UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM 10-Q


x
            QUARTERLY REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
      1934


For
the quarter ended March 31, 2010





-OR-




 ̈
            TRANSITION REPORT PURSUANT TO
      SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF
      1934


For
the transition period
from                               to




Commission File Number 0-50164


INNOCOM
TECHNOLOGY HOLDINGS, INC.


(Exact
Name of small business issuer as specified in Its charter)




NEVADA
                
                87-0618756(State
      or other jurisdiction of
                
                (I.R.S.
      Employer Identification No.)incorporation
      or organization)




Suite
      901 Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong,
      PRC
                    (Address
      of principal executive offices)
                  
                  (Zip
      code)





Issuer’s
telephone number, including area code: (852) 3102 1602





(Former
name, former address or former fiscal year, if changed since last
report)





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


Yesþ      No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of “accelerated
filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act.





Large
accelerated filer  ̈     Accelerated
filer  ̈     Non-accelerated
filer  ̈     Smaller
reporting company þ





Indicate
by check mark whether the registrant is a shell company (as defined in Rue
12b-2of the Exchange Act).


Yes   ̈   No þ


The
number of shares outstanding of each of the Registrant’s classes of common
stock, as of May 18, 2010 was 37,898,251 shares, all of one class of $0.001 par
value Common Stock.









INNOCOM
TECHNOLOGY HOLDINGS, INC.


FORM
10-Q


Quarter
Ended March 31, 2010


TABLE
OF CONTENTS





PagePART
      I— FINANCIAL INFORMATIONItem
      1
                  Financial
      StatementsCondensed
      Consolidated Balance Sheets as of March 31, 2010 (unaudited)
                    and
      December 31, 2009 (audited)
                  F-2Condensed
      Consolidated Statements of Operations and Comprehensive (Loss) Income for
      the Three Months Ended March 31, 2010 and 2009 (unaudited)
                  F-3Condensed
      Consolidated Statements of Cash Flows for the
                    Three
      Months Ended March 31, 2010 and 2009 (unaudited)
                  F-4Condensed
      Consolidated Statement of Stockholders’ Deficit for the
                    Three
      Months Ended March 31, 2010 (unaudited)
                  F-5Notes
      to Condensed Consolidated Financial Statements
                  F-6 – F-12Item
      2
                  Managements
      Discussion and Analysis of Financial Condition and
                    Results
      of Operation
                  4Item
      3
                  Quantitative
      and Qualitative Disclosures About Market Risk
                  7Item
      4T
                  Controls
      and Procedures
                  7PART
      II—OTHER INFORMATIONItem
      1
                  Legal
      Proceedings
                  7Item
      1A
                  Risk
      Factors
                  7Item
      2
                  Unregistered
      Sales of Equity Securities and Use of Proceeds
                  7Item
      3
                  Defaults
      Upon Senior Securities
                  7Item
      4
                  Submission
      of Matters to a Vote of Security Holders
                  8Item
      5
                  Other
      Information
                  8Item
      6
                  Exhibits
                  8SIGNATURES
                  8




2




SPECIAL
NOTE ON FORWARD LOOKING STATEMENTS





This
Quarterly Report on Form 10-Q, including "Management's Discussion and Analysis
of Financial Condition and Results of Operations" in Item 2 of Part I of this
report include forward-looking statements. These statements involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance, or
achievements expressed or implied by forward-looking statements.





In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "proposed," "intended," or "continue" or the negative
of these terms or other comparable terminology. You should read statements that
contain these words carefully, because they discuss our expectations about our
future operating results or our future financial condition or state other
"forward-looking" information. There may be events in the future that we are not
able to accurately predict or control. Before you invest in our securities, you
should be aware that the occurrence of any of the events described in this
Annual Report could substantially harm our business, results of operations and
financial condition, and that upon the occurrence of any of these events, the
trading price of our securities could decline and you could lose all or part of
your investment. Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
growth rates, levels of activity, performance or achievements. We are under no
duty to update any of the forward-looking statements after the date of this
Quarterly Report to conform these statements to actual results.




3




PART
I.         FINANCIAL
INFORMATION





ITEM
 1.  Financial Statements





INNOCOM
TECHNOLOGY HOLDINGS, INC.





INDEX
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





(UNAUDITED)





PageCondensed
      Consolidated Balance Sheets as of March 31, 2010 and December 31,
      2009
                  
                  F-2Condensed
      Consolidated Statements of Operations And Comprehensive Loss for the Three
      Months ended March 31, 2010 and 2009
                  
                  F-3Condensed
      Consolidated Statements of Cash Flows for the Three Months ended March 31,
      2010 and 2009
                  
                  F-4Condensed
      Consolidated Statement of Stockholders’ Deficit for the Three Months ended
      March 31, 2010
                  
                  F-5Notes
      to Condensed Consolidated Financial Statements
                  
                  F-6 – F-12




F-1




INNOCOM
TECHNOLOGY HOLDINGS, INC.


