UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-KSB
                                   (Mark One)

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

                   For the fiscal year ended December 31, 2004

                                       OR

    [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                    For the transition period ____________to____________

                        Commission file number 000-28985

                                   VOIP, INC.

                 (Name of small business issuer in its charter)

                 Texas                                           75-2785941
    (State or other jurisdiction of                           (I.R.S. Employer
     incorporation or organization)                          Identification No.)

    12330 SW 53rd Street, Suite 712                                 33330
        Ft. Lauderdale, Florida                                  (Zip Code)
(Address of principal executive offices)

         Issuer's telephone number, including area code: (954) 434-2000

Securities registered pursuant to Section 12(b) of the Act:  None.

Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $0.001.

Check  whether the issuer (1) filed all reports  required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the issuer was required to file such reports),  and
(2) has been subject to such filing requirements for the past 90 days.

YES  X  NO

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation  S-B contained  herein,  and none 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's revenues for its most recent fiscal year were:  $2,619,393.

The aggregate market value of the voting common stock held by  non-affiliates of
the  issuer,  based  on the  average  bid and  asked  price of such  stock,  was
$98,248,877 at December 31, 2004.

At March 18, 2005, the registrant had outstanding 26,378,132 shares of par value
$.001 common stock.

                       DOCUMENTS INCORPORATED BY REFERENCE

None.

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


<PAGE>

                                TABLE OF CONTENTS


PART I.........................................................................1

   ITEM 1. DESCRIPTION OF BUSINESS.............................................1

   ITEM 2. PROPERTIES.........................................................18

   ITEM 3. LEGAL PROCEEDINGS..................................................18

   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................18



PART II.......................................................................19


   ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS...........19

   ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION..........20

   ITEM 7. FINANCIAL STATEMENTS...............................................23

   ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE........................................................23



PART III......................................................................25

   ITEM 9.   DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS.....25

   ITEM 10. EXECUTIVE COMPENSATION............................................26

   ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT....27

   ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS....................27

   ITEM 13. EXHIBITS..........................................................28

   ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES............................28









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                                   VOIP, INC.

PART I

ITEM 1.  BUSINESS
         --------

 Overview

         VoIP,  Inc.  (referred  to  herein  as the  Company,  we,  or us) is an
emerging  global service  provider of superior  quality Voice over IP,  ("VoIP")
based solutions  offering  residential and business customers more user friendly
and affordable ways to communicate.  VoIP, Inc. also  manufactures  products and
provides  services  to Internet  Service  Providers,  Telecommunication  Service
Providers and Cable  Operators in strategic  countries  around the world.  VoIP,
Inc.,  through  its  subsidiaries,  provides  a  comprehensive  portfolio  of IP
multimedia-based  solutions ranging from subscriber based voice services, to SIP
based  infrastructure  design and  deployment,  to  broadband  customer  premise
equipment design and  implementation  services,  as well as engineering  design,
manufacturing and distribution of wireless broadband technology.  VoIP, Inc. has
applied for a patent for its state of the art VoIP Multimedia  Terminal  Adaptor
which today supports the FCC  Commission's  desire for VoIP providers to deliver
Emergency  911  Calling,   Disability   Access,   and  Law  Enforcement   Access
capabilities to the marketplace.

Historical

         VoIP, Inc. is a Texas  corporation that was formerly known as Millennia
Tea Masters, Inc. Its original business was importing from Sri Lanka and selling
a line of fine teas.  Absence of capital  and  personnel  forced the  Company to
concentrate  its  efforts via direct mail and the  Internet.  Management  of the
Company was receptive to an  opportunity to expand its business into one or more
activities providing greater opportunities for growth, and on March 1, 2004, the
Company  announced  that  it had  accepted  an  unsolicited  offer  to  issue  a
controlling  block of common  stock to an  investor  wishing to  contribute  his
business  assets,  intellectual  property and sales  opportunities to a publicly
traded  company.  On February 27, 2004,  the Company  issued  12,500,000  shares
representing  87.8% of shares  outstanding  in  exchange  for  $12,500  with the
agreement   to   contribute   two   companies   to   engage   in   a   specialty
telecommunications business as described below. The Company subsequently changed
its name to VoIP,  Inc.  The Company  then moved its  headquarters  from Dallas,
Texas  to Fort  Lauderdale,  Florida  and  underwent  a change  in the  Board of
Directors  and  management.  IN  December  2004 the Company  sold its  remaining
inventory of teas and discontinued the tea segment.  The Company now operates in
only one business segment.


Industry Background

         According  to  Internet  World - Stats,  the current  world  market for
telecommunications   is  estimated  at  513  billion   dollars  and  the  market
opportunity of the global information industry as at least 1.3 trillion dollars.

         The advance of broadband  delivery of the Internet into residential and
small  offices  has  opened up a large  market  for  high-speed  services  to be
delivered in a manner that is independent of the actual wires  connected to each
property.  Nearly  three out of four  households  with basic phone  service have
Internet access,  and of that 75% of all households in the US, almost half, have
broadband access.  (Source:  Nielsen/NetRatings) The penetration of broadband is
rising at around 2.5% per month.  These growth  figures are even higher in other
nations,  which have only recently been implementing systems after understanding
and  modeling  their  platforms  on what has become the  standard  in the United
States.

         An  additional  factor in the cost  savings  of VoIP is the  relatively
inexpensive nature of IP transit data at the "core" of the Internet. In the late
90's, a large amount of capital was  invested in fiber  connectivity  in between
major metropolitan  areas. Due to market forces,  this fiber became available at
incredibly inexpensive rates, and a "bandwidth glut" or "fiber glut" occurred at
the core of the Internet, driving costs down.

         The costs paid by consumers for traditional  telephony are still in the
hundreds of billions of dollars.  It is possible for VoIP  services to undermine
large  sections of that  revenue and provide  significant  cost savings by using



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<PAGE>

packet-switched   networks  to  deliver  the  same  call  quality  to  the  same
destinations,  but at a heavily  discounted  rate to the service  provider.  The
"fiber  glut" at the core of the  network  is  fueling  this  growth by  keeping
bandwidth prices low for IP services even over long distances, while traditional
telephony  providers are unable to compete against the new model that strips the
usefulness from their antiquated telephony equipment, which is still capitalized
at billions of dollars over its (now) very low value.

         VoIP  is a  technology  that  enables  voice  communications  over  the
Internet  through  the  compression  of  voice  into  data  packets  that can be
transmitted  over data networks and then  converted back into voice at the other
side. Data networks,  such as the Internet or local area networks  (LANs),  have
always utilized  packet-switched  technology to transmit information between two
communicating terminals (for example, a PC downloading a page from a web server,
or one computer sending an e-mail message to another computer).  The most common
protocol used for  communicating  on these packet switched  networks is internet
protocol,  (IP). VoIP allows for the transmission of voice along with other data
over these same  packet  switched  networks,  and  provides  an  alternative  to
traditional  telephone  networks,  which uses a fixed  electrical  connection to
carry voice signals through a series of switches to the final destination.

         As a result of the cost savings and added features of VoIP, the Company
believes  that  many  consumers,   business,   cable  television  providers  and
traditional  telecommunication  providers  are  viewing  VoIP as the  future  of
telecommunications. VoIP has experienced significant growth in recent months.

         The  telephone  networks  maintained  by many  local and long  distance
telephone  companies were designed  solely to carry  low-fidelity  audio signals
with a high level of reliability.  Although these traditional telephone networks
are very reliable for voice communications,  they are not well suited to service
the explosive  growth of digital  communication  applications  for the following
reasons:

         Until  recently,  telephone  companies  have  avoided the use of packet
switched  networks for  transmitting  voice calls due to the  potential for poor
sound quality attributable to latency issues (delays) and lost packets which can
prevent real-time transmission. Recent improvements in packet switch technology,
compression and broadband access technologies,  as well as improved hardware and
provisioning  techniques,  have significantly improved the quality and usability
of packet-switched voice calls.

         Packet-switched  networks  have been  built  mainly  for  carrying  non
real-time  data,  and the  advantages  of such  networks  are their  efficiency,
flexibility,  reliability  and  scalability.  Bandwidth  is only  consumed  when
needed,  networks can be built in a variety of configurations to suit the number
of users,  client/server  application  requirements and desired  availability of
bandwidth and many terminals can share the same connection to the network.  As a
result,  significantly  more traffic can be transmitted  over a packet  switched
network,  such  as a home  network  or  the  Internet,  than a  circuit-switched
telephony  network.  Packet  switching  technology  allows service  providers to
converge  their  traditionally   separate  voice  and  data  networks  and  more
efficiently  utilize  their  networks by  carrying  voice,  video,  fax and data
traffic over the same  network.  The  improved  efficiency  of packet  switching
technology creates network cost savings that can be passed on to the consumer in
the form of lower telephony rates.

         The  exponential  growth of the Internet in recent years has proven the
scalability  and  reliability  of  these  underlying  packet  switched  IP based
networks.  As  broadband   connectivity  has  become  more  available  and  less
expensive,  it is now  possible  for  service  providers  like us to offer voice
services that run over these IP networks to consumers and business worldwide.

Marketing and Business Strategy

         Most VoIP service  providers  have focused on the Internet as a primary
method to market and retail their  products.  A few companies  have placed their
products on the shelves of a limited number of retail computer stores;  however,
with the enormous amount of products that these stores carry, these products are
easily overlooked and unexplained.  We have taken steps to place our products in
the hands of manned retail  outlets across the US that have trained sales agents
to sell the products.


                                       2
<PAGE>

         Our  competitors  are  focused  on  the  United  States  market,  while
providing  innovative and focused  solutions for reseller channels in the United
States we will also be focused on the international  market.  The highest margin
revenue stream is from the off net origination and termination of  international
calls  from  customers  outside  the  United  States.   The  extensive  industry
experience  and  potential  customer  and  partner  contacts  of  the  Company's
executives  will assist the rapid  establishment  of  competitive  services  and
aggressive international sales channels.

