UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM 10-Q








QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
      OF 1934For
      the quarter ended June 30, 2009




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
      1501, Bank of East Asia Harbour View Centre, 56
              Gloucester
      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 August 19, 2009 was 37,900,536 shares, all of one class of $0.001
par value Common Stock.










INNOCOM
TECHNOLOGY HOLDINGS, INC.


FORM
10-Q


Quarter
Ended June 30, 2009


TABLE
OF CONTENTS





PagePART
      I— FINANCIAL INFORMATIONItem
      1
                Financial
      Statements
                F-1Condensed
      Consolidated Balance Sheets as of June 30, 2009 (unaudited) and
      December 31, 2008 (audited)
                F-2Condensed
      Consolidated Statements of Operations and Comprehensive(Loss) Income for
      the Three Months Ended June 30, June 2009 and 2008, for the Six Months
      Ended June 30, 2009 and 2008 (unaudited) and for the period from January
      19, 2007 (Inception) through June 30, 2009 (unaudited)
                F-3
      to F-4Condensed
      Consolidated Statements of Cash Flows for the Six Months Ended June 30,
      2009 and 2008 (unaudited) and for the period from January 19, 2007
      (Inception) through June 30, 2009 (unaudited)
                F-5Condensed
      Consolidated Statement of Stockholders’ Equity (Deficit) for the period
      from January 19, 2007 (Inception) through March 31, 2009
      (unaudited)
                F-6Notes
      to Condensed Consolidated Financial Statements
                F-7
      to F-14Item
      2
                Managements
      Discussion and Analysis of Financial Condition and Results of
      Operation
                4-7Item
      3
                Quantitative
      and Qualitative Disclosures About Market Risk
                7Item
      4T
                Controls
      and Procedures
                8PART
      II—OTHER INFORMATIONItem
      1
                Legal
      Proceedings
                8Item
      1A
                Risk
      Factors
                8Item
      2
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                8Item
      3
                Defaults
      Upon Senior Securities
                8Item
      4
                Submission
      of Matters to a Vote of Security Holders
                8Item
      5
                Other
      Information
                8Item
      6
                Exhibits
                9SIGNATURES
                10




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.


(A
Development Stage Company)





INDEX
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





(UNAUDITED)





PageCondensed
      Consolidated Balance Sheets as of June 30, 2009 and December 31,
      2008
                F-2Condensed
      Consolidated Statements of Operations And Comprehensive Income (Loss) for
      the three and six months ended June 30, 2009 and 2008 and the period from
      January 19, 2007 through June 30, 2009
                F-3
      – F-4Condensed
      Consolidated Statements of Cash Flows for the six months ended June 30,
      2009 and 2008 and the period from January 19, 2007 through June 30,
      2009
                F-5Condensed
      Consolidated Statement of Stockholders’ Deficit for the period from
      January 19, 2007 through June 30, 2009
                F-6Notes
      to Condensed Consolidated Financial Statements
                F-7
      to F-14




F-1


INNOCOM
TECHNOLOGY HOLDINGS, INC.


(A
Development Stage Company)




CONDENSED
CONSOLIDATED BALANCE SHEETS


AS
OF JUNE 30, 2009 AND DECEMBER 31, 2008


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





June 30, 2009
                        
                        
                        December 31, 2008(Unaudited)
                        
                        
                        (Audited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                        
                        $
                        8,438
                        
                        
                        $
                        11,553Prepayments
      and other receivables
                        
                        
                        72,833
                        
                        
                        
                        72,869Total
      current assets
                        
                        
                        81,271
                        
                        
                        
                        84,422Non-current
      assets:Intangible
      assets, net
                        
                        
                        -
                        
                        
                        
                        -Land
      use right, net
                        
                        
                        -
                        
                        
                        
                        -Property,
      plant and equipment, net
                        
                        
                        735,471
                        
                        
                        
                        737,859TOTAL
      ASSETS
                        
                        $
                        816,742
                        
                        
                        $
                        822,281LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      liabilities:Accounts
      payable
                        
                        $
                        80,603
                        
                        
                        $
                        80,692Amount
      due to a related party
                        
                        
                        4,345,501
                        
                        
                        
                        4,152,410Other
      payables and accrued liabilities
                        
                        
                        210,366
                        
                        
                        
                        210,866Total
      current liabilities
                        
                        
                        4,636,470
                        
                        
                        
                        4,443,968Commitments
      and contingenciesStockholders’
      deficit:Common
      stock, $0.001 par value; 50,000,000 shares authorized; 37,898,251 shares
      issued and outstanding as of June 30, 2009 and December 31,
      2008
                        
                        
                        37,898
                        
                        
                        