CONDENSED
CONSOLIDATED BALANCE SHEETS


AS
OF MARCH 31, 2010 AND DECEMBER 31, 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)





March 31, 2010
                        
                        
                        December 31, 2009(Unaudited)
                        
                        
                        (Audited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                        
                        $
                        7,797
                        
                        
                        $
                        7,548Prepayments
      and other receivables
                        
                        
                        55,149
                        
                        
                        
                        72,850Total
      current assets
                        
                        
                        62,946
                        
                        
                        
                        80,398Non-current
      assets:Property,
      plant and equipment, net
                        
                        
                        737,382
                        
                        
                        
                        734,738TOTAL
      ASSETS
                        
                        $
                        800,328
                        
                        
                        $
                        815,136LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      liabilities:Accounts
      payable
                        
                        $
                        80,710
                        
                        
                        $
                        80,696Amount
      due to a related party
                        
                        
                        4,580,097
                        
                        
                        
                        4,448,351Other
      payables and accrued liabilities
                        
                        
                        205,521
                        
                        
                        
                        262,909Total
      current liabilities
                        
                        
                        4,866,328
                        
                        
                        
                        4,791,956Commitments
      and contingenciesStockholders’
      deficit:Common
      stock, $0.001 par value; 50,000,000 shares authorized; 37,898,251 shares
      issued and outstanding as of March 31, 2010 and December 31,
      2009
                        
                        
                        37,898
                        
                        
                        
                        37,898Additional
      paid-in capital
                        
                        
                        6,901,232
                        
                        
                        
                        6,901,232Accumulated
      other comprehensive income
                        
                        
                        528,994
                        
                        
                        
                        531,230Accumulated
      deficit
                        
                        
                        (11,534,124
                        )
                        
                        
                        (11,447,180
                        )Total
      stockholders’ deficit
                        
                        
                        (4,066,000
                        )
                        
                        
                        (3,976,820
                        )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                        
                        $
                        800,328
                        
                        
                        $
                        815,136





See
accompanying notes to condensed consolidated financial statements.




F-2




INNOCOM
TECHNOLOGY HOLDINGS, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE LOSS


FOR
THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





Three months ended March 31,2010
                              
                              
                              2009Revenues,
      net
                              
                              $
                              -
                              
                              
                              $
                              -Cost
      of revenue
                              
                              
                              -
                              
                              
                              
                              -Gross
      profit
                              
                              
                              -
                              
                              
                              
                              -Operating
      expenses:General
      and administrative
                              
                              
                              86,944
                              
                              
                              
                              115,788Total
      operating expenses
                              
                              
                              86,944
                              
                              
                              
                              115,788LOSS
      BEFORE INCOME TAXES
                              
                              
                              (86,944
                              )
                              
                              
                              (115,788
                              )Income
      tax expense
                              
                              
                              -
                              
                              
                              
                              -NET
      LOSS
                              
                              $
                              (86,944
                              )
                              
                              $
                              (115,788
                              )Other
      comprehensive (loss) income:Foreign
      currency translation (loss) gain
                              
                              
                              (2,236
                              )
                              
                              
                              5,471COMPREHENSIVE
      LOSS
                              
                              $
                              (89,180
                              )
                              
                              $
                              (110,317
                              )Net
      loss per share – Basic and diluted
                              
                              $
                              (0.00
                              )
                              
                              $
                              (0.00
                              )Weighted
      average shares outstanding – Basic and diluted
                              
                              
                              37,898,251
                              
                              
                              
                              37,898,251





See
accompanying notes to condensed consolidated financial statements.




F-3




INNOCOM
TECHNOLOGY HOLDINGS, INC.


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009


(Currency
expressed in United States Dollars (“US$”))


(Unaudited)





Three months ended March 31,2010
                                      
                                      
                                      2009Cash
      flows from operating activities:Net
      loss
                                      
                                      $
                                      (86,944
                                      )
                                      
                                      $
                                      (115,788
                                      )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                                      
                                      
                                      841
                                      
                                      
                                      
                                      788Change
      in operating assets and liabilities:Prepayments
      and other receivables
                                      
                                      
                                      17,701
                                      
                                      
                                      
                                      -Accounts
      payable
                                      
                                      
                                      14
                                      
                                      
                                      
                                      -Other
      payables and accrued liabilities
                                      
                                      
                                      (57,388
                                      )
                                      
                                      
                                      8,463Net
      cash used in operating activities
                                      
                                      
                                      (125,776
                                      )
                                      
                                      
                                      (106,537
                                      )Cash
      flows from investing activities:Payment
      on plant and equipment
                                      
                                      
                                      (3,363
                                      )
                                      
                                      
                                      -Net
      cash used in investing activities
                                      
                                      
                                      (3,363
                                      )
                                      
                                      
                                      -Cash
      flows from financing activities:Advances
      from a related party
                                      
                                      
                                      131,746
                                      
                                      
                                      
                                      97,387Net
      cash provided by financing activities
                                      
                                      
                                      131,746
                                      
                                      
                                      
                                      97,387Effect
      of exchange rate changes on cash and cash equivalents
                                      
                                      
                                      (2,358
                                      )
                                      
                                      
                                      6,300Net
      change in cash and cash equivalents
                                      
                                      
                                      249
                                      
                                      
                                      
                                      (2,850
                                      )CASH
      AND CASH EQUIVALENT, BEGINNING OF PERIOD
                                      
                                      
                                      7,548
                                      
                                      
                                      
                                      11,553CASH
      AND CASH EQUIVALENT, END OF PERIOD
                                      
                                      $
                                      7,797
                                      
                                      
                                      $
                                      8,703SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid for income taxes
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -Cash
      paid for interest
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -





See
accompanying notes to condensed consolidated financial statements.