         Each  country has domestic  and  regional  markets.  Through the use of
multiple  web  sites,  regional  rate  plans  and  multi-language  support,  and
multi-currency  billing,  we will work with in-country partners to provide local
POP's (Points of Presence)  that will permit local  telephone and 800 numbers to
be  available  for  local  marketing  and for the  sale to  overseas  customers.
Interconnection with local carriers and PTT's (Postal, Telegraph, and Telephone)
will in turn  reduce  the off net  termination  costs to that  country  and open
access to the multi-billion dollar international wholesale long distance minutes
market.

         The Company will market its Voice over IP broadband  telephony  service
to business and residential consumers through its eGlobalphone, Inc. subsidiary.
eGlobalphone   service  requires  that  customers  have  a  high-speed  Internet
connection  to their  home or  business.  A  growing  number of  households  and
business  both in the United  States and abroad have  access to these  broadband
connections   through  their  local  cable  or  Telephone   Company.   Broadband
penetration in the United States is about 58 percent and is expected to reach 70
percent by 2007.

         The  Company  plans to expand  its  service  footprint  in about 25 new
markets monthly concentrating  primarily on the major United States metropolitan
areas. The Company's plan is to launch service in over 200 markets by year's end
as part of VoIP,  Inc.'s  strategic focus on IP-based  communications  services.
International  markets will be opened in parallel with domestic US markets.  Due
to the nature of IP telephony,  these markets are not significantly more complex
to weave  into  the  existing  back-office  design,  although  often  there  are
regulatory  issues in each  nation  which  must be  managed  appropriately.  The
Company's  goal is to sign up 2.3 million  business  and  consumer  customers by
2007, including domestic and international subscribers.

         eGlobalphone  plans to support the  marketing of  eGlobalphone  Service
with  an  extensive  communications  campaign  that  will  include  mass  market
advertising on television,  radio and in print and through direct mail,  virtual
marketing  and  online  advertising  in  addition  to an  extensive  network  of
resellers  through out the world. We have emphasized sales in the  international
marketplace  through  resellers and  wholesalers,  believing that the need for a
less  expensive  service  is  vital in many  countries  globally.  We will  seek
marketing  partners in each country that is identified as a potential market, in
order to provide a local  presence.  Manuals,  interfaces,  voice  prompts,  and
operators will be tailored for the primary language of the nationality,  and the
sales  force  will  operate  locally to  provide  "high-touch"  comfort to these
localized  markets.  A major  opportunity  for resale is being  developed with a
private retail wireless  vendor,  to allow for a very  "high-touch"  interaction
with customers. This model has proven to be successful in wireless sales, and it
is believed that the same marketing  strategy and  distribution  channel will be
successful for other telephony services that the Company can offer consumers.

         Customers  can  access  the  eGlobalphone   network  for  long-distance
telephony from any high speed  Internet  connection  anywhere in the world.  The
eGlobalphone service provides a two line patent pending MTA (Multimedia Terminal
Adaptor) with built-in  router and many  enhanced  functions  such as Quality of
Service  (QoS)  bandwidth  management,  failure-resistant  backup  systems,  and
low-bandwidth codec support. The MTA is manufactured by iCable System Co. Ltd. a
Korean company that is contractually tied to VoIP-Solutions,  Inc a wholly owned
subsidiary of VoIP,  Inc. By having our own  propriety MTA with custom  designed
enhanced  features  we  believe  that  we have a  distinct  advantage  over  our
competition  based on these  enhancements  and our patent  pending 911 emergency
access.  eGlobalphone  is  believed  to be the only VoIP  company  offering  911
emergency  access and integration with the existing  infrastructure  without the
use of a third party  database.  This  proprietary  system utilizes an automated
switching  circuit  to route  the call to the  user's  local  emergency  service
provider  (911 call  center)  and will also "fail  safe" in the event of a power
outage or Internet service interruption.

         eGlobalphone  Service is different  than  traditional  phone  services,
because  through the use of IP-based  networks it will offer  customers  typical
features such as call waiting,  three-way calling, and call forwarding,  and far
more  advanced  ones as well  including:  voicemail,  caller ID, call  transfer,
caller  ID  blocking,  and  voicemail-to-email   service.  Low-priced  directory
information (411) services,  conference call capabilities,  "follow-me" calling,
and other  features are offered as  additional  line items or per-call  products
which contribute to the revenue stream for this product.


                                       3
<PAGE>

         There are  significant  new features that the Company will introduce in
the next year which are currently under development. These features will further
extend the  abilities of the platform to function as a flexible  telephony  tool
for end users and not merely be a replacement for traditional telephony. Much in
the same way that cell phone features have driven the  successful  launch of new
companies in the mobile  market,  eGlobalphone  believes that a  combination  of
features in the hardware and service will quickly develop the customer base.

         The Company's VoIP  Solutions,  Inc.  subsidiary is an emerging  global
service provider of Voice over IP based solutions to Internet Service Providers,
Telecommunications  Service Providers and Cable Operators in strategic countries
around the world.  VoIP Inc,  through its  subsidiary,  provides a comprehensive
portfolio of IP  multimedia-based  solutions ranging from subscriber based voice
services,  to SIP based  infrastructure  design  and  deployment,  to  broadband
customer  premise  equipment  design  and  implementation  services,  as well as
engineering  design,   manufacturing  and  distribution  of  wireless  broadband
technology.  VoIP,  Inc.  has applied for a patent for its state of the art VoIP
Multimedia Terminal Adaptor which today supports the FCC Commission's desire for
VoIP  providers  to deliver  Emergency  911 Calling and Law  Enforcement  Access
capabilities to the marketplace.

         VoIP, Inc. plans to support marketing of the VoIP-Solutions  subsidiary
with  an  extensive  communications  campaign  that  will  include  mass  market
advertising  directly to industry  leaders,  and through  direct  mail,  virtual
marketing and online  advertising  in addition to an extensive  network of value
added resellers through out the world. The biggest problem facing small carriers
and cable operators,  is that they lack the money to build a telephone  network.
Prior to this year, getting into voice was considered  capital-intensive and out
of reach for small and medium-level  operators,  thus one of the primary reasons
that  VoIP-Solutions  was created.  We have entered into the market to offer the
`back office'  infrastructure  to make voice possible for small and medium-sized
cable companies, ISP's and MSO's.

         More and more cable  companies  want to get into phone service as a way
to  remain  competitive,  especially  as  satellite  companies  and  even  local
telephone carriers are snatching away customers by offering video and high-speed
Internet capability. There is wide-open competition in the home telephone market
and one of the reasons  that we have put so much  emphasis  on our VSP  (Virtual
Service  Provider)  model.  This  product  is in  compatible  with the small and
medium-sized cable companies, ISP's and MSO's allowing them to maintain customer
ownership  and  increase   revenues  while   eliminating  the  cost  of  network
infrastructure and the learning curve that is sometimes, an expensive lesson.

         On July 14,  2004 the  Company  announced  its  first  Virtual  Service
Provider  partner and continues to establish its products in a niche market with
small- and medium-sized  cable companies,  ISP's and MSO's. The Company seeks to
add over 100 Virtual Service  Provider  partner's by the December 31, 2005, year
end.

         Our experience in the IP networking and VoIP technology arenas allow us
to offer rapid project assessment and subsequent  deployment of a voice services
infrastructure  to a  customer  with  an  existing  IP  network  such  as an ISP
(Internet Service  Provider),  CLEC (Competitive  Local Exchange  Company),  PTT
(Public  Telephone  and  Telegraph)  and  PCO,  (Private  Cable  Operator.)  Our
solutions   involve   delivery  of   portions  of  a  SIP-based   infrastructure
(cost-effective media gateways,  transcoding  solutions,  SIP proxies) or a full
turn-key  system  with  components  that are custom  designed  to work with each
other: (Billing system, invoice system, least-cost-routing, rate import/exports,
etc.)  Our  combined  technology,  expertise,  resources  within  the  telephony
community, and ability to provide right-priced solutions comprise a strong value
combination  for our  customers  as they bring their  existing  base of Internet
users into a VoIP product line.


         To date, we have not incurred  significant  advertising and promotional
expenses as we have not had the working capital to fund  significant  mass media
advertising expenditures.

         We offer individuals and businesses the opportunity to become resellers
of our  eGlobalphone  services  through our  affiliate  and  reseller  programs.
Resellers  are able to  purchase  bulk  eGlobalphone  accounts  and  hardware at
reseller  specific  rates that they are then able to resell  these  accounts  to
private  individuals  under the  eGlobalphone  brand.  With the new  benefits of
wireless networks, VoIP Solutions can leverage the use of the VoIP-Solutions MTA
product and knowledge.

         Services  provided in a potential  VoIP  Solutions  package to customer
could include:


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<PAGE>

         o        Billing systems/Platform
         o        Customer Premise Equipment (CPE)
         o        Service and application design
         o        Network design
         o        Switching platforms
         o        Back Office/OSS systems
         o        Web site design and back office integration
         o        Telephone number management applications
         o        Auto CPE provisioning systems
         o        Wholesale call termination
         o        Installation and training
         o        Support agreements
         o        Consultancy

         The Company maintains an inventory of all VoIP-Solution's  products for
sale to  end-users,  carriers and  resellers.  Included is the Flag Ship product
"MTA"  (Multimedia  Terminal  Adaptor) the MTA's are  manufactured  with varying
options to meet the demands of today's network operators for tomorrows future IP
networks, products include:

VoIP ADSL Modem (SIP)

o        MTA-A201C - 1 line VoIP, 1 line PSTN
o        MTA-A201W - 2 lines VoIP / LAN (802.11b) or (g)
o        MTA-A201CW - 1 line VoIP, 1 line PSTN / LAN (802.11b) or (g)
o        VoIP Cable Modem (SIP)
o        MTA-C102 - 2 Line VoIP
o        MTA-C101C - 1 Line VoIP, 1 Line PSTN
o        MTA-C102W - 2 lines VoIP / LAN (802.11b) or (g)
o        MTA-C102CW - 1 line VoIP, 1 line PSTN / LAN (802.11b) or (g)
o        VoIP MTA (SIP)
o        MTA-102 - 2 lines VoIP
o        MTA-102C - 1 line VoIP, 1 line PSTN
o        MTA-102W - 2 lines VoIP / LAN (802.11b) or (g)
o        MTA-102CW - 1 line VoIP, 1 line PSTN / LAN (802.11b) or (g)


         The Company has  developed  intellectual  property and software for the
soft switch platform and associated  applications developed for the eGlobalphone
service.  This  includes the source code for the  switching  servers and related
application  servers.  An agreement  with Porta One provides  access to software
source  code  and  database  schema  that  permit  custom   application,   layer
development and integration. Along with the billing and back office application,
VoIP Solutions can supply all of the components,  services and  customization to
fully equip a VoIP Telco.

