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, 2002.

[ ]  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.)


130 Centennial Parkway North, Hamilton, Ontario, Canada            L8E 1H9
-------------------------------------------------------       ----------------
      (Address of principal executive offices)                   (Zip Code)

Issuer's telephone number:  (905) 560-9547

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, 2002.

The  aggregate  market value of the voting stock held by  non-affiliates  of the
registrant as of June 28, 2002, based on the closing trading price of the day of
$0.018 for the issuer's  Common Shares,  $0.001 par value (the "Common  Shares")
was $1,800,405.09.

The number of shares  outstanding of the issuer's common equity,  as of June 30,
2002, was 100,022,505.

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") 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 this niche market.Innofone currently has 2 employees on
staff.

The company has one new operating subsidiary, CompuBec Micro Distribution
Inc.("Compubec"), which was incorporated in August, 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 is dependent upon raising capital to fund its startup and
operational needs.

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 currently leases
approximately 1000 square feet of office space, which houses our executive
offices, at 130 Centennial Pkwy N, Hamilton, Ontario.


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

The Company does not currently have any pending legal proceedings.

Innofone has settled the lawsuit by Global Financial Press, Inc. by paying the
$12,500 as per the settlement agreement. The United States Bankruptcy Court of
Pennsylvania has discharged the suit.





                                        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, 2002 was $0.006 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


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 95 shareholders of record.

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

(d)  COMPENSATORY STOCK OPTION PLAN

The Company has also adopted the 1997 Compensatory Stock Option Plan for
officers, employees, directors and advisors. We have reserved a maximum of
1,500,000 shares of common stock to be issued upon the exercise of options
granted under the stock option plan. The plan provides for the issuance of
non-statutory stock options for shares of common stock. The stock options issued
under this plan are not intended to qualify as "incentive stock options" within
the meaning of Section 422 of the Internal Revenue Code. Options covering
1,205,000 shares of common stock have been granted under the plan. During the



                                        3
<PAGE>





year, 475,000 options were exercised and 570,000 options expired. The Company's
stock option plan will automatically terminate on January 7, 2007, unless we
terminate it sooner. In addition, we may amend, alter or discontinue the plan at
any time provided it does not adversely affect any option previously granted
under the plan.

The compensation committee, or in the absence of such a committee the board of
directors, administers the stock option plan and has full power and authority to
designate plan participants and determine the provisions and terms of options
granted under the plan, including the exercise price and vesting provisions, in
accordance with the terms of the plan. Under the plan, the exercise price of
each stock option shall be not less than 100% of the fair market value of the
common stock on the date of the grant. In addition, no option shall have a term
of more than ten years from the date of the grant.


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, 2001 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 expectations regarding the amount of our receivable from
          Innofone Canada that we expect to recover;

and

     o    The Company's ability to raise the financing and gain government
          approval of the Compubec project.

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 still negotiating with ePhone and the noteholder to convert
their notes to common stock 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.

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 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.

(a)  Plan of Operations

The company is in discussions with an investor to raise $1,500,000 US in
exchange for a convertible note and/or common shares. $1,000,000 CAD of these



                                        4
<PAGE>





funds will be loaned to the Company's operating subsidiary Compubec. Compbec has
been having negotiations with the government of the province of Quebec to obtain
loans and grants totaling $5,000,000CDN. The portion of grants and loans is yet
to be determined. The Company is also negotiating a wages subsidy and tax free
operations for a period of five and ten years respectively. The company would
move its head office to Quebec and would build a 40,000 to 50,000 square foot
warehouse from which it would run its operations.

The company projects that the building would cost $800,000 and will be
operational within 3 months of relocating to Quebec. Assuming the company can
raise the initial $1,500,000US and Compubec can successfully negotiate the
Quebec government grants and loans, the Company expects to have approximately
$6,000,000 CAD in Startup capital to launch its new operations.

Compubec expects to hire up to seventy-five employees during the first year of
operations. The Company is currently negotiating training subsidies for up to
fifty percent of the labour costs of employees hired from the local area.

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 Janne Vilhunen is currently staying in Canada on a Work Visa
that expires in October of 2002. Due to the going concern of not having
sufficient operating funds, Mr. Vilhunen is planning to return to Finland at the
end of October 2002. Mr. Jamie Lobo has already assumed most of his functions.

