FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 2004
OR
[ ] TRANSITION REPORT PURSUANT TO 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, INC.
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(Exact name of registrant as specified in its charter)
Nevada 98-0202313
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3470 Olney-Laytonsville Rd., Suite 118, Olney, MD 20832
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(Address of principal executive office) (Zip Code)
(301) 774-8294
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that 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
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The number of shares outstanding of each of Issuer's classes of common equity as
of September 30, 2004.
Common Stock at Par Value $0.001 7,361,484
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Title of Class Number of Shares
Transitional Small Business Disclosure Format yes no X
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This document is made up of 13 pages.
INNOFONE.COM, INC.
Index
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Page
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Part I
Item 1. Financial Statements
Condensed Balance Sheet................................. 4
Condensed Statements of Operations...................... 5
Statements of Shareholders' Deficit..................... 6
Statement of Changes in Financial Position.............. 7
Notes to Condensed Financial Statements................. 8
Item 2. Management's Discussion and Analysis or Plan of
Operation.............................................. 10
Part II
Items 1-6. Other Information....................................... 12
Signatures.............................................. 13
2
(Stated in United States dollars)
I N N O F O N E . C O M ,
I N C O R P O R A T E D
For the quarter ended September 30, 2004
(Unaudited)
3
INNOFONE.COM, INCORPORATED
(Stated in United States dollars)
September 30, 2004 with comparative figures as at September 30, 2003 and June
30, 2004
=============================================================================================================
September 30, 2004 September 30, 2003 June 30,2004
-------------------------------------------------------------------------------------------------------------
(unaudited) (audited)
Assets
------
Current assets: $ 0 $ 0 $ 0
--------------------------------------------------------------------------------------------------------
0
Investment in 908651 Alberta Ltd. 0 210,000 0
-------------------------------------------------------------------------------------------------------------
$ 0 $ 210,000 $ 0
=============================================================================================================
Liabilities and Shareholders' Deficiency
-----------------------------------------
Current liabilities:
Accounts payable and accrued liabilities $ 0 $ 316,572 $ 0
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316,572
Shareholders' deficiency:
Share capital (note 2):
Common shares 4,879,010 4,874,010 4,879,010
Additional paid-in capital 8,998,252 8,550,112 8,998,252
--------------------------------------------------------------------------------------------------------
13,877,262 13,424,122 13,877,262
Deficit (13,877,262) (13,530,694) (13,877,262)
--------------------------------------------------------------------------------------------------------
0 (106,572) 0
Future operations (note 1(a))
Subsequent event (note 5)
-------------------------------------------------------------------------------------------------------------
$ 0 $ 210,000 $ 0
=============================================================================================================
See accompanying notes to financial statements.
4
INNOFONE.COM, INCORPORATED
(Stated in United States dollars)
For the three months ended September 30, 2004 with comparative figures for the
three months ended September 30, 2003
===================================================================================
Three months ended
September 30, 2004 September 30, 2003
-----------------------------------------------------------------------------------
(unaudited)
Sales $ - $ -
Cost of sales - -
-----------------------------------------------------------------------------------
Gross profit - -
Selling, general and administrative expenses 2,690
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2,690
-----------------------------------------------------------------------------------
Net income (loss) - (2,690)
===================================================================================
Basic net loss per share $ nil $ nil
===================================================================================
Weighted average number of common
shares outstanding 7,361,484 1,891,484
===================================================================================
See accompanying notes to financial statements.
5
INNOFONE.COM, INCORPORATED
Statements of Shareholders' Deficiency and Comprehensive Loss
(Stated in United States dollars)
Three months ended September 30, 2004 with comparative figures for the period
ended September 30, 2003
===========================================================================================================
Additional
Common Paid-In
Shares Capital Deficit Total
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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
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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)
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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)
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BALANCE, June 30, 2004 $ 4,879,010 $ 8,998,252 $ (13,877,262) $ -
-----------------------------------------------------------------------------------------------------------
Balance, September 30, 2004 $ 4,879,010 $ 8,998,252 $ (13,877,262) $ -
===========================================================================================================
See accompanying notes to financial statements.
6
INNOFONE.COM, INCORPORATED
Statement of Changes in Financial Position
(Stated in United States dollars)
For the quarter ended September 30, 2004 with comparative figures for the
quarter then ended September 30, 2003
=========================================================================================
September 30, 2004 September 30, 2003
-----------------------------------------------------------------------------------------
(unaudited) (unaudited)
Cash flows provided by (used in):
Operations:
Net earnings (loss) $ - $ (2,690)
Change in non-cash operating working capital
Prepaid expenses and deposits - 0
Accounts payable and accrued liabilities - 0
------------------------------------------------------------------------------------
(2,690)
Financing:
Issuance of capital stock - 2,690
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2,690
Investments:
Investment in 908651 Alberta Ltd. - -
Capital assets - -
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- -
Effect of exchange rate changes on cash - -
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Increase (decrease) in cash and cash equivalents nil nil
Cash and cash equivalents, beginning of period nil nil
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Cash and cash equivalents, end of period $ nil $ nil
=========================================================================================
Cash interest paid for the quarter ended September 30, 2004 and the quarter
ended September 30, 2003 was $0 and $0 respectively.