         DTNet  Technologies Inc. is a primary importer and distributor of cable
network  components,  cable  modems,  ADSL modems,  wireless  products and other
Customer Premise  Equipment for the cable and Telco  industries.  Established in
1999,  their 1,000 plus clients include AT&T,  Comcast,  Cox Cable,  Bell South,
Time Warner as well as regional and local Multiple  Service  Operators  (MSO's).
DTNet has experienced  strong growth sales for the past three years,  increasing
from  approximately  $2 million in 2001 to $2.9 million in 2002 and $4.7 million
in 2003.  With the addition of the products from VoIP,  Inc.,  specifically  the
Multi Media Terminal  Adaptor and the Virtual Service  Provider  solution,  2005
sales are projected to reach $7.5  million.  DTNet has  established  itself as a
respected  supplier to the cable industry.  This includes a strong  relationship
and platinum  customer  status with the National  Cable  Television  Cooperative
(NCTC), representing over 1000 cable operator members.

         VoIP  Inc.  acquired  100% of DTNet on June 25,  2004  through  a stock
purchase.  In addition to the existing  business and revenues,  the  acquisition
provided  VoIP Inc.  with direct  access to a valuable  market and a  nationwide
sales force to sell products and services from other VoIP Inc. companies.  There
is also a demand  within  the group for the  existing  products  distributed  by



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<PAGE>

DTNet. Additionally, the existing customer base of DTNet consists of firms which
are the primary target for other VoIP, Inc. products. This customer base and the
existing  relationships  that DTNet has developed is one of the primary benefits
of the acquisition strategy.

         VoIP, Inc.'s DTNet subsidiary seeks to pursue cable companies for voice
deals:  The  availability  of VoIP  hardware and  services  from other VoIP Inc.
subsidiaries  has  positioned  DTNet  to be a leader  in  marketing  VoIP,  Inc.
products  and  services  into  this  channel.  The  NCTC  is in the  process  of
evaluating DTNet as the preferred VoIP vendor and contracts are in progress with
over  20  members  for the  supply  of  outsourced  services,  Customer  Premise
Equipment (CPE), and wholesale  long-distance,  local,  and  international  call
termination/origination.  The  desire  of cable  companies  to  diversify  their
service  offerings  to  increase  their  revenue and  profitability  will be the
motivation  for  interest in the combined  offerings  of DTNet and VoIP,  Inc.'s
newly combined abilities and product lines.

         Effective  September 1st, 2004, VoIP Inc. closed the acquisition of Vox
Consulting  Group,  Inc.,  d/b/a  VoIP  Americas,  a  Florida  corporation.  The
acquisition  took the form of an exchange of 1,000,000 shares of VoIP restricted
common stock in exchange the all issued and outstanding  shares of VoIP Americas
common stock.

Our Strategy

         Our objective is to build a profitable,  worldwide  enhanced  telephony
services   company   that   provides   rich  media  IP  services   with  minimum
infrastructure  costs.  We intend to bring the best possible  voice products and
services,  at an affordable  price,  to consumers and businesses and enhance the
ways in which these customers communicate.


Our strategy to accomplish this objective is to:

         o        Capitalize  on our  technological  expertise to introduce  new
                  products and features.  Over the past year, we have  developed
                  or acquired several core  technologies  that form the backbone
                  of our voice over IP  service,  and we intend to  continue  to
                  develop new products and  enhancements.  We developed  the CPE
                  (Customer  Premises  Equipment)  technologies  used to provide
                  voice service,  and control the software and firmware that run
                  these CPE devices. As a result, we are able to update customer
                  CPE without any third party assistance.
         o        Offer the best possible  service and support to our customers.
                  We have  established a call center and customer  support group
                  at our headquarters in Fort Lauderdale Florida.. In the second
                  quarter  of fiscal  2005,  we expect to be  providing  24-by-7
                  support to our  worldwide  subscriber  base. We also expect to
                  make   significant   upgrades  or  acquire   existing   system
                  infrastructure  to enhance  the  support we can provide to new
                  and  existing   subscribers,   as  well  as  our  distribution
                  partners.   In  an  emerging   industry  with   world-changing
                  technologies,  we are  focused  on  our  customers  and  their
                  experience with eGlobalphone.
         o        Develop additional  distribution channels. We have established
                  relationships  with  several  resellers  and  distributors  of
                  telecommunications  products.  To further accelerate growth of
                  our VSP  (Virtual  Service  Provider)  platform  consumer  and
                  enterprise  offerings,  we intend to build  upon our  existing
                  relationships   and   establish   new    relationships    with
                  distributors,  value added  resellers and system  integrators,
                  other  service  providers  and  retailers to make our products
                  more readily  available and accessible to potential  customers
                  of our service.


Network Operations

         We have a centrally  managed  platform  that  monitors  and manages all
network  elements and devices at the physical and logical  layers which  support
all of our products and  services.  We have  invested  substantial  resources to
develop and implement our real-time  call  management  information  system.  Key
elements of this system include:  customer provisioning,  customer access, fraud
control, network security, call routing, call monitoring, media processing, call
reliability  and call  detail  records.  Our  platform  monitors  our process of
digitizing and  compressing  voice into packets and transmits these packets over
data  networks  around  the  world.  We  maintain  a  softswitch,   which  is  a
software-based  product that manages call admission,  call control,  call rating
and routes calls to an  appropriate  endpoint.  Unless the recipient is using an
Internet  telephony device,  the packets  representing a voice and/or video call



                                       6
<PAGE>

initiated by a eGlobalphone subscriber are sent to a gateway belonging to one of
our partner  telecommunications  carriers, where the packets are reassembled and
the call is transferred to the PSTN and directed to a regular telephone anywhere
in the world.  Our billing and back office systems  manage and enroll  customers
and bill calls as they originate and terminate on the service.


Network Operations Center

         We maintain  Network  Operations  Centers at the NAP of the Americas in
Miami,  Florida  and at 111th 5th  Avenue,  New York City.  We employ a staff of
individuals  with  experience  in both  voice  and data  operations  to  provide
twenty-four  hour  support to our  subscribers.  Additional  network  operations
support is provided by our engineers in Ecuador. We use various tools to monitor
and manage all  elements of  telephone  calls in  real-time.  Additionally,  our
Network Operations Center provides  technical support to troubleshoot  equipment
and network problems.


Customer and Technical Support

         We  maintain  a call  center at our  headquarters  in Fort  Lauderdale,
Florida and have a staff of employees  and  contractors  that  provide  customer
service and technical support to customers. We also provide customer service and
technical support directly to our resellers, and certain resellers provide their
own support directly to their sub-resellers and end users.

Interconnection Agreements

         We are party to telecommunications  interconnect and service agreements
with VoIP  providers  and PSTN  telecommunications  carriers.  Pursuant to these
agreements,  VoIP calls  originating  on our network can be  terminated on other
VoIP  networks or the PSTN.  Correspondingly,  calls  originating  on other VoIP
networks and the PSTN can be terminated on our network.

Manufacturing and Suppliers

         We outsource the  manufacturing of our Multimedia  Terminal Adaptors to
our South Korean partner,  who provides offshore inventory and delivery services
worldwide.  Our Korean partner has in-house PC board  pressing,  case design and
manufacturing,  and board processing facilities, making them less susceptible to
supply chain dropouts that may cause other manufacturers difficulty.

         The primary chipset used in the CPE units is the  Broadcom(R)  chipset,
for which there is an available  supply path and rapid delivery  periods.  It is
not anticipated that there will be any significant  shortfalls in the ability to
produce  equipment  or deliver  equipment,  given past  experience  and  current
operating procedures, even under heavy volume sales.

         We rely on  multiple  telecommunications  providers  to  originate  and
terminate  substantially all of our PSTN telephone calls.  While we believe that
relations  with our  suppliers  are  good,  there can be no  assurance  that our
suppliers  will be able or willing to supply  products and services to us in the
future.  While we believe that we could replace our suppliers if necessary,  our
ability to provide  service to our  subscribers  would be  impacted  during this
timeframe,  and this  could have an adverse  effect on our  business,  financial
condition and results of operations.

Research and Development

         The VoIP industry is characterized by rapid  technological  changes and
advances.  Accordingly we are making  continued  efforts and  investments in the
design and  development  of new  products and  services,  and  enhancements  and
features to existing products and services.  Our current and future research and
development  efforts relate to our VSP,  eGlobalphone,  1-800-TalkTime,  and the
Multimedia  Terminal Adaptor products future products under development  consist
of new endpoints for  subscribers of our service WiMax phones and IP set top box
products.