                        37,898Additional
      paid-in capital
                        
                        
                        6,901,232
                        
                        
                        
                        6,901,232Accumulated
      other comprehensive income
                        
                        
                        537,994
                        
                        
                        
                        532,248Retained
      earnings
                        
                        
                        5,351,825
                        
                        
                        
                        5,351,825Deficit
      accumulated during the development stage
                        
                        
                        (16,648,677
                        )
                        
                        
                        (16,444,890
                        )Total
      stockholders’ deficit
                        
                        
                        (3,819,728
                        )
                        
                        
                        (3,621,687
                        )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                        
                        $
                        816,742
                        
                        
                        $
                        822,281





See
accompanying notes to condensed consolidated financial
statements.


F-2


INNOCOM
TECHNOLOGY HOLDINGS, INC.


(A
Development Stage Company)




CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE INCOME (LOSS)


FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD


FROM
JANUARY 19, 2007 (INCEPTION) THROUGH JUNE 30, 2009


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


(Unaudited)





Three months ended June
      30,
                              
                              
                              Six months ended June
      30,
                              
                              
                              Period
      from
                                January 19,
      2007
                                (Inception)
                                through June
      30,2009
                              
                              
                              2008
                              
                              
                              2009
                              
                              
                              2008
                              
                              
                              2009Revenues,
      net
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Cost
      of revenue
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Gross
      profit
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Operating
      expenses:Impairment
      loss on long-lived assets
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              14,481,991General
      and administrative
                              
                              
                              87,999
                              
                              
                              
                              669,122
                              
                              
                              
                              203,787
                              
                              
                              
                              806,188
                              
                              
                              
                              1,945,247Total
      operating expenses
                              
                              
                              87,999
                              
                              
                              
                              669,122
                              
                              
                              
                              203,787
                              
                              
                              
                              806,188
                              
                              
                              
                              16,427,238LOSS
      FROM OPERATIONS
                              
                              
                              (87,999
                              )
                              
                              
                              (669,122
                              )
                              
                              
                              (203,787
                              )
                              
                              
                              (806,188
                              )
                              
                              
                              (16,427,238
                              )Other
      income (expense):Interest
      expense
                              
                              
                              -
                              
                              
                              
                              (102,704
                              )
                              
                              
                              -
                              
                              
                              
                              (102,704
                              )
                              
                              
                              (240,497
                              )Interest
      income
                              
                              
                              -
                              
                              
                              
                              11,077
                              
                              
                              
                              -
                              
                              
                              
                              11,077
                              
                              
                              
                              20,727Loss
      on disposal of plant and equipment
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (1,669
                              )LOSS
      BEFORE INCOME TAXES
                              
                              
                              (87,999
                              )
                              
                              
                              (760,749
                              )
                              
                              
                              (203,787
                              )
                              
                              
                              (897,815
                              )
                              
                              
                              (16,648,677
                              )Income
      tax expense
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -LOSS
      FROM CONTINUING OPERATIONS, NET OF TAX
                              
                              
                              (87,999
                              )
                              
                              
                              (760,749
                              )
                              
                              
                              (203,787
                              )
                              
                              
                              (897,815
                              )
                              
                              
                              (16,648,677
                              )Income
      from discontinued operations, net of tax
                              
                              
                              -
                              
                              
                              
                              129,384
                              
                              
                              
                              -
                              
                              
                              
                              251,412
                              
                              
                              
                              401,190NET
      LOSS
                              
                              $
                              (87,999
                              )
                              
                              $
                              (631,365
                              )
                              
                              $
                              (203,787
                              )
                              
                              $
                              (646,403
                              )
                              
                              $
                              (16,247,487
                              )





See
accompanying notes to condensed consolidated financial
statements.


F-3


INNOCOM
TECHNOLOGY HOLDINGS, INC.


(A
Development Stage Company)




CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS


AND
COMPREHENSIVE INCOME (LOSS)


FOR
THE THREE AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD


FROM
JANUARY 19, 2007 (INCEPTION) THROUGH JUNE 30, 2009


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


(Unaudited)





Three months ended June
      30,
                          
                          
                          Six months ended June
      30,
                          
                          
                          Period
      from
                            January 19,
      2007
                            (Inception)
                            through June
      30,2009
                          
                          
                          2008
                          
                          
                          2009
                          
                          
                          2008
                          
                          
                          2009Other
      comprehensive income:Foreign
      currency translation gain
                          
                          
                          275
                          
                          
                          
                          395,077
                          
                          
                          
                          5,746
                          
                          
                          
                          429,535
                          
                          
                          
                          357,576COMPREHENSIVE
      LOSS
                          
                          $
                          (87,724
                          )
                          
