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

                                   FORM 10-KSB

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF

                     THE SECURITIES AND EXCHANGE ACT OF 1934

                       FOR THE PERIOD ENDED MARCH 31, 2003

                         COMMISSION FILE NUMBER 0-24408

                                FONEFRIEND, INC.
             (Exact Name of Registrant as Specified in its Charter)

                  DELAWARE                                    33-0611753
         (State of Incorporation)                    (I.R.S. Employer ID Number)

                         2722 Loker Avenue West, Suite G
                               Carlsbad, CA 92008
                    (Address of Principal Executive Offices)

                                 (760) 607-2330
              (Registrant's Telephone Number, Including Area Code)

         Indicate by check whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes /X/ No / /

         Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. |X|

         As of July 10, 2003, there were 820,361 shares of Preferred Stock and
8,726,000 shares of Common Stock issued and outstanding. The aggregate market
value of voting stock held by non-affiliates of 2,386,875 shares outstanding at
July 10, 2003 was approximately $4,296,375. This amount was computed using the
average of the bid and ask price as of July 10, which was $1.80.

Transitional Small Business Disclosure Format (check one): |X| Yes  | | No

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                                FONEFRIEND, INC.

                          ANNUAL REPORT ON Form 10-KSB
                        FISCAL YEAR ENDED MARCH 31, 2003

TABLE OF CONTENTS

                                     PART I

ITEM 1.    BUSINESS....................................................        1
ITEM 2.    PROPERTIES..................................................       17
ITEM 3.    LEGALPROCEEDINGS............................................       17
ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITYHOLDERS..........       18

                              PART II

ITEM 5.    MARKET FOR REGISTRANT'S SECURITIES AND RELATED STOCK-
           HOLDER MATTERS..............................................       19
ITEM 6.    SELECTED FINANCIAL DATA.....................................       21
ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
           CONDITION AND RESULTS OF OPERATIONS.........................       21
ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
           MARKET RISK.................................................       25
ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.................       4
ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE.........................       37

                             PART III

ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT..........       37
ITEM 11.   EXECUTIVE COMPENSATION......................................       40
ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
           MANAGEMENT..................................................       42
ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS..............       44
ITEM 14.   CONTROLS AND PROCEEDURES....................................       44

                                     PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
                  FORM 8-K..............................................      45


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         This Form 10-KSB includes "forward-looking statements." The words
"may," "will," "should," "continue," "future," "potential," "believe," "expect,"
"anticipate," "project," "plan," "intend," "seek," "estimate" and similar
expressions identify forward-looking statements. We caution you that any
forward-looking statements made by us are not guarantees of future performance
and that a variety of factors, including those discussed below, could cause our
actual results and experience to differ materially from the anticipated results
or other expectations expressed in our forward-looking statements. Please see
"Risk Factors" below for detailed information about the uncertainties and other
factors that may cause actual results to materially differ from the views stated
in such forward-looking statements. All forward-looking statements and risk
factors included in this Form 10-KSB are made as of the date hereof, based on
information available to us as of the date hereof, and we assume no obligation
to update any forward-looking statement or risk factors.

         The information set forth herein should be read in conjunction with the
Company's financial statements and related footnotes included elsewhere herein.
The Company's actual results could differ materially from those anticipated by
its management.

                                     PART I

ITEM 1.  BUSINESS

COMPANY OVERVIEW

         FoneFriend, Inc. ("FoneFriend" or the "Company") was incorporated on
April 24, 2001, under the laws of the State of Nevada, to market, distribute and
otherwise commercially exploit the marketplace for a small Internet box, known
as the "FoneFriend", which contains a unique proprietary technology, owned by
FoneFriend Systems, Inc., a District of Columbia corporation (hereinafter,
referred to as "FSI"). The Company holds a ten-year license with "FSI", to
market and distribute the FoneFriend box, which will be utilized in a Voice Over
The Internet (hereinafter, referred to as "VoIP) application for worldwide, long
distance telephone calling. The "FoneFriend", technology is also known as
Internet Telephony (hereinafter, referred to as "IP Telephony").

 ACQUISITION BY PUBLIC ENTITY

         On October 31, 2000, Universal Broadband Networks, Inc., a publicly
traded Delaware corporation ("UBNT") and four of its wholly-owned subsidiaries
filed a voluntary petition for reorganization pursuant to Chapter 11 of Title 11
of the United States Code, 11 U.S.C.ss.ss.101 et seq., in the United States
Bankruptcy Court for the District of Eastern California.

         On June 13, 2002, UBNT entered into a definitive agreement to acquire
the assets of FoneFriend, a Nevada corporation, and, upon completion of that
acquisition to change its name to FoneFriend, Inc. (the "Company"), a Delaware
corporation. The United States Bankruptcy Court, Central District of California,
with the overwhelming support of the creditors committee approved this agreement
in September, 2002, and the transaction was completed on November 21, 2002. As a
result, the Company is now publicly traded on the Over The Counter Bulletin
Board (OTC:BB) under its new name, FoneFriend, Inc. and its new trading symbol,
FFRD.

                                       1


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COMPANY OVERVIEW

         The Company is a development stage enterprise and has not generated any
revenues during its brief history. The primary business of the Company is to
market and otherwise commercially exploit an Internet telephony device and
related services to customers worldwide, called the "FoneFriend". The underlying
technology of FoneFriend has been licensed by the Company from FSI and will
enable the Company's subscribers to make and receive unlimited long distance
telephone calls over the Internet, using only their standard residential
telephone set (without the need for a computer or any software), for a low
monthly fee of $10.00 or less. Due to the small cost of transmitting calls over
the Internet, the Company anticipates that it will realize significant profit
margins, well in excess of those realized by the traditional telecommunications
industry.

         Since the Company's inception, efforts have largely been dedicated to
developing its plan of business, identifying and procuring infrastructure
components, manufacturing a small quantity of the FoneFriend product and
implementing the FoneFriend network for a "beta test" of the product and
financing initial startup costs.

         The business strategy centered on building proprietary FoneFriend units
that would enable free, long distance, worldwide telephone service when calls
are made from one FoneFriend box to another ("box to box"), from any landline
telephone, and pennies per minute if the receiver of the telephone call did not
have a FoneFriend box. The customer would be charged about $10, or less per
month, for this service.

         FoneFriend recognizes that it may be difficult to continue working on
the development of the box and offer FoneFriend services to the world without
assistance in the foreign market place. In May, 2002, the Company entered an
agreement with Credit Phone International ("CPI"), located in Italy, to utilize
each other's customer service, and discussions began to manufacture and begin
marketing the boxes for a beta test between CPI and FoneFriend.

         To help implement this marketing strategy, the Company filmed a number
of television commercials to attempt to brand name the FoneFriend box. The spots
were entitled "Nobody Takes My FoneFriend", and had very little dialog to enable
the Company to globally show the commercials with subtitles or looping in
various languages. FoneFriend has given the commercials to CPI and others to
begin product distribution relationships in order to accelerate market presence
and market share penetration.

         Given the success of the Company's product testing, FoneFriend began to
look for a manufacture who could secure a line of credit to allow FoneFriend to
build enough boxes to have the proprietary technology ready for sales on
television through the commercials and/or infomercial. Additionally the Company
continues to seek other forms of debt and/or investment capital to further the
development of its marketing strategy.

                                       2


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CURRENT CORPORATE STRATEGY

         The following section discussion and analysis should be read in
conjunction with "Selected Financial Data" and the Company's financial
statements and related footnotes included elsewhere herein. This discussion
contains forward-looking statements that involve risks and uncertainties. The
Company's actual results could differ materially from those anticipated by
management.

         FoneFriend management remains confident in the VoIP communications
opportunity and is committed to endeavor to bring its proprietary technology to
market that will enable consumers to make telephone calls from anywhere, to
anyplace in the world, at costs competitive to traditional communication
services.

         FoneFriend management has concentrated on conserving corporate
resources in order to preserve shareholder prospects while exploring alternative
strategies to penetrate the converged communications opportunity in a
dramatically different consumer and capital climate than the climate prevailing
at the Company's onset. After significant deliberation, management has defined
and adopted a new strategy that leverages existing investment, remains centered
on the enabling of enhanced communications with proprietary technologies at
costs competitive to traditional services, at the same time taking into account
the prevailing consumer and capital climate.

         The current strategic plan calls for opening the European division of
FoneFriend and focusing on foreign telephone calls to the U.S. rather than the
U.S. to foreign. FoneFriend believes it can leverage the products appeal by
"thinking out of the box", and has already entered into agreements with
consultants to help bring this plan to fruition. Management believes by setting
up marketing and distributors in foreign countries first, FoneFriend will
capture a significant customer base more rapidly than if it focused marketing
efforts domestically, as long distance prices are presently much higher in
foreign countries. The low calling rates of VoIP have a greater appeal to
foreign consumers and should, therefore, help us to achieve a significant
customer base more rapidly. Management estimates that we will need a customer
base of about 20,000 subscribers, that will generate monthly revenues of $10.00
a month for a one-year period in order to break even on our operational expenses
and infrastructure costs and, eventually, achieve profitability. There can be no
assurances that we will be successful in doing so. Further, even if we do
achieve profitability, we cannot be certain that we will be able to sustain or
increase profitability on a quarterly or annual basis in the future.

         In addition, FoneFriend has recently been contacted by several
marketing representatives in foreign countries who have expressed a serious
interest in either buying territorial rights or becoming our marketing
representative. Our management believes that we can saturate the foreign
marketplace more quickly and gain consumer confidence by having a local office
and representative in each foreign country where we intend to market. As a
result of recent increasing domestic competition in the United States, we may
have to lower the price of our product and/or our proposed monthly subscriber
fee to make the FoneFriend product more affordable and more cost effective than
its competitors.

                                       3

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         Our management has had discussions recently with an emerging cable
network to develop a plan which can utilize their television services for the
airing of the FoneFriend commercials, and future infomercial testing, plus a
percentage of the company or the revenues. We have not entered into any
agreement at the present time and there can be no assurance that any agreement
will ever materialize.

VoIP INDUSTRY OVERVIEW

         The international telecommunications industry has continued to grow
since our inception in 1995. This growth has been driven by increased demand and
enabled by technological advances, increased network development, greater
bandwidth capacity and domestic and international deregulation. VoIP technology
is a cost effective and efficient alternative to traditional circuit switching
technology. According to a Frost & Sullivan analyst report issued in January of
2002, VoIP is expected to account for approximately 35% of world voice services
by 2007. This expected growth, if achieved, will result in additional VoIP
minutes and associated revenues for the companies positioned to take advantage
of this market. Our goal is to place our company in a position to capitalize on
these market changes.

TECHNOLOGY
TECHNOLOGY LICENSE AND RELATIONSHIP WITH FSI

         Shortly after its formation, the Company entered into a "Technology
License Agreement", dated April 30, 2001, with FSI, wherein it acquired a ten
(10) year license to manufacture, market, sell and utilize a proprietary,
patented technology which is commonly referred to as the "FoneFriend." Pursuant
to said agreement, FSI has agreed to provide selected support services, related
to the operation of the FoneFriend product, as well as assist the Company in
arranging third party suppliers to provide infrastructure services for the
FoneFriend product, such as internet service providers (ISP) and connectivity to
long distance carriers in order to enable the FoneFriend product to place
"gateway" type calls to any standard telephone located anywhere in the world.
Additionally, FSI will provide access to its global network servers, which
connect "FoneFriend-to-FoneFriend" calls over the Internet, and coordinate the
manufacturing, procurement and quality assurance of the FoneFriend appliances.
The Company also has the right to develop its own brand name of Internet
telephony appliance.

         Further, conditioned upon the receipt of financing in the amount of $5
Million, or more, the Company will have an irrevocable option for the term of
the agreement to: (i) prevent FSI from issuing any future agreements relating to
the use of FoneFriend technology to any third parties that may compete with the
Company in exchange for a one-time payment of $250,000, and (ii) acquire all of
FSI's right, title and interest in any other agreements that it may have in
place with distributors and licensees, also in exchange for an additional
one-time payment of $250,000. The Company believes this will provide a strategic
marketing advantage as it will be able to coordinate all marketing activities of
the FoneFriend, worldwide, and generate revenues from all other such
distributors and licensees. Additionally, said option entitles the Company to
acquire all rights to FSI's web site on the Internet, located at:
www.fonefriend.com.

                                       4

<PAGE>

         The FoneFriend technology currently provides high quality, extremely
low cost, worldwide voice communications services, with the development of other
value added "e-commerce" services currently under considering and development.

COMPETITION
THE INTERNET TELEPHONY MARKET IS HIGHLY COMPETITIVE.