                                       7
<PAGE>

Licensing and Development Arrangements

         We have  licensed  portions  of our  systems  technology  and  software
platform to our VSP customers.  Such  arrangements may enable these companies to
use our  technology  to produce  services  that compete with our VoIP  telephony
products.  We also OEM manufacture certain of our MTA VoIP telephony products to
VSP customers, or OEMs (Original Equipment Manufactures).  Only certain of these
OEM  licensees  may sell  products  based on the  licensed  technology  to third
parties,  while other  licensees are limited to sales of such technology as part
of  multimedia  communication  systems or  sub-systems.  The Company  expects to
continue licensing its technology to others, many of whom may be located outside
of the United  States.  In addition to licensing its  technology to others,  the
Company  from  time to time  may take a  license  to  technology  owned by third
parties and currently  relies upon certain  technology,  including  hardware and
software, licensed from third parties. Inventories

         All the inventories  are kept in our local facility in Ft.  Lauderdale,
Florida.  Our local inventory and supply methods provide  adequate  capacity for
most order volumes,  but special orders or  multi-thousand  unit  deliveries are
typically  drop-shipped  from Korea.  All softswitch and "back office"  solution
materials are also kept on-site for customer  deployment,  except in cases where
local  purchase of  equipment is less  difficult or less costly than  in-country
sourcing.

         The "cascading  provisioning" server method that is used in the network
allows for the "out-of-box" configuration and deployment of CPE hardware without
ever being configured on the customer's network. This means that deployment time
can be reduced  drastically for  field-shipping  equipment,  and no intermediate
warehouse  or  customer  care steps are  required.  Devices are  delivered  from
overseas and can be directly put into production by any of our customers without
manual configuration.  This is significantly  different than most other hardware
and  softswitch  providers,  in that our solution  removes the  requirement  for
customer  configuration  of equipment  (which is confusing and slow) or two-step
shipping (which is costly and slow.)

Competition

         At the present  time, we believe that no direct  competitor  offers the
full suite of components and services that VoIP, Inc. will be able to provide to
customers. Each individual solution is offered by a wide variety of competitors.

These primary competitors of each company include the following:

         o        eGlobalphone:  Vonage, Packet8, DeltaThree, Voicepulse as well
                  as  incumbent  telephone  carriers,  and  other  providers  of
                  traditional and legacy telephone service.

         o        VoIP  Solutions:   (Hardware):  Sipura,  Grandstream,   Cisco,
                  Mediatrix

         o        VoIP Solutions: (SIP softswitch):  Nuera, Broadsoft,  Pingtel,
                  Nortel

         o        VoIP Solutions: (integration): Accenture, Hughes Software

         o        VoIP  Americas:  (wholesale)  Several Tier 1 and 2 competitive
                  carriers

         We have secured some of the industry's  best and most forward  thinking
software developers and engineers. This team will continue to develop innovative
new products and  services to propel our company past our  competition  and into
the mainstream. Our development resources and marketing expertise,  coupled with
continued complementary  acquisitions makes us unique in our industry and one of
the leaders in our field.

         Our  Multimedia   Terminal  Adapter  (MTA)  design  and   manufacturing
capability  gives the company a competitive  advantage over other VoIP suppliers
through the latest SIP technology, enhanced features and built-in router.

         In  addition,  we have entered into  multiple  agreements  with various
Carriers that provide the company with some of the industry's best rates.  These
rates enable the company to not only resell these minutes,  wholesale,  to other
Carriers  but allow us to make  maximum  profit on the minutes  sold through our
VoIP  Solutions'  Virtual  Service  Provider  (VSP)  platform  and  eGlobalphone
subscriber based offering.


                                       8
<PAGE>

Regulation

         The  Company  currently  is as a  value  added  service  provider.  The
hardware,  integration,  softswitch,  and  wireless  portions  of the  firm  are
expected to remain  unthreatened  by  regulation  in major  nations in which the
Company  expects  to  do  business.   The  eGlobalphone   service  offering  may
potentially  experience  regulatory pressures as the United States makes changes
in its  telecommunications  law to encompass  VoIP  services.  The imposition of
government  regulation on our business could adversely  affect our operations by
requiring additional expense to meet compliance requirements.

         1)       Regulation is expected to be applied to the following areas of
                  our service:  E911,  CALEA (law  enforcement  wiretap) and USF
                  taxation.

                  a.       Our  existing  E911  service  addresses  this concern
                           already,  and we are working with industry  groups to
                           also address E911  delivery via the network when that
                           technology   becomes  mature  and   affordable.   The
                           combined delivery methods should  adequately  protect
                           the Company against  negative  regulatory or economic
                           pressure in the future.

                  b.       CALEA data delivery is almost  complete in the system
                           for the basics of call  status and PIN  tapping.  The
                           additional   steps  of  call   monitoring   and  call
                           splitting  are yet to be even  defined,  though it is
                           not anticipated  that their  deployment would require
                           anything   other  than  minor  expense  for  adequate
                           compliance with these laws, given current technology.

                  c.       USF   (Universal   Service  Fee)  taxation  has  been
                           explicitly  not  required  for  data  services.   The
                           classification  of VoIP as a value added data service
                           has clearly  indicated  that it is outside of the USF
                           charter.

         2)       Comments  by the FCC staff  have  indicated  that VoIP will be
                  handled in a relatively  "hands-off" manner until the industry
                  is more mature and capable of competing directly with RBOC and
                  ILEC carriers.  This is anticipated to be at least another two
                  years.

         3)       Even  with  additional  regulations  and if  they  were  to be
                  applied,  the costs of compliance would be significantly lower
                  than  those of  traditional  telephony,  as  these  regulatory
                  structures are already being considered and compensated for in
                  design aspects of the network.

         4)       Our  primary  focus  on  non-US  customers  should  limit  our
                  exposure in the United States.


Intellectual Property and Proprietary Rights

         Our ability to compete  depends,  in part, on our ability to obtain and
enforce intellectual property protection for our technology in the United States
and  internationally.  We currently  rely  primarily on a  combination  of trade
secrets,   patents,   copyrights,   trademarks   and  licenses  to  protect  our
intellectually   property.   We  cannot  predict   whether  our  pending  patent
applications will result in issued patents.  Due to rapid technological  change,
we believe  that factors such as the  technological  and creative  skills of our
personnel,  new product  developments and enhancements to existing  products are
more  important  than  the  various  legal  protections  of  our  technology  to
establishing and maintaining technology leadership. To protect our trade secrets
and other proprietary  information,  we require our employees to sign agreements
providing for the  maintenance  of  confidentiality  and also the  assignment of
rights to inventions made by them while in our employ. There can be no assurance
that our means of  protecting  our  proprietary  rights in the United  States or
abroad will be  adequate  or that  competition  will not  independently  develop
technologies  that are  similar or  superior to our  technology,  duplicate  our
technology or design around any of our patents

         o        VoIP.  The patent  pending E911 bypass  system  developed  and
                  integrated into the CPE is a key  differentiator  in equipment
                  for VoIP deployment.




                                       9
<PAGE>

         o        The Pathfinder 2.0 "cascading provisioning server" feature for
                  deployment  of  zero-touch  hardware is  additionally  a novel
                  approach to deployment of equipment,  and is a new development
                  that is exclusive to VoIP, Inc.'s platform.

Employees

         VoIP, Inc. currently employs 35 persons in the following capacities:  5
executive officers,  8 general  administrative,  11 sales and marketing,  and 11
technology personnel, respectively. We consider our relations with our employees
to be good.  We have never had a work  stoppage,  and none of our  employees  is
represented  by  collective  bargaining  agreements.  We believe that our future
success  will depend in part on our ability to  attract,  integrate,  retain and
motivate  highly  qualified  personnel,  and upon the  continued  service of our
senior  management  and key technical  personnel.  None of our key personnel are
bound by employment  agreements that prohibit them from ending their  employment
at  any  time.   Competition  for  qualified   personnel  in  our  industry  and
geographical  location  is  intense.  We  cannot  assure  you  that  we  will be
successful in  attracting,  integrating,  retaining and  motivating a sufficient
number of  qualified  employees  to conduct  our  business  in the  future.  Our
corporate headquarters are located at: 12330 SW 53rd Street, Ft. Lauderdale,  FL
33330.


                                  RISK FACTORS

         You should  carefully  consider each of the following  risk factors and
all of the other  information in this Prospectus.  If any of the following risks
and uncertainties develops into actual events, our business, financial condition
or results of operations  could be materially  and adversely  affected.  If that
happens, the trading price of our Shares could decline  significantly.  The risk
factors below contain  forward-looking  statements regarding our company. Actual
results  could  differ  materially  from those set forth in the  forward-looking
statements.

Cautionary Statement Regarding Forward-Looking Statements

         This Prospectus contains forward-looking  statements relating to events
anticipated to happen in the future. These forward-looking  statements are based
on the beliefs of our management, as well as assumptions made by and information
currently  available to our management.  Forward-looking  statements also may be
included in other  written and oral  statements  made or released by us. You can
identify forward-looking statements by the fact that they do not relate strictly
to historical or current facts.  The words  "believe,"  "anticipate,"  "intend,"
"expect," "estimate," "project" and similar expressions are intended to identify
forward-looking statements. Forward-looking statements describe our expectations
today of what we believe is most likely to occur or may be reasonably achievable
in the future,  but they do not predict or assure any future  occurrence and may
turn out to be wrong.  Forward-looking  statements are subject to both known and
unknown risks and uncertainties and can be affected by inaccurate assumptions we
might make. Consequently, no forward-looking statement can be guaranteed. Actual
future  results may vary  materially.  We do not  undertake  any  obligation  to
publicly  update any  forward-looking  statements to reflect new  information or
future events or occurrences.  These  statements  reflect our current views with
respect to future  events and are subject to risks and  uncertainties  about us,
including, among other things:

         o        our  ability  to  market  our  services  successfully  to  new
                  subscribers;
         o        our ability to retain a high percentage of our customers;
         o        the possibility of unforeseen  capital  expenditures and other
                  upfront investments  required to deploy new technologies or to
                  effect new business initiatives;
         o        our ability to access markets and finance network developments
                  and operations;
         o        our  expansion,  including  consumer  acceptance  of new price
                  plans and bundled offerings;
         o        additions  or  departures  of key  personnel;
         o        competition,  including  the  introduction  of new products or
                  services by our competitors;
         o        existing and future laws or regulations affecting our business
                  and our ability to comply with these laws or regulations;
         o        our reliance on the Regional Bell operating  company's systems
                  and provisioning processes;
         o        technological innovations;
         o        the outcome of legal and regulatory proceedings;



                                       10
<PAGE>

         o        general economic and business conditions,  both nationally and
                  in the  regions  in  which  we  operate;  and
         o        other  factors  described in this  document,  including  those
                  described in more detail below.