                          $
                          (236,288
                          )
                          
                          $
                          (198,041
                          )
                          
                          $
                          (216,868
                          )
                          
                          $
                          (15,889,911
                          )Loss
      from continuing operations per share - Basic and diluted
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.01
                          )
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.44
                          )Income
      from discontinued operations per share - Basic and diluted
                          
                          $
                          -
                          
                          
                          $
                          0.00
                          
                          
                          $
                          -
                          
                          
                          $
                          0.01
                          
                          
                          $
                          0.01Net
      loss per share – Basic and diluted
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.01
                          )
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.43
                          )Weighted
      average shares outstanding – basic and diluted
                          
                          
                          37,898,251
                          
                          
                          
                          37,898,251
                          
                          
                          
                          37,898,251
                          
                          
                          
                          37,898,251
                          
                          
                          
                          37,898,251





See
accompanying notes to condensed consolidated financial
statements.


F-4


INNOCOM
TECHNOLOGY HOLDINGS, INC.


(A
Development Stage Company)




CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM


JANUARY
19, 2007 (INCEPTION) THROUGH JUNE 30, 2009


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


(Unaudited)





Six months ended June 30,
                              
                              
                              Period from
                                January 19, 2007
                                (Inception)
                                through June 30,2009
                              
                              
                              2008
                              
                              
                              2009Cash
      flows from operating activities:Loss
      from continuing operations
                              
                              $
                              (203,787
                              )
                              
                              $
                              (897,815
                              )
                              
                              $
                              (16,648,677
                              )Adjustments
      to reconcile loss from continuing operations to net cash used in operating
      activities:Depreciation
                              
                              
                              1,577
                              
                              
                              
                              1,246
                              
                              
                              
                              5,139Amortization
      of intangible assets
                              
                              
                              -
                              
                              
                              
                              297,259
                              
                              
                              
                              598,562Impairment
      of long-lived assets
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              14,481,991Write-off
      of obsolete inventories
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              87,299Loss
      on disposal of plant and equipment
                              
                              
                              -
                              
                              
                              
                              1,667
                              
                              
                              
                              1,669Change
      in operating assets and liabilities:Inventories
                              
                              
                              -
                              
                              
                              
                              (106,241
                              )
                              
                              
                              (87,299
                              )Prepayments
      and other receivables
                              
                              
                              -
                              
                              
                              
                              (311,661
                              )
                              
                              
                              (46,233
                              )Income
      tax payable
                              
                              
                              -
                              
                              
                              
                              (1,439,376
                              )
                              
                              
                              -Accounts
      payable, trade
                              
                              
                              -
                              
                              
                              
                              74,846
                              
                              
                              
                              80,692Other
      payables and accrued liabilities
                              
                              
                              (500
                              )
                              
                              
                              (78,031
                              )
                              
                              
                              12,669Net
      cash used in operating activities
                              
                              
                              (202,710
                              )
                              
                              
                              (2,458,106
                              )
                              
                              
                              (1,514,188
                              )Net
      cash provided by discontinued operations
                              
                              
                              -
                              
                              
                              
                              261
                              
                              
                              
                              401,190Cash
      flows from investing activities:Purchase
      of intangible assets
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (5,960,775
                              )Payment
      to the investment in an unconsolidated entity
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (8,448,584
                              )Acquisition
      of property, plant and equipment
                              
                              
                              -
                              
                              
                              
                              (11,315
                              )
                              
                              
                              (262,313
                              )Acquisition
      of land use right
                              
                              
                              -
                              
                              
                              
                              (129,462
                              )
                              
                              
                              (185,402
                              )Net
      cash used in investing activities
                              
                              
                              -
                              
                              
                              
                              (140,777
                              )
                              
                              
                              (14,857,074
                              )Net
      cash provided by (used in) discontinued operations
                              
                              
                              -
                              
                              
                              
                              5,617,101
                              
                              
                              
                              (2,382
                              )Cash
      flows from financing activities:Advances
      from (Repayment to) a related party
                              
                              
                              193,091
                              
                              
                              
                              (5,104,167
                              )
                              
                              
                              15,441,832Proceeds
      from short-term loan
                              
                              
                              -
                              
                              
                              
                              1,700,686
                              
                              
                              
                              6,080,032Proceeds
      from (Repayment of ) bills payable
                              
                              
                              -
                              
                              
                              
                              496,033
                              
                              
                              
                              (6,080,032
                              )Net
      cash provided by (used in) financing activities
                              
                              
                              193,091
                              
                              
                              
                              (2,907,448
                              )
                              