F-4




INNOCOM
TECHNOLOGY HOLDINGS, INC.


CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT


FOR
THE THREE MONTHS ENDED MARCH 31, 2010


(Currency
expressed in United States Dollars (“US$”), except for number of
shares)


(Unaudited)





Common stock
                      
                      
                      Additional
                      
                      
                      Accumulated
                        other
                        comprehensive
                      
                      
                      Accumulated
                      
                      
                      Total
                        stockholders’No. of shares
                      
                      
                      Amount
                      
                      
                      paid-in capital
                      
                      
                      (loss) income
                      
                      
                      deficit
                      
                      
                      deficitBalance
      as of December 31, 2009
                      
                      
                      37,898,251
                      
                      
                      $
                      37,898
                      
                      
                      $
                      6,901,232
                      
                      
                      $
                      531,230
                      
                      
                      $
                      (11,447,180
                      )
                      
                      $
                      (3,976,820
                      )Net
      loss for the period
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (86,944
                      )
                      
                      
                      (86,944
                      )Foreign
      currency translation adjustment
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (2,236
                      )
                      
                      
                      -
                      
                      
                      
                      (2,236
                      )Balance
      as of March 31, 2010
                      
                      
                      37,898,251
                      
                      
                      $
                      37,898
                      
                      
                      $
                      6,901,232
                      
                      
                      $
                      528,994
                      
                      
                      $
                      (11,534,124
                      )
                      
                      $
                      (4,066,000
                      )





See
accompanying notes to condensed consolidated financial statements.




F-5




INNOCOM
TECHNOLOGY HOLDINGS, INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE THREE MONTHS ENDED MARCH 31, 2010


(Currency
expressed in United States Dollars (“US$”))


(Unaudited)





NOTE
      - 1
            BASIS
      OF PRESENTATION





The
accompanying unaudited condensed consolidated financial statements have been
prepared by management in accordance with both accounting principles generally
accepted in the United States (“GAAP”), and the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Certain information and note disclosures normally
included in audited financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to those
rules and regulations, although the Company believes that the disclosures made
are adequate to make the information not misleading.





In the
opinion of management, the consolidated balance sheet as of December 31, 2009
which has been derived from audited financial statements and these unaudited
condensed consolidated financial statements reflect all normal and recurring
adjustments considered necessary to state fairly the results for the periods
presented. The results for the period ended March 31, 2010 are not necessarily
indicative of the results to be expected for the entire fiscal year ending
December 31, 2010 or for any future period.





These
unaudited condensed consolidated financial statements and notes thereto should
be read in conjunction with the Management’s Discussion and the audited
financial statements and notes thereto included in the Annual Report on Form
10-K for the year ended December 31, 2009.




NOTE
      - 2
            ORGANIZATION
      AND BUSINESS BACKGROUND





Innocom
Technology Holdings, Inc. (the “Company” or “INCM”) was incorporated in the
State of Nevada on June 26, 1998. On June 20, 2006, the Company changed its name
from “Dolphin Productions, Inc.” to “Innocom Technology Holdings,
Inc.”





The
Company, through its subsidiaries, is principally engaged in trading and
manufacture of mobile phone handsets and components in Hong Kong and the
People’s Republic of China (“the PRC”).





In
February 2009, the Company has temporarily ceased its planned principal
operation in the manufacturing facility in Changzhou City, Zhejiang Province,
the PRC. Starting from the fourth quarter 2008, global economic conditions have
deteriorated significantly across the countries and the demand for communication
products and components was adversely slowed down. During such challenging
economic times, the Company temporarily discontinued operation in the
manufacture of mobile communication products and components in the PRC. The
Company intends to continue to operate the manufacturing facility depending upon
the market recovery condition and demands from the customers.





INCM and
its subsidiaries are hereinafter referred to as (the “Company”).





NOTE
      - 3
            GOING
      CONCERN UNCERTAINTIES





The
accompanying condensed consolidated financial statements have been prepared
using the going concern basis of accounting, which contemplates the realization
of assets and the satisfaction of liabilities in the normal course of
business.




F-6




INNOCOM
TECHNOLOGY HOLDINGS, INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE THREE MONTHS ENDED MARCH 31, 2010


(Currency
expressed in United States Dollars (“US$”))


(Unaudited)





For the
three months ended March 31, 2010, the Company has experienced a net loss of
$86,944 with an accumulated deficit of $11,534,124 as of that date. The
continuation of the Company as a going concern through March 31, 2011 is
dependent upon the continued financial support from its stockholders. Management
believes this funding will continue, and is also actively seeking new investors.
Management believes the existing stockholders will provide the additional cash
to meet the Company’s obligations as they become due, and will allow its planned
principal business to commence and assembly the production lines of mobile
handsets and components in the PRC.