         Many other companies offer products and services similar to the
Company's product, and many of those companies have already established a
substantial presence in the IP telephony market. Competitor companies currently
have substantially greater financial, distribution and marketing resources than
the FoneFriend. As a result, FoneFriend may not be able to compete successfully
in the Internet Telephony market. There is a risk that new product introductions
or enhancements by competitors could reduce the sales or market acceptance of
the Company's products and services, increase price competition or render the
Company's products obsolete. To become and remain competitive, the Company plans
to continue to invest significant resources in research and development, sales
and marketing and customer support. However, given the formidable competition,
the Company continues to run the risk that it will not have sufficient resources
to withstand these market forces and may seek a consolidation or strategic
alliance with one or more of its competitors.

INTERNATIONAL COMMUNICATIONS SERVICES

         Internationally, the competitive marketplace varies from region to
region. In markets where the telecommunications marketplace has been fully
deregulated, the competition continues to increase. Even a newly deregulated
market, such as India, allows for new entrants to establish a foothold and offer
competitive services more easily. Competitors include both government- owned
phone companies as well as emerging competitive carriers. As consumers and
telecommunications providers have come to understand the benefits that may be
realized from transmitting voice over the Internet, a substantial number of
companies have emerged to provide VoIP services. The principal competitive
factors in the market include: price, quality of service, breadth of geographic
presence, customer service, reliability, network capacity, the availability of
enhanced communications services and brand recognition.

 COMPARISON WITH THE COMPETITION

         The Company's competitors currently utilize similar technology.
However, they generally have a higher product cost, are higher priced in the
consumer market and require programming and/or some computer knowledge. The
FoneFriend device utilizes proprietary design and software and is covered,
worldwide, by patented technology (licensed from FoneFriend Systems, Inc.). We
believe that FoneFriend has the potential to deliver the lowest retail pricing
and offer calling rates that may be highly competitive.

                                       5

<PAGE>

         The Company plans to launch an aggressive marketing campaign designed
to rapidly build consumer awareness in targeted markets through the use of
direct response television. The Company plans to conduct market testing of its
product at a retail price of about $60, or less, and will offer free, unlimited
calling, worldwide, when calling from one FoneFriend unit to another ("box to
box"). Customers in the U.S. will be charged an ongoing monthly fee of about
$10, or less, which includes an Internet connection for the box. Customers
calling any standard phone, without another FoneFriend device ("box to phone"),
will be charged reduced domestic calling rates which may be as low as 2-cents,
per minute.

         DIRECT COMPETITION:
         -------------------

         There are numerous companies offering competitive VoIP products. The
Company has identified Net2Phone's "Aplio" and "Yap Jack", Cisco's "ATA186",
Infotalk and Vonage, as the Company's primary, direct competition that offer
unit-to-unit and unit-to-phone long distance calling services via the Internet.
The foregoing competition primarily markets to resellers, and, although their
rates range from competitive to slightly higher than the Company's, generally
ranging from about 2 cents to 4.9 cents per minute, domestically, their initial
product costs are substantially higher, generally ranging from $100 to $200,
plus they require the user to obtain Internet service (about $10 to $20 per
month) and perform some programming. Some competing products, like Net2Phone's
Yap Jack, require the user to have a computer and a headset with microphone.
However, these type of products generally offer lower calling rates, as low as
one-cent per minute for U.S. calls. Management believes that FoneFriend could
enjoy a competitive advantage over its competition in terms of "ease of use" and
overall pricing.

         "There are numerous companies offering competitive VoIP products. The
Company has identified Net2Phone's "Aplio" and "Yap Jack", Cisco's "ATA186",
Infotalk and Vonage, as the Company's primary, direct competition that offer
unit-to-unit and unit-to-phone long distance calling services via the Internet.
The foregoing competition primarily markets to resellers, and, although their
rates are slightly higher than the Company's, ranging from 2.5 cents to 4.9
cents per minute domestically, their initial product costs are substantially
higher, plus they require the user to obtain Internet service and perform some
programming, which factors may afford FoneFriend a competitive advantage in
terms of overall pricing and ease of use."

         INDIRECT COMPETITION:

         Other telephony competitors offer VoIP software that's down loaded into
your computer and allows the subscriber the opportunity to initiate local and
long distance calls via their computer, to either another PC or to any phone.
Carriers such as Dial Pad.com, Phone.com, Vocal-Tec, EZ-Phone, and Inter-Phone,
etc. offer domestic long-distance calling rates that vary in per minute charges
from a low of 2.9 cents to upwards of 8.9 cents. The Company recognizes that
certain of these long distance providers realize significant traffic volume each
month, although the percentage of users in any given geographical marketing area
is relatively low. The majority of residential consumers are reluctant to alter
their calling habits and the Company believes that long distance usage via the
computer will be minimal in the long run of this industry. For analog dialers
this technology is inferior and the worst voice quality offered, but a small
percentage of the population using DSL or cable modem service have experienced
enhanced voice quality.

                                       6

<PAGE>

         Two of the Company's direct competitors, Aplio and Komodo Technology
have been acquired by larger competitors. Komodo Technology's Komodo Phone, a
U.S. company, was acquired by CISCO Systems, Inc. for $175 Million in stock, and
Aplio was acquired by Net2Phone for approximately $45 Million in cash, notes and
stock. Management anticipates seeking such a consolidation partner should market
conditions dictate such an opportunity.

REGULATION

         The use of the Internet and private IP networks to provide voice
communications services, is a relatively recent market development. Although the
provision of such services is currently permitted by United States law and
largely unregulated within the United States, several foreign governments have
adopted laws and/or regulations that could restrict or prohibit the provision of
voice communications services over the Internet or private IP networks. More
aggressive regulation of the Internet in general, and Internet telephony
providers and services specifically, may adversely affect our business,
financial condition, operating results and future prospects, particularly if
increased numbers of governments impose regulations restricting the use and sale
of IP telephony services.

         In addition, other aspects of our operations may be subject to state or
federal regulation, such as regulations relating to the confidentiality of data
and communications, copyright issues, taxation of services, universal service
funding, and licensing. Similarly, changes in the legal and regulatory
environment relating to the Internet connectivity market, including regulatory
changes that affect telecommunications costs or that may increase the likelihood
of competition from the regional Bell operating companies, or RBOCs, or other
telecommunications companies, could increase our costs of providing service.

         Moreover, state governments and their regulatory authorities may assert
jurisdiction over the provision of intrastate IP communications services where
they believe that their telecommunications regulations are broad enough to cover
regulation of IP services. Various state regulatory authorities have initiated
proceedings to examine the regulatory status of Internet telephony services, and
a state court in Colorado has ruled that the use of the Internet to provide
certain intrastate services does not exempt an entity from paying intrastate
access charges. Similarly, the State Public Service Commission (PSC) of New York
has ruled (with respect to another company providing IP telecommunications,)
that certain IP services may be considered telecommunications services subject
to access charges depending on how much of the service is provided over IP
networks.

         As state governments, courts, and regulatory authorities continue to
examine the regulatory status of Internet telephony services, they could render
decisions or adopt regulations affecting providers of Internet telephony
services or requiring such providers to pay intrastate access charges or to make
contributions to universal service funding. Should the FCC determine to regulate
IP services, states may decide to follow the FCC's lead and impose additional
obligations as well.

                                       7

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INTERNATIONAL REGULATION

         The regulatory treatment of IP communications outside the United States
varies significantly from country to country. FoneFriend anticipates operating
on a global scale. The regulations we are subject to in many jurisdictions
change from time to time, they may be difficult to obtain or it may be difficult
to obtain accurate legal translations where official legal translations are
unavailable. Additionally, in our experience, the enforcement of these
regulations does not always track the letter of the law. Accordingly, although
we devote what we believe to be sufficient resources to maintaining compliance
with these regulations, we cannot be certain that we are in compliance with all
of the relevant regulations at any given point in time.

         While some countries prohibit IP telecommunications, others have
determined that IP services offer a viable alternative to traditional
telecommunications services. As the Internet telephony market has expanded,
regulators have begun to reconsider whether to regulate Internet telephony
services. Some countries currently impose little or no regulation on Internet
telephony services, as in the United States. Other countries, including those in
which the governments prohibit or limit competition for traditional voice
telephony services, generally do not permit Internet telephony services or
strictly limit the terms under which those services may be provided. Still other
countries regulate Internet telephony services like traditional voice telephony
services, requiring Internet telephony companies to make universal service
contributions and pay other taxes. While some countries subject IP telephony
providers to reduced regulations, others have moved towards liberalization of
the IP communications sector and have lifted bans on provision of IP
telecommunications services. We cannot predict how a regulatory or policy change
of a particular country might affect the future provision of our services. We
believe that while increased regulations and restrictions could pose a threat to
our ability to provide services, the lifting of regulations in a country
generally will enable us to market our services in that country.

         In the event that we are able to initiate marketing in any foreign
countries, some countries may conclude that we are required to qualify to do
business in their country, that we are otherwise subject to regulation, or that
we are prohibited from conducting our business in such countries. Our failure to
qualify as a foreign corporation in certain jurisdictions, or to comply with
foreign laws and regulations, may adversely affect our business.

REGULATION OF THE INTERNET.

         In addition to regulations addressing Internet telephony specifically,
other regulatory issues relating to the Internet in general could affect our
ability to provide our services. Congress has adopted legislation that regulates
certain aspects of the Internet, including online content, user privacy,
taxation, liability for third-party activities, and jurisdiction. In addition, a
number of initiatives pending in Congress and state legislatures would prohibit
or restrict advertising or sale of certain products and services on the
Internet, which may have the effect of raising the cost of doing business on the
Internet generally. The European Union has also enacted several directives
relating to the Internet, one of which addresses online commerce. Recently, the
European Union adopted a privacy directive that establishes certain requirements
with respect to, among other things, the confidentiality, processing and
retention of personally identifiable subscriber information and usage patterns.
The potential effect, if any, of these data protection rules on the development
of our business remains uncertain.

                                       8

<PAGE>

         Federal, state, local and foreign governmental organizations are
considering other legislative and regulatory proposals that would regulate the
Internet. For instance, the extension of the Internet Tax Freedom Act prohibits
the taxing of certain Internet uses through November 1, 2003. We cannot predict
whether new taxes will be imposed on our services or, depending on the type of
taxes imposed, whether and how our services would be affected thereafter.
Increased regulation of the Internet may decrease its growth and hinder
technological development, which may negatively impact the cost of doing
business via the Internet or otherwise materially adversely affect our business,
financial condition, and results of operations.

PATENTS AND TRADEMARKS

         As currently featured on www.fonefriend.com (owned and operated by
FoneFriend Systems, Inc), the FoneFriend appliance holds FCC Registration
Certificate No. B11 USA-25483-MD-E. A first patent application for FoneFriend
was filed on February 25, 1997, and on February 25, 1998, an improved
continuation-in-part application, based thereon, was filed as an International
Application under the Patent Cooperation Treaty (PCT), providing the right to
file applications in the United States and Europe. The U.S. application was
filed on March 9, 1998, and FoneFriend Systems, Inc. filed its European
application on September 22, 1999.

         Finally, a trademark application for the FoneFriend appliance was filed
on March 28, 1998, in the U.S. Patent & Trademark Office ("PTO") for
telecommunications devices for long-distance Internet telephony. This
application was cleared by the PTO for publication in the fall of 1998. Included
in the Company's license agreement with FSI is the use of its computer server
network comprised of Sun Microsystems servers that is scaleable to millions of
users and is deployed in two secure and separate locations to provide true
network redundancy. Management believes a strategic competitive advantage of the
FoneFriend appliance is the method by which the system measures the bandwidth of
the call from both ends throughout the call. When packet loss occurs, instead of
buffering the packets like many other systems, the FoneFriend technology
dynamically double packetizes the voice. This means that users do not detect
latency in voice transfer. Along with making Internet calls, it is contemplated
that the FoneFriend system will enable users to send and receive Internet voice
mails using the user's e-mail address, as well as to listen to radio stations
that broadcast over the Internet. In the planning stages is also the ability of
the computer network to communicate over larger bandwidth (such as ISDN, cable,
and DSL), to send and receive faxes and video conferencing.

         The ability to make, use, sell or offer for sale our products and
services is important to our business. We are aware that patents have been
granted to others based on fundamental technologies in the Internet telephony
area. It is possible that certain patent infringement claims might be asserted
successfully against us in the future. A party making an infringement claim
could secure a substantial monetary award or obtain injunctive relief that could
effectively block our ability to provide services or products in the United
States or a broad. If any of these risks materialize, we could be forced to
either suspend operations, to pay significant amounts to defend our rights,
and/or secure a more expensive license. Moreover, because patent applications in
the United States are not publicly disclosed when filed, third parties may have
filed applications that, if issued as patents, could result in claims against us
in the future. These claims could materially adversely affect our financial
condition and results of operations. We may be able to use our own patents
against such claims, for example, if cross-licenses are warranted.

                                       9

<PAGE>

PERSONNEL

         We currently have three officers and several business, professional and
technical consultants. We believe our relationships with all personnel are good.
The Company plans to hire additional personnel at such time as our business
growth demands.

