U.S. Securities and Exchange Commission
                             Washington, D.C. 20549

                                   FORM 10-KSB

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

                   For the fiscal year ended December 31, 2003

                               Commission File No.
                                     1-11476

                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
           (Exact name of the registrant as specified in its charter)

           California                                      95-3977501
 (State or other jurisdiction of              (IRS Employer Identification No.)
  Incorporation or organization)


                       15915 Ventura Boulevard, Suite 301
                            Encino, California 91436
                    (Address of principal executive offices)

       Registrant's telephone number, including area code: (818) 783-0393

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

                 Name of each exchange on which registered: None

      Securities registered under Section 12(g) of the Exchange Act: Common
                            Stock, $0.001 Par Value

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not 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-K or any amendment to this
Form 10-K. [ ]

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes [ ] No [X]

Voice Powered Technology International, Inc.'s revenues for the year ended
December 31, 2003 were $0.

The aggregate market value of the issuer's Common Stock held by non-affiliates
as of February 23, 2004, based on the closing price on that date, was
approximately $230,000.



                                       1
<PAGE>
As of February 23, 2004, there were 92,970,027 shares of Voice Powered
Technology International, Inc. Common Stock, $.001 par value, outstanding.

Check  whether the issuer has filed all  documents  and  reports  required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the  distribution  of
securities under a plan confirmed by a court. Yes X No



















































                                       2
<PAGE>
                                TABLE OF CONTENTS


     PART I.                                                            PAGE
                                                                        ----

Item 1.  Business                                                         4
Item 2.  Properties                                                      11
Item 3.  Legal Proceedings                                               11
Item 4.  Submission of Matters to a Vote of Security Holders             11

     PART II

Item 5.  Market for Registrant's Common Equity and Related
         Stockholder Matters                                             12
Item 6.  Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                       12
Item 7.  Financial Statements                                            14

     PART III

Item 8.  Disagreements on Accounting and Financial Disclosure            27
Item 8A. Controls & Procedures                                           27
Item 9.  Directors and Executive Officers of the Registrant              27
Item 10. Executive Compensation                                          27
Item 11. Security Ownership of Certain Beneficial Matters Owners and
         Management and Related Stockholder                              29
Item 12. Certain Relationships and Related Transactions                  29

     PART IV

Item 13. Exhibits, Financial Statements Schedules, and Reports on
         Form 8-K                                                        30
Item 14. Principal Accountant Fees and Services                          31























                                       3
<PAGE>
PART I
--------------------------------------------------------------------------------
Except for the historical information contained herein, the matters discussed
throughout this report, including, but not limited to, those that are stated as
the Company's belief or expectation or preceded by the word "should" are forward
looking statements that involve risks to and uncertainties in the Company's
business and other risks and uncertainties that may be detailed from time to
time in the Company's reports filed with the Securities and Exchange Commission.
--------------------------------------------------------------------------------

Item 1.  Description of Business

Voice Powered Technology International, Inc. (the "Company"), incorporated in
California in June 1985, began active operations in January 1990. The Company
was formed to develop, market, and distribute low-cost voice recognition and
voice activated products on a worldwide basis, both directly and through
licensing agreements. From January 1990 until July 1992, the Company operated as
a development stage enterprise.

Effective March 31, 2001, the Company discontinued its operations.

On August 19, 2002, Franklin sold its 74,258,788 shares of the Company's common
stock, equal to an approximately 82% interest in the Company, to Belle Group,
Ltd. Concurrent with the sale, all amounts due and owing to Franklin by the
Company were forgiven. This resulted in approximately $1,908,000 of income from
the forgiveness of debt.

Plan of Operations
------------------
The Company has had no business operations since March 2001. Since August 2002,
after a change in control and management, the Company's objective has been to
acquire a company that will have experienced management and opportunities for
growth in exchange for its securities.

General Business Plan
---------------------
The Company's purpose is to seek, investigate and, if such investigation
warrants, acquire an interest in business opportunities presented to it by
persons or firms who or which desire to seek the advantages of an Issuer who has
complied with the Securities Act of 1934 ("1934 Act"). The Company will not
restrict its search to any specific business, industry, or geographical
location, and may participate in a business venture of virtually any kind or
nature. This discussion of the proposed business is purposefully general and is
not meant to be restrictive of the Company's virtually unlimited discretion to
search for and enter into potential business opportunities. Management
anticipates that it may be able to participate in only one potential business
venture because the Company has nominal assets and limited financial resources.

The Company may seek a business opportunity with entities which have recently
commenced operations, or which wish to utilize the public marketplace in order
to raise additional capital in order to expand into new products or markets, to
develop a new product or service, or for other corporate purposes. The Company
may acquire assets and establish wholly owned subsidiaries in various businesses
or acquire existing businesses as subsidiaries.



                                       4
<PAGE>
The Company anticipates that the selection of a business opportunity in which to
participate will be complex and extremely risky. Due to general economic
conditions, rapid technological advances being made in some industries and
shortages of available capital, management believes that there are numerous
firms seeking the benefits of an Issuer who has complied with the 1934 Act. Such
benefits may include facilitating or improving the terms on which additional
equity financing may be sought, providing liquidity for incentive stock options
or similar benefits to key employees, providing liquidity (subject to
restrictions of applicable statutes), for all shareholders and other factors.
Potentially, available business opportunities may occur in many different
industries and at various stages of development, all of which will make the task
of comparative investigation and analysis of such business opportunities
extremely difficult and complex. The company has, and will continue to have,
limited capital with which to provide the owners of business opportunities with
any significant cash or other assets. However, management believes the Company
will be able to offer owners of acquisition candidates the opportunity to
acquire a controlling ownership interest in an Issuer who has complied with the
1934 Act without incurring the cost and time required to conduct an initial
public offering.

The analysis of new business opportunities will be undertaken by, or under the
supervision of, the officers and directors of the Company. Management intends to
concentrate on identifying preliminary prospective business opportunities which
may be brought to its attention through present associations of the Company's
officers and directors, or by the Company's shareholders. In analyzing
prospective business opportunities, management will consider such matters as the
available technical, financial and managerial resources; working capital and
other financial requirements; history of operations, if any; prospects for the
future; nature of present and expected competition; the quality and experience
of management services which may be available and the depth of that management;
the potential for further research, development or exploration; specific risk
factors not now foreseeable but which then may be anticipated to impact the
proposed activities of the Company; the potential for growth or expansion; the
potential for profit; the public recognition of acceptance of products, services
or trades; name identification; and other relevant factors. Officers and
directors of the Company expect to meet personally with management and key
personnel of the business opportunity as part of their investigation. To the
extent possible, the Company intends to utilize written reports and personal
investigation to evaluate the above factors. The Company will not acquire or
merge with any company for which audited financial statements cannot be obtained
within a reasonable period of time after closing of the proposed transaction.

Acquisition Opportunities
-------------------------
In implementing a structure for a particular business acquisition, the Company
may become a party to a merger, consolidation, reorganization, joint venture, or
licensing agreement with another corporation or entity. It may also acquire
stock or assets of an existing business. On the consummation of a transaction,
it is probable that the present management and shareholders of the Company will
no longer be in control of the Company. In addition, the Company's directors
may, as part of the terms of the acquisition transaction, resign and be replaced
by new directors without a vote of the Company's shareholders or may sell their
stock in the Company. Any terms of sale of the shares presently held by officers




                                       5
<PAGE>
and/or directors of the Company will be also afforded to all other shareholders
of the Company on similar terms and conditions. Any and all such sales will only
be made in compliance with the securities laws of the United States and any
applicable state.