(b)  Results of Operations

As reflected in the company's statement of operations the company has recorded
no sales for the year and the comparative information has been deleted due to
the disposition of DMD Canada. The forgiveness of debt of $294,908 consists of
$284,470 owing to former directors of Innofone.com Inc. and the balance relates
to amounts which were owed to DMD Canada. The net gain on the sale of DMD Canada
represents the net book value of DMD Canada on its disposition in the amount of
$210,000 less the $67,000 value attributed to the shares issued for the
acquisition of DMD Canada effective October 15, 2001. The largest component of
the selling general and administrative expenses consist of a management fee in
the amount of $100,000 accrued for Musha Inc., a company controlled by Mr. Sumit
Majumdar the controlling shareholder of Innofone.com. The Compnay has not paid
any wages for the last fiscal year.

(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.




                                        5
<PAGE>





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.



                                    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

Sumit Majumdar                    67,000,000                     67%
Director, Officer
                                  Failure to File             Late Filings
                                      No                               1


Janne Vilhunen                    Number of Shares      Percentage of Ownership
Director, Officer                 0                               0

                                  Failure to File             Late Filings
                                      No                          0


Jamie Lobo                        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
----               ---        --------     ----        ------------

Sumit Majumdar     26         Chairman     Annual      Oct 01 to current
Janne Vilhunen     31         Director     Annual      Oct 01 to current
Jamie Lobo         28         Director     Annual      Sept 02 to current





                                        6
<PAGE>





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

Name                Age      Position/Office      Period served
----                ---      ---------------      -------------

Sumit Majumdar      26       President            Oct 01 to current
Janne Vilhunen      31       CEO                  Oct 01 to current
Jamie Lobo          28       COO                  Sept 02 to current

Sumit Majumdar: Mr. Majumdar, the President and director of Innofone since
--------------
October 2001, has extensive experience in the used and refurbished computer
distribution industry. He is a board level technician and is fully trained for
assembly of PC's, software installation, network configuration and Internet
connectivity. He has extensive experience in working with Java, C++, Oracle
8.01, MS Access, HTML and XML. In July 1997 he started a wholesale division for
Burloak Systems Inc., a computer retailer., Mr. Majumdar was the President of
Digital Micro Distribution Canada Inc., which is the former subsidiary of the
Company from July 1998 to July 2002.

Janne Vilhunen: Mr. Vilhunen has been the CEO and director of Innofone.com Inc.
--------------
since October 2001. Mr. Vilhunen also was the General Manager of Digital Micro
Distribution Canada, Inc., the former subsidiary of Innofone, from August 2001
until July of 2002. Prior to joining Innofone, Mr. Vilhunen worked for Bloomberg
L.P. in Princeton, New Jersey, for a year and a half as a research assistant and
equity analyst. He received his BBA in May 1997 from Lander University in
Greenwood SC. Mr. Vilhunen earned an MBA in corporate finance and international
business from the School of Management at SUNY Buffalo in May of 1999. During
the summer of 1998 Mr. Vilhunen worked as a business development intern for
Outokumpu American Brass Inc., of Buffalo, New York.

Jamie Lobo: Mr. Lobo joined Innofone in September of 2002 as a Director. Jamie
----------
has extensive executive experience from the computer industry. He has held
significant Senior Sales Executive management roles with Bluechip Canada,
Serebral Consulting, Microforum, and CIT Group. Leveraging over 7 years of
business-to-business sales in the Finance, Enterprise Software, and IT
industries, Jamie is focused on creating strategic industry partnerships and new
direct opportunities within local markets. Under direct management as Consultant
and Business Manager for Serebral, and CIT Group, revenues increased 470% in
1999-2000 and 290% in 2001, respectively. Jamie graduated from York University,
where he received an Honors Bachelor Degree, with specialization in Macro
Economics and Business. Jamie also has numerous sales & negotiation
certifications, coupled with a project management designation from Ryerson
University.


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.

COMPENSATION OF DIRECTORS.

There has not been any compensation paid to the directors of the company.







                                        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>
                         Sumit Majumdar
                     130 Centennial Pkwy N
                        Hamilton, Ontario                  67,000,000
Common shares            L8E 1H9, Canada                     Direct                    67 %
</TABLE>

(b) Security ownership of management.