         We caution  you not to place undue  reliance  on these  forward-looking
statements, which speak only as of the date of this document.


                      RISK FACTORS RELATED TO OUR INDUSTRY

         Our  business  may  be  adversely   affected  by  developments  in  the
telecommunications industry.

         Through the year 2000, the telecommunications  market experienced rapid
growth spurred by a number of factors,  including  deregulation in the industry,
entry of a large  number  of new  emerging  service  providers,  growth  in data
traffic and the availability of significant  capital from the financial markets.
Commencing in 2001 and continuing thereafter,  the  telecommunications  industry
experienced a reversal of some of these trends, marked by a sharp contraction in
the  availability  of capital,  dramatic  reductions in capital  expenditures by
service providers and financial  difficulties  and, in some cases,  bankruptcies
experienced  by  service  providers.   These  conditions  caused  a  substantial
reduction in demand for telecommunications equipment.

         We expect the  developments  described  above to continue to affect our
business in the following manner:

         o        our ability to accurately forecast revenues is diminished;
         o        our revenues could be reduced; and
         o        we may incur losses because a high percentage of our operating
                  expenses are and will continue to be fixed in the short-term.

         Our  business,  operating  results  and  financial  condition  could be
materially and adversely affected by any one or a combination of the above.

The market for VoIP  products  for the new public  network is  evolving  and our
business will suffer if it does not develop as we expect.

         The market for our products is rapidly evolving. Our technology may not
be widely  accepted as a platform for voice and a viable market for our products
may not develop or be sustainable.  If this market does not develop, or develops
more  slowly  than  we  expect,  we may not be able  to  sell  our  products  in
significant volumes, or at all.

If we do not respond rapidly to technological  changes or to changes in industry
standards, our products could
become obsolete.

         The market for VoIP  products  is likely to be  characterized  by rapid
technological change and frequent new product introductions. We may be unable to
respond  quickly  or  effectively  to  these  developments.  We  may  experience
difficulties  with  software  development,  hardware  design,  manufacturing  or
marketing that could delay or prevent our development, introduction or marketing
of new  products  and  enhancements.  The  introduction  of new  products by our
competitors,  the market  acceptance  of  products  based on new or  alternative
technologies  or the  emergence  of new  industry  standards  could  render  our
existing or future  products  obsolete.  If the standards  adopted are different
from those that we have chosen to support, market acceptance of our products may
be  significantly  reduced or delayed.  If our products  become  technologically
obsolete,  we may be unable to sell our products in the marketplace and generate
revenues.

                          RISKS RELATED TO OUR COMPANY

Our revenues have been generated from a limited number of customers, and we will
not be successful if we do not grow our customer base.

         To date, we have sold our products to a limited number of customers. To
be successful, we will need to greatly expand our customer base and users of our
products.



                                       11
<PAGE>

         The growth of our customer base could be adversely affected by:

         o        customer unwillingness to implement our new VoIP products;
         o        any delays or difficulties that we may incur in completing the
                  development  and  introduction  of  our  planned  products  or
                  product enhancements;
         o        new product introductions by our competitors;
         o        any failure of our products to perform as expected; or
         o        any  difficulty  we may incur in meeting  customers'  delivery
                  requirements.

         If we do not expand our customer base to include  additional  customers
that deploy our products in all of their  applications,  our  revenues  will not
grow significantly, or at all.

We will not retain  customers or attract new  customers if we do not  anticipate
and meet specific  customer  requirements or if our products do not interoperate
with our customers' existing networks.

         To achieve  market  acceptance  for our products,  we must  effectively
anticipate,  and adapt in a timely manner to,  customer  requirements  and offer
products that meet changing customer demands.  Prospective customers may require
product  features and  capabilities  that our current  products do not have. The
introduction of new or enhanced  products also requires that we carefully manage
the transition  from older products in order to minimize  disruption in customer
ordering  patterns  and ensure that  adequate  supplies of new  products  can be
delivered to meet anticipated  customer  demand.  If we fail to develop products
and offer services that satisfy customer requirements,  or to effectively manage
the transition from older products, our ability to create or increase demand for
our products would be seriously  harmed and we may lose current and  prospective
customers.

         Many of our  customers  will  require  that our products be designed to
interface  with  their  existing  networks,  each of which  may  have  different
specifications.  Issues caused by an unanticipated lack of interoperability  may
result in significant  warranty,  support and repair costs, divert the attention
of our engineering  personnel from our hardware and software development efforts
and cause  significant  customer  relations  problems.  If our  products  do not
interoperate  with  those of our  customers'  networks,  installations  could be
delayed or orders for our products  could be  cancelled,  which would  seriously
harm our gross margins and result in loss of revenues or customers.

We may not become profitable.

         We have  incurred  significant  losses since our  inception  and, as of
December  31,  2004,  had an  accumulated  deficit  of  $4,639,386.  We have not
achieved  profitability on an annual or quarterly basis and may incur additional
net losses in future  quarters  and years.  Our revenues may not grow and we may
not generate sufficient revenues to sustain profitability.

The  unpredictability  of our quarterly results may adversely affect the trading
price of our common stock.

         Our revenues and operating results will vary significantly from quarter
to quarter due to a number of factors,  many of which are outside of our control
and any of which may cause our stock price to  fluctuate.  The  primary  factors
that may affect our revenues and results include the following:

         o  fluctuation  in demand for our VoIP products and the timing and size
of customer orders; o cancellations or deferrals of existing  customer orders or
the  renegotiations  of  existing  contractual  commitments;  o the  length  and
variability of the sales cycle for our products; o new product introductions and
enhancements  by our  competitors  and us; o timing of revenues  recognition and
amount of  deferred  revenues;  o changes in our pricing  policies,  the pricing
policies of our competitors and the prices of the components of our products;  o
our ability to develop, introduce and ship new products and product enhancements
that  meet  customer  requirements  in a  timely  manner;  o the mix of  product
configurations  sold;  o our  ability to obtain  sufficient  supplies of sole or
limited  source  components;  o our  ability to attain and  maintain  production
volumes and quality levels for our products;  o costs related to acquisitions of
complementary products, technologies or businesses; and



                                       12
<PAGE>

         o        general economic conditions,  as well as those specific to the
                  telecommunications, networking and related industries.

         Our operating  expenses are largely fixed in the  short-term  and, as a
result, a delay in generating or recognizing  revenues for the reasons set forth
above,  or for any other  reason,  could  cause  significant  variations  in our
operating results.  If revenues for a particular quarter are below expectations,
we may not be able to reduce operating expenses  proportionally for the quarter.
Any such revenue shortfall would,  therefore,  have a disproportionate effect on
our operating results for the quarter.

         We believe that quarter-to-quarter comparisons of our operating results
are not a good indication of our future  performance.  It is likely that in some
future quarters,  our operating  results may be below the expectations of public
market analysts and investors. In this event, the price of our common stock will
probably substantially decrease.

We have incurred  substantial losses resulting from issuance of common stock and
warrants at prices below the market values of the common stock.

         On August 4th,  2004,  the  Company  issued  4,400,000  warrants to two
executives to acquire  2,200,000  shares at $1.00 per share each. The additional
compensation of $1,936,000,  shown in General and Administrative expenses in the
Consolidated Statement of Operations, is the difference between the market price
of the shares and the $1.00 purchase price.

If we fail to retain needed personnel,  the  implementation of our business plan
could slow or our future growth could halt.

         Our business depends upon highly-skilled engineering,  sales, marketing
and customer support personnel. Any failure to retain needed qualified personnel
could impair our growth.  Our future success depends upon the continued services
of  our  executive   officers  who  have  critical   industry   experience   and
relationships  that we rely  on to  implement  our  business  plan.  None of our
officers or key  employees is bound by  employment  agreements  for any specific
term.  The loss of the  services of any of our officers or key  employees  could
delay the development and introduction of, and negatively  impact our ability to
sell, our products.

We may face risks  associated  with  international  sales that could  impair our
ability to grow our revenues abroad.

         We intend to market  our  products  into  international  markets.  This
expansion will require significant  management attention and financial resources
to  successfully  develop  direct and indirect  international  sales and support
channels. In addition, we may not be able to develop international market demand
for our products,  which could impair our ability to grow our revenues.  We have
limited   experience   marketing,   distributing  and  supporting  our  products
internationally  and, to do so, we expect that we will need to develop  versions
of our products  that comply with local  standards.  Furthermore,  international
operations are subject to other inherent risks, including.

         o        greater difficulty  collecting  accounts receivable and longer
                  collection periods;
         o        difficulties and costs of staffing and managing  international
                  operations;
         o        the impact of differing technical standards outside the United
                  States
         o        the  impact of  recession  in  economies  outside  the  United
                  States;
         o        unexpected  changes in  regulatory  requirements  and currency
                  exchange rates;
         o        certification requirements;
         o        reduced  protection for  intellectual  property rights in some
                  countries;
         o        fluctuation in currency exchange rates;
         o        potentially adverse tax consequences; and
         o        political and economic instability

We are entirely  dependent upon our VoIP products and our future revenues depend
upon their commercial success.

         Our  future  growth  depends  upon the  commercial  success of our VoIP
products.  We intend to develop and introduce new products and  enhancements  to



                                       13
<PAGE>

existing  products  in  the  future.  We  may  not  successfully   complete  the
development or introduction of these  products.  If our target  customers do not
adopt,  purchase and successfully  deploy our current or planned  products,  our
revenues will not grow.

If we fail to compete  successfully,  our  ability to increase  our  revenues or
maintain profitability will be impaired.