                              
                              15,441,832Effect
      of exchange rate changes on cash and cash equivalents
                              
                              
                              6,504
                              
                              
                              
                              428,436
                              
                              
                              
                              539,060Net
      change in cash and cash equivalents
                              
                              
                              (3,115
                              )
                              
                              
                              539,467
                              
                              
                              
                              8,438BEGINNING
      OF PERIOD
                              
                              
                              11,553
                              
                              
                              
                              3,597
                              
                              
                              
                              -END
      OF PERIOD
                              
                              $
                              8,438
                              
                              
                              $
                              543,064
                              
                              
                              $
                              8,438SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid for income taxes
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              $
                              -Cash
      paid for interest
                              
                              $
                              -
                              
                              
                              $
                              102,704
                              
                              
                              $
                              240,497




See
accompanying notes to condensed consolidated financial
statements.


F-5


INNOCOM
TECHNOLOGY HOLDINGS, INC.


(A
Development Stage Company)




CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)


FOR
THE PERIOD FROM JANUARY 19, 2007 (INCEPTION) THROUGH JUNE 30, 2009


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


(Unaudited)





Common
      stock
                                    
                                    
                                    Additional
                                    
                                    
                                    Accumulated
                                      other
                                      comprehensive
                                    
                                    
                                    Retained
                                    
                                    
                                    Deficit
                                      accumulated
                                      during
                                      development
                                    
                                    
                                    Totalstockholders’No. of
      shares
                                    
                                    
                                    Amount
                                    
                                    
                                    paid-in
      capital
                                    
                                    
                                    (loss)
      income
                                    
                                    
                                    earnings
                                    
                                    
                                    stage
                                    
                                    
                                    equity
      (deficit)Balance
      as of January 19, 2007 (Inception)
                                    
                                    
                                    37,898,251
                                    
                                    
                                    $
                                    37,898
                                    
                                    
                                    $
                                    6,901,232
                                    
                                    
                                    $
                                    180,418
                                    
                                    
                                    $
                                    8,585,184
                                    
                                    
                                    $
                                    -
                                    
                                    
                                    $
                                    15,704,732Net
      loss for the year
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (3,634,549
                                    )
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (3,634,549
                                    )Foreign
      currency translation adjustment
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (8,766
                                    )
                                    
                                    
                                    
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (8,766
                                    )Balance
      as of December 31, 2007
                                    
                                    
                                    37,898,251
                                    
                                    
                                    
                                    37,898
                                    
                                    
                                    
                                    6,901,232
                                    
                                    
                                    
                                    171,652
                                    
                                    
                                    
                                    4,950,635
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    12,061,417Net
      income (loss) for the year
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    401,190
                                    
                                    
                                    
                                    (16,444,890
                                    )
                                    
                                    
                                    (16,043,700
                                    )Foreign
      currency translation adjustment
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    360,596
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    360,596Balance
      as of December 31, 2008
                                    
                                    
                                    37,898,251
                                    
                                    
                                    
                                    37,898
                                    
                                    
                                    
                                    6,901,232
                                    
                                    
                                    
                                    532,248
                                    
                                    
                                    
                                    5,351,825
                                    
                                    
                                    
                                    (16,444,890
                                    )
                                    
                                    
                                    (3,621,687
                                    )Net
      loss for the period
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (203,787
                                    )
                                    
                                    
                                    (203,787
                                    )Foreign
      currency translation adjustment
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    5,746
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    5,746Balance
      as of June 30, 2009
                                    
                                    
                                    37,898,251
                                    
                                    
                                    $
                                    37,898
                                    
                                    
                                    $
                                    6,901,232
                                    
                                    
                                    $
                                    537,994
                                    
                                    
                                    $
                                    5,351,825
                                    
                                    
                                    $
                                    (16,648,677
                                    )
                                    
                                    $
                                    (3,819,728
                                    )





See
accompanying notes to condensed consolidated financial
statements.


F-6


INNOCOM
TECHNOLOGY HOLDINGS, INC.
 (A
Development Stage Company)
  NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY
 19,
2007 (INCEPTION) THROUGH JUNE 30, 2009
 (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, 2008
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 June 30, 2009 are not necessarily
indicative of the results to be expected for the entire fiscal year ending
December 31, 2009 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, 2008.
 