<TABLE>
<CAPTION>
     (1)                        (2)                             (3)                    (4)
Title of Class               Name and                       Amount and            Percent of Class
                   Address of Beneficial Owner     Nature of Beneficial Owner
<S>                <C>                             <C>                            <C>
Common shares                                                                          67 %
                         Sumit Majumdar                    67,000,000
                     130 Centennial Pkwy N
                        Hamilton, Ontario
                         L8E 1H9, Canada

    --                   Janne Vilhunen                         0                      NIL

    --                     Jamie Lobo                           0                      NIL
</TABLE>


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

An accrued management fee of $100,000 USD has been attributed to Musha LLC, a
company controlled by Sumit Majumdar. This fee is in exchange for management
services. The total fee was agreed to by the former officers and directors and
was disclosed in the Reorginization agreement in September 2001. No fees have
been paid to date.










                                        8
<PAGE>





                                     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)

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



                                        9
<PAGE>





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.




















































                                       10
<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:  October 10, 2002                            By: /s/ Sumit Majumdar
                                                       ---------------------
                                                       Sumit Majumdar
                                                       President and Director







































                                       11
<PAGE>





















                           INNOFONE.COM, INCORPORATED

                              Financial Statements
                        (Stated in United States Dollars)

                                  June 30, 2002




































                                       F-1
<PAGE>

















                           INNOFONE.COM, INCORPORATED

                                      INDEX

                                  June 30, 2002


                                                                      PAGE
                                                                      ----


AUDITORS' REPORT                                                       F-3


FINANCIAL STATEMENTS

     Balance Sheet - Statement I                                       F-4

     Statement of Shareholders' Deficiency and
        Comprehensive Loss - Statement II                              F-5

     Statement of Operations - Statement III                           F-6

     Statement of Cash Flows - Statement IV                            F-7


NOTES TO FINANCIAL STATEMENTS                                       F-8 - F-16
















                                       F-2
<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,  2002  and  the   statements  of   shareholders'   deficiency  and
comprehensive  loss,  operations  and cash flows for the year then ended.  These
financial  statements are the  responsibility of the company's  management.  Our
responsibility  is to express an opinion on these financial  statements based on
our audit.

We conducted  our audit in  accordance  with United  States  generally  accepted
auditing standards. 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.

In our opinion,  these  financial  statements  present  fairly,  in all material
respects,  the  financial  position  of the  company as at June 30, 2002 and the
results  of its  operations  and its  cash  flows  for the  year  then  ended in
accordance with United States generally accepted accounting principles.

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







North York, Ontario
September 24, 2002                                         Chartered Accountants




                                       F-3
<PAGE>




<TABLE>
<CAPTION>
INNOFONE.COM, INCORPORATED                                           Statement I
Balance Sheet
(Stated in United States Dollars)
As at June 30, 2002
=========================================================================================
                                                           2002                2001
-----------------------------------------------------------------------------------------


<S>                                                  <C>                 <C>
ASSETS
     Current
        Prepaid expenses and deposits                $        -          $          225
-----------------------------------------------------------------------------------------

     Capital Assets                                           -                     441
     Investment in 908651 Alberta Ltd.                      210,000                 -
-----------------------------------------------------------------------------------------

                                                     $      210,000      $          666
=========================================================================================


LIABILITIES
     Current
        Bank indebtedness                            $        -          $          546
        Accounts payable and accrued liabilities            212,572             232,510
        Due to officers and directors (note 3)              104,000             284,470
        Convertible debt (note 4)                           500,000           1,116,000
        Note payable (note 5)                               150,000             150,000
-----------------------------------------------------------------------------------------
                                                            966,572           1,783,526
-----------------------------------------------------------------------------------------

SHAREHOLDERS' DEFICIENCY

     CAPITAL STOCK (note 6)
        Common shares                                     4,841,522           4,772,715
        Preferred shares                                      1,250               1,250
        Additional paid-in capital                        7,719,593           7,098,052
-----------------------------------------------------------------------------------------
                                                         12,562,365          11,872,017

     (DEFICIT) - Statement II                           (13,318,937)        (13,654,877)
-----------------------------------------------------------------------------------------
                                                           (756,572)         (1,782,860)
-----------------------------------------------------------------------------------------

                                                     $      210,000      $          666
=========================================================================================
</TABLE>

ON BEHALF OF THE BOARD:

/s/
--------------------------------




{See accompanying notes.}
                                       F-4
<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, 2002
====================================================================================================================================

                                                                                                        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
Other comprehensive income, net of tax:                  -          -            -        (1,819,095)           -        (1,819,095)
      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 7)             -          -          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)
====================================================================================================================================
</TABLE>