These
factors raise substantial doubt about the Company’s ability to continue as a
going concern. These condensed consolidated financial statements do not include
any adjustments to reflect the possible future effects on the recoverability and
classification of assets and liabilities that may result in the Company not
being able to continue as a going concern.




NOTE
      - 4
            SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES





The
accompanying condensed consolidated financial statements reflect the application
of certain significant accounting policies as described in this note and
elsewhere in the accompanying condensed consolidated financial statements and
notes.





l
            Use
      of estimates





In
preparing these condensed consolidated financial statements, management makes
estimates and assumptions that affect the reported amounts of assets and
liabilities in the balance sheets and revenues and expenses during the periods
reported. Actual results may differ from these estimates.





l
            Basis
      of consolidation





The
condensed consolidated financial statements include the financial statements of
INCM and its subsidiaries. All significant inter-company balances and
transactions within the Company have been eliminated upon
consolidation.





l
            Revenue
      recognition





The
Company will recognize its revenue in accordance with the ASC Topic 605, "Revenue Recognition".
Revenue will be recognized upon shipment, provided that evidence of an
arrangement exists, title and risk of loss have passed to the customer, fees are
fixed or determinable and collection of the related receivable is reasonably
assured. Revenue will be recorded net of taxes and estimated product returns,
which is based upon the Company's return policy, sales agreements, management
estimates of potential future product returns related to current period revenue,
current economic trends, changes in customer composition and historical
experience.





l
            Cash
      and cash equivalents





Cash and
cash equivalents are carried at cost and represent cash on hand, demand deposits
placed with banks or other financial institutions and all highly liquid
investments with an original maturity of three months or less as of the purchase
date of such investments.





l
            Property,
      plant and equipment, net





Property,
plant and equipment are stated at cost less accumulated depreciation and
accumulated impairment losses, if any. Depreciation is calculated on the
straight-line basis (after taking into account their respective estimated
residual values) over the following expected useful lives from the date on which
they become fully operational:




F-7




INNOCOM
TECHNOLOGY HOLDINGS, INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE THREE MONTHS ENDED MARCH 31, 2010


(Currency
expressed in United States Dollars (“US$”))


(Unaudited)





Depreciable life
                    
                    Residual valuePlant
      and machinery
                    
                    5-10
      years
                    
                    
                    5
                    %Furniture,
      fixtures and office equipment
                    
                    5
      years
                    
                    
                    5
                    %Leasehold
      improvement
                    
                    2
      years
                    
                    
                    0
                    %





Expenditure
for repairs and maintenance is expensed as incurred. When assets have retired or
sold, the cost and related accumulated depreciation are removed from the
accounts and any resulting gain or loss is recognized in the results of
operations.





Depreciation
expense was $841 and $788 for the three months ended March 31, 2010 and 2009,
respectively.





l
            Valuation
      of long-lived assets





In
accordance with Accounting Standards Codification (“ASC”) Topic 360-10-5, “Impairment or Disposal of Long-Lived
Assets”, the Company periodically reviews long-lived assets for
impairment whenever events or changes in business circumstances indicate that
the carrying amount of the assets may not be fully recoverable or that the
useful lives are no longer appropriate. Each impairment test is based on a
comparison of the undiscounted cash flows to the recorded value of the asset. If
an impairment is indicated, the asset is written down to its estimated fair
value based on a discounted cash flow analysis. Determining the fair value of
long-lived assets includes significant judgment by management, and different
judgments could yield different results. There has been no impairment as of
March 31, 2010.





l
            Comprehensive
      income or loss





ASC Topic
220,“Comprehensive
Income” establishes standards for reporting and display of comprehensive
income or loss, its components and accumulated balances. Comprehensive income or
loss as defined includes all changes in equity during a period from non-owner
sources. Accumulated comprehensive income or loss, as presented in the
accompanying consolidated statement of stockholders’ deficit consists of changes
in unrealized gains and losses on foreign currency translation. This
comprehensive income or loss is not included in the computation of income tax
expense or benefit.





l
            Income
      taxes





The
Company adopts the ASC Topic 740, “Income Taxes”, regarding
accounting for uncertainty in income taxes which prescribes the recognition
threshold and measurement attributes for financial statement recognition and
measurement of tax positions taken or expected to be taken on a tax return. In
addition, the guidance requires the determination of whether the benefits of tax
positions will be more likely than not sustained upon audit based upon the
technical merits of the tax position. For tax positions that are determined to
be more likely than not sustained upon audit, a company recognizes the largest
amount of benefit that is greater than 50% likely of being realized upon
ultimate settlement in the financial statements. For tax positions that are not
determined to be more likely than not sustained upon audit, a company does not
recognize any portion of the benefit in the financial statements. The guidance
provides for de-recognition, classification, penalties and interest, accounting
in interim periods and disclosure.





The
Company did not have any unrecognized tax positions or benefits and there was no
effect on the financial condition or results of operations for the three months
ended March 31, 2010. The Company and its subsidiaries are subject to local and
various foreign tax jurisdictions. The Company’s tax returns remain open subject
to examination by major tax jurisdictions.