 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 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
 
 These
condensed consolidated financial statements have been prepared assuming that
Company will continue as a going concern, which contemplates the realization of
assets and the discharge of liabilities in the normal course of business for the
foreseeable future. The accompanying condensed consolidated financial statements
do not reflect any adjustments that might result if the Company is unable to
continue as a going concern. The Company does not generate significant revenue,
and has negative cash flows from operations, which raise substantial doubt about
the Company’s ability to continue as a going concern.
  F-7
  INNOCOM
TECHNOLOGY HOLDINGS, INC.
 (A
Development Stage Company)
  NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY
 19,
2007 (INCEPTION) THROUGH JUNE 30, 2009
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 The
continuation of the Company is dependent upon the continuing financial support
from its shareholders throughout June 30, 2009. Management believes this funding
will continue, and is also actively seeking new investors. Management believes
the existing shareholders 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.
 
 NOTE-4    SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
 
 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
              Development
      stage company
 
 The
Company has no substantive operations as of June 30, 2009 and the historical
operations of the Company relating to its planned manufacturing facility in the
PRC are presented for the period from January 19, 2007 (date of inception). The
Company is considered as a development stage company in accordance with the
provisions of Statement of Financial Accounting Standards (“SFAS”) No. 7, “Accounting and Reporting by
Development Stage Enterprises”.
 
 l
              Revenue
      recognition
 
 The
Company will recognize its revenue in accordance with the Staff Accounting
Bulletin No. 104, "Revenue
Recognition in Financial Statements" ("SAB 104"). 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. To date, the
Company has had no revenues and is in the development stage.
 
 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
              Intangible
      assets
 
 Intangible
assets include trademarks of mobile phone handsets purchased from a third party.
In accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142,
“Goodwill and Other Intangible
Assets” (“FAS 142”), intangible assets with finite useful lives related
to developed technology, customer lists, trade names and other intangibles are
being amortized on a straight-line basis over the estimated useful life of the
related asset.
  F-8
  INNOCOM
TECHNOLOGY HOLDINGS, INC.
 (A
Development Stage Company)
  NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY
 19,
2007 (INCEPTION) THROUGH JUNE 30, 2009
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 Trademarks
are carried at cost less accumulated amortization and impairment loss, are
amortized on a straight-line basis over their estimated useful lives of 10 years
beginning at the time the related trademarks are granted. They will be used in
the planned assembly line for mobile phone communication products and components
in the PRC and subject to amortization when they are in operational
use.
 
 For the
three and six months ended June 30, 2009, no amortization is no longer required
since their carrying values were fully provided for impairment loss during
2008.
 
 l         Land
use right
 
 All lands
in the People’s Republic of China (the “PRC”) are owned by the PRC government.
The government in the PRC, according to the relevant PRC law, may sell the right
to use the land for a specified period of time. Thus, all of the Company’s land
purchases in the PRC are considered to be leasehold land and are stated at cost
less accumulated amortization and any recognized impairment loss. Amortization
is provided over the term of the land use right agreements on a straight-line
basis, which is 45 years and they will expire in 2054.
 
 For the
three and six months ended June 30, 2009, no amortization is no longer required
since its carrying value was fully provided for impairment loss during
2008.
 
 l
              Plant
      and equipment, net
 
 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:
 
 Depreciable life
                  
                  Residual valuePlant
      and machinery
                  5-10
      years
                  
                  
                  5
                  %Furniture,
      fixtures and office equipment
                  5
      years
                  
                  
                  5
                  %
 
 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.
 
 l
              Valuation
      of long-lived assets
 
 Long-lived
assets primarily include plant and equipment, land use right and intangible
assets. In accordance with SFAS No. 144, “Accounting for the 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 June 30, 2009.
  F-9
  INNOCOM
TECHNOLOGY HOLDINGS, INC.
 (A
Development Stage Company)
  NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY
 19,
2007 (INCEPTION) THROUGH JUNE 30, 2009
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 l
              Comprehensive
      (loss) income
 
 SFAS No.
130, “Reporting Comprehensive
Income”, establishes standards for reporting and display of comprehensive
income, its components and accumulated balances. Comprehensive income as defined
includes all changes in equity during a period from non-owner sources.
Accumulated comprehensive income, as presented in the accompanying consolidated
statements of stockholders’ equity consists of changes in unrealized gains and
losses on foreign currency translation. This comprehensive income is not
included in the computation of income tax expense or benefit.
 
 l
              Income
      taxes
 
 The
Company accounts for income tax using SFAS No. 109 “Accounting for Income
Taxes”, which requires the asset and liability approach for financial
accounting and reporting for income taxes. Under this approach, deferred income
taxes are provided for the estimated future tax effects attributable to
temporary differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases, and for the expected future tax
benefits from loss carry-forwards and provisions, if any. Deferred tax assets
and liabilities are measured using the enacted tax rates expected in the years
of recovery or reversal and the effect from a change in tax rates is recognized
in the consolidated statement of operations and comprehensive income in the
period of enactment. A valuation allowance is provided to reduce the amount of
deferred tax assets if it is considered more likely than not that some portion
of, or all of the deferred tax assets will not be realized.
 