                                  RISK FACTORS

         In addition to other information in this Form 10-KSB and any documents
incorporated by reference to this Form 10-KSB, the following risk factors should
be carefully considered when evaluating our company and our business. Investing
in our common stock involves a high degree of risk, and you should be able to
bear the complete loss of your investment. We also caution you that this Form
10-KSB includes forward-looking statements that are based on management's
beliefs and assumptions and on information currently available to management.
Future events and circumstances and our actual results could differ materially
from those projected in any forward-looking statements. The risk and
uncertainties described below are not the only ones we face. Additional risks
and uncertainties not presently known to us or that we currently deem immaterial
also may impair our business operations. If any of the following risk and
uncertainties actually occur, our future operating results and financial
condition could be harmed, and the market price of our common stock could
decline.

         RISKS RELATED TO OUR FINANCIAL CONDITION AND OUR BUSINESS
         ---------------------------------------------------------

         We have never been profitable due to the nature of our start up and
infrastructure development expenses. If we continue to incur losses, we may not
be able to finance the commercial deployment of our products and services. We
estimate that we will need a customer base of about 20,000 subscribers, that
will generate monthly revenues of $10.00 a month for a one-year period in order
to achieve profitability. There can be no assurances that the Company will be
able to do so. Even if we do achieve profitability, we cannot assure you that we
will be able to sustain or increase profitability on a quarterly or annual basis
in the future.

         Our limited operating history makes evaluating our business difficult.
You must consider the numerous risks and uncertainties an early stage company
like ours faces in the new and rapidly evolving market for Internet-related
services. These risks include our ability to:

o        increase awareness of our brand and continue to keep and build our
         customer base;
o        develop and implement effective marketing and business plans;

                                       10

<PAGE>

o        maintain our current, and develop new, strategic relationships;
o        respond effectively to competitive pressures; and
o        continue to develop and upgrade our network and technology.

         If we are unsuccessful in addressing these risks, sales of our product
and services, as well as our ability to maintain or increase our customer base,
will be substantially diminished.

         We may have difficulties managing our operations, which may reduce our
chances of achieving profitability.

         Our future performance will depend, in part, on our ability to manage
our business growth effectively. To that end, we will have to undertake the
following tasks, among others:

o        continue to develop our operating, administrative, financial and
         accounting systems and controls;
o        continue to improve coordination among our engineering, accounting,
         finance, marketing and operations personnel;
o        continue to enhance our management information systems capabilities;
         and

         If we cannot accomplish these tasks, our chances of achieving
profitability may be diminished.

If we fail to establish and maintain strategic relationships, our sales may
never happen.

         In addition, there are political and economic instability in some other
countries, which could impact our service in those areas. There may be power
supply problems, difficulty maintaining local customer support and difficulties
dealing with local companies and governments in some of these regions. Moreover,
developments in the Middle East, such as the commencement of hostilities by the
United States or others, could result in the disruption of our business in the
regions affected by the hostilities. These events could also reduce travel to
these regions. We cannot assure you that these political and economic
difficulties will not continue or that they will not expand into other
geographic areas experiencing political and economic instability.

Competition could reduce any market share we may achieve and decrease our
revenue.

         The market for VoIP services is extremely competitive. Many companies
offer products and services similar to ours, and many of these companies have a
substantial presence in the markets we serve. In addition, many of these
companies are larger than we are and have substantially greater financial,
distribution and marketing resources than we do. We therefore may not be able to
compete successfully with these companies. If we do not succeed in competing
with these companies, we will lose customers and our revenue will be
substantially reduced.

                                       11

<PAGE>

         Our business may be affected by the proliferation and increased usage
of cellular telephones, and utilizing less land line telephones.

         Pricing pressures may lessen our competitive pricing advantage.

         Our strategy for potential success is based partly on our ability to
provide discounted domestic and international long distance services by taking
advantage of cost savings achieved by carrying voice traffic over the Internet,
as compared to carrying calls over long distance networks, such as those owned
by AT&T, MCI and Sprint. In recent years, the price of long distance calls has
fallen, especially in the U.S. In response, we may lower the price of our
service offerings. AT&T, MCI and Sprint have adopted pricing plans in which the
rates that they charge for U.S. domestic long distance calls are not always
substantially higher than the rates that we charge for our U.S. domestic
service. The price of long distance calls may decline to a point where we no
longer have a price advantage over these traditional long distance services.
Alternatively, other providers of long distance services may begin to offer
unlimited or nearly unlimited use of some of their services for an attractive
monthly rate. We would then have to rely on factors other than price to
differentiate our product and service offerings, which we may not be able to do.

         Competitors may be able to bundle services and products that we do not
offer together with long distance or Internet telephony services. These services
could include wireless communications, voice and data services, Internet access
and cable television. This form of bundling would put us at a competitive
disadvantage if these providers can combine a variety of service offerings at a
single attractive price. In addition, some of the telecommunications and other
companies that compete with us may be able to provide customers with lower
communications costs or other packaged incentives with their services, reducing
the overall cost of their communications packages, and significantly increasing
pricing pressures on our services. This form of competition could significantly
reduce our revenues. Furthermore, if our potential customers do not perceive our
services to be effective or of high quality, our brand and name recognition
would suffer.

         We believe that establishing and maintaining brand and name recognition
is critical for attracting and expanding our targeted client base. We also
believe that the importance of reputation and name recognition will increase as
competition in our market increases. Promotion and enhancement of our name will
depend on the effectiveness of our marketing and advertising efforts and on our
success in continuing to provide high-quality products and services, neither of
which can be assured. Our international communications services business
requires us to rely on third party distributors to promote and market our
products and services. We cannot be assured that these third parties provide the
same level of effort as we do to protect the high-quality reputation we believe
our services and products maintain. If they do not, our reputation may be
tarnished in these markets.

                                       12

<PAGE>

         The IP telephony calls that will be made by our customers will be
connected through local telephone companies and, at least in part, through
leased networks that may become unavailable.

         In many of the foreign jurisdictions in which we plan to conduct
business, the primary provider of significant in-country transmission facilities
is the national telephone company, which may be the only provider in that
country. Accordingly, we may have to lease transmission capacity at artificially
high rates from such a monopolistic provider, and consequently, we may not be
able to generate a profit on those calls. In addition, national telephone
companies may not be required by law to lease necessary transmission lines to us
or, if applicable law requires national telephone companies to lease
transmission facilities to us, we may encounter delays in negotiating leases and
interconnection agreements and commencing operations. Additionally, disputes may
result with respect to pricing, billing or other terms of these agreements, and
these disputes could affect our ability to continue to operate in these
countries.

         Our success depends on our ability to handle a large number of
simultaneous calls, which our network systems may not be able to accommodate.

         We expect the volume of simultaneous calls to be quite significant as
we commence our operations. Our proposed network hardware and software may not
be able to accommodate this volume. If we fail to maintain an appropriate level
of operating performance, or if our service is disrupted, our reputation could
be hurt and we could lose customers.

         Because we are unable to predict definitely the volume of usage and our
capacity needs, we may be forced to enter into disadvantageous contracts that
would reduce our operating margins.

         We may have to enter into additional long-term agreements for leased
capacity. To the extent that we overestimate our call volume, we may be
obligated to pay for more transmission capacity than we actually use, resulting
in costs without corresponding revenue. Conversely, if we underestimate our
capacity needs, we may be required to obtain additional transmission capacity
through more expensive means or such capacity may not be available.
   We may not be able to obtain sufficient funds to grow our business.

         Due to our limited operating history and the nature of our industry,
our future capital needs are difficult to predict. Therefore, we may require
additional capital to fund some or all of the following:

o        unanticipated opportunities;
o        strategic alliances;
o        potential acquisitions;
o        changing business conditions; and
o        unanticipated competitive pressures.

         We may need to forego business opportunities relating to the above
listed events if we do not obtain additional financing. Obtaining additional
financing will be subject to a number of factors, including market conditions,
our operating performance and investor sentiment. These factors may make the
timing, amount, terms and conditions of additional financings unattractive to
us. If we are unable to raise additional capital, our growth could be impeded.

                                       13

<PAGE>

         Any damage to or failure of our systems or operations could result in
reductions in, or terminations of, our services.

         Our common stock price is likely to be highly volatile in this
marketplace.

         The market price of our common stock has been and will likely continue
to be highly volatile, as is the stock market in general, and the market for
VoIP services and telecommunications related companies in particular. Some of
the factors that may materially affect the market price of our common stock are
beyond our control, such as changes in financial estimates by securities
analysts, conditions or trends in the VoIP services and other Internet and
telecommunications related industries, announcements made by our competitors, or
sales of our common stock. These factors may materially adversely affect the
market price of our common stock, regardless of our performance.

         RISKS RELATED TO OUR RELATIONSHIP WITH FONEFRIEND SYSTEMS INC.

         We regard FSI's patents, service marks, trademarks, trade secrets and
other intellectual property as important to our success. We rely on trademark
and copyright law, trade secret protection and confidentiality agreements with
our employees, customers, partners and others to protect our intellectual
property rights. Despite our precautions, it may be possible for third parties
to obtain and use our intellectual property without authorization. Furthermore,
the laws of some foreign countries may not protect intellectual property rights
to the same extent as do the laws of the United States. It may be difficult for
FSI to enforce certain of our intellectual property rights against third parties
who may have acquired intellectual property rights by filing unauthorized
applications in foreign countries to register the marks that we use because of
their familiarity with our worldwide operations. Since Internet related
industries such as ours are exposed to the intellectual property laws of
numerous foreign countries and trademark rights are territorial, there is
uncertainty in the enforceability and scope of protection of our intellectual
property. The unauthorized use of our intellectual property by third parties may
damage our brand.

Defending against intellectual property infringement claims could be expensive
to FSI, and could disrupt our business.

         We may also be subject to legal proceedings and claims from time to
time relating to the intellectual property of others in the ordinary course of
our business. In the event FSI cannot afford to defend its intellectual property
rights, we may incur substantial expenses in defending against those third-party
infringement claims, regardless of their merit. Successful infringement claims
against either FSI or us may result in substantial monetary liability or may
materially disrupt the conduct of our business.

         If FSI defaults in its obligations to give support to the FoneFriend
technology, we may not succeed or be forced to find an alternative VoIP device,
or technology, which could be expensive. FSI founders, Mr. John Wimsatt and Dr.
Faramarz Vaziri, have informed our Company that they may not continue their
association with each other. If further difficulty arises between the two
principals, it may cause economic or commercial damage to our Company.

                                       14

<PAGE>

         Our contract with S7T for technical support services relating to the
FoneFriend technology, is presently in default although the parties continue to
negotiate in good faith to resolve all issues of contention. We believe it is
crucial to our success to retain the services of S7T, and/or Dr. Vaziri, as it
would be expensive, if not impractical, to obtain alternative services. However,
we have been able to maintain a good working and professional relationship with
Dr. Vaziri, president of S7T, and our technology consultant.

         FSI informs us that, presently, we are the only licensee of the
FoneFriend technology in the world. However, FSI has the right to grant other
licensees at any time, if it so desires. If FSI does grant additional licensees
of its technology, this may adversely impact our business and market share in
the VoIP marketplace.

         Currently, there are two companies who have defaulted on and lost
licenses issued by FSI: Iglo-Tel, Inc., a Delaware corporation, and Credit Phone
International, Sr.I., an Italian company. Should either of these companies
re-instate their license with FSI, this could adversely impact our exploitation
of our VoIP business.

RISKS RELATED TO OUR INDUSTRY

         Federal, state and international regulations may be passed that could
impede our business.

         The legal and regulatory environment that pertains to our business is
uncertain and changing rapidly. For example, in the United States, the Federal
Communications Commission (FCC) could undertake an examination of whether to
impose surcharges or additional regulations upon certain providers of Internet
telephony. The imposition of regulations on IP communications services may
negatively impact our business.

         In addition, regulatory treatment of Internet telephony outside the
United States varies from country to country. For example, access to certain
services may be negatively impacted by government regulation. We cannot predict
whether these regulations will restrict or prohibit our ability to provide
products and services in the future. These actions and other similar actions in
foreign countries may cause us to lose customers and revenue.

         New regulations could increase our costs of doing business and prevent
us from delivering our products and services over the Internet, which could
adversely affect our potential customer base and our revenue. The growth of the
Internet may also be significantly slowed. This could delay growth in demand for
our products and services and limit the growth of our revenue. In addition to
new regulations being adopted, existing laws may be applied to the Internet. We
cannot predict how the laws will develop with regard to IP communications and
the extent of any negative impact that such regulations could have on our
business. New and existing laws may cover issues that include:

                                       15

<PAGE>

o        sales and other taxes;
o        interstate access charges;
o        user privacy;
o        pricing controls;
o        characteristics and quality of products and services;
o        consumer protection;
o        contributions to the Universal Service Fund, which is funded by
         telecommunications carriers for the purpose of supporting local
         telephone service in rural and high cost areas;
o        cross-border commerce;
o        copyright, trademark and patent infringement; and
o        other claims based on the nature and content of Internet materials.