F-8




INNOCOM
TECHNOLOGY HOLDINGS, INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE THREE MONTHS ENDED MARCH 31, 2010


(Currency
expressed in United States Dollars (“US$”))


(Unaudited)





l
            Net
      loss per share





The
Company calculates net loss per share in accordance with ASC Topic 260,“Earnings per Share”. Basic
loss per share is computed by dividing the net loss by the weighted-average
number of common shares outstanding during the period. Diluted loss per share is
computed similar to basic loss per share except that the denominator is
increased to include the number of additional common shares that would have been
outstanding if the potential common stock equivalents had been issued and if the
additional common shares were dilutive.





l
            Foreign
      currencies translation





Transactions
denominated in currencies other than the functional currency are translated into
the functional currency at the exchange rates prevailing at the dates of the
transaction. Monetary assets and liabilities denominated in currencies other
than the functional currency are translated into the functional currency using
the applicable exchange rates at the balance sheet dates. The resulting exchange
differences are recorded in the statement of operations.





The
reporting currency of the Company is United States Dollars ("US$"). The
Company’s subsidiaries operating in Hong Kong and the PRC maintained their books
and records in their local currency, Hong Kong Dollars ("HK$") and Renminbi Yuan
(“RMB”), which are functional currencies as being the primary currency of the
economic environment in which these entities operate.





In
general, assets and liabilities are translated into US$, in accordance with ASC
Subtopic 830-30 “Translation
of Financial Statement”, using the exchange rate on the balance sheet
date. Revenues and expenses are translated at average rates prevailing during
the period. The gains and losses resulting from translation of financial
statements of foreign subsidiaries are recorded as a separate component of
accumulated other comprehensive income within the statement of stockholders’
equity.





Translation
of amounts from HK$ into US$1 has been made at the following exchange rates for
the respective period:


March 31, 2010
                  
                  
                  March 31, 2009Period-end
      RMB:US$1 exchange rate
                  
                  
                  6.8159
                  
                  
                  
                  6.8293Average
      period RMB:US$1 exchange rate
                  
                  
                  6.8193
                  
                  
                  
                  6.8252Period-end
      HK$:US$1 exchange rate
                  
                  
                  7.7647
                  
                  
                  
                  7.7505Average
      period HK$:US$1 exchange rate
                  
                  
                  7.7639
                  
                  
                  
                  7.7547





l
            Related
      parties





Parties,
which can be a corporation or individual, are considered to be related if the
Company has the ability, directly or indirectly, to control the other party or
exercise significant influence over the other party in making financial and
operating decisions. Companies are also considered to be related if they are
subject to common control or common significant influence.





l
            Fair
      value measurement





ASC Topic
820, “Fair Value Measurements
and Disclosures” ("ASC 820") establishes a new framework for measuring
fair value and expands related disclosures. Broadly, ASC 820 framework requires
fair value to be determined based on the exchange price that would be received
for an asset or paid to transfer a liability (an exit price) in the principal or
most advantageous market for the asset or liability in an orderly transaction
between market participants. ASC 820 establishes a three-level valuation
hierarchy based upon observable and non-observable inputs. These tiers include:
Level 1, defined as observable inputs such as quoted prices in active markets;
Level 2, defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and Level 3, defined as unobservable
inputs in which little or no market data exists, therefore requiring an entity
to develop its own assumptions.




F-9


INNOCOM
TECHNOLOGY HOLDINGS, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE THREE MONTHS ENDED MARCH 31, 2010
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 For
financial assets and liabilities, fair value is the price the Company would
receive to sell an asset or pay to transfer a liability in an orderly
transaction with a market participant at the measurement date. In the absence of
active markets for the identical assets or liabilities, such measurements
involve developing assumptions based on market observable data and, in the
absence of such data, internal information that is consistent with what market
participants would use in a hypothetical transaction that occurs at the
measurement date.
 
 l
              Financial
      instruments
 
 Cash and
cash equivalents, prepayments and other receivables, accounts payable, amount
due to a related party, other payables and accrued liabilities, are carried at
cost which approximates fair value.
 
 l
              Recent
      accounting pronouncements
 
 The
Company has reviewed all recently issued, but not yet effective, accounting
pronouncements and does not believe the future adoption of any such
pronouncements may be expected to cause a material impact on its financial
condition or the results of its operations.
 
 In June
2009, the Financial Accounting Standards Board (“FASB”) expanded ASC 810-10, to
provide guidance for variable interest entities (VIEs). The change modifies our
approach for determining the primary beneficiary of a VIE by assessing whether
we have control over such entities. This change is effective for us on July 1,
2010. The Company is currently evaluating the requirements of the VIE provisions
of ASC 810-10, but does not expect a material impact on its condensed
consolidated financial statements.
 
 In
October 2009, the FASB issued Accounting Standard Update (ASU) No. 2009-13,
“Revenue Recognition”
(Topic 605). The accounting standard update addresses the accounting for
multiple-deliverable arrangements to enable vendors to account for products or
services separately rather than as a combined unit. Specifically, this subtopic
addresses how to separate deliverables and how to measure and allocate
arrangement consideration to one or more units of accounting. ASU 2009-13 will
be effective for us on July 1, 2010. The Company is currently evaluating the
requirements of ASU 2009-13, but do not expect a material impact on its
condensed consolidated financial statements.
 
