UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-KSB
-----------
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 For the fiscal year ended June 30, 2004.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________________ to _____________
Commission file number: 0-31949
Innofone.com Incorporated
-------------------------------
(Name of Small Business Issuer)
Nevada 98-0202313
---------------------------------------------- ----------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
3470 Onley- Laytonsville Rd #118 Olney MD 20832
---------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (301) 774-8294
Securities registered under Section 12(b) of the Exchange Act: None
----
Securities registered under Section 12(g) of the Exchange Act:
Common Shares, $ .001 par value
-------------------------------
(Title of class)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [X] Yes [ ] No
Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
The issuer had no revenues for the year ended June 30, 2003.
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of June 30, 2003, based on the closing trading price of the day of
$0.50 for the issuer's Common Shares, $0.001 par value (the "Common Shares") was
$150,742.00.
The number of shares outstanding of the issuer's common equity, as of June 30,
2003, was 301,484.
Transitional Small Business Disclosure Format (Check one): Yes No X
----- -----
(begin boldface)
Certain statements in this Annual Report on Form 10-KSB, or the Report, are
"forward-looking statements." These forward-looking statements include, but are
not limited to, statements about the plans, objectives, expectations and
intentions of CompuBec Micro Distribution Inc, a subsidiary corporation
(referred to in this Report as "we," "us" or "our,") and other statements
contained in this Report that are not historical facts. Forward-looking
statements in this Report or hereafter included in other publicly available
documents filed with the Securities and Exchange Commission, or the SEC, reports
to our shareholders and other publicly available statements issued or released
by us involve known and unknown risks, uncertainties and other factors which
could cause our actual results, performance (financial or operating) or
achievements to differ from the future results, performance (financial or
operating) or achievements expressed or implied by such forward-looking
statements. Such future results are based upon management's best estimates based
upon current conditions and the most recent results of operations. When used in
this Report, the words "expect," "anticipate," "intend," "plan," "believe,"
"seek," "estimate" and similar expressions are generally intended to identify
forward-looking statements. Because these forward-looking statements involve
risks and uncertainties, there are important factors that could cause actual
results to differ materially from those expressed or implied by these
forward-looking statements, including our plans, objectives, expectations and
intentions and other factors discussed under "Risk Factors."
(end boldface)
PART I
------
Item 1. Description of Business.
------------------------
Innofone.com, Incorporated ("The Company") operates as a holding company for
companies that are involved in the technology and financial services. Innofone
is actively seeking new investment opportunities in creating and or acquiring
assets involved in the broad technology and financial market. Innofone currently
has 5 employes on staff.
The company has no operating subsidiary, because of lack of capital it divested
it self of CompuBec Micro Distribution Inc.("Compubec")in early November 2002.,
As previously reported, our ex-sole operating subsidiary, Digital Micro
Distribution Canada Inc., has been sold to Qvest Management Group effective June
11th, 2002. Compubec, Innofone.com Inc's sole subsidiary, plans to specialize in
the disassembly and international distribution of used/refurbished, end of line
new personal computers, servers, peripherals and components. Compubec's core
business will act as a clearing house and distribution center for the hundreds
of thousands of used off-lease computers, monitors and printers that are surplus
to major Corporations on an annual basis. The ability of Compubec to execute its
business plan was dependent upon raising capital to fund its startup and
operational needs which never materialized.
Please see Item 6, "Management's Discussion and Analysis or Plan of Operation,"
for more information.
Item 2. Description of Property.
------------------------
The Company does not own any real estate. The company is currently negotiating a
lease for new office space.
Item 3. Legal Proceedings.
-----------------
The Company does not currently have any pending legal proceedings. The company
issued 80,000 shares to counsel for legal services. The value of which was
$5,000.
2
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
Not Applicable.
PART II
-------
Item 5. Market for Common Equity and Related Stockholder Matters.