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




<TABLE>
<CAPTION>
INNOFONE.COM, INCORPORATED                                         Statement III
Statement of Operations
(Stated in United States Dollars)
For The Year Ended June 30, 2002
============================================================================================

                                                               2002               2001
--------------------------------------------------------------------------------------------
                                                                               (note 12)

<S>                                                      <C>
SALES                                                    $         -

COST OF SALES                                                      -
--------------------------------------------------------------------------------------------

GROSS PROFIT                                                       -
--------------------------------------------------------------------------------------------


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

                                                                335,940
--------------------------------------------------------------------------------------------

NET INCOME FOR THE YEAR                                  $      335,940
============================================================================================


BASIC NET INCOME PER SHARE (note 9)                      $          NIL
============================================================================================


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















{See accompanying notes.}
                                       F-6
<PAGE>




<TABLE>
<CAPTION>
INNOFONE.COM, INCORPORATED                                          Statement IV
Statement of Cash Flows
(Stated in United States Dollars)
For The Year Ended June 30, 2002
===========================================================================================
                                                              2002               2001
-------------------------------------------------------------------------------------------
                                                                              (note 12)

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

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

                                                               316,227
-------------------------------------------------------------------------------------------

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

                                                              (106,668)
-------------------------------------------------------------------------------------------

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

                                                              (209,559)

EFFECT OF EXCHANGE RATE CHANGES ON CASH                           -
-------------------------------------------------------------------------------------------


INCREASE (DECREASE) IN CASH                                        NIL


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


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









{See accompanying notes.}
                                       F-7
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


Innofone.com, Incorporated (the "Company") is incorporated under the laws of the
State of Nevada.  Effective October 15, 2001, the Company acquired Digital Micro
Distribution  Canada  Incorporated  ("DMD Canada") which operates in Canada as a
reseller of used computer  related  products.  DMD Canada,  the Company's  legal
subsidiary was sold pursuant to an agreement of purchase and sale dated June 11,
2002.  The Company is currently  working on a strategy to raise capital in order
to  expand  its   business   model  of   reselling   used   computer   equipment
internationally.


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

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

     The company  currently 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 is  current or future  obligations
     cannot be determined.

     Acquisition and Disposition of Digital Micro Distribution Inc.
     --------------------------------------------------------------

     On October 15, 2001, the directors of the Company approved a share exchange
     takeover  bid  whereby;   all  of  the  common   shares  of  Digital  Micro
     Distribution  Canada Inc.  ("DMD  Canada")  were  acquired in exchange  for
     67,000,000  shares of its  common  stock.  The  exchanged  shares  would be
     "restricted  securities"  as defined under Rule 144(A) under the Securities
     Act of 1993, as amended.  The result of this transaction is that the former
     shareholder of DMD Canada would hold 67% of the  outstanding  common shares
     of the Company.

     Pursuant to an agreement dated June 11, 2002 between the Company and 908651
     Alberta Ltd.  operating as Qvest Management  Group  ("Qvest"),  the Company
     disposed  of its  interest  in Digital  Micro  Distribution  Canada Inc. in
     exchange  for  1,750,000  shares  of  Qvest.  This  investment   represents
     approximately a 13.5% interest in Qvest. Qvest has undertaken to amalgamate
     with  another  public  company by  reverse  takeover  within 6 months  upon
     meeting  the  criteria  for a  qualifying  transaction  for a company  with
     approval  from  the  TSX  Venture  Exchange.  The  value  of the  Company's
     investment in Qvest has been recorded at the approximate  book value of DMD
     Canada as at the date of the transaction.

     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.





                                       F-8
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


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.

     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.




                                       F-9
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


3.   DUE TO OFFICERS AND DIRECTORS
     -----------------------------

     Amounts  are  due to one of the  directors,  personally,  as well as to his
     related company.  The terms are non-interest  bearing,  due upon demand and
     have no fixed terms of repayment.


4.   CONVERTIBLE DEBT
     ----------------

a)   On November 16, 2000, the Company raised $100,000 through a subscription of
     8%  unsecured  promissory  notes,  which were due  November  15,  2001.  On
     December 16, 2000, the Company raised $100,000 through a subscription of 8%
     unsecured  promissory  notes,  which  were  due  November  15,  2001.  Both
     subscriptions  for notes were  converted into shares of common stock of the
     Company with a par value of $0.001 at a price of $0.30 per share. 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 $0.40 per share
     until March 18, 2003.  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.

b)   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.