 FASB ASC
810, “Consolidation”
(“ASC 810”), establishes accounting and reporting standards for minority
interests, which are recharacterized as noncontrolling interests. ASC 810 was
revised so that noncontrolling interests are classified as a component of equity
separate from the parent’s equity; purchases or sales of equity interests that
do not result in a change in control are accounted for as equity transactions;
net income attributable to the noncontrolling interest are included in
consolidated net income in the statement of operations; and upon a loss of
control, the interest sold, as well as any interest retained, is recorded at
fair value, with any gain or loss recognized in earnings. This revision was
effective for the Company as of January 1, 2009. It applies prospectively,
except for the presentation and disclosure requirements, for which it applies
retroactively. In addition, ASC 810, amends the consolidation guidance
applicable to variable interest entities. The amendments will significantly
affect the overall consolidation analysis under ASC 810. This phase of ASC 810
became effective for the Company on January 1, 2010 and did not impact the
Company’s consolidation conclusions for its variable interest
entities.
  F-10


INNOCOM
TECHNOLOGY HOLDINGS, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE THREE MONTHS ENDED MARCH 31, 2010
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 In
January 2010, the FASB issued an amendment to the fair value measurement and
disclosure standard improving disclosures about fair value measurements. This
amended guidance requires separate disclosure of significant transfers in and
out of Levels 1 and 2 and the reasons for the transfers. The amended guidance
also requires that in the Level 3 reconciliation, the information about
purchases, sales, issuances and settlements be disclosed separately on a gross
basis rather than as one net number. The guidance for the Level 1 and 2
disclosures was adopted on January 1, 2010, and did not have an impact on our
consolidated financial position, results of operations or cash flows. The
guidance for the activity in Level 3 disclosures is effective January 1, 2011,
and will not have an impact on our consolidated financial position, results of
operations or cash flows as the amended guidance provides only disclosure
requirements. The Company had no significant transfers between Level 1, 2 or 3
inputs during the quarter ended March 31, 2010.
 
 In
February 2010, the FASB issued amended guidance on subsequent events. Under this
amended guidance, SEC filers are no longer required to disclose the date through
which subsequent events have been evaluated in originally issued and revised
financial statements. This guidance was effective immediately and the Company
adopted these new requirements for the quarter ended March 31,
2010.
 
 NOTE
      - 5
              AMOUNT
      DUE TO A RELATED PARTY
 
 As of
March 31, 2010, a balance of $4,580,097 due to a director and a major
shareholder of the Company, Mr. William Hui, represented temporary advance to
the Company which was unsecured, interest-free with no fixed repayment
term.
 
 NOTE
      - 6
              INCOME
      TAXES
 
 The
Company operates in various countries: United States, British Virgin Island,
Hong Kong and the PRC that are subject to taxes in the jurisdictions in which
they operate, as follows:
 
 United
States of America
 
 The
Company is registered in the State of Nevada and is subject to United States
current tax law.
 
 British
Virgin Island
 
 Under the
current BVI law, the Company is not subject to tax on income.
 
 Hong
Kong
 
 For the
three months ended March 31, 2010, no provision for Hong Kong Profits Tax is
provided for since the Company’s income neither arises in, nor is derived from
Hong Kong under its applicable tax law.
 
 The
PRC
 
 With
effect from January 1, 2008, the Company is subject to the unified income rate
of 25% on the taxable income. For the three months ended March 31, 2010, the
Company generated net operating losses and accordingly, no provision for income
tax has been recorded.
  F-11
 
 INNOCOM
TECHNOLOGY HOLDINGS, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE THREE MONTHS ENDED MARCH 31, 2010
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 NOTE
      - 7
              COMMITMENTS
      AND CONTINGENCIES
 
 The
Company currently does not have any formal rent agreements. The Company recorded
and paid rent expense at the current market fair value on a monthly basis under
the lease agreement signed by a related party, which was controlled by the
director and major shareholder of the Company.
 
 Costs
incurred under this operating lease are recorded as rental expense and totaled
approximately $17,000 and $32,954 for the three months ended March 31, 2010 and
2009, respectively.
  F-12
  ITEM
      2.
              MANAGEMENTS
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATION
 
 The
following review concerns three months ended March 31, 2010 and March 31, 2009,
which should be read in conjunction with the financial statements and notes
thereto presented in the Form 10-K.
 
 Forward
Looking Statements
 
 The
information in this discussion contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. These forward-looking
statements involve risks and uncertainties, including statements regarding our
capital needs, business strategy and expectations. Any statements contained
herein that are not statements of historical facts may be deemed to be
forward-looking statements. In some cases, you can identify forward-looking
statements by terminology such as "may", "will", "should", "expect", "plan",
"intend", "anticipate", "believe", "estimate", "predict", "potential" or
"continue", the negative of such terms or other comparable terminology. Actual
events or results may differ materially. We disclaim any obligation to publicly
update these statements, or disclose any difference between its actual results
and those reflected in these statements. The
information constitutes forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995.
 