---------------------------------------------------------
The Company's common stock is currently traded on the National Association of
Securities Dealers Over the Counter Bulletin Board ("OTC Bulletin Board"). The
common stock had previously traded on the OTC Bulletin Board and was delisted on
September 1, 1999. From September 1, 1999 until the Company's re-listing on the
OTC Bulletin Board on March 27, 2001, its common stock traded in the
over-the-counter market in the United States.
The closing price of The Company's common stock on the OTC Bulletin Board on
September 30, 2003 was $0.52 per share.
The price ranges of trading in The Company's common stock during the last two
fiscal years and the subsequent interim period are as follows:
2000 High Low
---- ---- ---
7/1/00 - 9/30/00 (delisted) .703 .250
10/1/00 - 12/31/00 (delisted) .516 .156
2001
----
1/1/01 - 3/31/01 (delisted) .344 .047
4/1/01 - 6/30/01 .1 .012
7/1/01 - 9/30/01 .14 .012
10/1/01 - 12/31/01 .12 .015
2002
----
1/1/02 - 3/31/02 .08 .015
4/1/02 - 6/30/02 .06 .011
7/1/02 - 9/30/02 .05 .006
10/1/02 - 12/31/02 .14 .001
2003
----
1/1/03 - 3/31/03 .51 .05
4/1/03 - 6/30/03 .50 .10
7/1/02 - 9/30/03 2.35 2.00
10/1/02 -12/31/03 2.35 2.00
2004
----
1/1/04 - 3/31/04 2.50 2.35
4/1/04 - 6/30/04 2.50 2.35
7/1/04 - 9/30/04 2.50 2.35
Please note that quotations on the OTC Bulletin Board represent inter-dealer
prices, without mark-ups, commissions, etc., and they may not necessarily be
indicative of actual sales prices.
(b) As of June 30, 2004, we had 155 shareholders of record.
(c) We have not paid any cash dividends to date.
3
Item 6. Management's Discussion and Analysis or Plan of Operation.
----------------------------------------------------------
FORWARD-LOOKING STATEMENTS
--------------------------
The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the Consolidated Financial
Statements and Notes thereto for the year ended June 30, 2004 included elsewhere
in this Report. This Annual Report on Form 10-KSB includes forward-looking
statements within the meaning of Section 21E of the Securities Exchange Act of
1934. Words such as "may," "plans," "expects," "anticipates," "approximates,"
"believes," "estimates," "intends," "hopes," "potential," or "continue", and
variations of such words and similar expressions are intended to identify such
forward-looking statements. The Company intends such forward-looking statements,
all of which are qualified by this statement, to be covered by the safe harbor
provisions for forward-looking statements contained in the Private Litigation
Securities Reform Act of 1995 and is including this statement for purposes of
complying with these safe harbor provisions. The Company has based these
statements on its current expectations and projections about future events.
These forward-looking statements are not guarantees of future performance and
are subject to risks and uncertainties that could cause actual results to differ
materially from those projected in these statements. Forward-looking statements
include but are not limited to:
o The Company's ability to raise financing and find suitable
acquisitions.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's views only as of the date hereof. The
Company is not obligated to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
In light of the risks, uncertainties and assumptions to which the Company and
such forward-looking statements are subject, the forward-looking events
discussed in this Annual Report on Form 10-KSB might not occur.
The Company currently does not have sufficient funds with which to sustain its
operations. It is has convert noteholders to equity common stock shareholders
and the company is still waiting to see whether or not it will receive a
dividend from the bankruptcy of its previously owned subsidiary, Innofone
Canada. Which is highly unlikely.
The company changed its authorized share capital from 100,000,000 shares to
950,000,000 common shares. This was done in accordance to the companies by-laws
as disclosed in it's latest 8-K dated August 12, 2002.
The company issued shares to the President and new chairman for salary and
expense reimbursement due to the company's poor cash flow position total value
of these expenses was $330,000.
The Company is currently reviewing and implementing new disclosure controls and
procedures to ensure that they fully comply with the new Securities Exchange Act
Rules 13a-15 and 15d-15.