         For a more complete description of regulations affecting our business,
see Regulation above.

         If the Internet does not continue to grow as a medium for voice
communications, our business will suffer.

         The technology that allows voice communications over the Internet is
still in its early stages of development. Historically, the sound quality of
Internet calls was poor. As the industry has grown, sound quality has improved,
but the technology requires additional refinement. Additionally, the Internet's
capacity constraints may impede the acceptance of Internet telephony. Callers
could experience delays, errors in transmissions or other interruptions in
service that are beyond our control. Making telephone calls over the Internet
must also be accepted as an alternative to traditional telephone service.
Because the Internet telephony market is new and evolving, predicting the size
of this market and its growth rate is difficult. If our market fails to develop,
then we will be unable to grow our customer base and our opportunity for
profitability will be harmed.

         Our business will not grow without increased use of the Internet.

         The use of the Internet as a commercial marketplace is at an early
stage of development. Demand and market acceptance for recently introduced
products and services over the Internet are still uncertain. We cannot predict
whether customers will be willing to shift their traditional activities online.
The Internet may not prove to be a viable commercial marketplace for a number of
reasons, including:

o        concerns about security;
o        Internet congestion;
o        inconsistent service; and
o        lack of cost-effective, high-speed access.

         If the use of the Internet as a commercial marketplace does not
continue to grow, we may not be able to grow our customer base, which may
prevent us from achieving profitability. In addition, our risk management
practices may not be sufficient to protect us from unauthorized credit card
transactions or thefts of services.

                                       16

<PAGE>

ITEM 2.  PROPERTIES

         The Company maintains a lease on its corporate offices located at 2722
Loker Avenue, Suite G, Carlsbad, California 92008. The Company's telephone
number is: (760) 607-2330.

         The lessor of the property is H.G. Fenton and Associates, and our lease
will expire on January 31, 2004. The approximate square footage of the two
suites is 2,900 square feet, and leases for approximately $2,883.00 a month.
Additionally, a maintenance fee of $12.00 a month is charged for maintaining the
grounds and air conditioning. In August, 2002, the Company entered into a
payment arrangement whereby it would pay for the entire lease with two, advance
payments, in exchange for a slight discount. The first payment was made for
$14,000 last August, 2002, and the second payment for $20,000 was to be made on
or before January 31, 2003. The Company was unable to make the full $20,000
payment. The Company has worked out an arrangement with the landlord and is
making ongoing payments. FoneFriend feels the space it is renting is adequate
for its current needs and anticipated growth of the Company during the term of
the lease.

ITEM 3.  LEGAL PROCEEDINGS

         In January, 2003, the Company settled its litigation with William B.
Krusheski. Mr. Krusheski was formerly an officer and director of FoneFriend,
Inc., a Nevada corporation whose assets were acquired by the Company on November
21, 2002. Mr. Krusheski's employment was terminated by the Nevada Corporation in
April, 2002. Mr. Krusheski filed a lawsuit relating to his termination and
severance arrangement. The Company is current in its obligations under the terms
of the settlement agreement.

         In November of 2002, Michael Imbesi, an individual doing business as
First Tracks, filed a complaint in Small Claims Court, Newport Beach, California
against FoneFriend Inc., a Nevada Corporation, alleging that his company, First
Tracks, had performed consulting services, but was never compensated. This
complaint was removed to Superior Court and joined with the counter-claim by the
Company as described below.

         On January 3, 2003, FoneFriend, Inc., a Delaware Corporation, filed a
counter-claim in the Superior Court of California, County of Orange, California,
Case No. 03CC01251, against Michael Imbesi, C.I.C. Productions, Inc. ("CIC") and
Cary D. Arnold, C.P.A., alleging breach of contract, breach of fiduciary duty,
fraud and other allegations, and seeking monetary damages and cancellation of a
certain stock option agreement entitling CIC to purchase 700,000 shares of the
Nevada corporation. The Company and the defendants have executed a settlement
agreement pursuant to which the stock option for 700,000 shares held by CIC will
be cancelled and the Company has agreed to issue 60,000 shares of restricted
common stock to CIC.

                                       17

<PAGE>

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

         The merger of FoneFriend, Inc. of Nevada with and into FoneFriend, Inc.
of Delaware was consummated on November 21, 2002, wherein the assets of
FoneFriend, Inc. of Nevada were acquired by Universal Broadband Networks, Inc.
("UBNT") in a tax-free reorganization pursuant to IRC 368 (the "Merger"). The
Merger was approved by a majority vote of the stockholders of FoneFriend, Inc.,
a Nevada corporation, and by order of the United States Bankruptcy Court. The
Merger was effectuated as a "C" type reorganization whereby UBNT issued stock in
exchange for all of the assets of the Nevada corporation, after which that
corporation was dissolved under Nevada law. UBNT was the surviving corporation
and changed its name to FoneFriend, Inc. (a Delaware corporation) immediately
subsequent to the Merger. Pursuant to the express terms of the Fourth Amended
Plan of Reorganization, as approved by the United States Bankruptcy Court (the
"Plan"), the Merger was accomplished as follows:

         All of UBNT's issued and outstanding shares of capital stock were
         cancelled and extinguished and the stockholders of UBNT prior to the
         Merger have no further interest or rights in UBNT.

         UBNT issued 2,200,000 shares of newly created common stock in favor of
         FoneFriend, Inc. (Nevada corporation) in exchange for all of
         FoneFriend, Inc.'s assets and 115,750 of newly created common stock in
         favor of a Liquidating Trust for the benefit of UBNT's creditors. As a
         result, the merged entity had a total of 2,315,750 shares of newly
         created common stock issued and outstanding, of which former
         shareholders of the dissolved Nevada corporation owned 95%, and J.
         Michael Issa, Esq., as Trustee of the Liquidating Trust (which was
         created under the Plan), controlled 5% of the then issued shares of
         common stock outstanding.

         The issuance of stock pursuant to the Plan, as filed within the United
         States Bankruptcy Court, was ordered by the Court to be exempt from all
         applicable Federal, State and local securities law pursuant to 11
         U.S.C. ss.1145(a).

         The dissolved Nevada corporation's management distributed the newly
         issued 2,200,000 shares of FoneFriend, inc. (Delaware corporation) to
         its former shareholders, on a pro-rata basis. Each of such former
         shareholders received one share of stock in FoneFriend, Inc. (Delaware
         corporation) for every four-share shares held in the dissolved Nevada
         corporation.

         Immediately subsequent to the Merger, the Company authorized the
         issuance of 820,361 shares of a newly created Series "A" Preferred
         Stock (each share of which is convertible into one share of common
         stock) to be issued to shareholders of preferred stock in the dissolved
         Nevada corporation prior to the Merger.

                                       18

<PAGE>

         The Company thereafter issued 4,600,000 shares of common stock to
         various management personnel and consultants in order to hire or retain
         their services and entered into new employment agreements with all
         officers, directors and consultants with the exception of Francois Van
         Der Hoeven, former Senior Vice President of Marketing. Although no
         dispute has arisen and none is anticipated, he recently advised
         management he did not wish to continue as Senior Vice President of the
         Company due to the Company's inability to pay his salary and a change
         in employment with other members of his immediate family. Management
         has placed a stop order on his stock certificate for 1,300,000 shares
         of common stock and is currently coming to a consensual agreement as to
         what Mr. Van Der Hoeven earned as co founder and what he will earn as a
         consultant to the Company in the future. The Company also issued
         423,000 shares of common stock and agreed to issue 300,000 options to
         Dennis H. Johnston, Esq. as compensation for his services in connection
         with the Merger and for his continued services as an officer and
         director of the Company. Additionally, the Company issued an additional
         307,250 shares of common stock to the Liquidating Trust in accordance
         with the Plan of Reorganization ("Plan") so as to be in compliance with
         the Anti-Dilution Protection provisions of the Plan duly approved by
         Order of the United States Bankruptcy Court.

                                     PART II

ITEM 5.  MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

MARKET INFORMATION

         The market for the Company's common shares is very limited as it has
recently begun limited trading. The stock is traded on the over-the-counter
bulletin board market with the symbol FFRD, and there are presently five
broker-dealers that are beginning to maintain an orderly market in the Company's
common stock. As of July 10, 2003, the stock was trading at $2.00. Prior to
March 6, 2003, no shares had changed ownership in market transactions in this
over-the-counter trading market (OTCBB).

FISCAL 2003                                            HIGH              LOW
-----------                                          ---------         ---------
First Quarter                                           N/A               N/A
Second Quarter                                          N/A               N/A
Third Quarter                                           N/A               N/A
Forth Quarter                                        $ 4.00            $ 3.50

HOLDERS

         As of July 10, 2003, there were approximately 300 stockholders of
record of our common stock, par value $.001 per share, and about 230
stockholders of record of our Series "A" Preferred Stock, par value $.001 per
share.

                                       19

<PAGE>

DIVIDEND POLICY

         We have not paid any cash dividends in the past and do not intend to
pay cash dividends on our capital stock for the foreseeable future. Instead, we
intend to retain all earnings, if any, for use in the operation and expansion of
our business and marketing plan.

EQUITY COMPENSATION PLAN INFORMATION

         The following table provides, as of March 31, 2003, information with
respect to compensation plans (including individual compensation arrangements)
under which our equity securities are authorized for issuance.

2002 NON-EMPLOYEE
DIRECTOR AND CONSULTANT
RETAINER STOCK PLAN AND              AWARD STOCK               STOCK OPTIONS
EMPLOYEE STOCK INCENTIVE PLAN        ISSUED                    ISSUED
-----------------------------        ------------------        -----------------
                                     1,080,000 (1)(2)          1,000,000 (3)
Remaining securities available          20,000                 2,500,000

(1) On December 27, 2002, we issued 825,000 award shares to Consultants that
performed services on behalf and at the request of the Company.

(2) Subsequent to March 31, 2003, we issued an additional 255,000 award shares
to Consultants pursuant to consulting services agreements.

(3) The Board of Directors has authorized the grant of options covering
1,000,000 shares as follows: (i) 350,000 to Jackelyn Giroux, pursuant to her
employment agreement with the Company; (ii) 300,000 shares to Dennis H.
Johnston, pursuant to his agreement with the Company for his continued services
as Secretary and General Counsel; and (iii) 350,000 shares to Gary Rasmussen,
pursuant to his consulting agreement with the Company.

UNREGISTERED SALE OF COMMON STOCK

         In connection with the merger with FoneFriend, Inc., a Nevada
corporation, we issued 2,200,000 shares of our common stock to this Nevada
corporation in exchange for all of the assets of the Nevada corporation. The
Nevada corporation then distributed these shares, on a pro-rata basis, to its
existing shareholders. On November, 21, 2002, we issued 5,446,000 shares to
various members of management, consultants and to the Liquidating Trust as
provided for in the Plan at a value of $0.01 per share.

         The issuance of the shares of our common stock to FoneFriend, Inc., a
Nevada corporation, as well as the shares issued to management and consultants,
were exempt from the registration provisions of the Securities Act of 1933,
pursuant to Section 4(2) of the Securities Act for transactions not involving a
public offering, based on the fact that the common stock was issued to
accredited investors who had access to financial and other relevant data
concerning the Company, its financial condition, business and assets.

                                       20

<PAGE>

ITEM 6.  SELECTED FINANCIAL DATA

         The Company is a development stage enterprise and has not generated any
revenue during its brief history.

         The following selected financial data should be read in conjunction
with our financial statements and related notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in Item 7. The statement of operations data for fiscal 2001 and fiscal
2002 and the balance sheet data as of March 31, 2003 are derived from our
financial statements.

                                                       March             April
                                                     31, 2003          30, 2002
                                                     --------          --------
Operating Data:
Revenue                                             $        0        $        0
Expenses before write down of certain
Capitalized Development Costs                       $  740,356        $  885,288
Write down of Capitalized Development
Cost to estimated fair value                        $  865,108        $        0
Loss from development stage operations              $1,605,464        $  885,288

Balance Sheet Data:
Cash                                                $   20,221        $  228,010
Total assets                                        $1,350,514        $2,193,045
Stockholders' equity                                $1,259,908        $2,192,850

Number of common shares outstanding                  8,471,000         8,956,361
Number of preferred shares outstanding                 820,361                 0

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         The following discussion should be read in conjunction with our
financial statements and notes thereto included elsewhere in this report.