It is anticipated that any securities issued in any such reorganization would be
issued in reliance upon exemption from registration under application federal
and state securities laws. In some circumstances, however, as a negotiated
element of its transaction, the Company may agree to register all or a part of
such securities immediately after the transaction is consummated or at specified
times thereafter. If such registration occurs, or which there can be no
assurance, it will be undertaken by the surviving entity after the Company has
successfully consummated a merger or acquisition and the Company is no longer
considered an inactive company. The issuance of substantial additional
securities and their potential sale into any trading market which may develop in
the Company's securities may have a depressive effect on the value of the
Company's securities in the future, if such a market develops, of which there is
no assurance.

While the actual terms of a transaction to which the Company may be a party
cannot be predicted, it may be expected that the parties to the business
transaction will find it desirable to avoid the creation of a taxable event and
thereby structure the acquisition in a so-called "tax-free" reorganization under
Sections 368(a)(1) or 351 of the Internal Revenue Code (the "Code"). In order to
obtain tax-free treatment under the Code, it may be necessary for the owners of
the acquired business to own 80 percent or more of the voting stock of the
surviving entity. In such event, the shareholders of the Company would retain
less than 20 percent of the issued and outstanding shares of the surviving
entity, which would result in significant dilution in the equity of such
shareholders.

As part of the Company's investigation, officers and directors of the Company
will meet personally with management and key personnel, may visit and inspect
material facilities, obtain independent analysis of verification of certain
information provided, check references of management and key personnel, and take

other reasonable investigative measures, to the extent of the Company's limited
financial resources and management expertise. The manner in which the Company
participates in an opportunity will depend on the nature of the opportunity, the
respective needs and desires of the Company and other parties, the management of
the opportunity and the relative negotiation strength of the Company and such
other management.

With respect to any merger or acquisition and depending upon, among other
things, the target company's assets and liabilities, the Company's shareholders
will in all likelihood hold a substantially lesser percentage ownership interest
in the Company following any merger or acquisition. The percentage ownership may
be subject to significant reduction in the event the Company acquires a target
company with assets and expectations of growth. Any merger or acquisition
effected by the Company can be expected to have a significant dilutive effect on
the percentage of shares held by the Company's then shareholders.

The Company will participate in a business opportunity only after the
negotiation and execution of appropriate written agreements. Although the terms
of such agreements cannot be predicted, generally such agreements will require


                                       6
<PAGE>
some specific representations and warranties by all of the parties thereto, will
specify certain events of default, will detail the terms of closing and the
conditions which must be satisfied by each of the parties prior to and after
such closing, will outline the manner of bearing costs, including costs
associated with the Company's attorneys and accountants, will set forth remedies
on default and will include miscellaneous other terms.

As stated herein above, the Company will not acquire or merge with any entity
which cannot provide independent audited financial statements within a
reasonable period of time after closing of the proposed transaction. The Company
is subject to all of the reporting requirements included in the 1934 Act.
Included in these requirements is the affirmative duty of the Company to file
independent audited financial statements as part of its Form 8-K to be filed
with the Securities and Exchange Commission upon consummation of a merger or
acquisition, as well as the Company's audited financial statements included in
its annual report on Form 10-K (or 10-KSB, as applicable). If such audited
financial statements are not available at closing, or within time parameters
necessary to insure the Company's compliance with the requirements of the 1934
Act, or if the audited financial statements provided do not conform to the
representations made by the candidate to be acquired in the closing documents,
the closing documents will provide that the proposed transaction will be
voidable, at the discretion of the present management of the Company. If such
transaction is voided, the agreement will also contain a provision providing for
the acquisition entity to reimburse the Company for all costs associated with
the proposed transaction.

Competition
-----------
The Company will remain an insignificant participant among the firms which
engage in the acquisition of business opportunities. There are many established

venture capital and financial concerns which have significantly greater
financial and personnel resources and technical expertise than the Company. In
view of the Company's combined, extremely limited financial resources and
limited management availability, the Company will continue to be at a
significant competitive disadvantage compared to the Company's competitors.

Investment Company Act of 1940
------------------------------
Although the Company will be subject to regulation under the Securities Act of
1933, as amended, and the 1934 Act, management believes the Company will not be
subject to regulation under the Investment Company Act of 1940 insofar as the
Company will not be engaged in the business of investing or trading in
securities. In the event the Company engages in business combinations that
result in the Company holding passive investment interests in a number of
entities, the Company could be subject to regulation under the Investment
Company Act of 1940. In such event, the Company would be required to register as
an investment company and could be expected to incur significant registration
and compliance costs. The Company has obtained no formal determination from the
Securities and Exchange Commission as to the status of the Company under the
Investment Company Act of 1940 and, consequently, any violation of such Act
would subject the Company to material adverse consequences. The Company believes
that, currently, it is exempt from the Investment Company Act of 1940 under
Regulation 3a-2 thereto.



                                       7
<PAGE>
                                  RISK FACTORS

The Company's majority stockholder has the ability to effectively control
substantially all actions taken by stockholders.

Belle Group, Ltd. owns 74,258,788 shares of the Company's common stock and
controls approximately 80% of the aggregate voting power of all outstanding
shares. Accordingly, Belle Group, Ltd. can effectively control substantially all
actions taken by the Company's stockholders, including the election of
directors. Such concentration of ownership could also have the effect of
delaying, deterring or preventing a change in control of the Company that might
otherwise be beneficial to stockholders and may also discourage acquisition bids
for the Company and limit the amount certain investors may be willing to pay for
shares of the common stock.

The price of the Company's common stock has been volatile and could continue to
fluctuate in the future.

The market price for shares of the Company's common stock has been volatile and
has fluctuated substantially. Broad market fluctuations, general economic and
political conditions and the discontinuance of the Company's operations may also
adversely affect the market price of the common stock.

A third party claims that the Company infringes on its intellectual property
rights.

The Company has received a notice from a third party, which alleges that the
Company's products infringe on the proprietary rights of such third party, but
no legal proceedings have been commenced. There can be no assurance that
proceedings claiming infringement by the Company with respect to its past,
current or future activities will not be initiated by that third party or
others. If such proceedings are initiated and the Company is unsuccessful in
defending such proceedings, there could be a material adverse effect on the
Company's business.

Scarcity of, and competition for business opportunities and combinations.

The Company is and will continue to be an insignificant participant in the
business of seeking mergers with, joint ventures with and acquisitions of small
private and public entities. A large number of established and well-financed
entities, including venture capital firms, are active in mergers and
acquisitions of companies which may be desirable target candidates for the
Company. Nearly all such entities have significantly greater financial
resources, technical expertise and managerial capabilities than the Company and,
consequently, the Company will be at a competitive disadvantage in identifying
possible business opportunities and successfully completing a business
combination. Moreover, the Company will also compete in seeking merger or
acquisition candidates with numerous other small public companies.