4
(a) Plan of Operations
The company is in discussions with an several investors and acquistion
candidates.
As reflected in Note 1 of the financial statements the Company currently has a
going concern issue as there are insufficient assets or prospective cash flows
to fund its liabilities. While the Company is hopeful that the capital and loan
requirements can be achieved, there can be no assurance that they will be and
consequently, it cannot be determined if the company will be able to meet its
current or future obligations.
The Company's CEO and President Frederic Richardson is currently reviewing
several acquisition candidates and funding sources. The company's Chairman is
reviewing technology acquisitions and financing options. The company was
successful in canceling most the debt on the books which was one of the major
objectives of new management.
(b) Results of Operations
The company had no operations in 2004. Management is currently looking for
outside directors and new management to help in securing additional financing
for operations and viable acquisitions. To that end management has retained
Frederic Richardson as its new President, CEO and CFO in addition Mr Jeffery
Watson has become the company's chairman. The company hopes to make additional
appointments to the Board of Directors and management over the next three
months.
(c) Liquidity and Capital Resources
As previously mentioned, the company has a going concern issue as there are
insufficient assets or prospective cash flows to fund its liabilities. The
effect of this on the company being able to meet its current or future
obligations cannot be determined at this time.
Item 7. Financial Statements.
---------------------
The financial statements required by this Item 7 are included elsewhere in this
Report and incorporated herein by this reference.
Item 8. Changes in and Disagreements with Accountants on Accounting and
---------------------------------------------------------------
Financial Disclosure.
---------------------
There have been no changes in or disagreements with our accountants since the
formation of the Company required to be disclosed pursuant to Item 304 of
Regulation S-B.
The company was not in a financial position to pay the prior years auditor's
fees, and consequently, they refused to provide any further audit services. The
company retained the services of Danziger and Hochman chartered accountants to
perform the current years audit. There were no changes in or disagreements with
either the current or the prior years auditors relating to financial disclosure
issues. The change of auditors was reported in the 8-K dated August 12, 2002.
5
PART III
--------
Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
------------------------------------------------------------------------
with Section 16(a) of the Exchange Act.
---------------------------------------
COMPLIANCE WITH SECTION 16(a)OF THE EXCHANGE ACT.
(a) Beneficial Ownership
Name Number of Shares Percentage of Ownership
Frederic Richardson
Director, Officer
Failure to File Late Filings
No 1
Dick Swartzman Number of Shares Percentage of Ownership
Director, Officer 0 0
Failure to File Late Filings
No 0
Max Apple Number of Shares Percentage of Ownership
Director, Officer 0 0
Failure to File Late Filings
No 0
Ed Hutya Number of Shares Percentage of Ownership
Director, Officer 0 0
Failure to File Late Filings
No 0
None of the above officers and directors sold any common stock and therefore
were not required to file forms relating to the sale of their stock.
The following table sets forth the current names and ages of the directors of
the Company:
Name Age Position Term Period Served
----- --- -------- ---- -------------
Jeffery Watson 46 Chairman Annual June01 to current
Frederic Richardson 43 President Annual Nov 01 to current
Max Apple 61 Director Annual Nov 01 to current
Ed Hutya 53 Director Annual Nov 01 to current
Dick Swartzman 54 Director Annual Nov 01 to current
The following table sets forth the names and ages of the Company's current
executive officers:
Name Age Position Term Period Served
----- --- -------- ---- -------------
Jeffery Watson 46 Chairman Annual June01 to current
Frederic Richardson 43 President/CeoAnnual Nov 01 to current
Max Apple 61 COO Annual Nov 01 to current
Ed Hutya 53 Treasurer Annual Nov 01 to current
Dick Swartzman 54 Secretary Annual Nov 01 to current
6
Mr. Jeffrey H. Watson will be joining Innofone.com, Inc. as Chairman and CEO.