 The
Company adopts Financial Accounting Standards Board (“FASB”) Interpretation No.
(FIN) 48, "Accounting for
Uncertainty in Income Taxes" and FSP FIN 48-1, which amended certain
provisions of FIN 48. FIN 48 clarifies the accounting for uncertainty in income
taxes recognized in financial statements in accordance with SFAS No. 109, "Accounting for Income Taxes."FIN 48 prescribes a recognition threshold and measurement attribute for
the financial statement recognition and measurement of a tax position taken or
expected to be taken in a tax return. FIN 48 requires that the Company determine
whether the benefits of the Company's tax positions are more likely than not of
being sustained upon audit based on the technical merits of the tax position.
The provisions of FIN 48 also provide guidance on de-recognition,
classification, interest and penalties, accounting in interim periods and
disclosure.
 
 In
connection with the adoption of FIN 48, the Company also adopted the policy of
recognizing interest and penalties, if any, related to unrecognized tax
positions as income tax expense. 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 period ended June 30, 2009. The Company’s tax
returns remain open subject to examination by major tax
jurisdictions.
 
 l
              Net
      (loss) income per share
 
 The
Company calculates net (loss) income per share in accordance with SFAS No.
128,“Earnings per
Share”. Basic (loss) income per share is computed by dividing the net
(loss) income by the weighted-average number of common shares outstanding during
the period. Diluted (loss) income per share is computed similar to basic (loss)
income 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.
  F-10
  INNOCOM
TECHNOLOGY HOLDINGS, INC.
 (A
Development Stage Company)
  NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY
 19,
2007 (INCEPTION) THROUGH JUNE 30, 2009
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 The
reporting currency of the Company is the United States dollar ("US$"). The
Company’s subsidiaries operating in Hong Kong maintained their books and records
in its local currency, Hong Kong Dollars ("HK$"), 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 SFAS
No. 52, “Foreign Currency
Translation”, 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$ has been made at the following exchange rates for
the respective period:
 
 June 30, 2009
                    
                    
                    June 30, 2008Period-end
      RMB:US$ exchange rate
                    
                    
                    6.8249
                    
                    
                    
                    6.8520Average
      monthly RMB:US$ exchange rate
                    
                    
                    6.8226
                    
                    
                    
                    7.0504Period-end
      HK$:US$ exchange rate
                    
                    
                    7.7504
                    
                    
                    
                    7.8037Average
      monthly HK$:US$ exchange rate
                    
                    
                    7.7530
                    
                    
                    
                    7.7975
 
 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
 
 Effective
January 1, 2008, the Company adopted SFAS No. 157, “Fair Value Measurements”
(“FAS 157”), for all financial instruments and non-financial instruments
accounted for at fair value on a recurring basis. Effective January 1, 2009, the
Company adopted SFAS 157 for all non-financial instruments accounted for at fair
value on a non-recurring basis. SFAS 157 establishes a new framework for
measuring fair value and expands related disclosures. Effective April 1, 2009,
the Company adopted FASB FSP FAS 157-4, Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly. Adoption of
the FSP had an insignificant effect on the Company’s financial
statements.
 
 FAS 157
establishes a new framework for measuring fair value and expands related
disclosures. Broadly, FAS 157 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. FAS 157 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-11
  INNOCOM
TECHNOLOGY HOLDINGS, INC.
 (A
Development Stage Company)
  NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY
 19,
2007 (INCEPTION) THROUGH JUNE 30, 2009
 (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
              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 April
2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of
Financial Instruments.” This FSP amends SFAS No. 107, “Disclosures about Fair Value of
Financial Instruments,” and Accounting Principles Board (“APB”) Opinion
No. 28, “Interim Financial Reporting.”
(“FAS 107”) This FSP requires publicly-traded entities to disclose in the body
or in the accompanying notes of its summarized financial information for interim
reporting periods and in its financial statements for annual reporting periods,
the fair value of all financial instruments for which it is practicable to
estimate that value, whether recognized or not recognized in the statement of
financial position, as required by FAS 107. This FSP is effective for interim
and annual reporting periods ending after June 15, 2009. The Company adopted FSP
FAS 107-1 and APB 28-1 for the period ended June 30, 2009.
 
 In May
2009, the FASB issued SFAS No. 165, “Subsequent Events” (“FAS
165”), which establishes general standards of accounting for, and requires
disclosure of, events that occur after the balance sheet date but before
financial statements are issued or are available to be issued. The Company
adopted the provisions of FAS 165 for the quarter ended June 30, 2009. The
adoption of FAS 165 did not have a material effect on the
consolidated financial statements.
 