 History
 
 Innocom
Technology Holdings, Inc. (the “Company” or “INCM”) was incorporated in the
State of Nevada on June 26, 1998.
  On June
20, 2006, the Company changed its name from “Dolphin Productions, Inc.” to
“Innocom Technology Holdings, Inc.”
 
 On
January 19, 2007, Changzhou Innocom Communication Technology Limited is
incorporated and registered in the People’s Republic of China (“the
PRC”).
 
 On May
16, 2007, the Company purchased a 10 years mobile phone manufacturing license in
a consideration of RMB45 million (approximately $5,770,000) and annual license
fee of RMB500,000 (approximately $64,000).
 
 On May 8,
2008, the Company completed the establishment of a new subsidiary, Changzhou
Innocom Communication Technology Limited in the PRC upon the approval of its
local government.
 
 Overview
and Future Plan of Operations
 
 In
February 2009, the Company determined to have a temporary closure in the
manufacturing facility in Changzhou City, Zhejiang Province, the PRC. Starting
from the fourth quarter 2008, global economic conditions have deteriorated
significantly across the countries and the demand for communication products and
components was adversely slowed down. During such challenging economic times,
the Company temporarily discontinued operation in the manufacture of mobile
communication products and components in the PRC. However, the Company did not
intend to dispose by sale and may continue to operate the manufacturing facility
depending upon the market recovery condition in the next 12 months.
 
 Results
of Operations for Three Months ended March 31, 2010 and March 31,
2009
 
 During
the three months ended March 31, 2010, we experienced a net loss of $86,944
compared to a net loss of $115,788 for three months ended March 31,
2009. The loss is attributable to the significant deteriorated environment and
the challenging economic crisis of the period.
  4
  Revenue
  As a
result of temporary discontinue of business and operation in the manufacture of
mobile communication products and components in the PRC, the revenue recorded
zero during both three months ended March 31, 2010 and March 31,
2009.
 
 Cost
of Sales
 
 As a
result of temporary discontinue of business and operation in the manufacture of
mobile communication products and components in the PRC, the cost of sale
recorded zero during both three months ended March 31, 2010 and March 31,
2009.
 
 Administrative
Expenses
 
 Administrative
expenses mainly included office rental charges, salaries and professional
fee.
 
 Below
table sets out the components of non-cash items:
 
 Three Months ended March 31,2010
                  
                  
                  2009Depreciation
                  
                  $
                  841
                  
                  
                  $
                  788
 
 The
depreciation policy adopted in for the fiscal year 2010 was consistent with that
adopted in 2009.
 
 Other
Income
 
 No other
income occurred for both three months ended March 31, 2010 and March 31,
2009.
 
 Net
Loss
 
 Net loss
for the three months ended March 31, 2010 was $86,944 compared to net loss of
$115,788 for the three months ended March 31, 2009. Losses of both periods are
attributable to the significant deteriorated environment and the challenging
economic crisis of the periods.   The decrease of loss for the
three months ended March 31, 2010 is attributable to the decrease of
administrative expenses.
 
 Trends,
Events, and Uncertainties
 
 Starting
from the fourth quarter 2008, global economic conditions have deteriorated
significantly across the countries and the demand for communication products and
components was adversely slowed down. During challenging economic times, the
Company determined to temporarily discontinue operation in the manufacture of
mobile communication products and components in February 2009.
 
 Liquidity
and Capital Resources for Three Months Ended March 31, 2010 and
2009
 
 Cash
flows from operating activities
  We
experienced negative cash flows used in operations in the amount of $125,776 for
three months ended March 31, 2010 as compared with negative cash flow used in
the operations in the amount of $106,537 for three months ended March 31,
2009.
 
 Cash
flows from investing activities
 
 During
three months ended March 31, 2010, we have purchased plant and equipment of
$3,363.
 
 During
three months ended March 31, 2009, there are no investment
activities.
 
 Cash
flows from financing activities
  5
  We
experienced positive cash flow advanced from a related party in the amount of
$131,746 and $97,387 for the three months ended March 31, 2010 and
2009.
 
 Liquidity
 
 On a
long-term basis, our liquidity will be dependent on establishing profitable
operations, receipt of revenues, additional infusions of capital and additional
financing. If necessary, we may raise capital through an equity or debt
offering. The funds raised from this offering will be used to develop and
execute our business plan. However, there can be no assurance that we will be
able to obtain additional equity or debt financing in the future, if at all. If
we are unable to raise additional capital, our growth potential will be
adversely affected. Additionally, we will have to significantly modify our
plans.
 
 Critical
Accounting Policies
 
 The
financial statements are prepared in accordance with accounting principles
generally accepted in the U.S., which requires us to make estimates and
assumptions in certain circumstances that affect amounts reported in the
accompanying financial statements and related footnotes. In preparing these
financial statements, management has made its best estimates and judgments of
certain amounts included in the financial statements, giving due consideration
to materiality. We do not believe there is a great likelihood that materially
different amounts would be reported related to the accounting policies described
below. However, application of these accounting policies involves the exercise
of judgment and use of assumptions as to future uncertainties and, as a result,
actual results could differ from these estimates.
  Details
of critical accounting policies are set out in notes to the financial statements
included in Item 1.
 