Mr. Watson is currently a Managing Partner at J. Watson & Company, a
Washington-based lobbying and consulting firm. Prior to his current position at
J. Watson & Company, he worked as a Senior Consultant with the Jefferson Group
in Washington, D.C., and was employed with Deloitte & Touche in Miami. Mr.
Watson was a Senior Executive Assistant to the President for Inter-Governmental
Affairs during the first term of the Clinton Administration, and he is a past
President of the Young Democrats of America. Mr. Watson's experience and
guidance will be an asset to the Innofone team.
Frederic Richardson, the President and director of Innofone since Nov 01 2002,
has extensive experience in the computer distribution industry. He is a board
experience in capital formation and running public companies. Richardson is the
current chairman of another public company. He was the former chairman of life
insurance company that was liquidated by the Pennsyvania Insurance Departmant In
1994. Without the prior approval of the Pa insurnace Department Mr Richardson
can not hold a controlling position with any insurer for the next 5 years.
Mr. Maxwell W. Apple has been one of our directors since 2002, and has also
served as our Secretary since 2002. Mr Apple is a former judge and currently a
member of the Indiana Bar. He has been involved in various business ventures
which include owning Nunur Corporation, a company which owned commercial and
residential properties, being a partner in French Lick Springs Golf and Tennis
Resort, L.P., and being the sole shareholder of The Paoli Corporation, a company
specializing in the manufacturing of wood products and operating lumber dry
kilns. He received his Juris Doctor Degree from the Indiana University School of
Law and also attended the National College of the State Judiciary and Indiana
Judicial College during.
Mr. Edward A. Hutya has been one of our directors since 2002. He also served as
our vice president until September 2002. He is currently the president of the
Center of Independent Living and a consultant to Riverside Healthcare
foundation, two not-for-profit organizations. Mr. Hutya has many years of
experience in the operations and acquisitions of health care properties. During
his tenure as president of several not-for-profit corporations, Mr. Hutya
directed corporate development for the acquisition of housing and nursing
facilities for the elderly and special populations. Mr. Hutya also selected and
hired management companies which operated nursing homes. Prior to his
involvement with not-for-profit organizations, Mr. Hutya specialized in
financing, including equipment, vehicles, real estate and governmental leasing
and financing. Mr. Hutya received a degree in Economics from the University of
Connecticut in 1965, and participated in graduate work in Urban Economics at
American University.
Dick Swartzman has been a director seen 2002 He has been a Washington Dc
Attorney specailizing in litigation for over 20 years.
Item 10. Executive Compensation.
-----------------------
COMPENSATION OF OFFICERS.
-------------------------
The Officers have not received any compensation during the last fiscal year and
will not receive compensation until the Company is in a position to award
compensation. The company has not made any arrangements to negotiate any fees at
this time. The company will pay all operating personnel in stock until cash flow
can sustain salaries. The company has issued over 3,600,000 restricted shares to
management for salary and expense reimbursment.
COMPENSATION OF DIRECTORS.
--------------------------
There has not been any compensation paid to the directors of the company.
Although the company plans to in the coming months.
7
Item 11. Security Ownership of Certain Beneficial Owners and Management.
---------------------------------------------------------------
(a) Security ownership of certain beneficial owners.
(1) (2) (3) (4)
Name and Amount and
Title of Class Address of Beneficial Owner Nature of Beneficial Owner Percent of Class
--------------- --------------------------- -------------------------- ----------------
Common shares Frederic Richardson 1,250,000 Direct 17%
3470 Olney Rd.
Olney, MD 20832
Common shares Jeffery Watson 2,500,000 Direct 35%
7 W. Jefferson Street
Rockville Md 20850
(b) Security ownership of management.
(1) (2) (3) (4)
Name and Amount and
Title of Class Address of Beneficial Owner Nature of Beneficial Owner Percent of Class
-------------- --------------------------- -------------------------- ----------------
Common shares Frederic Richardson 1,250,000 Direct 17%
3470 Olney Rd.
Olney, MD 20832
Common shares Jeffery Watson 2,500,000 Direct 35%
7 W. Jefferson Street
Rockville Md 20850
Item 12. Certain Relationships and Related Transactions.