                   FORWARD-LOOKING AND CAUTIONARY STATEMENTS

         We may from time to time make written or oral forward-looking
statements, including those contained in the following section. These
forward-looking statements involve risks and uncertainties and actual results
could differ materially from those discussed in the forward-looking statements.
For this purpose, any statements contained in this section that are not
statements of historical fact may be deemed to be forward-looking statements.
Factors which may affect our results include, but are not limited to, our

                                       21

<PAGE>

ability to expand our customer base, our ability to develop additional and
leverage our existing distribution channels for our products and solutions,
dependence on strategic and channel partners including their ability to
distribute our products and meet or renew their financial commitments, our
ability to address international markets, the effectiveness of our sales and
marketing activities, the acceptance of our products in the marketplace, the
timing and scope of deployments of our products by customers, fluctuations in
customer sales cycles, customers' ability to obtain additional funding,
technical difficulties with respect to our products or products in development,
the need for ongoing product development in an environment of rapid
technological change, the emergence of new competitors in the marketplace, our
ability to compete successfully against established competitors with greater
resources, the uncertainty of future governmental regulation, our ability to
manage growth, obtain patent protection, and obtain additional funds, general
economic conditions and other risks discussed in this report and in our other
filings with the Securities and Exchange Commission. All forward-looking
statements and risk factors included in this document are made as of the date
hereof, based on information available to us as of the date thereof, and we
assume no obligation to update any forward-looking statement or risk factors.

COMPANY OVERVIEW

         We began our operations in April 2001, and manufactured our first
FoneFriend device for beta testing in 2002. In November, 2002, we became a
public company through the merger with Universal Broadband Networks, and we
became FoneFriend, Inc., a Delaware corporation. We have incurred net operating
losses since inception and expect to incur additional losses for the foreseeable
future. During the past twelve months, we have aggressively consolidated our
company to focus on the infrastructure for setting up the worldwide distribution
of the FoneFriend product. We have cut our expenses through a series of
reductions in workforce and de-emphasized our activities in certain markets to
focus our resources on what we believe are opportunities with a higher
probability of success. The financial impact of these expense reduction
initiatives is described in the Notes to our financial statements included
elsewhere in this Form 10-KSB.

         The company has experienced significant losses during development stage
operations and has yet to realize any revenues from operations. During the forth
quarter of fiscal year 2003, management of the Company evaluated the future
benefit to the Company of its capitalized development costs and determined that
it was prudent to write down the value of that asset to its estimated fair
market valuation.

RESULTS OF OPERATIONS

         The Company had no revenues during the eleven months ended March 31,
2003 or during the year ended April 30, 2002. Ongoing expenses of the Company
consist primarily of salaries, consulting fees and other general expenses
related to developing its product and bringing that product to market.

                                       22

<PAGE>

         The costs to acquire our technology license, researching and
identifying infrastructure components, developing a small scale infrastructure
to demonstrate the product, actual manufacturing and "beta" testing of the
product, capital raising efforts along with general and administrative expenses
have been the principal causes of our losses.

         The report of our independent accountants in our Annual Report on Form
10-KSB for the fiscal year ended March 31, 2003, contains an explanatory
paragraph expressing substantial doubt about our ability to continue as a going
concern as a result of recurring losses and negative cash flows from operations.
We had working capital of $288,881 at April 30, 2002, and negative working
capital of ($49,385) at March 31, 2003. We incurred net losses of ($885,288) for
the fiscal period ended April 30, 2002, and ($1,605,464) in the fiscal period
and 2003. In addition, we have accumulated aggregate net losses from the
inception of business through March 31, 2003, of ($2,490,751).

         The Company's cash portion is currently only sufficient to fund working
capital requirements for the next several months. Moreover, we have no immediate
access to additional capital although the Company is in the process of raising
additional capital through various means. Although we have received about
$80,000 in loans from officers and various third parties through March 31, 2003,
those funds are not expected to last indefinitely and may be completely expended
by July, 2003. We expect our minimum capital needs over the next 12 months to be
approximately $1.5 to $2.0 million to implement our intended plan of business
and become profitable. This amount will primarily be used for manufacturing,
implementing a large scale network system, marketing programs and for general
working capital.

         During the third quarter of 2003, the Company issued 825,000 shares of
stock to consultants for future services to be provided to the Company. The
value of such shares issued to consultants is being amortized to expense over a
twelve-month period.

RISKS RELATED TO OUR BUSINESS

         We have incurred significant losses to date, and for our last fiscal
year we received an opinion from our accountants expressing doubt about our
ability to continue as a going concern.

         We reported a net loss for the year ending March 31, 2003, as initial
marketing and development costs related to bringing our product to market
continue. Our ability to achieve and/or sustain profitable operations depends on
a number of factors, many of which are beyond our control and as are stated
elsewhere herein.

                                       23

<PAGE>

         Absent the infusion of capital from ongoing operations, we only have
sufficient cash to continue operations for several months.

         The Company has prepared a Private Place Memorandum and will commence
efforts to seek financing thereby. However, there can be no assurances that the
Company will be successful in raising cash to continue ongoing business
operations.

         The Company has been informed there will be orders for the FoneFriend
product in certain European territories, but the Company has not confirmed such
orders.

         The Company has been informed of certain strategic relationships, which
may come to fruition through a joint venture or partnership, but the Company can
not give its assurances this will transpire as no partnership agreements have
been negotiated or executed.

         As a result, we continue to seek funds through additional equity or
debt offerings and equity investments by our strategic partners. There can be no
assurance that sufficient additional equity or debt financing will be available.
If we cannot obtain financing when needed, or obtain it on favorable terms, we
may be required to curtail our intended plan of business, further reduce
operating costs through staff reductions or cease operations altogether. Such an
action is often a precursor to a bankruptcy filing, and may be deemed an event
of default under our several of our key agreements.

         Because of insufficient cash flows, we have been delinquent in our
obligations since January, 2003, including office rent and payments to personnel
which have been waived for the benefit of the Company and the shareholders,
alike. There can be no assurance that we will raise additional funds or receive
sufficient monthly revenue to prevent this from occurring again.

FACTORS THAT MAY AFFECT FUTURE RESULTS

         The Company anticipates that it will market its product through direct
marketing to segments of the population that use significant long distance
service to foreign countries, and to those foreign countries who call loved ones
in the United States.

         The initial target markets will be areas in which the population
includes significant Hispanic and Asian segments. These segments of the
population typically spend substantial time on international long distance calls
to their native countries.

         Other VoIP products may be developed over time that compete with the
Company's product, thereby reducing future potential revenue. Further, since the
Company's product requires significant lead time in the manufacturing process,
any delay in filling orders could affect customer satisfaction.

                                       24

<PAGE>

SUBSEQUENT EVENTS

         On or about May 30, 2003, Francois Van Der Hoeven informed the Company
that he had resigned as Senior Vice President of Marketing. Mr. Van Der Hoeven
had not worked at the Company's offices since on or about February of 2003, due
to the Company's inability to pay his then existing salary requirements. As a
result, he did not execute his executive employment contract with the Company
after the completion of the Merger. This contract was the primary basis for
issuance of 1,300,000 shares in exchange for his providing of services to the
Company for a 3-year term. The Company has placed a stop order on Mr. Van Der
Hoeven's stock certificate pending an amicable resolution of the negotiations
until such time as he returns the certificate for cancellation. The Company is
currently considering a consulting agreement with Mr. Van Der Hoeven. Although
he continues his term as a director, he has not attended the last two board of
directors' meetings and was not available to sign this Annual Report.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         The Securities and Exchange Commission's rule related to market risk
disclosure requires that we describe and quantify our potential losses from
market risk sensitive instruments attributable to reasonably possible market
changes. Market risk sensitive instruments include all financial or commodity
instruments and other financial instruments (such as investments and debt) that
are sensitive to future changes in interest rates, currency exchange rates,
commodity prices or other market factors. As we have not yet commenced
operations, and have little or no cash resources, we are not exposed to any such
market risks.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

                                FONEFRIEND, INC.
                          INDEX TO FINANCIAL STATEMENTS

Report of Independent Auditor............................................  26
Balance Sheets...........................................................  27
Statements of Operations.................................................  28
Statements of Cash Flows.................................................  29
Statements of Stockholders' Equity.......................................  30
Notes to Financial Statements............................................. 32

                                       25

<PAGE>

                              HENRY SCHIFFER, CPA
                          AN ACCOUNTANCY CORPORATION
                           315 S. BEVERLY DR. #211
                           BEVERLY HILLS, CA 90212
                               (310) 286-6830

                REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT


To: The Shareholders
    The Board of Directors
    FoneFriend, Inc.
    Carlsbad, California

I have audited the accompanying balance sheet of FoneFriend, Inc. as of March
31, 2003 and the related statements of operations, stockholders' equity and cash
flows for the periods ended April 30, 2002 and March 31, 2003. This financial
statement is the responsibility of the Company's management. My responsibility
is to express an opinion on this financial statement based on my audit.

I conducted my audit in accordance with generally accepted auditing standards in
the United States of America. Those standards require that I plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. I believe that my audit provides a reasonable basis for
my opinion.

In my opinion, the financial statements referred to above fairly present in all
material respects, the financial position of FoneFriend, Inc., a development
stage company, for the dates indicated above and the results of its operations,
stockholders' equity and cash flows for the respective periods then ended in
conformity with generally accepted accounting principles consistently applied. I
believe this to be a "true and fair" reflection of the company's financial
affairs.

The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in the Notes to the
financial statements, the Company has sustained losses from initial startup
costs and has a lack of substantial capital that raises doubt about its ability
to continue as a going concern. Management's plans in regard to these matters
are described in Note 6. The financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

I hereby consent to the use of this opinion letter for inclusion in the filing
of FoneFriend's Form 10-KSB for the period through March 31, 2003.

/s/ Henry Schiffer, CPA

Henry Schiffer, CPA
An Accountancy Corporation
Beverly Hills, California
July 8, 2003


                                       26

<PAGE>
<TABLE>

                                     FONEFRIEND, INC.

                                      BALANCE SHEETS
                                   (Amounts in Dollars)

                                          ASSETS
<CAPTION>

                                                                 March  31,          April 30,
                                                                       2003               2002
                                                                ------------      ------------
<S>                                                             <C>               <C>
Current Assets
Cash in banks and on hand                                       $    20,221       $   228,010
Inventory-equipment                                             $    16,000       $     6,000
Stock subscriptions receivable                                  $        --       $    61,066
Prepaid consulting fees                                         $   143,000       $        --
                                                                ------------      ------------
Total current assets                                            $   179,221       $   295,076
                                                                ------------      ------------
Furniture & equipment, net of depreciation Note 3               $    12,713       $     7,222
                                                                ------------      ------------

Other Assets
Non-current prepaid expenses and deposits                       $    13,597       $    22,500
Capitalized development costs                                   $   694,863       $ 1,329,491
Technology rights, FoneFriend license                           $   300,000       $   350,000
Notes receivable                                                $        --       $    38,600
Stock in FoneFriend Systems, Inc.                               $   150,000       $   150,000
Reorganizational costs, net of amortization Note 3              $       120       $       156
                                                                ------------      ------------

Total other assets                                              $ 1,158,580       $ 1,890,747
                                                                ------------      ------------

TOTAL ASSETS                                                    $ 1,350,514       $ 2,193,045
                                                                ============      ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable                                                $     4,302       $        --
Payroll taxes payable                                           $     5,416       $        --
Loans from officers and others, current Note 4                  $    60,888       $       195
                                                                ------------      ------------
Total current liabilities                                       $    70,606       $       195
                                                                ------------      ------------

Loans payable, non-current  Note 4                              $    20,000       $        --
                                                                ------------      ------------
TOTAL LIABILITIES                                               $    90,606       $       195
                                                                ------------      ------------

Stockholders' Equity Notes 5 and 6
Preferred stock, $.001 par value, authorized
5500,000 shares authorized, issued and outstanding
820,361 shares                                                  $       820       $        --
Common stock, $.001 par value, authorized
200,000,000 shares, issued and outstanding,
8,471,000 at March 31, 2003 and 8,956,361
at April 30, 2002                                               $     8,471       $     8,956
Additional paid in capital                                      $ 3,741,368       $ 3,069,182
Operating deficit                                               $(2,490,751)      $  (885,288)
                                                                ------------      ------------

TOTAL STOCKHOLDERS' EQUITY                                      $ 1,259,908       $ 2,192,850
                                                                ------------      ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $ 1,350,514       $ 2,193,045
                                                                ============      ============
</TABLE>
                      See Accompanying Notes to Financial Statements

                                            27

<PAGE>

                                FONEFRIEND, INC.