 Employees
 
 As of
March 31, 2010, we had approximately 4 full-time employees employed in Hong
Kong. From time to time we employ independent contractors to support our
production, engineering, marketing, and sales departments.
 
 Website
Access to our SEC Reports
  Our
Internet website address is www.innocomtechnology.com. Through our Internet
website, we will make available, free of charge, the following reports as soon
as reasonably practicable after electronically filing them with, or furnishing
them to, the SEC: our Annual Reports on Form 10-K; our Quarterly Reports on Form
10-Q; our Current Reports on Form 8-K; and amendments to those reports filed or
furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). Our Proxy Statements for our Annual Stockholder
Meetings are also available through our Internet website. Our Internet website
and the information contained therein or connected thereto are not intended to
be incorporated into this Annual Report on Form 10-K.
  You may
also obtain copies of our reports without charge by writing to:
 
 Attn:
Investor Relations
 Suite
901, Sun Hung Kai Centre
 30
Harbour Road
 Wanchai,
Hong Kong, PRC
 
 The
public may also read and copy any materials filed with the SEC at the SEC's
Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or through
the SEC website at www.sec.gov. The Public Reference Room may be contact at
(800) SEC-0330. You may also access our other reports via that link to the SEC
website.
  6
 ITEM
      3.
              QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.
  Foreign
Exchange Risk
  While our
reporting currency is the U.S. Dollar, all of our consolidated revenues and
consolidated costs and expenses are denominated in Renminbi. All of our assets
are denominated in RMB except for cash. As a result, we are exposed to foreign
exchange risk as our revenues and results of operations may be affected by
fluctuations in the exchange rate between U.S. Dollars and RMB. If the RMB
depreciates against the U.S. Dollar, the value of our RMB revenues, earnings and
assets as expressed in our U.S. Dollar financial statements will decline. We
have not entered into any hedging transactions in an effort to reduce our
exposure to foreign exchange risk.
 
 Inflation
 
 Inflationary
factors such as increases in the cost of our product and overhead costs may
adversely affect our operating results. Although we do not believe that
inflation has had a material impact on our financial position or results of
operations to date, a high rate of inflation in the future may have an adverse
effect on our ability to maintain current levels of gross margin and selling,
general and administrative expenses as a percentage of net revenues if the
selling prices of our products do not increase with these increased
costs.
 
 ITEM
      4T.
              CONTROLS
      AND PROCEDURES.
 
 Evaluation of Disclosure
Controls and Procedures.
 
 Based on
an evaluation under the supervision and with the participation of management,
our Chief Executive Officer and Chief Financial Officer have concluded that our
disclosure controls and procedures as defined in Section 13a-15(e) and 15d-15(e)
under the Securities Exchange Act of 1934, as amended
("Exchange  Act") were effective as of March 31, 2010 to ensure that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is (i) recorded, processed, summarized and reported
within the time periods specified in the Securities and Exchange Commission
rules and forms and (ii) accumulated and communicated to our management,
including our Chief Executive Officer and Chief Financial Officer, as
appropriate to allow timely decisions regarding required
disclosure.
 
 Changes in Internal Control
over Financial Reporting
 
 There
were no changes in our internal control over financial reporting during the
quarter ended March 31, 2010, which were identified in connection with
management's evaluation required by paragraph (d) of rules 13a-15 and 15d-15
under the Exchange Act, that have materially affected, or are reasonably likely
to materially affect, our internal control over financial
reporting.
 
 PART
II - OTHER INFORMATION
 
 ITEM
      1.
              LEGAL
      PROCEEDINGS
 
 We are
not involved in any material pending legal proceedings at this time, and
management is not aware of any contemplated proceeding by any governmental
authority.
 
 ITEM
      1A.
              RISK
      FACTORS
  N/A
 
 ITEM
      2.
              UNREGISTERED
      SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
 
 None.
 
 ITEM
      3.
              DEFAULTS
      UPON SENIOR SECURITIES
 
 None.
  7
 
 ITEM 4.
              SUBMISSION OF MATTERS TO A VOTE
      OF SECURITY HOLDERS
 
 Removed
and reserved
 
 ITEM
      5.
              OTHER
      INFORMATION
 
 None.
 
 ITEM
      6.
              EXHIBITS
 
 INDEX
TO EXHIBITS
 OF
 INNOCOM
TECHNOLOGY HOLDINGS, INC.
 
 31.1
              Rule
      13a-14 (a)/15d-14 (a) Certification of Chief Executive
    Officer31.2
              Rule
      13a-14 (a)/15d-14 (a) Certification of Chief Financial
    Officer32.1
              Section
      1350 Certification of Chief Executive Officer32.2
              Section
      1350 Certification of Chief Financial
Officer
 
 SIGNATURES
  In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
  INNOCOM
      TECHNOLOGY HOLDINGS, INC./s/ William Yan Sui HuiDated:
      May 18, 2010
                
                William
      Yan Sui Hui, Chief Executive Officer
                  (Principal
      executive officer)
 
 /s/ Cheung Wai Hung,
  EddieDated:
      May 18, 2010
                
                Cheung
      Wai Hung, Eddie, Chief Financial Officer
                  (Principal
      financial officer)
  8