-----------------------------------------------
None.
PART IV
-------
Item 13. Exhibits and Reports on Form 8-K.
---------------------------------
a) Exhibit Index
Exhibit No. Description
----------- -----------------------------------------------------------------
3.1# Certificate of Incorporation of the Registrant and all amendments
thereto (originally filed as Exhibit 2.1)
3.2* Bylaws of the Registrant, as currently in effect (originally
filed as Exhibit 3.01(i))
3.3# Specimen Common Stock Certificate (originally filed as Exhibit
3.1)
8
10.1+ Agreement and Plan of Reorganization by and among the Company,
Digital Micro Distribution Canada, Inc. and Sumit Majumdar dated
August 31, 2001
10.2* 1997 Compensatory Stock Option Plan (originally filed as Exhibit
10.04)
10.3* 1997 Employee Stock Option Plan (originally filed as Exhibit
10.05)
# Filed as an exhibit to the Company's Registration Statement on Form 10-SB, as
amended, file no. 0-31949, originally filed on November 14, 2000.
* Incorporated by reference from the Company's registration statement on Form
SB-2, as amended, file no. 333-94497, originally filed January 12, 2001.
+ Incorporated by Reference from the Company's Current Report on Form 8-K, file
no. 0-31949, filed on September 25, 2001.
b) There were no Forms 8-K's filed during the last quarter of the Fiscal Year
April 1, 2002 to June 30th 2002.
DOCUMENTS INCORPORATED BY REFERENCE
-----------------------------------
The Company is currently subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the SEC.
Such reports, proxy statements and other information may be inspected and copied
at the public reference facilities of the SEC at Judiciary Plaza, 450 Fifth
Street, N.W., Washington D.C. 20549; at its New York Regional Office, 233
Broadway, New York, NY 10279; and at its Chicago Regional Office, 175 W. Jackson
Boulevard, Suite 900, Chicago, IL 60604, and copies of such materials can be
obtained from the Public Reference Section of the SEC at its principal office in
Washington, D.C., at prescribed rates. In addition, such materials may be
accessed electronically at the Commission's site on the World Wide Web, located
at http://www.sec.gov. We intend to furnish our shareholders with annual reports
containing audited financial statements and such other periodic reports as we
may determine to be appropriate or as may be required by law.
9
SIGNATURES
-----------
In accordance with Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
INNOFONE.COM INCORPORATED
Dated: October 13, 2004 By: /s/ Frederic Richardson
------------------------
Frederic Richardson
President and Director
10
INNOFONE.COM, INCORPORATED
Financial Statements
(Stated in United States Dollars)
June 30, 2004
INNOFONE.COM, INCORPORATED
INDEX
-----
June 30, 2004
PAGE
----
AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheet - Statement I 2
Statement of Shareholders' Deficit - Statement II 3
Statement of Operations - Statement III 4
Statement of Cash Flows - Statement IV 5
NOTES TO FINANCIAL STATEMENTS 6 - 8
AUDITORS' REPORT
----------------
To the Board of Directors and Shareholders of:
INNOFONE.COM, INCORPORATED
We have audited the accompanying balance sheet of INNOFONE.COM, INCORPORATED as
at June 30, 2004 and 2003, and the statements of operations, shareholders'
deficit and cash flows for each of the years in the three-year period ended June
30, 2004. 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 the Public Company Accounting
Oversight Board (United States). Those standards require that we plan and
perform an audit to obtain reasonable assurance whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, these financial statements present fairly, in all material
respects, the financial position of the company as at June 30, 2004 and 2003,
and the results of its operations and their cash flows each of the years in the
three-year period ended June 30, 2004, in conformity with Accounting principles
generally accepted in the United States of America.