                            STATEMENTS OF OPERATIONS
                              (Amounts in Dollars)

                                                           FOR THE
                                               ------------------------------
                                               11 MONTHS ENDED   YEAR ENDED
                                               MARCH 31, 2003    APRIL 30, 2002
                                               ------------      ------------
Revenue                                        $        --       $        --
                                               ------------      ------------
Expenses
Advertising                                    $    12,244       $    76,540
Automobile                                     $    13,952       $    16,471
Commissions related to fund raising activity   $    18,889       $        --
Consulting fees                                $   323,422       $   374,088
Depreciation and amortization                  $     3,202       $     1,845
Insurance                                      $     7,886       $     3,562
Legal fees                                     $    49,104       $    21,683
Meals and entertainment                        $     5,603       $     5,211
Office supplies                                $    10,889       $    12,591
Officer/stockholder payments                   $    31,033       $    53,000
Salaries and payroll                           $   100,890       $        --
Postage                                        $     5,568       $    35,125
Accounting and auditing fees                   $    36,065       $     3,795
Rent                                           $    34,947       $   121,191
Telephone                                      $    25,880       $    95,155
Travel                                         $    26,848       $    24,362
Other                                          $    33,934       $    40,669
                                               ------------      ------------
Total before write-down of capitalized
development cost                               $   740,356       $   885,288

Write down capitalized development cost
to estimated fair value                        $   865,108       $        --
                                               ------------      ------------

                  Total expenses               $ 1,605,464       $   885,288
                                               ------------      ------------

Loss from development stage operations         $(1,605,464)      $  (885,288)
                                               ------------      ------------

                 See Accompanying Notes to Financial Statements

                                       28

<PAGE>
<TABLE>
                                FONEFRIEND, INC.

                            STATEMENTS OF CASH FLOWS
                              (Amounts in Dollars)
<CAPTION>

                                                                  FOR THE
                                                      ------------------------------
                                                      11 MONTHS ENDED   YEAR ENDED
                                                      MARCH 31, 2003    APRIL 30, 2002
                                                      ------------      ------------
<S>                                                   <C>               <C>
Operating Activities
Loss from development stage operations                $(1,605,464)      $  (885,288)
                                                      ------------      ------------

Adjustments to loss from development
stage operations:
Capitalized development costs                         $  (296,814)      $(1,329,491)
Capitalized organization costs                        $        --       $      (195)
Purchase of furniture and equipment                   $    (6,812)      $    (9,028)
Decrease in prepaid cash based
expenses and deposits                                 $     8,903       $   (22,500)
Purchase of inventory-equipment                       $   (10,000)      $    (6,000)
Increase in accounts payable                          $     4,303       $        --
Stock subscriptions receivable                        $    61,066       $   (61,066)
Depreciation and amortization                         $     3,202       $     1,845
Increase in loans from officers
and others                                            $    80,693       $       195
Write-down of capitalized development
cost to estimated fair value                          $   865,108       $        --
Other                                                 $    15,505       $   (38,600)
                                                      ------------      ------------
Net adjustments to loss from
development stage operations                          $   725,154       $(1,464,840)
                                                      ------------      ------------

Net cash provided (used) by development
stage operations                                      $  (880,310)      $(2,350,128)
                                                      ------------      ------------

Investing Activities
Purchase of technology license from FoneFriend
Systems, Inc.                                         $        --       $  (300,000)
Purchase of FoneFriend Systems, Inc. stock            $        --       $  (150,000)
Payment to Universal Broadband, Inc.                  $        --       $   (50,000)
                                                      ------------      ------------
Net cash provided (used) in investing activities      $        --       $  (500,000)
                                                      ------------      ------------

Financing Activities
Preferred stock                                       $       820       $        --
Common stock and paid in capital                      $   671,701       $ 3,078,138
                                                      ------------      ------------

Net cash provided by financing activities             $   672,521       $ 3,078,138
                                                      ------------      ------------

Net cash increase (decrease) for the period           $  (207,789)      $   228,010

Cash at beginning of period                           $   228,010       $        --
                                                      ------------      ------------

Cash at end of period                                 $    20,221       $   228,010
                                                      ------------      ------------
</TABLE>

                 See Accompanying Notes to Financial Statements

                                       29

<PAGE>
<TABLE>
                                               FONEFRIEND, INC.

                                      STATEMENTS OF STOCKHOLDERS' EQUITY
                                             (Amounts in Dollars)
<CAPTION>

                                                           ADDITIONAL        ACCUMU-           TOTAL
                        NO. SHARES          PAR             PAID-IN           LATED         STOCKHOLDERS'
                       OUTSTANDING         VALUE            CAPITAL          DEFICIT           EQUITY
                      ------------      ------------      ------------     ------------      ------------
<S>                     <C>             <C>               <C>              <C>               <C>
Common shares

Beginning
balance, April
30, 2002                8,956,361       $     8,956       $ 3,069,182      $  (885,288)      $ 2,192,850

Common shares
issued September
30, 2002                   85,500       $        86       $   427,415               --       $   427,501

Common shares
cancelled                (300,000)      $      (300)               --               --       $      (300)

Loss from
development
stage operations
to merger date                 --                --                --      $  (480,995)      $  (480,995)

Common shares
issued November
21, 2002                   58,139       $        58       $    29,942      $        --       $    30,000
                      ------------      ------------      ------------     ------------      ------------

Total common
shareholders'
equity pre-
merger, November
21, 2002                8,800,000       $     8,800       $ 3,526,539      $(1,366,283)      $ 2,169,056
                      ------------      ------------      ------------     ------------      ------------
</TABLE>

MERGER OF FONEFRIEND, INC. (NEVADA CORPORATION) ON NOVEMBER
21, 2002 WITH AND INTO FONEFRIEND, INC. (DELAWARE CORPORATION)
--------------------------------------------------------------
Exchange of
Nevada shares
for Delaware
shares                  2,200,000       $     2,200

Issue new Delaware shares to management
consultants and the Liquidating Trust for
Creditors:

                        5,464,000       $     5,464

                                                      30

<PAGE>
<TABLE>

                                                    FONEFRIEND, INC.

                                      STATEMENT OF STOCKHOLDERS' EQUITY (Continued)

                                                             ADDITIONAL          ACCUMU-            TOTAL
                          NO. SHARES           PAR             PAID-IN            LATED          STOCKHOLDERS'
                         OUTSTANDING          VALUE            CAPITAL           DEFICIT            EQUITY
                         ------------      ------------      ------------      ------------      ------------
<S>                       <C>             <C>                <C>               <C>               <C>
Transfer par
value to paid-
in capital                        --       $    (1,154)      $     1,154                --                --

Issue common
shares to
consultants,
December 10,
2002                         825,000       $       825       $   213,675                --       $   214,500

Loss from
operations
from November
21, 2002 to
March 31, 2003                    --                --                --       $(1,124,468)      $(1,124,468)
                         ------------      ------------      ------------      ------------      ------------

Total common
shareholders'
equity, March
31, 2003
Delaware
corporation                8,471,000       $     8,471       $ 3,741,368       $(2,490,751)      $ 1,259,088
                         ------------      ------------      ------------      ------------      ------------

PREFERRED SHARES

Preferred shares
issued November
21, 2002, Nevada             820,361       $       820                --                --       $       820

Cancel Nevada
preferred shares,
November 21,
2002                        (820,361)      $      (820)                                          $      (820)
                         ------------      ------------      ------------      ------------      ------------

Issue Delaware
preferred shares
for Nevada
preferred shares,
November 21,
2002                         820,361       $       820                --                --       $       820
                         ------------      ------------      ------------      ------------      ------------

Total stockholders'
equity, March
31, 2003                          --                --                --                --       $ 1,259,908
                         ------------      ------------      ------------      ------------      ------------

</TABLE>

                                See Accompanying Notes to Financial Statements

                                                      31

<PAGE>

                                FONEFRIEND, INC.

                          NOTES TO FINANCIAL STATEMENTS
                                 March 31, 2003

NOTE 1.  DESCRIPTION OF BUSINESS

A.       Background

FoneFriend, Inc. ("FoneFriend" or the "Company") was incorporated on April 24,
2001, under the laws of the State of Nevada, and on November 21, 2002, was
merged with and into FoneFriend, Inc., a Delaware corporation. The Company
maintains a corporate office at 2722 Loker Avenue, Suite G, Carlsbad, California
92008. The Company's telephone number is: (760) 607-2330.

The Company is a development stage enterprise and has not generated any revenues
during its brief history. The primary business of the Company is to market an
Internet telephony device and related services to customers worldwide, called
the "FoneFriend". The underlying technology of FoneFriend has been licensed by
the Company from FoneFriend Systems, Inc. and will enable the Company's
subscribers to make and receive unlimited long distance telephone calls over the
Internet, using only their standard residential telephone set (without the need
for a computer), for a low monthly fee of less than $10.00 per month. Due to the
small cost of transmitting calls over the Internet, the Company anticipates that
it will realize significant profit margins, well in excess of the traditional
telecommunications industry.

B.       Basis of Presentation

The accompanying financial statements have been prepared in accordance with
Generally Accepted Accounting Principles ("GAAP") which contemplates
continuation of the Company as a going concern. Management is attempting to
raise additional operating capital.

NOTE 2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A.       Fiscal Year

The Company's fiscal year is March 31 (after the above-described merger of
FoneFriend, Inc. of Nevada with and into FoneFriend, Inc. of Delaware. The
accompanying audited financial statements are for March 31, 2003 and April 30,
2002 and the respective eleven month and one year periods then ended.

B.       Significant Estimates

In the process of preparing its financial statements in accordance with GAAP,
the Company estimates the carrying value of certain assets and liabilities that
are subjective in nature. The primary estimates included in the Company's
financial statements include capitalized development costs and the ongoing value
of its purchased technology license.

                                       32

<PAGE>

                                FONEFRIEND, INC.

                     NOTES TO FINANCIAL STATEMENTS Continued

C.       Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with
maturity dates of three months or less at the date of purchase. These items are
carried at cost, which approximates fair value due to their short-term maturity
dates.

D.       Prepaid Expenses and other Current Assets

The Company has cash outlays in advance of expense recognition for items such as
rent, interest, financing fees, and service contracts. All amounts identified as
prepaid expenses that will be utilized during the next twelve months are
identified as current assets, while any portion that will not be utilized during
the next twelve months are classified as non-current assets.

E.       Furniture and Equipment

Furniture and equipment are carried at cost and depreciated over the estimated
useful lives of the individual assets.

F.       Capitalized Development Costs

Capitalized development costs consist of expenditures made by the Company to
improve the product and develop marketing channels for the product, and which
are deemed by management to have future value to the Company. Such capitalized
development costs will be amortized over the estimated useful life once product
sales begin.

G.       Technology Rights, FoneFriend License

The Company purchased a license to use the FoneFriend technology for a period of
ten years from FoneFriend Systems, Inc. under a license agreement dated April
30, 2001. This license agreement allows the Company to manufacture, market and
utilize a proprietary technology referred to as FoneFriend. During the
development stage operations, the company is carrying the asset at cost and will
begin amortization over the remaining life of the license when product sales
begin. The remaining value to the company will be reviewed quarterly and if
management determines that impairment of the asset has occurred, the carrying
value will be adjusted accordingly.

                                       33

<PAGE>

                                FONEFRIEND, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued

H.       Stock in FoneFriend Systems, Inc.

The Company purchased stock in FoneFriend Systems, Inc. as a long-term
investment. Such investment is carried at cost and will be evaluated
periodically by management to determine whether impairment has occurred. Should
management determine that the value has been impaired, the carrying value will
be adjusted accordingly.

NOTE 3.   DEPRECIATION AND AMORTIZATION

The Company's management has estimated the useful lives of furniture, equipment
and certain organization costs. The following tables show the gross asset
amounts and the accumulated depreciation and amortization:

A.       Furniture and Equipment
                                            March          April
                                            31, 2003       30, 2002
                                            ---------      ---------

         Cost                               $ 15,840       $  9,028
         Less accumulated depreciation      $ (3,127)      $ (1,806)
                                            ---------      ---------

                  Net value                 $ 12,713       $  7,222
                                            ---------      ---------

B.       Organizational Costs

         Cost                               $    195       $    195
         Less accumulated depreciation      $    (75)      $    (39)
                                            ---------      ---------

                  Net value                 $    120       $    156
                                            ---------      ---------

NOTE 4.  NOTES PAYABLE

The company has borrowed funds from certain officers and others in order to
maintain its operations while attempting to raise additional capital through the
issuance of shares under the terms of a Private Placement Memorandum. The
amounts and terms of such borrowings as of March 31, 2003 are presented below:

         Due on demand, bearing interest at 6.0% per annum             $60,888
                                                                       -------

         Due April 1, 2005, bearing interest at 8.0% per annum         $20,000
                                                                       -------

                                       34

<PAGE>

                                FONEFRIEND, INC.

                    NOTES TO FINANCIAL STATEMENTS Continued

NOTE 5.   MERGER AND CAPITAL STOCK

The merger of FoneFriend, Inc. of Nevada with and into FoneFriend, Inc. of
Delaware was consummated on November 21, 2002 wherein the assets of FoneFriend,
Inc. of Nevada were acquired by Universal Broadband Networks, Inc. ("UBNT") in a
tax-free reorganization pursuant to IRC 368 (the "Merger"). The Merger was
effectuated as a "C" type reorganization whereby UBNT issued stock in exchange
for all of the assets FoneFriend, Inc. of Nevada, after which that corporation
was dissolved. UBNT was the surviving corporation and changed its name to
FoneFriend, Inc. (a Delaware corporation) immediately subsequent to the Merger.
Pursuant to the express terms of the Fourth Amended Plan of Reorganization, as
approved by the United States Bankruptcy court (the "Plan"), the Merger was
accomplished as follows:

1. All of UBNT's issued and outstanding shares of capital stock were cancelled
and extinguished and the stockholders of UBNT prior to the Merger have no
further interest or rights in UBNT.