         Competition in the  telecommunications  market is intense.  This market
has  historically  been  dominated  by  large  companies  that  possess  greater
resources  and operating  histories.  We will also face  competition  from other
large  telecommunications  and networking companies,  some of which have entered
our market by acquiring companies that design competing  products.  In addition,
several smaller and most private  companies have announced  products that target
the same market opportunities  similar to those we address.  Because this market
is rapidly evolving, additional competitors with significant financial resources
may enter these markets and further intensify competition.

         Many  of our  current  and  potential  competitors  have  significantly
greater  selling and marketing,  technical,  manufacturing,  financial and other
resources.  Further,  some of our competitors sell significant  amounts of other
products  to our current  and  prospective  customers.  Our  competitors'  broad
product portfolios,  coupled with already existing relationships.  may cause our
customers  to buy our  competitors'  products or harm our ability to attract new
customers.

         To compete effectively, we must deliver products that:

         o        provide extremely high reliability and voice quality;
         o        scale easily and efficiently;
         o        interoperate  with existing network designs and other vendors'
                  equipment;
         o        provide effective network management;
         o        are  accompanied  by   comprehensive   customer   support  and
                  professional services; and
         o        provide a  cost-effective  and  space-efficient  solution  for
                  service providers.

         If we are unable to compete successfully against our current and future
competitors, we could experience price reductions, order cancellations,  loss of
revenues and reduced gross margins.

We depend upon contract  manufacturers and any disruption in these relationships
may  cause  us to fail to meet the  demands  of our  customers  and  damage  our
customer relationships.

         We rely on a small number of contract  manufacturers to manufacture our
products  according to our  specifications and to fill orders on a timely basis.
Our  contract  manufacturers  provide  comprehensive   manufacturing   services,
including  assembly of our products and  procurement  of materials.  Each of our
contract  manufacturers  also builds  products for other  companies  and may not
always have sufficient  quantities of inventory  available to fill our orders or
may not  allocate  their  internal  resources  to fill these  orders on a timely
basis. We do not have long-term supply contracts with our manufacturers and they
are not required to manufacture products for any specified period.  Qualifying a
new  contract  manufacturer  and  commencing   commercial-scale   production  is
expensive and time consuming and could result in a significant  interruption  in
the supply of our  products.  If a change in contract  manufacturers  results in
delays of our fulfillment of customer orders or if a contract manufacturer fails
to make timely delivery of orders, we may lose revenues and suffer damage to our
customer relationships.

We and our contract  manufacturers rely on a single or limited source for supply
of some  components  of our products,  and if we fail to adequately  predict our
manufacturing  requirements  or if our  supply  of any of  these  components  is
disrupted, we will be unable to shop our products.

         We and  our  contract  manufacturers  currently  purchase  several  key
components of our products  from single or limited  sources.  We purchase  these
components  on  a  purchase  order  basis.  If  we  overestimate  our  component
requirements, we could have excess inventory, which would increase our costs. If
we underestimate our requirements,  we may not have adequate supply, which could
interrupt  manufacturing  of our products and result in delays in shipments  and
revenues.

         We currently do not have long-term  supply contracts with our component
suppliers and they are not required to supply us with products for any specified
periods,  in any  specified  quantities  or at any set  price,  except as may be
specified in a particular  purchase order. In the event of a disruption or delay
in supply,  or  inability to obtain  products,  we may not be able to develop an



                                       14
<PAGE>

alternate source in a timely manner or at favorable prices, or at all. A failure
to find  acceptable  alternative  sources  could  hurt our  ability  to  deliver
high-quality  products to our  customers  and  negatively  affect our  operating
margins.  In  addition,  our reliance on our  suppliers  exposes us to potential
supplier production difficulties or quality variations.  Our customers rely upon
our ability to meet committed  delivery dates,  and any disruption in the supply
of key  components  would  seriously  impact our ability to meet these dates and
could result in legal action by our customers,  loss of customers or harm to our
ability to attract new customers.

If we are not able to obtain  necessary  licenses of  third-party  technology at
acceptable prices, or at all, our products could become obsolete.

         From time to time, we may be required to license  technology from third
parties to develop new products or product  enhancements.  Third-party  licenses
may  not  be  available  or  continue  to be  available  to  us on  commercially
reasonable  terms.  The  inability  to maintain or  re-license  any  third-party
licenses  required in our  current  products,  or to obtain any new  third-party
licenses to develop new products and product  enhancements  could  require us to
obtain  substitute  technology of lower quality or  performance  standards or at
greater  cost,   and  delay  or  prevent  us  from  making  these   products  or
enhancements,  any of which  could  seriously  harm the  competitiveness  of our
products.

Our ability to compete and our business could be jeopardized if we are unable to
protect our  intellectual  property or become subject to  intellectual  property
rights litigation, which could require us to incur significant costs.

         We currently rely on a combination of patent, copyright,  trademark and
trade secret laws and  restrictions  on disclosure  to protect our  intellectual
property  rights.  Despite  our  efforts  to  protect  our  proprietary  rights,
unauthorized  parties  may  attempt  to copy  or  otherwise  obtain  and use our
products, services or technology. Monitoring unauthorized use of our products is
difficult  and we cannot be certain  that the steps we have  taken will  prevent
unauthorized use of our technology,  particularly in foreign countries where the
laws may not protect our proprietary rights as fully as in the United States. If
competitors are able to use our technology,  our ability to compete  effectively
could be harmed.

         In addition, we may receive inquiries from other patent holders and may
become subject to claims that we infringe their  intellectual  property  rights.
Any parties asserting that our products  infringe upon their proprietary  rights
would force us license  their  patents for  substantial  royalty  payments or to
defend  ourselves  and  possibly  our  customers  or contract  manufacturers  in
litigation.  These claims and any resulting licensing arrangement or lawsuit, if
successful,  could subject us to significant  royalty  payments or liability for
damages and invalidation of our proprietary  rights. Any potential  intellectual
property litigation also could force us to do one or more of the following:

         o        stop selling, incorporating or using our products that use the
                  challenged intellectual property;
         o        obtain from the owner of the infringed  intellectual  property
                  right a license to sell or use the relevant technology,  which
                  license may not be available on reasonable  terms,  or at all;
                  or
         o        redesign  those  products  that use any  allegedly  infringing
                  technology.

         Any lawsuits  regarding  intellectual  property  rights,  regardless of
their success,  would be  time-consuming,  expensive to resolve and would divert
our management's time and attention.

Any investments or acquisitions we make could disrupt our business and seriously
harm our financial condition.

         We have made four acquisitions, and we intend to consider investing in,
or acquiring,  complementary products,  technologies or businesses. In the event
of future investments or acquisitions, we could:

         o        issue  stock  that  would  dilute  our  current  shareholders'
                  percentage ownership;
         o        incur debt or assume liabilities;
         o        incur significant  impairment charges related to the write-off
                  of goodwill and purchased intangible assets;
         o        incur significant  amortization  expenses related to purchased
                  intangible assets; or



                                       15
<PAGE>

         o        incur large and immediate  write-offs for in-process  research
                  and development and stock-based compensation.

         Our  integration of any acquired  products,  technologies or businesses
will also involve numerous risks, including:

         o        problems and unanticipated costs associated with combining the
                  purchased products, technologies or businesses;
         o        diversion of management's attention from our core business;
         o        adverse  effects  on  existing  business   relationships  with
                  suppliers and customers;
         o        risks  associated  with  entering  markets  in  which  we have
                  limited or no prior experience; and
         o        potential  loss of key  employees,  particularly  those of the
                  acquired organizations.

         We may be unable to successfully integrate any products,  technologies,
businesses or personnel that we might acquire in the future without  significant
costs or disruption to our business.

If we are subject to  employment  claims,  we could incur  substantial  costs in
defending ourselves.

         We may become subject to employment  claims in connection with employee
terminations.  In addition,  companies in our industry  whose  employees  accept
positions with competitors  frequently claim that their competitors have engaged
in unfair hiring practices.  These claims may result in material litigation.  We
could incur substantial  costs defending  ourselves or our employees again those
claims, regardless of their merits. In addition,  defending ourselves from those
types of claims could divert our management's attention from our operations.  If
we are found  liable  in  connection  with any  employment  claim,  we may incur
significant  costs  that could  adversely  impact our  financial  condition  and
results of operations.

The Company is substantially controlled by its management.

         As of December 31, 2004,  the  executive  officers,  key  employees and
directors of the Company and their family  members and  associates  beneficially
owned approximately 64% of the shares of outstanding common stock.  Accordingly,
and because there is no cumulative voting for directors,  our executive officers
and  directors  will be in a  position  to  influence  the  election  of all the
directors  of the  Company and to control  through  their  stock  ownership  the
business of the Company.

                           RISKS RELATED TO OUR STOCK

We may  seek  to  raise  additional  capital  in the  future,  which  may not be
available to us, and if it is available,  may dilute the ownership of our common
stock.

         In the future,  we may seek to raise additional funds through public or
private debt or equity financings in order to:

         o        fund ongoing operations and capital requirements;
         o        take   advantage  of   opportunities,   including  more  rapid
                  expansion   or   acquisition   of   complementary    products,
                  technologies or businesses;
         o        develop new products; or
         o        respond to competitive pressures.

         Any additional  capital raised through the sale of convertible  debt or
equity may  further  dilute an  investor's  percentage  ownership  of our common
stock.  Furthermore,  additional  financings  may  not  be  available  on  terms
favorable to us, or at all. A failure to obtain additional funding could prevent
us from  making  expenditures  that  may be  required  to grow or  maintain  our
operations.

Our stock price has been and may continue to be volatile.