See accompanying notes to financial statements
7
INNOFONE.COM, INCORPORATED
Notes to the Financial Statements
September 30, 2004
================================================================================
1. BASIS OF PRESENTATION
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Bulletin Board Listing
----------------------
In January 2001, the Company completed a Registration Statement that has
been filed with the United States Securities and Exchange Commission in
order for the Company's shares to be eligible for trading in the United
States on the National Association of Securities Dealings over-the-counter
Bulletin Board.
2. SIGNIFICANT ACCOUNTING POLICIES
-------------------------------
These financial statements have been prepared by management in accordance
with accounting principles generally accepted in the United States, the
more significant of which are outlined below.
Use of Estimates
----------------
The preparation of financial statements in conformity with United States
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
expenses during the year. Actual results could differ from those estimates.
8
INNOFONE.COM, INCORPORATED
Notes to Financial Statements
(Stated in United States Dollars)
September 30, 2004
================================================================================
3. CAPITAL STOCK
-------------
The number of outstanding shares of the Company as at September 30, 2004 is
computed as follows:
Common Preferred
=======================================================================================
Outstanding Shares as at June 30, 2000 20,750,000 2,500,000
Shares issued in exchange for legal fees 1,403,333 -
Options exercised in exchange for marketing costs 30,000
Options exercised 430,000 -
Promissory notes converted to common stock 3,851,500 -
Common stock subscribed 1,000,004 -
Preferred stock to be converted to common stock 3,750,000 (1,250,000)
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Outstanding Shares as at June 30, 2001 31,214,837 1,250,000
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
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Outstanding Shares as at June 30, 2002 100,022,505 1,250,000
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)
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Outstanding shares as at June 30, 2003 301,484 1,250,000
Share issuance for consulting fees 2,690,028
--------------------------------------------------------------------------------------------
Outstanding shares as at September 30, 2003 2,991,512 1,250,000
Share issuance for consulting fees 4,369,972
--------------------------------------------------------------------------------------------
Outstanding shares as at September 30, 2004 7,361,484 1,250,000
============================================================================================
9
Management's Discussion and Analysis
For the Quarter ended September 30, 2004
Forward-Looking Statements
--------------------------
The following discussion of the financial condition and results of operations of
the Company should be read in conjunction with the Management's Discussion and
Analysis of Financial Condition and Results of Operations and the Consolidated
Financial Statements and Notes thereto for the year ended June 30, 2002 filed
with the SEC on October 15, 2002. This quarterly report 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:
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 these risks, uncertainties and assumptions, the forward-looking
events discussed in this Quarterly Report on Form 10-QSB might not occur.
Readers should carefully review the risk factors described in the previously
filed Form 10-KSB and in any other documents the Company files from time to time
with the Securities and Exchange Commission, including any future Annual Reports
on Form 10-KSB and Quarterly Reports on Form 10-QSB.
Overview
--------
Innofone.com Inc. currently operates out of Maryland with mailing address of
3470 Olney-Laytonsville Rd., Suite 118, Olney, MD 20832.
10
The Company currently does not have sufficient funds with which to sustain its
operations. The company plans to issue restricted 144 stock to try and raise
operating capital for the company. There is no assurance that this can be done.
There is little chance that the company will receive a dividend from the
bankruptcy of its previously owned subsidiary, Innofone Canada.
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.
(a) Plan of Operations
(b) Acquisitions
(c) Future
The company plans to look for new acquisitions and will not invest or operate
any current or previously owned subsidiaries.
The company has relocated to Maryland and may change it's offices again if the
company is successful in finding a new acquisition.
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 it can raise money through the sail of stock, there are no
assurances that this can be achieved, it cannot be determined if the company
will be able to meet its current or future obligations.
Due to the going concern issues and lack of sufficient operating funds, Mr
Richardson is currently funding operations.
(b) Results of Operations
As reflected in the company's statement of operations the company has recorded
no sales for the year and the company does not currently conduct any operations.
The company has paid off old debt holders with stock pursuant to the terms of a
2001 agreement. The current officers and directors are covering all expenses of
the company via short-term loans and advances which have been and will continue
to be paid off in stock until the company has the cash flow to cover these
expenses. These services include the preparation of company filings, the search
of acquisition targets and legal expenses.
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 is grave and the future of the company is in great
peril.
11
PART II- OTHER INFORMATION.
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Item 1. Legal Proceedings.
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There are currently no legal proceedings against the company at this time.
Item 2. Change in Securities.
-----------------------------
No change in securities for the period.
Item 3. Defaults Upon Senior Securities.
----------------------------------------
There was no material default in payments of any Senior Securities it has all
been paid in full with stock.
Item 4. Submission of Matters to a Vote of Security Holders.
------------------------------------------------------------
There were no matters requiring a vote of security holders during this period.
Item 5. Other Information.
--------------------------
None.
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SIGNATURES
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Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INNOFONE.COM, INC.
Date: November 3, 2004 By: /s/ Frederic Richardson
---------------------------------
Frederic Richardson, President
13