2. UBNT issued 2,200,000 shares of newly created common stock in favor of
FoneFriend, Inc. (Nevada corporation) in exchange for all of FoneFriend, Inc.'s
assets and 115,750 of newly created common stock in favor of a Liquidating Trust
for the benefit of UBNT's creditors. As a result, the merged entity had a total
of 2,315,750 shares of newly created common stock issued and outstanding, of
which former shareholders of the dissolved Nevada corporation owned 95%, and J.
Michael Issa, Esq., as Trustee of the Liquidating Trust (which was created under
the Plan), controlled 5% of the then issued and outstanding shares.

3. The issuance of stock pursuant to the Plan, as filed within the U.S.
Bankruptcy Court, was ordered by the Court to be exempt from all applicable
Federal, State and local securities law pursuant to 11 U.S.C. ss.1145 (a).

4. The dissolved Nevada corporation's management distributed the newly issued
2,200,000 shares of FoneFriend, inc. (Delaware corporation) to its former
shareholders, on a pro-rata basis. Each of such former shareholders received one
share of stock in FoneFriend, Inc. (Delaware corporation) for every four shares
held in the dissolved Nevada corporation.

Immediately subsequent to the Merger, the Company authorized the issuance of
820,361 shares of an newly created Series "A" Preferred Stock (each share of
which is convertible into one share of common stock) to be issued to
shareholders of preferred stock in the dissolved Nevada corporation prior to the
Merger.

                                       35

<PAGE>

                                FONEFRIEND, INC.

                     NOTES TO FINANCIAL STATEMENTS Continued

5. The Company then issued 4,600,000 shares of common stock to various
management personnel and consultants in order to hire or retain their services.
The Company also issued 423,000 shares of common stock to Dennis H. Johnston,
Esq. and options to acquire a like number of shares as compensation for his
services in connection with the Merger and for his continued serves for acting
as a director and officer of the Company. Additionally, the company issued
307,250 shares of common stock to the Liquidating Trust so as to be in
compliance with the Anti-Dilution Protection provisions of the Plan.

NOTE 6.  MANAGEMENT'S PLANS FOR RAISING ADDITIONAL CAPITAL

As described in Note 1 hereinabove, the Company is a development stage
enterprise and has not generated any revenue during its brief history. The
primary business of the Company is to market an Internet telephony device and
related services to customers worldwide, called the "FoneFriend". The underlying
technology of FoneFriend has been licensed by the Company from FoneFriend
Systems, Inc. and will enable the Company's subscribers to make and receive
unlimited long distance telephone calls over the Internet, using only their
standard residential telephone set (without the need for a computer), for a low
monthly fee of $10.00 or less. Due to the small cost of transmitting calls over
the Internet, the Company anticipates that it will realize significant profit
margins, well in excess of the traditional telecommunications industry.

Management is presently in the process of finalizing a Private Placement
Memorandum for distribution to qualified investors in an attempt to raise up to
$5,000,000 in additional capital in order to effectuate its business plan.

                                       36

<PAGE>

ITEM 9.  CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS
         ON ACCOUNTING AND FINANCIAL DISCLOSURE

NONE

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         Jackelyn Giroux           45                President, Director
         Edward N. Jones           66                Chief Financial Officer
         Dennis H. Johnston        49                Secretary, Director
         Francois Van Der Hoeven   46                Director
         Gary A. Rasmussen         51                Senior Business Consultant

         JACKELYN GIROUX, is a co-founder and director and serves as the
Company's interim President. Ms. Giroux is also the President of Global
Universal Limited, a film production and distribution company. Ms. Giroux is a
writer, producer and director of feature films. Jackelyn Giroux won a
scholarship to the New York American Academy of Dramatic Arts, and has appeared
in many off Broadway and Broadway plays. Her career in films was launched with a
lead role in "The Cross and the Switch Blade", starring Pat Boone and Eric
Estrada. Through 1985, she has appeared in fifteen feature films and several TV
series. Since then, she has written and produced ten feature films and two
"Movies of the Week." Ms. Giroux has extensive experience in structuring
financing and co-production deals, having successfully arranged for the
financing and co-production of films between Canada, France and Germany, as well
as Canada, France and Australia. In 2000, she wrote and directed "Coo Coo Cafe",
a satire on the media networks, which prominently features the "FoneFriend"
product being used by the main characters.

                                       37

<PAGE>

         EDWARD N. JONES serves as the Company's Chief Financial Officer. Mr.
Jones has over thirty-five years experience as a practicing certified public
accountant, chief financial officer, chief executive officer, corporate board
member and as a consultant to corporate management and legal counsel. Mr. Jones
began his career at KPMG. He progressed rapidly at KPMG and left to work as a
chief financial officer and chief executive officer at various companies. In
1986, he began a new phase of his career, consulting for corporate management
and legal counsel on matters involving finance and litigation. His past board of
director affiliations include the following prestigious companies: Founders Life
Insurance Company, Presidio Insurance Company, Massachusetts Life Insurance &
Indemnity Company, First Nevada Corporation, Camino Real Savings Bank, Real
Estate Management Trust, Inc. (REIT), Sherman Oaks Savings Bank, as well as the
Gawzner Corporation.

         In addition to the foregoing, Mr. Jones was responsible for listing the
stock of Nevada Savings and Loan Association on the New York Stock Exchange and
growing the institution from $600 million plus in assets to over $1.1 billion in
assets by early 1984, all the while maintaining exceptional profitability and
superior asset quality. Thereafter, while continuing his practice as a forensic
accountant and analyst, Mr. Jones was retained to act as the accounting expert
for counsel to the State of Rhode Island in the simultaneous, massive failure of
72 credit unions based in that state. Mr. Jones is a fully licensed Certified
Public Accountant in the State of California and is a member of both the
American Institute of Certified Public Accountants and the California Society of
Certified Public Accountants. Mr. Jones has a Bachelor of Sciences degree in
business and finance, graduating from California State University, Northridge in
1963. He was awarded the Wall Street Journal Outstanding Business Student Award
in 1961.

         DENNIS H. JOHNSTON, ESQ. serves as the Company's Corporate Secretary,
and is also an independent director. Mr. Johnston has more than 25 years of
experience as a practicing attorney currently specializing in the representation
of corporations and formerly representing large financial institutions. He has
assisted in organizing and financing numerous private and publicly traded
companies and has handled mergers and acquisitions with a total value in excess
of $3 billion. Mr. Johnston received undergraduate degrees in business and
economics from UCLA and a law degree with Dean's List Honors from Loyola
University of Los Angeles, where he was an Editor of The Loyola Law Review and a
co founder of The International and Comparative Law Journal. He is a former
partner at the nationally recognized law firms of Manatt, Phelps, Rothenberg, &
Tunney, and Wyman, Bautzer, Kuchel & Silbert.

         FRANCOIS VAN DER HOEVEN is a co-founder and director and was formerly
Senior Vice President of Marketing. Mr. Van Der Hoeven is also the Chief
Executive Officer of NU Quest International, Inc., a media consulting firm
specializing in direct response marketing. Mr. Van Der Hoeven possesses a broad
knowledge base and extensive experience in marketing, especially with

                                       38

<PAGE>

Infomercials (direct response TV) and retail distribution. He was previously
Vice President of Marson Gold, an international product development and
marketing organization where he was responsible for numerous marketing projects
utilizing Infomercials from inception to manufacturing to retail distribution.
Notably, in connection with working with his brother Martin Van Der Hoeven, he
was instrumental in marketing the Abflex(TM) abdominal exerciser, which became
the "number-one" Infomercial in 1995, selling over 5 million units and grossing
over $350 million. In late 1997, he left Marson Gold to form his own company,
Van Der Hoeven Direct, which was engaged in the business of designing,
researching, manufacturing and marketing new products. He is the co-inventor of
3 patents (Bun Trainer, Bench Roller Pro Home, & Bench Roller Pro Gym) and the
sole inventor of Six Pack and Abdominal Pad.

         GARY A. RASMUSSEN, is a co-founder of the Company and serves as a
senior business consultant to guide the Company through its development stage
and implementation of its initial operations and plan of business. Mr. Rasmussen
has an extensive background spanning over 25 years as an entrepreneur with
experience in all phases of business development, having been a founder, chief
executive officer or director of several private and publicly-held corporations
in the areas of cable television, investment banking, mortgage banking and
motion pictures. He has extensive experience in structuring debt and equity
capital arrangements for both public and private enterprises, implementing short
and long term business planning and strategic concepts, acquisitions and
divestitures, and has played a leading role in spearheading several publicly
held corporations from their inception through the capital raising stages.
Because he was President of La Paz Farmaceuticos, S.A. de C.V. at the time his
business partner moved the contents of his laboratory to an un-permitted EPA
site without an EPA permit, the EPA charged Mr. Rasmussen with being a
co-conspirator with respect to that violation. Mr. Rasmussen vehemently denies
any wrongdoing or culpability and believes he was wrongfully convicted through
intentional prosecutorial misconduct. He is currently pursuing legal remedies
seeking to reverse the conviction. In the opinion of legal counsel and
management of the Company, this conviction has no bearing on Mr. Rasmussen's
honesty, veracity or his engagement with FoneFriend and does not reflect upon
his ability to diligently perform his duties. Mr. Rasmussen is a graduate of
Western Michigan University.

                                       39

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

COMPENSATION OF OFFICERS, DIRECTORS AND CONSULTANTS

         The following table sets forth certain information concerning the
actual compensation paid by the Company to each officer and director, and key
consultants for the year ending March 31, 2003.

<TABLE>
<CAPTION>
                                                                                 COMPENSATION
                                                                                 ------------
NAME                                TITLE                              CASH          STOCK          OPTIONS
-----------------------------------------------------------------------------------------------------------
<S>                                 <C>                                <C>           <C>             <C>
Jackelyn Giroux (1)                 President, Director                $  69,500     1,800,000       350,000

Edward N. Jones (2)                 Chief Financial Officer            $  - 0 -         50,000             0

Francois Van Der Hoeven (3)         Director                           $  43,911     1,300,000             0

Dennis H. Johnston (4)              Secretary, Director                $  15,000       423,000       300,000

Gary Rasmussen (5)                  Senior Business Consultant         $  35,280     1,500,000       350,000

Faramarz Vaziri, Ph.D. (6)          Technology Consultant              $  - 0 -         50,000             0

Brandon Powell (7)                  Former Executive Vice President    $ 115,000             0             0

Daniel Brooking (8)                 Former Chief Operating Officer     $  29,188             0             0

William Krusheski (9)               Former Executive Vice President    $   2,000             0             0
</TABLE>

(1) Ms. Giroux's employment agreement provides for an annual base compensation
of $90,000 and her compensation is payable to Global Universal Limited, a
corporation majority owned and controlled by her. Ms. Giroux has agreed to allow
the Company to accrue a portion of her salary until the Company has received
financing. Additionally, her agreement with the Company granted her the right to
purchase 1,800,000 shares of common stock and grants her the right to purchase a
minimum of 350,000 shares of common stock at a price of $0.01. The stock options
will be subject to a vesting schedule and will be subject to an agreement that
will limit the amount that can be sold in any given month.. In addition, her
agreement provides for bonus compensation of 1.0% of the net revenues realized
by the Company.

(2) Mr. Jones' agreement with the Company provides for his compensation to be
payable in the form of 50,000 shares of the Company's common stock in
consideration for services already performed and for services to be performed as
Chief Financial Officer through January 31, 2004. He has not received any cash
compensation for the current year.

(3) Mr. Van Der Hoeven's employment arrangement with the Company ended in
February, 2003, and the Company has placed a stop order with its transfer agent
with respect to the 1,300,000 shares that were issued to him in anticipation of
his acceptance and execution of his employment agreement.

(4) Mr. Johnston's employment arrangement with the Company is a verbal agreement
that provides him with a monthly fee of $3,000 for his continued services as
Secretary and General Counsel. This agreement will allow the Company to accrue
his salary until such time as the Company is operating profitably. Pursuant to
this verbal understanding, the Board of Directors has agreed to grant him an
option to acquire 300,000 shares of the Company's common stock at a price of
$0.10, per share. The stock options will be subject to vesting over a 3-year
period and will be subject to an agreement that will limit the amount that can
be sold in any given month.

                                       40

<PAGE>

(5) Mr. Rasmussen's agreement with the Company provides for a fixed monthly fee
of $10,000 as compensation for his services as a consultant, subject to the
Company's right to pay a minimum of $3,000 per month until it has adequate
financial resources. His monthly fee will increase to $15,000 upon the Company's
receipt of a minimum of $1 million in financing. Additionally, he will receive a
portion of his compensation in stock options, in an amount to be determined by
the Company's board of directors, subject to a minimum option entitling him to
purchase 350,000 shares of common stock under the Company's "2002 Stock Plan",
at a price of $0.10. In addition, his agreement provides for bonus compensation
of 1.5% of net financing proceeds received, and 1.0% of net revenues realized by
the Company.