         The market for  technology  stocks in general,  and our common stock in
particular,  has been and will likely  continue to be  extremely  volatile.  The
following  factors could cause the market price of our common stock to fluctuate
significantly:



                                       16
<PAGE>

         o        the addition or loss of any major customer;
         o        changes in the  financial  condition  or  anticipated  capital
                  expenditure  purchases  of any  existing  or  potential  major
                  customer;
         o        quarterly variations in our operating results;
         o        changes in financial estimates by securities analysts;
         o        speculation in the press or investment community;
         o        announcements   by  us  or  our   competitors  of  significant
                  contracts,   new   products  or   acquisitions,   distribution
                  partnerships, joint ventures or capital commitments;
         o        sales of  common  stock or  other  securities  by us or by our
                  shareholders in the future;
         o        securities and other litigation;
         o        announcement  of a stock split,  reverse  stock  split,  stock
                  dividend or similar event;
         o        economic conditions for the telecommunications, networking and
                  related industries; and
         o        worldwide economic instability.

We do not expect to pay dividends.

         We do not  anticipate  paying any cash dividends on our common stock in
the foreseeable  future. We intend to retain profits, if any, to fund growth and
expansion.

Shares that may be  eligible  for future  sale may  adversely  affect the market
price of our Common Stock.

         Sales of  substantial  amounts of Common Stock by  shareholders  in the
public  market,  or even the potential  for such sales,  are likely to adversely
affect the  market  price of the Common  Stock and could  impair our  ability to
raise  capital by selling  equity  securities.  As of March 18, 2005, we believe
that approximately 20% of the 26,378,132 shares of Common Stock currently issued
and  outstanding  are  freely   transferable   without  restriction  or  further
registration  under the  securities  laws,  unless held by  "affiliates"  of the
Company, as that term is defined under the securities laws.

Our Company is substantially controlled by our management team.

         As of December 31, 2004,  the  executive  officers,  key  employees and
directors of our Company and their family  members and  associates  beneficially
owned approximately 66% of the shares of outstanding common stock.  Accordingly,
and because there is no cumulative voting for directors,  our executive officers
and  directors  will be in a  position  to  influence  the  election  of all the
directors  of the  Company and to control  through  their  stock  ownership  the
business of the Company.  The  management  of the Company is  controlled  by our
Board of Directors, comprised of one Director.

Recent Developments

VoIP, Inc. Names "William  Staffeld" as Vice President of Global Sales & Carrier
Relations for VoIP Americas Subsidiary
FORT LAUDERDALE,  Fla.--(BUSINESS  WIRE)--March 22, 2005--VoIP Inc. (OTCBB:VOII)
announced today that William Staffeld,  former Director of North America Sales &
Enhanced  Network  Services  for  iBasis,  Inc.,  has joined the Company as Vice
President of Global Sales.

VoIP Inc. Releases Pathfinder 2.0
Provisioning Server Software Enables Broadband Providers to Add VOIP Services
FORT LAUDERDALE,  Fla.--(BUSINESS  WIRE)--March 15, 2005--VoIP Inc. (OTCBB:VOII)
announced  today the release of the latest  version of its  provisioning  server
application  software.  The new release enables Broadband  Providers to add VOIP
services through the Company's Multimedia Terminal Adapter (MTA).


VoIP Inc.  Enhances Network  Infrastructure  to Support Growth and Redundancy of
All Network  Elements  New York  location  provides  additional  redundancy  and
improved QoS
FORT LAUDERDALE,  Fla.--(BUSINESS  WIRE)--March 2, 2005-- VoIP Inc. (OTCBB:VOII)
announced today that it had added an additional Point of Presence by co-locating
and adding  network  elements to its VOIP systems in Level 3's  state-of-the-art
Data Center located in New York City.



                                       17
<PAGE>

VoIP Inc. Acquires 1-800-TALKTIME Brand
Company Expects Brand to Be the Household Name for VOIP Telephone Services
MIAMI--(BUSINESS  WIRE)--Feb.  24, 2005--VoIP Inc. (OTCBB: VOII) announced today
at  the  INTERNET   TELEPHONY   Conference   &  EXPO  that  it   purchased   the
1-800-TALKTIME(R)  registered trademark and other assets from Creative Marketing
Associates, Inc. The terms of the Asset Purchase Agreement were not disclosed.

VoIP, Inc. Receives Customer Interaction  Solutions Magazine's IP Contact Center
Technology Pioneer Award
FORT LAUDERDALE,  Fla.--(BUSINESS  WIRE)--March 1, 2005--VoIP Inc.  (OTCBB:VOII)
announced  today  that  Technology  Marketing  Corporation's  (TMC(R))  Customer
Interaction  Solutions(R)  magazine  (www.cismag.com) has named the Company as a
recipient  of a 2005  IP  Contact  Center  Technology  Pioneer  Award.  Customer
Interaction  Solutions has been the leading publication in CRM, call centers and
teleservices since 1982(TM).

VoIP, Inc. Announces Beta Deployment of Native VoIP(TM) -- Offers Industry First
voipsla(TM)
FORT LAUDERDALE,  Fla., Feb. 22  /PRNewswire-FirstCall/ -- VoIP Inc. (OTC OTCBB:
VOII) announced today that its subsidiary VoIP Americas has released the beta of
its latest  enterprise  offering -- Native VoIP(TM).  The new service will allow
new and current IP PBX  operators to peer directly with via The Internet to gain
access to the Public  Switched  Telephone  Network (PSTN) and fully leverage the
functionality of their next generation systems.


ITEM 2.  PROPERTIES
         ----------

         As of  December  31,  2004 the  Company is leasing a 3,000  square foot
office/warehouse  building in Fort Lauderdale,  Florida from a non-related third
party for an annual amount of $37,572.

ITEM 3.  LEGAL PROCEEDINGS
         -----------------

         The  Company is  involved  from time to time in legal  proceedings  and
litigation  incidental  to  the  conduct  of  its  business.  No  pending  legal
proceeding  is deemed by the  Company to pose the risk of any  material  adverse
effect.

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

         None.













                                       18
<PAGE>

                                    PART II

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
         --------------------------------------------------------

                        COMMON STOCK AND DIVIDEND POLICY

Market Information

         Our common  stock is traded in the  over-the-counter  market on the OTC
Bulletin Board under the symbol VOII. The following  table shows the price range
of the Company's  common stock since it was initially quoted in March 2004 until
December 31, 2004.


            Quarter Ended                   High             Low
            -------------                   ----             ---
            3-31-04                         $0.85           $0.85
            6-30-04                         $3.75           $1.40
            9-30-04                         $3.10           $1.10
            12-31-04                        $4.80           $1.13

Holders

         As of March 18, 2005,  26,378,132 common shares of the Company's common
stock  are held of  record by 264  holders  of  record,  and  approximately  310
beneficial stockholders.

Dividends

         We have never paid any dividends, and we do not anticipate any stock or
cash dividends on our common stock in the foreseeable future.

Recent Sales of Unregistered Securities

Changes in Securities

The following unregistered securities have been issued during the fourth quarter
of 2004:

         Effective  October 2004,  registrant  issued  251,831  shares to twelve
         accredited  investors.  Also effective October 2004,  registrant issued
         100,000 shares to one accredited individual investor in satisfaction of
         accounts payable totaling $105,000.

         Effective   November  2004,   registrant  issued  2,249,500  shares  to
         seventeen accredited investors.

         In  November   2004,  the  Company  issued  318,500  shares  to  twelve
         accredited investors.

         Effective  December  2004,  registrant  issued  79,659  shares  to five
         accredited investors.

         Effective  December 2004,  registrant  issued 400,000 shares to sixteen
         accredited investors.








                                       19
<PAGE>

ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
         ---------------------------------------------------------

         The information presented in this section should be read in conjunction
with the information contained in the financial statements,  including the notes
thereto,  and  the  other  financial  statements  appearing  elsewhere  in  this
report.

General

         The  following  discussion  should  be read  in  conjunction  with  the
Consolidated  Financial Statements and the notes thereto and the other financial
information appearing elsewhere in this Prospectus. Certain statements contained
in this Prospectus and other written material and oral statements made from time
to time by us do not relate  strictly to historical or current  facts.  As such,
they  are  considered   "forward-looking   statements"   that  provide   current
expectations  or forecasts  of future  events.  Such  statements  are  typically
characterized  by  terminology  such  as  "believe,"   "anticipate,"   "should,"
"intend,"  "plan,"  "will,"  "expect,"  "estimate,"  "project,"  "strategy"  and
similar  expressions.  Our  forward-looking  statements  generally relate to the
prospects  for  future  sales of our  products,  the  success  of our  marketing
activities,  and the success of our  strategic  corporate  relationships.  These
statements are based upon  assumptions and assessments made by our management in
light  of its  experience  and its  perception  of  historical  trends,  current
conditions,  expected  future  developments  and other  factors  our  management
believes to be appropriate.  These  forward-looking  statements are subject to a
number of risks and  uncertainties,  including  the  following:  our  ability to
achieve  profitable  operations and to maintain  sufficient  cash to operate its
business and meet its liquidity  requirements;  our ability to obtain financing,
if required,  on terms  acceptable to it, if at all; the success of our research
and  development  activities;  competitive  developments  affecting  our current
products;  our ability to successfully  attract strategic partners and to market
both new and existing products; exposure to lawsuits and regulatory proceedings;
our  ability  to  protect  our  intellectual  property;  governmental  laws  and
regulations  affecting   operations;   our  ability  to  identify  and  complete
diversification  opportunities;  and the impact of  acquisitions,  divestitures,
restructurings,  product withdrawals and other unusual items. A further list and
description  of  these  risks,  uncertainties  and  other  matters  can be found
elsewhere in this Prospectus. Except as required by applicable law, we undertake
no obligation to update any forward-looking  statements,  whether as a result of
new information, future events or otherwise.

    Balance Sheet Data:             December 31, 2004
                                    -----------------


       Total assets                    $10,215,552
       Long-term liabilities, net      $         0
       Total liabilities               $ 2,108,114
       Shareholders' equity            $ 8,107,438


                                                  Year Ended
                                                 December 31,
                                         --------------------------
      Statements of Operations Data:         2004           2003
                                         -----------    -----------

         Revenue                         $ 2,619,393    $     8,678
         Operating (loss) (1)            $(4,160,050)   $  (352,968)
         Net (loss)                      $(4,014,739)   $  (352,968)
         Net (loss) per common share     $     (0.27)   $     (0.20)

(1)  Includes  $1,936,000  non-cash  compensation  expenses  resulting  from the
     issuance to executive officers and warrants to purchase 4,400,000 shares of
     common stock for $1.00 per share.