     The  Company  was not in a position  to repay the set-up fee on January 19,
     2002,  and ePhone is currently in the process of negotiating to convert the
     loan into 2,000,000 common shares of company stock.

c)   On June 1, 2000, the Company raised $416,000 through the subscription of 8%
     unsecured convertible promissory notes, which were due on June 1, 2001. The
     notes were  convertible  into shares of common  stock of the Company with a
     par value of $0.001 per share at a price of $0.80 per share. The notes also
     included a warrant to  purchase  one share of common  stock of the  Company
     with a par value of $0.001 at a price of $0.80  (amended  from the  initial
     price of $1.50)  per share for each $0.80 of notes  purchased  on or before
     June 30, 2002 (amended  from the initial date of June 30,  2001).  The fair
     value of the  warrants at the issuance  date was nominal.  The total market
     value of the  Company's  shares of common stock at the dates when the notes
     were signed was less than the total conversion price. Therefore,  there was
     no embedded beneficial conversion feature.





                                      F-10
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


5.   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, 2001 and the  Company is  currently  in the  process of  negotiating  to
     convert the loan into 300,000 common shares of company stock.


6.   CAPITAL STOCK
     -------------

     The number of  outstanding  shares of the  Company  as at June 30,  2002 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
     -------------------------------------------------------------------------------
</TABLE>





                                      F-11
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


6.   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.

     As at June 30,  2002,  all of the  Company's  outstanding  shares of common
     stock are restricted from resale. However,  approximately 20,750,000 shares
     of  outstanding  common  stock  has  been  held  for  more  than 2 years by
     non-affiliates,  and therefore,  may be freely sold in reliance on Rule 144
     of the Securities Act. Additional  10,464,237 shares of common stock may be
     sold in  compliance  with certain  volume  restrictions  and manner of sale
     limitations  under Rule 144.  These  figures do not take into account stock
     that may be issued  pursuant to  outstanding  warrants and options and upon
     the conversion of convertible promissory notes into common stock.


7.   STOCK OPTIONS
     -------------

     At June 30, 2002, 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
     2002.





                                      F-12
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


7.   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  CSO Plan,  the Company has  outstanding  160,000
     stock  options to  directors  and  employees  for the purchase of shares of
     common stock  ranging from $0.25 to $0.50 per share,  expiring from January
     12, 2002 to  February  9, 2003 and  vesting  either on the date of grant or
     periods up to 12 months after the date of grant.

     Pursuant to the Company's ESC 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
     -------------------------------------------------------------------------------------------
</TABLE>




                                      F-13
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


7.   STOCK OPTIONS (continued)
     -------------------------

     The weighted average remaining contractual life for all outstanding options
     is approximately one half year.

     The fair value of each option was  estimated on the date of grant using the
     Black-Scholes option pricing model with the following assumptions: dividend
     yield of 0%,  expected  volatility  of  100%,  risk-free  interest  rate of
     approximately 6% and expected life of two years.


8.   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,  2002 and 2001.  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
                                                           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
     ---------------------------------------------------------------------------








                                      F-14
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


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

                                                         Carrying        Fair
                                                          Amount        Value
                                                           2001          2001
     ---------------------------------------------------------------------------

     Financial Assets
        Deposits                                        $      225   $      225

     Financial Liabilities
        Bank indebtedness                                      546          546
        Accounts payable and accrued liabilities           232,510      232,510
        Due to officers and directors                      284,470      284,470
        Note payable                                       150,000      150,000
        Convertible debt                                 1,116,000    1,116,000
     ---------------------------------------------------------------------------

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

     (i)  Deposits, bank indebtedness, 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-15
<PAGE>




INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2002
================================================================================


9.   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.


10.  INCOME TAXES
     ------------

     As at June 30, 2002 the  company  had not filed  income tax returns for the
     years ending 1999 through  2002.  No income tax provision has been recorded
     for fiscal 2002.


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

     During the year, the Company issued  1,186,668 common shares in exchange of
     $616,600 convertible debt.


12.  COMPARATIVE FIGURES
     -------------------

     The  prior  period  figures  were  audited  by  another  firm of  Chartered
     Accountants.

     The 2001  statement of operations and cash flows have not been presented in
     these financial statements as the 2001 figures represented the consolidated
     operations  and  cash  flows  of the  Company  and its  subsidiary.  As the
     subsidiary  declared  bankruptcy in 2001, the comparative figures would not
     be meaningful to the readers of these financial statements.









                                      F-16