The Company has not executed any formal agreement for a business combination or
other transaction and no standards for business combinations.

The Company has not executed any formal arrangement, agreement or understanding
with respect to engaging in a merger with, joint venture with or acquisition of,



                                       8
<PAGE>
a private or public entity. There can be no assurance the Company will be
successful in identifying and evaluating suitable business opportunities or in
concluding a business combination. Management has not identified any particular
industry or specific business within an industry for evaluation by the Company.
There is no assurance the Company will be able to negotiate a business
combination on terms favorable to the Company. The Company has not established a
specific length of operating history or specified level of earnings, assets, net
worth or other criteria which it will require a target business opportunity to
have achieved, and without which the Company would not consider a business
combination in any form with such business opportunity. Accordingly, the Company
may enter in to a business combination with a business opportunity having no
significant operating history, losses, limited or no potential for earnings,
limited assets, negative net worth or other negative characteristics.



Reduction of percentage share ownership following business combination and

possible dilution.

The Company's primary plan of operation is based upon a business combination
with a private concern which, in all likelihood, would result in the Company
issuing securities to shareholders of any such private company. The issuance of
previously authorized and unissued Common Shares of the Company would result in
reduction in percentage of shares owned by present and prospective shareholders
of the Company and may result in a change in control or management of the
Company. In addition, any merger or acquisition effected by the Company can be
expected to have a significant dilutive effect on the percentage of the shares
held by the Company's then shareholders, including significant reverse stock
splits.

The Company does not anticipate paying cash dividends on its common stock.

The Company does not anticipate paying any cash dividends on the common stock in
the foreseeable future.

Patents and Copyrights
----------------------
The Company has a trademark registration in the United States on the mark IQ
Voice.

The Company has been granted a United States patent related to the functionality
of the Company's Voice Organizer. No assurance can be made that the patent
issued will provide significant proprietary protection or will not be
circumvented or invalidated. The Company has assigned all of its rights to the
patent, trademark and technology to Franklin and it has no intention to continue
in the voice recognition business. No assurance can be given that the Company's
prior, use, or sale of its products will not result in challenges from other
third parties claiming patents, copyrights or other rights to such products or
parts thereof in the future. The Company has received notice from the holder of
U.S. Patent 5,696,496 entitled "Portable Messaging and Scheduling Device with
Homebase Station" stating that the holder had filed suit alleging infringement
of that patent in December 1999 in United States District Court for the District
of Massachusetts (Civil Action No. 99-CV12468) against certain companies (not
including the Company) and alleging that certain of the Company's Voice


                                       9
<PAGE>
Organizer products may also infringe that patent. No assurance can be given with
respect to that patent.

Given the fact that the Company has assigned its rights in the Technology to
Franklin, the Company has no continuing rights to control the disposition of the
Technology.

Employees
---------
Since August 1, 1999, the Company has not employed any persons. The Company
entered into a contract with Franklin for Franklin to provide the Company with
warehousing, distribution, financial, and manufacturing management services. The
contract terminated in August 2002. The executive officers of the Company are
not paid any amounts by the Company in connection with the services performed
for the Company.










































                                       10
<PAGE>
Item 2.  Description of Property

In August 1999, the Company's operations were relocated to Franklin's facility
in Burlington, New Jersey. In September 2002, the Company's offices were
relocated to office space supplied by its President at 15915 Ventura Boulevard,
Suite 301, Encino, California 91436. This space is provided to the Company on a
rent-free basis, and it is anticipated that this arrangement will remain until
such time as the Company consummates a merger or acquisition. Management
believes that their arrangement will meet the Company's needs for the
foreseeable future.

Item 3.  Legal Proceedings

The Company has received notice from the holder of U.S. Patent 5,696,496
entitled "Portable Messaging and Scheduling Device with Homebase Station"
stating that the holder had filed suit alleging infringement of that patent in
December 1999 in United States District Court for the District of Massachusetts
(Civil Action No. 99-CV-12468) against certain companies (not including the
Company) and alleging that certain of the Company's Voice Organizer products may
also infringe that patent. No assurance can be given with respect to that
patent.

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

None
































                                       11
<PAGE>
                                     PART II

Item 5.  Market for Common Equity and Related Stockholders Matters

The Company's Common Stock, "VPTI," is quoted on the OTC Bulletin Board. The
following table sets forth, for the periods indicated, the high and low closing
bid prices for the Company's Common Stock on the OTC Bulletin Board, for the
quarters presented. Bid prices represent inter-dealer quotations without
adjustments for markups, markdowns, and commissions, and may not represent
actual transactions.
                       --------------------
                               Bid Prices
                         --------------------
                            High          Low
                          ------       ------
        Calendar 2002
        -------------
        First Quarter       0.01         0.01
        Second Quarter      0.01         0.01
        Third Quarter       0.01         0.01
        Fourth Quarter      0.02         0.01

        Calendar 2003
        -------------
        First Quarter       0.01         0.01
        Second Quarter      0.01         0.01
        Third Quarter       0.01         0.01
        Fourth Quarter      0.06         0.01

At February 23, 2004, there were 92,970,027 shares of Common Stock  outstanding,
which were held by approximately  631 shareholders of record.  Belle Group, Ltd.
owns 74,258,788 shares of the Common Stock.

The Company has never paid any dividends to its common stock shareholders.
Additionally, the Company does not intend to pay or declare any future cash
dividends or special payments of cash, stock or to make any other distributions.

Item 6.  Management's Discussion and Analysis of Financial Condition and Results
         of Operations

Overview
--------
Voice Powered Technology International, Inc. (the "Company"), incorporated in
California in June 1985, began active operations in January 1990. The Company
was formed to develop, market, and distribute low-cost voice recognition and
voice activated products on a worldwide basis, both directly and through
licensing agreements. From January 1990 until July 1992, the Company operated as
a development stage enterprise.

Effective March 31, 2001, the Company discontinued its operations.

On August 19, 2002, Franklin sold its 74,258,788 shares of the Company's common
stock, equal to an approximately 82% interest in the Company, to Belle Group,
Ltd. Concurrent with the sale, all amounts due and owing to Franklin by the
Company were forgiven. This resulted in approximately $1,908,000 of income from
the forgiveness of debt.

                                       12
<PAGE>
Results of Operations
---------------------
The Company had no sales for the years ended December 31, 2003 or December 31,
2002.

The company had no cost of goods sold for the years ended December 31, 2003 or
December 31, 2002.

Total operating costs for the twelve months ended December 31, 2003 decreased by
$36,000 to $16,000 compared with $52,000 in the prior year. The year-to-year
reduction in operating expense is a result of the sale of an approximately 82%
interest in the Company to Belle Group, Ltd. The Company's objective has been to
sustain the minimum operating costs of the Company until such time an
appropriate acquisition can be completed.

Interest expense for the year ended December 31, 2003 was $0 compared to $29,100
in the prior year. The decrease was the result of Franklin (the Company's former
parent) forgiving all debts owed to it by the Company in August 2002 in
conjunction with the sale of an approximately 82% interest in the Company to
Belle Group, Ltd.

The Company had no income from the forgiveness of debt for the year ended
December 31, 2003 as compared to $1,908,000 for the year ended December 31,
2002. The forgiveness of debt resulted from Franklin forgiving all debts owed to
it by the Company prior to selling its 82% interest in the Company to the Belle
Group, Ltd. in August 2002.