(6) This amount represents an arbitrary value of 50,000 shares of common stock
granted to Dr. Vaziri as consideration for services performed and to be
performed by Sector 7 Technologies, LLC, of which Dr. Vaziri is the President.
This payment is expected to cover the services of Dr. Vaziri and four additional
engineers who have agreed to provide technical services and support to the
Company for a period of six months. This amount does not include an aggregate
sum of $63,683 that was paid to Sector 7 Technologies for technical services and
expenses, pursuant to an agreement with the Company. The Company is also
currently negotiating a new agreement with Sector 7 Technologies for continued
technical support.

(7) Mr. Powell was the former Executive Vice President and sole remaining
officer during the Bankruptcy. Mr. Powell's salary amount is presented as an
estimate and was determined from previous Company filings under its former name,
Universal Broadband Technologies. Mr. Powell resigned on November 20, 2002.

(8) Mr. Brooking was the former Chief Operating Officer of FoneFriend, Inc., a
Nevada corporation, prior to the Merger with the Company. Mr. Brooking's
employment was terminated on or about August 31, 2002.

(9) Mr. Krusheski was the former Executive Vice President and a director of
FoneFriend, Inc., a Nevada corporation, prior to the Merger with the Company.
Mr. Krusheski's employment was terminated on or about April 30, 2002.

BENEFITS AND PERFORMANCE INCENTIVE BONUS

         The Board of Directors ("Board") has agreed to establish a benefits
package for key executives and consultants whereby they will receive automobile
allowances, health insurance and other benefits customary for high level
executives. Also, the Board has authorized the implementation of a cash
incentive compensation package which provides for an aggregate cash incentive of
not more than fifteen percent (15%) of the Company's net, pre-tax profits to be
paid to directors, executive officers and key consultants as a performance
incentive bonus; provided, however, that the Company realizes two or more
consecutive quarters of net profits in any one fiscal year period. Additionally,
the Board has authorized the adoption of the Company's `2002 NON-EMPLOYEE
DIRECTOR AND CONSULTANT RETAINER STOCK PLAN AND EMPLOYEE STOCK INCENTIVE PLAN'
(the "2002 Stock Plan"), whereby stock incentives may be issued to executive
officers, directors, consultants and third parties who provide a benefit to the
Company. The maximum number of shares of common stock that may be issued
pursuant to the Plan is 4,600,000; of which 1,100,000 shares is reserved for
Award Shares and 3,500,000 shares of which is reserved for Option Shares. As of
March 31, 2003, the Board had issued 825,000 shares of Award Shares under the
Plan. During the last quarter ended June 30, 2003, the Board issued an
additional net of 255,000 shares. As of June 30, 2003, the Board has authorized
the issuance of 1,000,000 Option Shares to two officers and a consultant of the
Company, pursuant to the terms of their respective agreements. (See footnotes to
"Compensation of Officers, Directors And Consultants", above)

                                       41

<PAGE>

         Further, the Company will provide additional and customary benefits to
all officers including, but not limited to, automobile allowance, health
insurance and reimbursement of reasonable business expenses. The Directors and
any Advisory Board Members will receive a reasonable fee to be determined by the
Board, for each meeting attended, plus expenses.

         Additionally, the Board may authorize further issuance of common stock
and/or stock options as the business expands and adds additional personnel or
acquires assets or services in exchange for securities. Incentive bonuses, stock
and stock options shall be issued and distributed upon such terms, and in such
amounts, and at such times as may be determined by the Board, in its sole
discretion.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth certain information regarding the
beneficial ownership of the common stock, and the address of such beneficial
owner, as of March 31, 2003, and (i) each person known by the Company to be the
beneficial owner of 5% or more of the outstanding common stock ("Principal
Stockholder"), (ii) each of the Company's officers, directors and consultants,
and (iii) all of the Company's executive officers, directors, consultants and
Principal Stockholders as a group.

COMMON STOCK                        PERCENTAGE OF
NAME AND ADDRESS                    BENEFICIALLY OWNED          SHARES OWNED
----------------                    ------------------          ------------

Jackelyn Giroux (1)
2722 Loker Avenue West, #G
Carlsbad, CA  92008                         2,050,000                 24.2%

Gary Rasmussen.  (2)
2722 Loker Avenue West, #G
Carlsbad, CA  92008                         2,016,125                 23.8%

Francois Van Der Hoeven (3)
2722 Loker Avenue West, #G
Carlsbad, CA  92008                         1,800,000                 21.3%

Dennis Johnston (4)
2895 Woodwardia Dr.
Los Angeles, CA  90077                        423,000                  5.0%

Edward N. Jones (5)
13331 Moorpark Street, Unit 346
Sherman Oaks, CA  91423                        50,000                  0.6%

J. Michael Issa, Trustee (6)
Ballenger Cleveland & Issa, LLC
4100 Newport Place,
Suite 300
Newport Beach, CA  92660                      423,000                  5.0%

Principal Shareholders &
Officers, Directors as a group              6,339,125                 74.8%

                                       42

<PAGE>

(1) Includes 250,000 shares held in the name of Global Universal Limited, Inc.,
a corporation controlled by Jackelyn Giroux as its President and majority
shareholder. This number does not include a minimum of 350,000 stock options
that were issued in accordance with her employment agreement and pursuant to the
Company's incentive stock option plan.

(2) Includes 428,625 shares owned by Rochester Capital Partners, a limited
partnership, of which Mr. Rasmussen is the general partner and a beneficial
owner of 20% of its equity. Mr. Rasmussen disclaims any direct beneficial
ownership in the remaining 80% of said partnership, which remaining equity
interests are held by Mr. Rasmussen's minor children and ex-wife. Also, does not
include 75,000 shares held by an irrevocable trust for Mr. Rasmussen's children,
nor does it give effect to 62,500 shares owned by various members of his
immediate family, of which he disclaims any beneficial interest. Mr. Rasmussen
holds 1,587,500 shares directly in his name. This number does not include a
minimum of 350,000 stock options which were issued Mr. Rasmussen in accordance
with his consulting agreement and pursuant to the Company's incentive stock
option plan.

(3) Does not include 121,125 shares of common stock held by members of Mr. Van
Der Hoeven's immediate family, in which he disclaims any beneficial interest.
Mr. Van Der Hoeven holds 1,800,000 shares directly in his name of which the
Company has placed a stop order on 1,300,000 shares following Mr. Van Der
Hoeven's departure from the Company. The amount of shares represented includes
the 1,300,000 shares because they are still outstanding at present.

(4) These shares were issued to Mr. Johnston in connection with his services
relating to the merger and reorganization between the Company and FoneFriend,
Inc., a Nevada corporation. Mr. Johnston became a director and officer of the
Company on June 17, 2002, and currently serves as the Company's General Counsel
and Secretary. This number does not include 300,000 stock options which will be
issued to Mr. Johnston in accordance with his agreement with the Company and
pursuant to the Company's incentive stock option plan.

(5) These shares were issued to Mr. Jones as compensation for his services as
CFO of the Company in lieu of a cash salary.

(6) These shares are not included in the calculation of Officers and Directors.

                                       43

<PAGE>

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

NONE

ITEM 14. CONTROLS AND PROCEDURES

         The principal executive officer and principal financial officer, based
on their evaluation of the Company's disclosure controls and procedures (as
defined in Rules13a-14(c) and 15d-14(c) of the Securities and Exchange Act of
1934) as of March 31, 2003, have concluded that the Company's disclosure
controls and procedures are adequate and effective to ensure that material
information relating to the Company is recorded, processed, summarized and
reported with the time periods specified by the SEC's rules and forms,
particularly during the period in which the annual report has been prepared.

         The principal executive officer and principal financial officer have
concluded that there were no significant changes in the Company's internal
controls or in other factors that could significantly affect these controls
subsequent to March 31, 2003, the date of their evaluation of such controls, and
that there were no significant deficiencies or material weakness in the
Company's internal controls.

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A)      (1)      FINANCIAL STATEMENTS.

         The Financial Statements filed as part of this Annual Report on Form
10-KSB are identified in the Index to Consolidated Financial Statements on page
F-1 hereto.

         (2)      FINANCIAL STATEMENT SCHEDULES.

         Financial Statement Schedules have been omitted because the information
required to be set forth therein is not applicable or is shown on the financial
statements or notes thereto.

         (3)      EXHIBITS.

         The exhibits required by Item 601 of Regulation S-K filed as part of,
or incorporated by reference in, this Form 10-KSB are listed below in (c).

                                       44

<PAGE>

(B)      REPORTS ON FORM 8-K

l.       Form 8-K filed on December 5, 2002 incorporated by reference.
2.       Form 8-K/A filed on December 24, 2002 incorporated by reference.
3.       Form 8-K/A filed on December 26, 2002 incorporated by reference.
4.       Form 8-K/A filed on February 19, 2003 incorporated by reference.
5.       Form 8-K filed on April 9, 2003 incorporated by reference.

(C)      EXHIBITS

         The following exhibits are filed herewith or are incorporated by
reference to exhibits previously filed with the Commission.

       EXHIBIT
          NO.                              DESCRIPTION
          ---                              -----------

         10.1     2002 Non-Employee Director And Consultant Retainer Stock Plan
                  And Employee Stock Incentive Plan. Incorporated by reference
                  in Form S-8, filed on December 27, 2002.
         10.2*    Employment Agreement executed by the Registrant and Jackelyn
                  Giroux.
         10.3*    Consulting Agreement executed by the Registrant and Gary A.
                  Rasmussen.
         10.4*    Indemnification Agreement executed by the Registrant and
                  Jackelyn Giroux.
         10.5*    Indemnification Agreement executed by the Registrant and
                  Edward N. Jones.
         10.6*    Indemnification Agreement executed by the Registrant and
                  Dennis H. Johnston.
         10.7*    Indemnification Agreement executed by the Registrant and Gary
                  A. Rasmussen.
         10.8*    Indemnification Agreement executed by the Registrant and
                  Francois Van Der Hoeven.
         10.9*    Technology License Agreement executed by the Registrant and
                  Fonefriend Systems, Inc.
         24.1*    Opinion Letter From Counsel.
         99.1*    Certification of the Chief Executive Officer and Chief
                  Financial Officer pursuant to 18 U.S.C. Section 1350, as
                  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                  2002.

---------------
*   Filed herewith

                                       45

<PAGE>

                                   SIGNATURES

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

                                   FoneFriend, Inc.

                                   By:  /s/ JACKELYN GIROUX
                                        ---------------------------
                                        Jackelyn Giroux
                                        Chief Executive Officer



         Pursuant to the requirements of the Securities and Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities indicated on this 15th day of July, 2003.

<TABLE>
<CAPTION>

<S>                                             <C>                                                 <C>
/s/ Jackelyn Giroux                             Chief Executive Officer and Director (Principal     Dated:  July 15, 2003
--------------------------------------------    Executive Officer)
    Jackelyn Giroux

/s/ Ed Jones                                    Chief Financial Officer (Chief Accounting           Dated:  July 15, 2003
--------------------------------------------    Officer)
    Ed Jones

/s/ Dennis Johnston                             Director                                            Dated:   July 15, 2003
--------------------------------------------
    Dennis Johnston


/s/ Jackelyn Giroux                             Director                                            Dated:  July 15, 2003
--------------------------------------------
    Jackelyn Giroux

</TABLE>





                                 Certifications

     I, Jackelyn Giroux, certify that:

     1.   I have reviewed this annual report on Form 10-K of FoneFriend, Inc.;

     2.   Based on my knowledge, this annual report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary in order to make the statements made, in light if the
          circumstances under which such statements were made, not misleading
          with respect to the period covered by this annual report; and

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this annual report, fairly present in all
          material respects the financial condition, results of operation and
          cash flows of the registrant as of, and for, the periods presented in
          this annual report.

Dated: July 15, 2003

                                 /s/ Jackelyn Giroux
                                 ---------------------------------------------
                                 Jackelyn Giroux
                                 Chief Executive Officer

                                      S-1

<PAGE>

                                 Certifications

     I, Ed Jones, certify that:

     1.   I have reviewed this annual report on Form 10-K of FoneFriend, Inc.;

     2.   Based on my knowledge, this annual report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary in order to make the statements made, in light if the
          circumstances under which such statements were made, not misleading
          with respect to the period covered by this annual report; and

     3.   Based on my knowledge, the financial statements, and other financial
          information included in this annual report, fairly present in all
          material respects the financial condition, results of operation and
          cash flows of the registrant as of, and for, the periods presented
          in this annual report.

Dated: July 15, 2003

                                 /s/ Ed Jones
                                 ---------------------------------------------
                                 Ed Jones
                                 Chief Financial Officer

                                      S-2