 In June
2009, the FASB issued SFAS No. 166, “Accounting for Transfers of
Financial Assets, an amendment to SFAS No. 140” (“FAS 166”). FAS 166
eliminates the concept of a “qualifying special-purpose entity,” changes the
requirements for derecognizing financial assets, and requires additional
disclosures in order to enhance information reported to users of financial
statements by providing greater transparency about transfers of financial
assets, including securitization transactions, and an entity’s continuing
involvement in and exposure to the risks related to transferred financial
assets. FAS 166 is effective for fiscal years beginning after November 15, 2009.
The Company will adopt FAS 166 in fiscal 2010 and is evaluating the impact it
will have on the consolidated results of the Company.
 
 In June
2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation
No. 46(R)” (“FAS 167”). The amendments include: (1) the elimination of
the exemption for qualifying special purpose entities, (2) a new approach for
determining who should consolidate a variable-interest entity, and (3) changes
to when it is necessary to reassess who should consolidate a variable-interest
entity. FAS 167 is effective for the first annual reporting period beginning
after November 15, 2009 and for interim periods within that first annual
reporting period. The Company will adopt FAS 167 in fiscal 2010 and is
evaluating the impact it will have on the consolidated results of the
Company.
 
 In June
2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards
Codification TMand the
Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No.
162” (“FAS 168”). FAS 168 replaces SFAS No. 162, “The Hierarchy of Generally AcceptedAccounting
Principles” and establishes the “FASB Accounting Standard
Codification TM ” (“Codification”) as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental
entities in the preparation of financial statements in conformity with generally
accepted accounting principles in the United States. All guidance contained in
the Codification carries an equal level of authority. On the effective date of
FAS 168, the Codification will supersede all then-existing non-SEC accounting
and reporting standards. All other nongrandfathered non-SEC accounting
literature not included in the Codification will become nonauthoritative. FAS
168 is effective for financial statements issued for interim and annual periods
ending after September 15, 2009. The Company has evaluated this new statement,
and has determined that it will not have a significant impact on the
determination or reporting of the financial results.
  F-12
  INNOCOM
TECHNOLOGY HOLDINGS, INC.
 (A
Development Stage Company)
  NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY
 19,
2007 (INCEPTION) THROUGH JUNE 30, 2009
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 NOTE-5    DISCONTINUED
OPERATIONS
 
 Starting
from the fourth quarter of 2008, global economic conditions have deteriorated
significantly across the countries and the demand for communication products and
components was adversely slowed down. The Company has discontinued its trading
business in the mobile communication products and components in Hong Kong since
the customers no longer demanded for sales orders during the first and second
quarters of 2009.
 
 NOTE-6    AMOUNT
DUE TO A RELATED PARTY
 
 As of
June 30, 2009, a balance of $4,345,194 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-7    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 Neveda 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
six months ended June 30, 2009 and 2008 and for the period from January 19, 2007
(Inception) through June 30, 2009, no provision for Hong Kong Profits Tax is
provided for since the Company’s income neither arises in, nor is derived form
Hong Kong under its applicable tax law.
 
 The
PRC
 
 The
Company’s subsidiary, CICTL is subject to the unified income rate of 25% on the
taxable income. For the six months ended June 30, 2009 and 2008 and for the
period from January 19, 2007 (Inception) through June 30, 2009, CICTL generated
net operating losses and accordingly, no provision for income tax has been
recorded.
  F-13
  INNOCOM
TECHNOLOGY HOLDINGS, INC.
 (A
Development Stage Company)
  NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE PERIOD FROM JANUARY
 19,
2007 (INCEPTION) THROUGH JUNE 30, 2009
 (Currency
expressed in United States Dollars (“US$”))
 (Unaudited)
 
 NOTE-8    COMMITMENTS
AND CONTINGENCIES
 
 Operating lease
commitment
 
 The
Company leases an office premise under a non-cancelable operating lease for a
term of 2 years due June 15, 2010. Costs incurred under this operating lease are
recorded as rent expense and totaled approximately $65,923, $52,515 and $293,998
for the six months ended June 30, 2009 and 2008, and the period from January 19,
2007 (Inception) through June 30, 2009.
 