The Company had net loss of $16,000 for the year ended December 31, 2003 as
compared to net income of $1,827,000 for the year ended December 31, 2002. This
was the result of the debt forgiveness. The Company had no operations for the
years ended December 31, 2003 or December 31, 2002.

Liquidity
---------
On August 19, 2002, Franklin sold its 74,258,788 shares of the Company's common
stock, equal to an approximately 82% interest in the Company, to Belle Group,
Ltd.

As a condition to the sale of its ownership in the Company to Belle Group, Ltd.
in August 2002, Franklin forgave all monies owed to it by the Company. This
forgiveness of debt resulted in income to the Company of approximately
$1,908,000.

As of December 31, 2003, the Company had an accumulated deficit of $116,000 and
negative working capital of $18,000, which primarily consists of loans payable
to shareholders.

The Company's major shareholder has provided the Company with its financial
resources. The shareholder has agreed to provide continuous support to enable
the Company to satisfy its working capital until the Company changes control or
it develops its own business and revenues. Without outside funding the Company
is totally dependent upon its major shareholder. The Company has been exploring
various alternatives, such as an equity or debt private placement, to raise new
capital, but there can be no assurances that the Company will ultimately be
successful in this regard.


                                       13
<PAGE>
Item 7. Financial Statements


                          Independent Auditor's Report
                          ----------------------------

March 27, 2003

The Board of Directors
Voice Powered Technologies International, Inc.
Los Angeles, California

We have audited the accompanying statements of operations, shareholder's
deficit, and cash flows of Voice Powered Technologies International, Inc. for
the year ended December 31, 2002. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform 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. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, result of operations and cash flows of Voice Powered
Technologies International, Inc. for the year ended December 31, 2002, in
conformity with accounting principles generally accepted in the United States of
America.


/s/ Beckman Kirkland & Whitney
------------------------------
Beckman Kirkland & Whitney
Agoura Hills, California


















                                       14
<PAGE>
The Board of Directors
Voice Powered Technologies International, Inc.
Los Angeles, California

We have audited the accompanying balance sheet of Voice Powered Technologies
International, Inc. as of December 31, 2003, and the related statements of
operations, shareholder's deficit, and cash flows for the year then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we 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. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Voice Powered Technologies
International, Inc. as of December 31, 2003, and the results of its operations
and its cash flows for the year then ended in conformity with accounting
principles generally accepted in the United States of America.


/s/ Stonefield Josephson, Inc.
------------------------------
CERTIFIED PUBLIC ACCOUNTANTS
Santa Monica, California
February 19, 2004
























                                       15
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                                 BALANCE SHEETS
                        AS OF DECEMBER 31, 2003 AND 2002
                        (in thousands, except share data)

                                                                 2003
                                                            -------------
                                          ASSETS
CURRENT ASSETS
     Cash                                                  $            1
     Accounts receivable                                                -
                                                           --------------

     TOTAL CURRENT ASSETS                                               1
                                                           --------------
TOTAL ASSETS                                               $            1
                                                           ==============
        LIABILITIES AND SHAREHOLDERS' EQUITY
        ------------------------------------
CURRENT LIABILITIES
     Accounts payable and accrued expenses                 $            2
     Loans payable to shareholders                                     18
                                                           --------------
     TOTAL CURRENT LIABILITIES                                         20
                                                           --------------
SHAREHOLDERS' EQUITY (DEFICIT)
     Common stock, $.001 stated value - 100,000,000
       shares authorized; 92,970,027 and 92,840,027
       issued and outstanding at December 31, 2003
       and 2002, respectively                                          97
     Accumulated deficit                                             (116)
                                                           --------------
     TOTAL SHAREHOLDERS' EQUITY (DEFICIT)                             (19)
                                                           --------------
 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                $            1
                                                           ==============



















                See accompanying notes to financial statements.

                                       16

<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                            STATEMENTS OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
                        (in thousands, except share data)


                                               2003                 2002
                                        -----------------    -----------------
Net Sales                                 $           -        $            -
Costs and expense
   General and administrative                        16                    52

         Total costs and expenses                    16                    52
                                          -------------        --------------
Operating (loss)                                    (16)                  (52)

Other income (expense):
         Forgiveness of debt (Note 5)                 -                 1,908
         Interest expense                             -                   (29)
                                          -------------        --------------
Net Income (Loss)                         $         (16)       $        1,827
                                          =============        ==============
Net Income per share:                     $       (0.00)       $         0.02
                                          -------------        --------------
Weighted average common shares
         outstanding                         92,970,027            92,840,027
                                          =============        ==============




























                See accompanying notes to financial statements.

                                       17

<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                            STATEMENTS OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002
                                 (in thousands)

                                                          2003          2002
                                                     ------------- -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
   NET INCOME (LOSS)                                 $       (16)  $      1,827
   ADJUSTMENTS TO RECONCILE NET LOSS TO NET CASH
   PROVIDED BY (USED IN) OPERATING ACTIVITIES:
      Stock issued for services                                -              4
      Gain on sale of assets                                   -              -
      Gain from forgiveness of debt                            -         (1,908)
   CHANGES IN OPERATING ASSETS AND LIABILITIES:
      Decrease in receivables                                  -             19
      Decrease in Inventories                                  -              -
      Decrease in other assets                                 -             21
      (Decrease) increase in accounts payable and
         accrued expenses                                     (2)             2
                                                     -----------   ------------
   NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES       (18)           (35)

CASH FLOWS FROM FINANCING ACTIVITIES:
      Loans from shareholders                                 18              -
                                                     -----------   ------------
        NET CASH PROVIDED BY INVESTING ACTIVITIES             18              -

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS               -            (35)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD               1             36
                                                     -----------   ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD           $         1   $          1
                                                     ===========   ============






















                See accompanying notes to financial statements.

                                       18
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2003
                                 (in thousands)

                           -------------
                           Common Stock
                           ------------- ---------- ----------- ----------------
                                         Additional
                                         Paid in    Accumulated  Stockholders'
                           Shares Amount Capital      Deficit   Equity (Deficit)
                           ------ ------ ---------- ----------- ----------------
Balance December 31, 2001  90,240 $  90  $       -  $  (1,927)     $    (1,837)
Stock issued for services   2,600 $   3  $       1  $       -      $         4
Net Income                                          $   1,827      $     1,827
                           ------ -----  ---------  ---------      -----------
Balance December 31, 2002  92,840 $  93  $       1  $    (100)     $        (6)

Stock issued for services     130 $   2  $       1  $       -      $         3
Net Income (Loss)               - $   -  $       -  $     (16)     $       (16)
                           ------ -----  ---------  ---------      -----------
Balance December 31, 2003  92,970 $  95  $       2  $    (116)     $       (19)
                           ====== =====  =========  =========      ===========
































                See accompanying notes to financial statements.

                                       19
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates: The financial statements have been prepared in accordance with
generally accepted  accounting  principles and necessarily include amounts based
on estimates and  assumptions  by  management.  Actual results could differ from
those amounts.

Revenue Recognition: The Company recognizes revenue upon shipment of product.
-------------------

Cash and Cash Equivalents:  The Company considers all highly liquid  investments
-------------------------
purchased  with  an  original  maturity  of  three  months  or  less  to be cash
equivalents.

