing.


6.   STOCK OPTIONS
     -------------

     At June 30, 2003, the Company has two stock-based compensation plans, which
     are described  below. The Company accounts for the fair value of its grants
     under these plans in accordance  with FASB Statement 123. The  compensation
     cost that has been charged against income for those plans was $Nil for 2003
     (2002 - $Nil).















                                      F-10
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2003
================================================================================


6.   STOCK OPTIONS (continued)
     -------------------------

     In 1997,  the Company  adopted a  Compensatory  Stock Option Plan (the "CSO
     Plan") and an Employee Stock Compensation Plan (the "ESC Plan") pursuant to
     which  the  Company's  Board  of  Directors  may  grant  stock  options  to
     employees,  consultants, advisors or directors of the Company. The CSO Plan
     authorizes  grants  of  options  to  purchase  up to  1,500,000  shares  of
     authorized but unissued common stock and the ECS Plan authorizes  grants of
     options to purchase  up to  1,000,000  shares of  authorized  but  unissued
     common stock. Stock options are granted under the CSO Plan with an exercise
     price equal to or greater than 100% of the stock's fair market value at the
     date of grant and the vesting period is limited to no more than 10 years.

     Pursuant  to the  Company's  ESC  Plan and CSO  plan,  the  Company  has no
     outstanding options.

     No stock options were issued during the fiscal year.

     The following  table  summarizes  the activity for stock  options  granted,
     exercised and expired during the year:

<TABLE>
<CAPTION>
     ============================================================================================
                                                                  Number of      Weighted-Average
                                                                   Options        Exercise Price
     --------------------------------------------------------------------------------------------

<S>                                                                <C>               <C>
     Outstanding (held by 13 optionees) as at June 30, 2000         8,642,000        $ 0.45
     (2,097,000 exercisable at an average price of $0.47)

     Granted - employees                                              160,000          0.41
     Exercised                                                       (460,000)         0.15
     Expired or forfeited                                          (4,675,000)         0.50
     --------------------------------------------------------------------------------------------

     Outstanding (held by 9 optionees) as at June 30, 2001          3,667,000          0.42

     Granted - employees                                                 -              -
     Exercised                                                       (475,000)         0.0001
     Expired or forfeited                                          (3,032,000)         0.47
     --------------------------------------------------------------------------------------------

     Outstanding (held by 3 optionees) as at June 30, 2002            160,000          0.40
     --------------------------------------------------------------------------------------------

     Expired or forfeited                                             160,000          0.40
-------------------------------------------------------------------------------------------------

     Outstanding as at June 30, 2003                                     -           $  -
=================================================================================================
</TABLE>




                                      F-11
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2003
================================================================================


7.   FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES
     --------------------------------------------------------

     Financial Instruments
     ---------------------

     The following table presents the carrying amounts and estimated fair values
     of the  Company's  financial  instruments  at June 30,  2003 and 2002.  The
     estimated  fair value of a financial  instrument is the amount at which the
     instrument  could be exchanged  in a current  transaction  between  willing
     parties, other than a forced or liquidation sale. These estimates, although
     based on the relevant market  information  about the financial  instrument,
     are  subjective  in  nature  and  involve   uncertainties  and  matters  of
     significant judgment and therefore cannot be determined with precision.

     Changes in assumptions could significantly affect the estimates.

                                                     Carrying         Fair
                                                      Amount         Value
                                                       2003           2003
     =======================================================================

     Financial Assets
        Investment in 908651 Alberta Ltd.          $ 210,000       $ 210,000

     Financial Liabilities
        Accounts payable and accrued liabilities     316,572         316,572
     =======================================================================





















                                      F-12
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2003
================================================================================


7.   FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES (Continued)
     --------------------------------------------------------------------

                                                     Carrying         Fair
                                                      Amount         Value
                                                       2002           2002
     =======================================================================

     Financial Assets
        Investment in 908651 Alberta Ltd.          $ 210,000       $ 210,000

     Financial Liabilities
        Accounts payable and accrued liabilities     212,572         212,572
        Due to officers and directors                104,000         104,000
        Note payable                                 150,000         150,000
        Convertible debt                             500,000         500,000
     =======================================================================


     The following  methods and assumptions were used to estimate the fair value
     of each class of financial instruments:

     (i)  Accounts payable and accrued liabilities, and note payable
          ----------------------------------------------------------

          The carrying amounts  approximate fair value because of the short term
          to maturity of these instruments.

     (ii) Convertible debt
          ----------------

          The fair value is  estimated by  discounting  the future cash flows at
          rates currently offered to the Company for similar debt instruments of
          comparable maturity by the Company's bankers.

     (iii) Due to officers and directors and advances from ultimate shareholders
           ---------------------------------------------------------------------

          Imputed interest  computed at comparable  market rates on the interest
          free  advances  from  ultimate  shareholders  is not  considered to be
          material to the  financial  statements.  Consequently,  the  financial
          statements  do not  include  a  charge  for  imputed  interest  on the
          interest  free  advances  and  the  fair  value  is  considered  to be
          comparable to the carrying value.









                                      F-13
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2003
================================================================================


8.   BASIC NET LOSS PER SHARE
     ------------------------

     Basic net loss per share figures are calculated  using the weighted average
     number of common shares  outstanding  computed on a daily basis. The effect
     of the  conversion of the  preferred  shares on an  if-converted  basis and
     stock options has an anti-dilutive effect.


9.   INCOME TAXES
     ------------

     As at June 30, 2003 the  company  had not filed  income tax returns for the
     years ending 1999 through  2003.  No income tax provision has been recorded
     for fiscal 2003.


10.  NON-CASH FINANCING AND INVESTING ACTIVITIES
     -------------------------------------------

     During the year, the Company issued  2,300,000 common shares in exchange of
     $650,000 convertible debt and note payable.























                                      F-14