 As of
June 30, 2009, the Company has the future minimum rental payments of $126,396
under a non-cancelable operating lease in the next 12 months.
  F-14


ITEM
      2.
            MANAGEMENTS
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
      OPERATION





The
following review concerns three months ended June 30, 2009 and June 30, 2008,
and six months ended June 30, 2009 and June 30, 2008, 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 has 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 June 30, 2009 and June 30, 2008 and Six
Months Ended June 30, 2009 and June 30, 2008





During
the three months ended June 30, 2009, we experienced a net loss of $87,999
compared to a net loss of $631,365 for three months
ended June 30, 2008. During six months ended June 30, 2009, we
experienced a net loss of $203,787 compared to a net loss of $646,403 for six
months ended June 30, 2008. 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, no revenue is recorded
during both three and six months ended June 30, 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, no cost of sale is
recorded during both three and six months ended June 30, 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 June 30,
                    
                    
                    Six Months
      ended June 30,2009
                    
                    
                    2008
                    
                    
                    2009
                    
                    
                    2008Depreciation
                    
                    $
                    789
                    
                    
                    $
                    829
                    
                    
                    $
                    1,577
                    
                    
                    $
                    1,246Amortization
      of intangible assets
                    
                    
                    -
                    
                    
                    
                    148,588
                    
                    
                    
                    -
                    
                    
                    
                    297,259$
                    789
                    
                    
                    $
                    149,417
                    
                    
                    $
                    1,577
                    
                    
                    $
                    298,505





The
depreciation policy adopted in for the fiscal year 2009 was consistent with that
adopted in 2008.





The
decrease in amortization of intangible assets is due to intangible assets being
written off during the last quarter of 2008.





Other
Income





Total
other income for both periods presented was immaterial and consisted of the
following:




Three
      Months
                          ended
                          June
      30, 2009
                        
                        
                        Three
      Months
                          ended
                          June
      30, 2008
                        
                        
                        Six
      Months
                          ended
                          June
      30, 2009
                        
                        
                        Six
      Months
                          ended
                          June
      30, 2008Interest
      income
                        
                        $
                        -
                        
                        
                        $
                        11,077
                        
                        
                        $
                        -
                        
                        
                        $
                        11,077Interest
      expense
                        
                        $
                        -
                        
                        
                        $
                        102,704
                        
                        
                        $
                        -
                        
                        
                        $
                        102,704


Net
Loss





Net loss
for the six months ended June 30, 2009 was $203,787 compared to net loss of
$646,403 for the six months ended June 30, 2008. Loss of both periods is
attributable to the significant deteriorated environment and the challenging
economic crisis of the periods.   .





Trends,
Events, and Uncertainties





On May 8,
2008, we have completed the establishment of a new subsidiary, Changzhou Innocom
Communication Technology Limited in Changzhou, Jiangsu Province, China upon the
approval of its local government. Trial assembling of mobile phones has been
completed. We will assemble mobile phones under the purchased trade mark namely
“Tsinghua Unisplendour” and other mobile phone components on OEM basis. On
August 13, 2008, this subsidiary has entered into an annual assembling service
agreement for a brand-name mobile phone manufacturer on OEM basis. We expect to
start assembling service in first quarter of 2009.


5


However,
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 discontinue operation in the manufacture of
mobile communication products and components in February 2009.





Liquidity
and Capital Resources for Six Months Ended June 30, 2009 and 2008





Cash
flows from operating activities





We
experienced negative cash flows used in operations in the amount of $202,710 for
six months ended June 30, 2009 as compared with negative cash flow used in the
operations in the amount of $2,457,845 for six months ended June 30,
2008.





Cash
flows from investing activities





During
six months ended June 30, 2009, there are no investment activities.





During
six months ended June 30, 2008, we had positive cash flow provided by investment
activities in the amount of $5,476,324. We received proceed from disposal of
subsidiaries of $5,617,101. We used $11,315 to purchase property, plant and
equipment and made a capital payment of $129,462 in acquisition of land use
right.





Cash
flows from financing activities





During
six months ended June 30, 2009 we experienced positive cash flow advanced from a
related party in the amount of $193,091.





During
six months ended June 30, 2008, we experienced negative cash flows in financing
activities in the amount of $2,907,448. We repay advance from a related party in
the amount of $5,104,167. On the other hand, we obtained short-term bank loans
and note payable of $1,700,686 and $496,033 respectively.





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.


6


Employees





As of
June 30, 2009, we had approximately 5 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
1501, Bank of East Asia Harbour View Centre


56
Gloucester 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.





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.




7




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, 2008 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 June 30, 2009, 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.




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





None.





ITEM
5.             OTHER
INFORMATION





None.





8




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




9





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:
      August 19, 2009
                          William
      Yan Sui Hui, Chief Executive Officer
                            (Principal
      executive officer)





/s/
      Cheung Wai Hung, EddieDated:
      August 19, 2009
                    Cheung
      Wai Hung, Eddie, Chief Financial Officer
                      (Principal
      financial officer)


10