Property  and  Equipment:  Property  and  equipment  are  stated at cost and are
------------------------
depreciated on a straight-line  basis using estimated useful lives,  which range
from 2-7 years.

Patents and Technology Rights: Patents and technology rights are expensed when
-----------------------------
management believes they provide no future benefit.

Loss Per Share: Loss per share is based on the weighted average number of common
--------------
shares outstanding during each period presented. There were no outstanding stock
options or warrants for the years ended December 31, 2003 and 2002.

Income Taxes: The Company utilizes Statement of Financial  Accounting  Standards
------------
No. 109,  "Accounting for Income Taxes" (SFAS No. 109). This standard employs an
asset and liability  approach in accounting  for income taxes,  the objective of
which is to  recognize  the  amount of current  and  deferred  taxes  payable or
receivable  at the date of the  financial  statements  using the  provisions  of
enacted tax laws.

Fair  Value  of  Financial  Instruments:  The  carrying  values  of  cash,  cash
---------------------------------------
equivalents,  restricted cash, accounts  receivable,  accounts payable, and loan
payable  approximate  their fair values  because of the short  maturity of these
instruments.

New Accounting Pronouncements:
-----------------------------
In July 2001, the FASB issued SFAS No. 141 "Business Combinations." SFAS No. 141
supersedes  Accounting  Principles  Board  ("APB") No. 16 and requires  that any
business  combinations  initiated  after  June 30,  2001 be  accounted  for as a
purchase;  therefore,  eliminating the pooling-of-interest method defined in APB
16. The statement is effective for any business combination initiated after June
30,  2001 and shall  apply to all  business  combinations  accounted  for by the



                                       20
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

purchase method for which the date of acquisition is July 1, 2001 or later.  The
Company does not expect the adoption to have a material  impact to the Company's
financial   position  or  results  of  operations  since  the  Company  has  not
participated in such activities covered under this pronouncement.

In July 2001,  the FASB issued SFAS No. 142,  "Goodwill and Other  Intangibles."
SFAS No. 142 addresses the initial recognition,  measurement and amortization of
intangible assets acquired individually or with a group of other assets (but not
those  acquired  in a  business  combination)  and  addresses  the  amortization
provisions for excess cost over fair value of net assets acquired or intangibles
acquired in a business combination.  The statement is effective for fiscal years
beginning  after  December  15,  2001,  and is  effective  July 1,  2001 for any
intangibles  acquired in a business  combination  initiated after June 30, 2001.
The Company is  evaluating  any  accounting  effect,  if any,  arising  from the
recently issued SFAS No. 142,  "Goodwill and Other Intangibles" on the Company's
financial position or results of operations.

In October 2001, the FASB recently  issued SFAS No. 143,  "Accounting  for Asset
Retirement  Obligations," which requires companies to record the fair value of a
liability  for asset  retirement  obligations  in the  period in which  they are
incurred. The statement applies to a company's legal obligations associated with
the retirement of a tangible long-lived asset that results from the acquisition,
construction,  and  development or through the normal  operation of a long-lived
asset. When a liability is initially recorded,  the company would capitalize the
cost,  thereby  increasing  the  carrying  amount  of  the  related  asset.  The
capitalized asset retirement cost is depreciated over the life of the respective
asset while the liability is accreted to its present value.  Upon  settlement of
the liability,  the obligation is settled at its recorded  amount or the company
incurs a gain or loss.  The  statement is effective  for fiscal years  beginning
after June 30, 2002. The Company does not expect the adoption to have a material
impact to the Company's financial position or results of operations.

In October 2001, the FASB issued SFAS No. 144, "Accounting for the Impairment or
Disposal of Long-Lived  Assets".  Statement 144  addresses  the  accounting  and
reporting for the  impairment or disposal of  long-lived  assets.  The statement
provides a single  accounting model for long-lived assets to be disposed of. New
criteria  must be met to  classify  the  asset as an asset  held-for-sale.  This
statement  also focuses on reporting the effects of a disposal of a segment of a
business.  This statement is effective for fiscal years beginning after December
15, 2001. The Company does not expect the adoption to have a material  impact to
the Company's financial position or results of operations.

In April 2002, the FASB issued Statement No. 145, "Rescission of FASB Statements
No.  4,  44,  and  64,  Amendment  of  FASB  Statement  No.  13,  and  Technical
Corrections." This Statement rescinds FASB Statement No. 4, "Reporting Gains and
Losses from  Extinguishment  of Debt", and an amendment of that Statement,  FASB
Statement  No.  64,  "Extinguishments  of  Debt  Made  to  Satisfy  Sinking-Fund
Requirements"  and FASB Statement No. 44,  "Accounting for Intangible  Assets of
Motor Carriers".  This Statement  amends FASB Statement No. 13,  "Accounting for
Leases",  to eliminate an  inconsistency  between the  required  accounting  for
sale-leaseback  transactions  and the  required  accounting  for  certain  lease



                                       21
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

modifications  that have  economic  effects  that are similar to  sale-leaseback
transactions. The Company does not expect the adoption to have a material impact
to the Company's financial position or results of operations.

In June  2002,  the  FASB  issued  Statement  No.  146,  "Accounting  for  Costs
Associated with Exit or Disposal Activities." This Statement addresses financial
accounting and reporting for costs  associated with exit or disposal  activities
and  nullifies  Emerging  Issues Task Force (EITF)  Issue No.  94-3,  "Liability
Recognition for Certain Employee Termination Benefits and Other Costs to Exit an
Activity (including Certain Costs Incurred in a Restructuring)."  The provisions
of this  Statement  are  effective  for  exit or  disposal  activities  that are
initiated  after  December  31, 2002,  with early  application  encouraged.  The
Company does not expect the adoption to have a material  impact to the Company's
financial position or results of operations.

In October 2002,  the FASB issued  Statement No. 147,  "Acquisitions  of Certain
Financial  Institutions--an amendment of FASB Statements No. 72 and 144 and FASB
Interpretation No. 9", which removes acquisitions of financial institutions from
the scope of both  Statement 72 and  Interpretation  9 and  requires  that those
transactions be accounted for in accordance  with  Statements No. 141,  Business
Combinations,  and No. 142,  Goodwill and Other Intangible  Assets. In addition,
this Statement amends SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived  Assets,  to  include  in its scope  long-term  customer-relationship
intangible   assets  of   financial   institutions   such  as   depositor-   and
borrower-relationship intangible assets and credit cardholder intangible assets.
The  requirements  relating  to  acquisitions  of  financial   institutions  are
effective  for  acquisitions  for which the date of  acquisition  is on or after
October 1, 2002.  The  provisions  related to accounting  for the  impairment or
disposal  of  certain  long-term  customer-relationship  intangible  assets  are
effective  on October 1, 2002.  The  adoption of this  Statement  did not have a
material impact to the Company's  financial position or results of operations as
the Company has not engaged in either of these activities.