Toronto, Ontario
October 7, 2004 Chartered Accountants
Page 1
INNOFONE.COM, INCORPORATED Statement I
Balance Sheet
(Stated in United States Dollars)
As at June 30, 2004
======================================================================================
2004 2003
--------------------------------------------------------------------------------------
ASSETS
Investment in 908651 Alberta Ltd.(note 4) $ - $ 210,000
--------------------------------------------------------------------------------------
LIABILITIES
Current
Accounts payable and accrued liabilities $ - $ 316,572
--------------------------------------------------------------------------------------
SHAREHOLDERS' DEFICIENCY
CAPITAL STOCK (note 3)
Common shares 4,879,010 4,871,950
Additional paid-in capital 8,998,252 8,550,112
--------------------------------------------------------------------------------------
13,877,262 13,422,062
(DEFICIT) - Statement II (13,877,262) (13,528,634)
--------------------------------------------------------------------------------------
- (106,572)
--------------------------------------------------------------------------------------
$ - $ 210,000
======================================================================================
ON BEHALF OF THE BOARD:
Director
-------------------------------------
{See accompanying notes.} Page 2
INNOFONE.COM, INCORPORATED Statement II
Statement of Shareholders' Deficit
(Stated in United States Dollars)
===========================================================================================================
Additional
Common Paid-In
Shares Capital Deficit Total
-----------------------------------------------------------------------------------------------------------
BALANCE, June 30, 2001 $ 4,773,965 $ 7,098,052 $ (13,654,877) $ (1,782,860)
Stock options exercised 475 (427) - 48
Convertible notes converted to stock 520 415,480 - 416,000
Issuance of stock for Digital Micro
Distribution Canada Inc. 67,000 - - 67,000
Issuance of stock for equipment 146 7,154 - 7,300
Convertible notes converted to stock 666 199,334 - 200,000
Net earnings - - 335,940 335,940
-----------------------------------------------------------------------------------------------------------
BALANCE, June 30, 2002 4,842,772 7,719,593 (13,318,937) (756,572)
Convertible note converted to stock 2,300 647,700 - 650,000
Issuance of shares for legal services 500 1,887 - 2,387
Issuance of shares for consulting services 26,378 180,932 - 207,310
Net loss - - (209,697) (209,697)
-----------------------------------------------------------------------------------------------------------
BALANCE, June 30, 2003 4,871,950 8,550,112 (13,528,634) (106,572)
Issuance of shares for consulting services 7,060 448,140 - 455,200
Net loss - - (348,628) (348,628)
-----------------------------------------------------------------------------------------------------------
BALANCE, June 30, 2004 $ 4,879,010 $ 8,998,252 $ (13,877,262) $ -
===========================================================================================================
{See accompanying notes.} Page 3
INNOFONE.COM, INCORPORATED Statement III
Statement of Operations
(Stated in United States Dollars)
For the Year Ended June 30, 2004
==========================================================================================================
2004 2003 2002
----------------------------------------------------------------------------------------------------------
SALES $ - $ - $ -
----------------------------------------------------------------------------------------------------------
EXPENSES
Selling, general and administrative 455,200 209,697 101,968
----------------------------------------------------------------------------------------------------------
Net (Loss) from Operations (455,200) (209,697) (101,968)
----------------------------------------------------------------------------------------------------------
EXTRA-ORDINARY ITEMS
Write-off of Investment in 908651 Alberta Ltd
(note 4) 210,000 - -
Forgiveness of debt(recovery) (316,572) - (294,908)
Net gain on sale of Digital Micro
Distribution Canada Incorporated - - (143,000)
----------------------------------------------------------------------------------------------------------
(106,572) - (437,908)
----------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) FOR THE YEAR $ (348,628) (209,967) $ 335,940
==========================================================================================================
BASIC NET INCOME (LOSS) PER SHARE
(Note 8) $ (.07) $ (1.37) $ -
==========================================================================================================
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,740,817 152,682 79,738,604
==========================================================================================================
{See accompanying notes.} Page 4
INNOFONE.COM, INCORPORATED Statement IV
Statement of Cash Flows
(Stated in United States Dollars)
For The Year Ended June 30, 2004
==========================================================================================================