In December 2002, the FASB issued Statement No. 148, "Accounting for Stock-Based
Compensation--Transition  and Disclosure",  which amends FASB Statement No. 123,
Accounting  for  Stock-Based  Compensation,  to provide  alternative  methods of
transition  for a voluntary  change to the fair value based method of accounting
for stock-based employee  compensation.  In addition,  this Statement amends the
disclosure  requirements  of Statement 123 to require  prominent  disclosures in
both annual and interim financial  statements about the method of accounting for
stock-based employee  compensation and the effect of the method used on reported
results.  The transition guidance and annual disclosure  provisions of Statement
148 are effective for fiscal years ending after December 15, 2002,  with earlier
application   permitted  in  certain   circumstances.   The  interim  disclosure
provisions are effective for financial reports containing  financial  statements
for interim  periods  beginning  after  December 15, 2002.  The adoption of this
statement did not have a material impact on the Company's  financial position or
results of operations as the Company has not elected to change to the fair value
based method of accounting for stock-based employee compensation.

During  April 2003,  the FASB issued SFAS 149 - "Amendment  of Statement  133 on
Derivative Instruments and Hedging Activities",  effective for contracts entered


                                       22
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

into or modified  after June 30,  2003,  except as stated  below and for hedging
relationships  designated  after June 30, 2003.  In  addition,  except as stated
below,  all provisions of this Statement  should be applied  prospectively.  The
provisions of this Statement that relate to Statement 133 Implementation  Issues
that have been effective for fiscal  quarters that began prior to June 15, 2003,
should  continue to be applied in  accordance  with their  respective  effective
dates. In addition, paragraphs 7(a) and 23(a), which relate to forward purchases
or sales of when-issued  securities or other  securities  that do not yet exist,
should be applied to both  existing  contracts  and new  contracts  entered into
after June 30, 2003.  The Company  does not  participate  in such  transactions,
however,  is evaluating the effect of this new  pronouncement,  if any, and will
adopt FASB 149 within the prescribed time.

During May 2003,  the FASB issued SFAS 150 - "Accounting  for Certain  Financial
Instruments with Characteristics of both Liabilities and Equity",  effective for
financial instruments entered into or modified after May 31, 2003, and otherwise
is effective for public  entities at the  beginning of the first interim  period
beginning after June 15, 2003. This Statement  establishes  standards for how an
issuer   classifies   and   measures   certain   financial    instruments   with
characteristics  of both  liabilities  and equity.  It  requires  that an issuer
classify  a  freestanding  financial  instrument  that is within  its scope as a
liability (or an asset in some  circumstances).  Many of those  instruments were
previously  classified as equity.  Some of the  provisions of this Statement are
consistent with the current definition of liabilities in FASB Concepts Statement
No. 6, Elements of Financial Statements. The Company is evaluating the effect of
this new pronouncement and will adopt FASB 150 within the prescribed time.

         In November 2002,  the Financial  Accounting  Standards  Board ("FASB")
         issued  Interpretation  No.  (FIN)  45,  "Guarantor's   Accounting  and
         Disclosure  requirements for Guarantees,  Including Indirect Guarantees
         of  Indebtedness  of Others."  Among other things,  the  Interpretation
         requires  guarantors to recognize,  at fair value, their obligations to
         stand ready to perform  under certain  guarantees.  FIN 45 is effective
         for  guarantees  issued or  modified on or after  January 1, 2003.  The
         Company  does not expect the adoption of this  pronouncement  to have a
         material  impact to the  Company's  financial  position  or  results of
         operations.


In January  2003,  the FASB  issued  Interpretation  No. 46,  "Consolidation  of
Variable Interest Entities." Interpretation 46 changes the criteria by which one
company  includes  another  entity  in its  consolidated  financial  statements.
Previously,  the  criteria  were  based  on  control  through  voting  interest.
Interpretation  46 requires a variable  interest  entity to be consolidated by a
company if that  company  is subject to a majority  of the risk of loss from the
variable interest  entity's  activities or entitled to receive a majority of the
entity's  residual  returns  or both.  A company  that  consolidates  a variable
interest entity is called the primary beneficiary of that entity.

In December 2003 the FASB concluded to revise certain  elements of FIN 46, which
will be issued shortly. The FASB also modified the effective date of FIN 46. For



                                       23
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

all entities that were previously  considered  special purpose entities,  FIN 46
should be applied in periods ending after December 15, 2003.  Otherwise,  FIN 46
is to be applied for registrants who file under  Regulation SX in periods ending
after March 15,  2004,  and for  registrants  who file under  Regulation  SB, in
periods ending after December 15, 2004. The Company does not expect the adoption
to have a material  impact on the  Company's  financial  position  or results of
operations.


In  December  2003,  the  FASB  issued  a  revised  SFAS  No.  132,  "Employers'
Disclosures about Pensions and Other Postretirement Benefits" which replaces the
previously  issued  Statement.  The revised  Statement  increases  the  existing
disclosures  for  defined  benefit  pension  plans  and  other  defined  benefit
postretirement plans. However, it does not change the measurement or recognition
of those  plans as  required  under  SFAS No.  87,  "Employers'  Accounting  for
Pensions," SFAS No. 88, "Employers'  Accounting for Settlements and Curtailments
of Defined  Benefit  Pension Plans and for  Termination  Benefits," and SFAS No.
106,  "Employers'  Accounting for Postretirement  Benefits Other Than Pensions."
Specifically,  the revised Statement  requires  companies to provide  additional
disclosures  about pension plan assets,  benefit  obligations,  cash flows,  and
benefit  costs of  defined  benefit  pension  plans  and other  defined  benefit
postretirement  plans.  Also,  companies  are required to provide a breakdown of
plan assets by category,  such as debt,  equity and real estate,  and to provide
certain  expected rates of return and target  allocation  percentages  for these
asset  categories.  The  Company  has  implemented  this  pronouncement  and has
concluded that the adoption has no material impact to the financial statements.

Note 2 - BUSINESS

Voice Powered Technology  International,  Inc. (the "Company"),  incorporated in
California in June 1985,  began active  operations in January 1990.  The Company
was formed to develop,  market,  and distribute  low-cost voice  recognition and
voice  activated  products  on a  worldwide  basis,  both  directly  and through
licensing agreements. From January 1990 until July 1992, the Company operated as
a development stage enterprise.

Effective March 31, 2001, the Company discontinued its operations.

On August 19, 2002, Franklin Electronic Publishers,  Inc. sold its approximately
82%  interest  in the  Company,  to Belle  Group,  Ltd.  for  $100,000  in cash.
Concurrent  with the sale,  all amounts due and owing to Franklin by the Company
were  forgiven.  This  resulted in  approximately  $1,908,000 of income from the
forgiveness  of debt.  The Company does not use business  line  reporting in its
internal financial reporting.

Note 3 - LOANS PAYABLE

On August 19, 2002  Franklin  sold its 82%  interest in the company to the Belle
Group Ltd. As part of the purchase  agreement  Franklin  forgave all of the debt
owed to it by the Company, which was approximately $1,908,000.




                                       24
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

The  Company's  major  shareholder  has provided the Company with its  financial
resources.  The shareholder has agreed to provide  continuous  support to enable
the Company to satisfy its working capital.  Without outside funding the Company
is totally dependent upon its major shareholder. For the year ended December 31,
2003, loans payable to shareholders was $18,000.

Note 4 - CAPITAL STOCK

In May  1998,  in  accordance  with the Plan of  Reorganization,  the  Company's
Articles of  Incorporation  were amended to increase,  among other  things,  the
authorized shares of common stock to 100,000,000. Pursuant to the Plan, Franklin
was issued 72,196,288 shares of the Company's common stock,  which equated to an
additional  80% equity  interest  in the  Company  in  exchange  for  Franklin's
pre-petition secured claim in the amount of $1,733,990.

On August 19, 2002,  Franklin sold its 74,258,788 shares of the Company's common
stock,  equal to an approximately  82% interest in the Company,  to Belle Group,
Ltd.

Note 5 - SUPPLEMENTAL CASH FLOW INFORMATION

For the years ended  December 31, 2003 and 2002,  interest  expense due Franklin
totaling $0 and $29,100, respectively, was accrued and unpaid.

 Note 6 - INCOME TAXES

The Company's provision for income taxes is as follows:

                               -----------------   -----------------
                               December 31, 2003   December 31, 2002
                               -----------------   -----------------
  Federal Income Taxes         $            -      $            -
                               -----------------   -----------------
  Provision for income taxes   $            -      $            -
                               =================   =================

A  reconciliation  between  the  statutory  federal  tax rate and the  Company's
effective tax rate is as follows:
                                     -----------------   -----------------
                                     December 31, 2003   December 31, 2002
                                     -----------------   -----------------
  Statutory federal income tax rate         (34%)               34%
  State income taxes                          -                  -
  Utilization of NOL carryforward             0%               (34%)
  Valuation allowance adjustment             34%                 -
                                      ----------------   -----------------
Effective tax rate                            0%                 0%
                                      ================   =================

Unused net operating  losses of  approximately  $27,000,000  are available as of
December 31, 2003 to offset future years'  federal  taxable  income,  and expire



                                       25
<PAGE>
                  VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.
                          NOTES TO FINANCIAL STATEMENTS

through 2013. Under federal tax law IRC Section 382, certain significant changes
in  ownership  of  the  Company  may  restrict   future   utilization  of  these
carry-forwards.  On August 19, 2002, a significant change in ownership did occur
when the Belle Group Ltd. purchased  approximately 82% of stock in Voice Powered
Technology International previously owned by Franklin for $100,000. Based on the
guidelines  stipulated  by  this  code,  this  ownership  change  results  in  a
limitation  of net  operating  losses  calculated  as the  value of the old loss
corporation  multiplied by the federal  long-term  tax-exempt rate. Based on the
purchase  price of  $100,000,  the  valuation  of the Company was $122,000 as of
August 19, 2002. The long-term tax-exempt rate was 4.91%. This limits the use of
these unused net operating losses to approximately $6,000 per year.

Based on the net operating  loss  carryforwards,  the Company has a deferred tax
asset of  approximately  $11,000,000  as of December 31, 2003. In addition,  the
Company has research and development tax credits of  approximately  $250,000 and
$123,000 for Federal and California tax purposes  respectively.  They will begin
to expire in 2007.  The Company has a  valuation  allowance  equal to, and which
offsets,  the net deferred tax asset as the Company  cannot  conclude that it is
more likely than not the net  deferred tax asset will be realized and due to the
limitations on the utilization of the net operating loss carryforwards resulting
from the recent ownership change.


Note 7 - RELATED PARTY TRANSACTIONS

On August 19, 2002  Franklin  sold its 82%  interest in the company to the Belle
Group Ltd. As part of the purchase  agreement  Franklin  forgave all of the debt
owed to it by the Company, which was approximately $1,908,000.


























                                       26
<PAGE>
                                    PART III


Item 8. Disagreements on Accounting and Financial Disclosure

None.

Item 8A. Controls and Procedures

(a)      Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer, and Principal Financial and Accounting Officer,
after evaluating the effectiveness of our disclosure controls and procedures (as
defined in the Securities Act of 1934 Rules 13a-14(c) and 15d-14(c) as of a date
within 90 days of the filing date of this annual report on From 10-KSB (the
"Evaluation Date"), has concluded that as of the Evaluation Date, our disclosure
controls and procedures were adequate and effective to ensure that material
information relating to us would be made known to him by others within the
Company, particularly during the period in which this annual report on Form
10-KSB was being prepared.

(b)      Changes in Internal Controls.

There were no significant changes in our internal controls or other factors that
could significantly affect our disclosure controls and procedures  subsequent to
the Evaluation Date, nor any significant  deficiencies or material weaknesses in
such  disclosure  controls and procedures  requiring  corrective  actions.  As a
result, no corrective actions were taken.

Item 9.  Directors and Executive Officers of the Registrant

The  following  table sets forth  certain  information  regarding  the Company's
directors and executive officers.

  -------------------- ----------------------------- ---- -------------
                                                          Year Became a
  Name                 Principal Occupation          Age  Director
  -------------------- ----------------------------- ---- -------------
  Harold S. Fleischman President and Chief Financial 60       2002
                       Officer and Director
  Robert Larcara       Secretary and Director        49       2002
  Gary Saderup         Director                      53       2003

No family relationship exists between any director and executive officer of the
Company.

Harold S. Fleischman
--------------------
Mr. Fleischman has practiced law in California for over 30 years and maintains a
private practice in Encino, California, at the Encino Law Center, a building of
which he is one of the founders/owners. He earned a Bachelor's degree and Law
degree from UCLA.





                                       27
<PAGE>
Robert Larcara
--------------
Mr. Larcara is Founder President of Commonwealth Financial Mortgage Services
established in 1988. He has been a California-licensed mortgage broker/real
estate broker for over 20 years. He has a Bachelor of Science degree from the
University of Wisconsin-Milwaukee.

Gary Saderup
------------
Mr. Saderup has been an Artist Publisher and businessman for the past 28 years.
He has sold his work in the U.S., Japan, Australia, the United Kingdom, Germany,
Canada, and South Africa. Mr. Saderup studied at Bringham Young University, the
University of Hawaii and The Art Center College of Design. Prior to this, he
worked as a professional actor and director.

Committees
----------
Currently, the Board of Directors has no separate audit, nominating or
compensation committees and acts as such as an entire Board.

Item 10. Executive Compensation

Gregory J. Winsky, the Company's Chief Executive Officer from September 1998
until August 2002, has never received any compensation from the Company or any
of its subsidiaries.

Mr. Harold S. Fleischman, the Company's President and Chief Financial Officer
was not paid any compensation in 2003 or 2002. No compensation was paid to any
other officer during the last fiscal year.

No bonuses, other annual compensation, stock appreciation rights, long-term
compensation awards, long-term incentive plan payouts or other compensation (as
defined in the proxy regulations of the Securities and Exchange Commission) were
awarded to, earned by, or paid to the Chief Executive Officer during any of the
Company's last two fiscal years.






















                                       28
<PAGE>
Item 11.  Security Ownership of Certain Beneficial Owners and Management

The following table sets forth certain information regarding the ownership of
the Company's common stock as of February 23, 2004 by: (a) each person known by
the Company to be the beneficial owner of more than five percent of its common
stock; (b) each director of the Company; and (c) all officers and directors of
the Company as a group.