2004 2003 2002
----------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING
ACTIVITIES
Net earnings (loss) for year $ (348,628) $ (209,697) $ 335,940
Issuance of shares for consulting services 455,200 209,697 -
Write-off of Investment in 908651 Alberta Ltd 210,000 - -
Changes in non-cash working capital
components
- Prepaid expenses and deposits - - 225
- Accounts payable and accrued
liabilities (316,572) (104,000) (19,938)
----------------------------------------------------------------------------------------------------------
- (104,000) 316,227
----------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Bank indebtedness - - (546)
Due to officers and directors - 104,000 (180,470)
Issuance of capital stock - 650,000 690,348
Convertible debt - (650,000) (616,000)
----------------------------------------------------------------------------------------------------------
- 104,000 (106,668)
----------------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Investment in 908651 Alberta Ltd. - - (210,000)
Capital assets - - 441
----------------------------------------------------------------------------------------------------------
- - (209,559)
----------------------------------------------------------------------------------------------------------
INCREASE IN CASH - - -
CASH, BEGINNING OF YEAR - - -
----------------------------------------------------------------------------------------------------------
CASH, END OF YEAR $ - $ - $ -
==========================================================================================================
{See accompanying notes.} Page 5
INNOFONE.COM, INCORPORATED
Notes to the Financial Statements
(Stated in United States Dollars)
June 30, 2004
================================================================================
1. NATURE OF OPERATIONS
--------------------
The Company was incorporated in Nevada on December 19, 1995 and is in the
process of attempting to raise capital for future operations.
2. SIGNIFICANT ACCOUNTING POLICIES
-------------------------------
These financial statements have been prepared by management in conformity
with accounting principles generally accepted in the United States of
America and include the following significant accounting policies:
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amount of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amount
of revenues and expenses during the reporting period. Actual results could
differ from these estimates. These estimates are reviewed periodically and,
as adjustments become necessary, they are reported in earnings in the
period in which they become known.
Financial Instruments
---------------------
Financial Instruments included in the balance sheet are accounts payable.
Their carrying values approximate fair market value.
Page 6
INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2004
================================================================================
3. CAPITAL STOCK
-------------
The number of outstanding shares of the Company as at June 30, 2004 is
computed as follows:
Common
===========================================================================
Outstanding Shares as at June 30, 2001 31,214,837
Shares issued in exchange for equipment 146,000
Options exercised 475,000
` Shares issued to DMD CANADA shareholders 67,000,000
Shares issued on conversion of debt 1,186,668
---------------------------------------------------------------------------
Outstanding Shares as at June 30, 2002 100,022,505
Shares issued in exchange for consulting fees 23,357,826
Shares issued in exchange for legal fees 500,000
Reverse stock split: 175 shares for one share (123,172,444)
Share issuance on conversion of debt 2,300,000
Share issuance on exchange for consulting fees 3,021,800
Reverse stock split: 20 shares for one share (5,728,203)
---------------------------------------------------------------------------
Outstanding shares as at June 30, 2003 301,484
Shares issuance on exchange for consulting fees 7,060,000
---------------------------------------------------------------------------
Outstanding shares as at June 30, 2004 7,361,484
===========================================================================
The Company's authorized capital stock consists of 950,000,000 shares of
common stock and 25,000,000 shares of preferred stock each with a par value
of $0.001 per share. There are no outstanding preferred shares at year end.
Page 7
INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
June 30, 2004
================================================================================
4. INVESTMENT IN 908651 ALBERTA LTD.
---------------------------------
The investment has been written-off to reflect the estimated fair market
value.
5. BASIC NET LOSS PER SHARE
------------------------
Basic net loss per share figures are calculated using the weighted average
number of common shares outstanding computed on a daily basis. The effect
of the conversion of the preferred shares on an if-converted basis and
stock options has an anti-dilutive effect.
Page 8