                                     ------------      -------------
                                        Amount
       Name and Address of           Beneficially       Percent of
        Beneficial Owner                Owned              Class
                                     ------------      -------------
    Belle Group, Ltd.                  74,258,788          80.0%
       23679 Calabasas Road #412
       Calabasas, California 91302
    Harold S. Fleischman                1,000,000           1.0%
       15915 Ventura Blvd. #301
       Encino, California 91436
    Robert Larcara                        400,000             *
       15915 Ventura Blvd. #301
       Encino, California 91436
    Gary Saderup                          130,000             *
       15915 Ventura Blvd. #301
       Encino, California 91436
     All officers and directors         1,530,000           1.3%
       as a Group (3 persons)

      *   Less than 1%



Based upon a review of the filings furnished to the Company pursuant to Rule
16a-3(e) promulgated under the Securities Exchange Act of 1934 and on
representations from its executive officers and directors and Franklin, all
filing requirements of Section 16(a) of said Act were complied with in a timely
manner during 2003.


Item 12.  Certain Relationships and Related Transactions

The Company has engaged in various transactions with Franklin Electronic
Publisher, Inc., who prior to August 2002 owned the approximately 80% of the
Company now owned by Belle Group, Ltd. Such transactions are more fully
described elsewhere in this Form 10-KSB.









                                       29
<PAGE>
Item 13. Exhibits and Reports on Form 8-K

(a) Exhibits: See Exhibit Index

(b) No Reports on Form 8-K were filed during the Company's last quarter.

EXHIBIT INDEX

Exhibit Number    Description
--------------    -----------
*3(a)             Articles of Incorporation, as amended
3(aa)             Certificate of Amendment of Articles of Incorporation dated
                  May 12, 1998
*3(b)             Bylaws, as amended
*4(c)             Specimen of Common Stock Certificate of Registrant
*10(h)            Leases for Canoga Park, California
*10(hh)           Additional Leases for Canoga Park, California
**10(hhh)         Additional Leases for Canoga Park and Chatsworth, California
***10(hhhh)       Lease for Executive Offices, Sherman Oaks, California
(1)10.6           Letter of Intent from Franklin Electronic Publishers, Inc.
(1)10.6.1         Security Agreement with Franklin Electronic Publishers, Inc.
(1)@10.6.2        Purchase and Loan Agreement with Franklin Electronic
                  Publishers, Inc.
(1)@10.6.3        Technology Transfer Agreement with Franklin Electronic
                  Publishers, Inc.
10.6.4            Revised Loan and Security Agreement with Franklin Electronic
                  Publishers, Inc. dated September 22, 1997
10.6.5            Letter Agreement of October 7, 1997 Regarding Post Petition
                  Financing Agreement and Loan and Security Agreement
10.6.6            Amendment to Loan and Security Agreement with Franklin
                  Electronic Publishers, Inc. dated September 22, 1997
(1)10.7           Lease for Executive Offices, Tarzana, California
(2)10.7.1         Amendment Number One Lease for Executive Officers, Tarzana,
                  California
(2)10.7.2         Amendment Number Two to Lease for Executive Officers, Tarzana,
                  California
(2)10.8           Disclosure Statement and Plan of Reorganization for Voice
                  Powered Technology International, Inc. dated as of January 21,
                  1998
(2)10.8.1         Order confirming Amended Disclosure Statement and Plan of
                  Reorganization for Voice Powered Technology International,
                  Inc. dated as of April 29, 1998
(4)10.9.1         Promissory Note dated May 12, 1998 executed by Voice Powered
                  Technology
                  International, Inc. in favor of Franklin Electronic
                  Publishers, Inc.
(4)10.9.2         Promissory Note dated May 12, 1998 executed by Voice Powered
                  Technology I International, Inc. in favor of Franklin
                  Electronic Publishers, Inc.
(4)10.10.1        Management Services Agreement dated July 31, 1999 between
                  Voice Powered Technology International, Inc. and Franklin
                  Electronic Publishers, Inc.
(4)10.10.2        Amendment to Management Services Agreement dated March 15,
                  2000 between Voice Powered Technology International, Inc. and



                                       30
<PAGE>
                  Franklin Electronic Publishers, Inc.
(3)16             Letter, dated September 8, 1998, from BDO Seidman LLP to SEC
                  re Form 8-K
                  Statements
21                Subsidiaries:  None
(1)23             Consent of BDO Seidman LLP
(3)99             Voice Powered Technology International, Inc. Press Release,
                  dated September 11, 1998
--------------------------------------------------------------------------------
o                Previously filed with, and incorporated herein by reference
                 from, Registrant's Registration Statement on Form SB-2, File
                 No. 33-50506, Effective October 20, 1993.

**               Previously filed with, and incorporated herein by reference
                 from, Registrant's Form 10-KSB for the year ended December 31,
                 1993.

***              Previously filed with, and incorporated herein by reference
                 from Registrant's Form 10-KSB for the year ended December
                 31, 1994.

@                Filed separately with the Securities and Exchange Commission
                 with a request for confidential treatment.

(1)              Previously filed with, and incorporated herein by reference
                 from Registrant's Form 10-KSB for the year ended December 31,
                 1996.

(2)              Previously filed with, and incorporated herein by reference
                 from Registrant's Form 10-KSB for the year ended December 31,
                 1997.

(3)              Previously filed with, and incorporated herein by reference
                 from Registrant's Form 8-K filed on September 11, 1998.

(4)              Previously filed with, and incorporated herein by reference
                 from Registrant's Form 10-KSB for the year ended December 31,
                 1999.


Item 14. Principal Accountant Fees and Services

(1)  Audit Fees

The aggregate fees billed for professional services rendered by Beckman Kirkland
and Whitney, for the audit of the registrant's annual financial statements and
review of the financial statements included in the registrant's Form 10-QSB or
services that are normally provided by the accountant in connection with
statutory and regulatory filings or engagements for fiscal years 2003 and 2002
were $2,400 and $5,300, respectively. For the audit for the year ended December
31, 2003, the company expects to pay Stonefield Josephson, Inc. approximately
$5,000.





                                       31
<PAGE>
(2)  Audit Related Fees

None.

(3)  Tax Fees

The aggregate fees billed for professional services rendered by Beckman Kirkland
and Whitney, for the preparation of the registrant's tax returns, including tax
planning for fiscal years 2003 and 2002 were $0 and $2,339, respectively.

(4)  All Other Fees

None.

(5)  Audit Committee Policies and Procedures

The Company does not have an audit committee.

(6)  If greater than 50 percent, disclose the percentage of hours expended on
     the principal accountant's engagement to audit the registrant's financial
     statements for the most recent fiscal year that were attributed to work
     performed by persons other than the principal accountant's full-time,
     permanent employees.

Not applicable.
































                                       32
<PAGE>
                                   SIGNATURES


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


VOICE POWERED TECHNOLOGY INTERNATIONAL, INC.


By /s/ Harold S. Fleischman
  -------------------------
       Harold S. Fleischman                                 February 24, 2004
       President

In accordance with the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.

/s/ Harold S. Fleischman         President, Chief Financial
-------------------------        Officer and Director       February 24, 2004
    Harold S. Fleischman


/s/ Robert Larcara               Director, Secretary        February 24, 2004
-------------------------
    Robert Larcara

/s/ Gary Saderup                 Director                   February 24, 2004
-------------------------
    Gary Saderup

























                                       33