                                       20
<PAGE>

                                                     Three Months Ended
                                                        September 30,
                                                 --------------------------
       Statements of Operations Data:                2004           2003
                                                 -----------    -----------
           Revenue                               $ 1,604,328    $     4,291
           Operating (loss)                      $(1,133,680)   $   (21,995)
           Net (loss)                            $  (988,369)   $   (21,995)
           Net (loss) per common share           $     (0.04)   $     (0.01)


         See "Financial Statements" beginning on Page F-1.

         (a)      Results of Operations - 2004 compared to 2003.

         Net revenue totaled  $3,028,006  ($2,619,393 from continued  operations
and $408,613 from discontinued operations), for the year ended December 31, 2004
as compared  to $8,678 for the year ended  December  31,  2004.  The  $3,019,328
increase in total net revenue was  primarily  attributable  to the new  business
segment  "VoIP" (Voice over IP) and the  acquisition of  Voipamericas  and DTNet
which were acquired in 2004 .

         Revenue  from  the  sale of tea in the  segment  business  that we have
discontinued  was $ 408,613,  or 13.5%,  of total net revenue for the year ended
December 31, 2004,  versus  $8,678,  or 100%, of total net revenue for the prior
year.

         As mentioned in Note A, the Company acquired DTNet  Technologies,  Inc.
in June  2004 and  Voipamericas  in  September  2004.  DTNet  provides  customer
premises equipment to cable and DSL Internet providers throughout North America.
DTNet sales were approximately $4.7 million in 2003.  Voipamericas  revenues for
the first nine months of the year were $1.4  million.  Management  believes that
the  acquisitions  of DTNet and  Voipamericas  will provide proven  distribution
channels and leadership in sales throughout the Americas. DTNet and Voipamericas
complement the Company's strategy to deliver Voice over Internet Protocol over a
wireless local loop and deliver service provider solutions to cable operators.

         Net losses for the  respective  years ended  December 31, 2004 and 2003
were  $4,014,739 and $352,968.  Net loss per share was  approximately  $0.27 and
$0.20  respectively  for each  period.  This  included the one time event of the
issuance of 4,400,000  warrants to two executives to acquire  2,200,000  Company
shares at $1.00 for each. The difference  between the market value and the $1.00
share  price is  $1,936,000.  Additionally,  there is an increase of $884,937 in
operating costs  attributable  basically to start up operations.  Net losses for
the  respective  quarters  ended  December  31, 2004 and 2003 were  $988,369 and
$21,995.  Net loss per share was approximately  $0.04 and $0.01 respectively for
each period.

         General and  administrative  expenses consist primarily of salaries and
related personnel costs for general corporate functions including finance, human
resources and facilities,  outside legal and  professional  fees,  directors and
officers  insurance,  bad debt expenses and general  corporate  overhead  costs.
General  and  administrative  expenses  were  $4.9  million  for the year  ended
December 31, 2003,  as compared to $99 thousand for the year ended  December 31,
2004.  Increases in headcount and the resulting personnel  expenses,  as well as
other general and administrative expenses directly attributable to the Company's
new line of business,  VoIP telephony services,  were major factors contributing
to the $2.9 million increase in total general and administrative expenses. Other
expense  categories  which  increased as compared to 2004 largely as a result of
the  Company's  entrance  into the VoIP  business,  included  legal fees,  other
professional fees and facilities costs.

         The  comparison of operations for the years ended December 31, 2004 and
2003 is not indicative of the Company's current business model. Whereas,  during
2003 the Company was in the  business  of  importing  and selling a line of fine
teas. The Company has, since  discontinued the tea business,  to focus solely on
VoIP and emerging technologies.



                                       21
<PAGE>
<TABLE>
<CAPTION>

         (b)      Liquidity and Capital Resources

         As of December 31, 2004, we had cash and cash equivalents approximating
$1,141,000,  compared to $3,400 at December  31,  2003.  We  currently  have two
borrowing arrangements,  one for $200,000 with a local bank and one for $560,000
with a note payable to a shareholder.  Cash used in operating activities of $2.9
million in fiscal year 2004 was primarily  attributable  to the net loss of $4.1
million, which included a non cash item for warrants issued to Company employees
amounting to $1.9  recorded as  compensation  in the  Consolidated  Statement of
Operations.  Cash  provided by  financing  activities  in fiscal 2004  consisted
primarily of $3.6 million of proceeds resulting from the sale of common stock to
investors  in private  placement  transactions  during  the whole  year and,  as
above-mentioned, proceeds from issuance of note payable of $560,000.

         Liquidity for the period from inception  through  December 31, 2004 has
been mainly  provided by sales of common stocks through  private  placements and
borrowing from affiliates.  Management has taken actions directly related to the
generation of product  sales during  calendar  2004 and  anticipates  that these
efforts  will be  sufficient  to provide  reasonable  resources  to sustain  its
operations during 2005.

         The Company  anticipates that all working capital  requirements for the
current annual period will be satisfied from the operation of the newly acquired
business and the sales of additional common shares through private placements.





         (c)      Payments Due by Period

         The following table illustrates our outstanding debts and the terms of
that debt as of December 31, 2004:

                                              Less than 1       1-3           3-5       More than
  Contractual Obligations          Total          Year         Years         Years       5 Years
---------------------------------------------------------------------------------------------------
<S>                             <C>           <C>           <C>           <C>           <C>
Long-Term Debt                  $      0.00   $      0.00   $      0.00   $      0.00   $      0.00
                                                            $   560,000   $   560,000   $      0.00
Notes Payable to shareholders   $      0.00   $      0.00
Operating Leases                $    35,572   $    35,572   $      0.00   $      0.00   $      0.00
Purchase Obligations            $      0.00   $      0.00   $      0.00   $      0.00   $      0.00
                                -------------------------------------------------------------------
Total                           $   560,000   $   560,000   $      0.00   $      0.00   $      0.00
                                ===================================================================
</TABLE>


         (d)      Market Risk

         We own  market  investment  securities  issued  by  various  securities
issuers.  The issuers of these  products  retain all  interest  rate and default
risk.


Available Information


         We   maintain  a   corporate   Internet   website   with  the   address
www.voipincorporated.com.  The contents of this website are not  incorporated in
or  otherwise  to be regarded as part of this  report.  We file reports with the
Securities and Exchange  Commission,  or SEC, which are available on our website
free of charge.  These reports include annual reports on Form 10-KSB,  quarterly
reports  on Form  10-QSB,  current  reports on Form 8-K and  amendments  to such
reports,  each of  which  is  provided  on our  website  as  soon as  reasonably
practicable after we electronically  file such materials with or furnish them to
the SEC.  You can also read and copy any  materials  we file with the SEC at the
SEC's Public Reference Room at 450 Fifth Street, NW,  Washington,  DC 20549. You
can obtain  additional  information  about the operation of the Public Reference
Room by calling the SEC at  1.800.SEC.0330.  In  addition,  the SEC  maintains a



                                       22
<PAGE>

website (www.sec.gov) that contains reports,  proxy and information  statements,
and other information  regarding issuers that file  electronically with the SEC,
including us.


ITEM 7.  FINANCIAL STATEMENTS
         --------------------

         The  financial  statements  required  by this  item  begin  at Page F-1
hereof.

ITEM  8.  CHANGES  IN AND  DISAGREEMENTS  WITH  ACCOUNTANTS  ON  ACCOUNTING  AND
FINANCIAL DISCLOSURE
--------------------------------------------------------------------------------

         On November 16, 2004,  Registrant  was informed by Tschopp,  Whitcomb &
Orr (the "Auditor") that such firm was resigning as Registrant's Auditor.

         During the two most recent  fiscal years and during the interim  period
from  December 31, 2003 until  November  16, 2004,  the Company did not have any
disagreements  with the  Auditor  on any  matter  of  accounting  principles  or
practices,  financial statement  disclosure or auditing scope or procedures that
would  require  disclosure in this Form 8-K.  During such period,  there were no
reportable events as described in Item 304(a)(1)(v) of Regulation S-K.

         On  December  1,  2004,  Registrant  retained  the  accounting  firm of
Berkovits,  Lago & Company,  LLP, to conduct an audit of Registrant's  financial
statements for the year ending December 31, 2004, and to issue a report thereon.
The Board of Directors of Registrant  approved the selection of Berkovits,  Lago
and Company, LLP as new independent  auditors.  Neither management nor anyone on
its behalf has consulted  with  Berkovits,  Lago and Company,  LLP regarding the
application  of  accounting  principles  to  a  specified  transaction,   either
completed  or proposed,  or the type of audit  opinion that might be rendered on
the  Registrant's  financial  statements,  and neither a written report nor oral
advice was provided to the  Registrant  that  Berkovits,  Lago and Company,  LLP
concluded was an important  factor  considered  by the  Registrant in reaching a
decision as to the accounting,  auditing or financial reporting issue during the
Registrant's two most recent fiscal years prior to engaging Berkovits,  Lago and
Company, LLP.


ITEM 8A. CONTROLS AND PROCEDURES
         -----------------------
Introduction.

         "Disclosure  Controls and Procedures" are defined in Exchange Act Rules
13a-15(e)  and  15d-15(e) as the controls and  procedures  of an issuer that are
designed to ensure that  information  required to be  disclosed by the issuer in
the  reports  that it files or  submits  under  the  Exchange  Act is  recorded,
processed,  summarized,  and reported,  within the time period  specified by the
SEC's rules and forms.  Disclosure  Controls  and  Procedures  include,  without
limitation, controls and procedures designed to ensure that information required
to be disclosed  by an issuer in the reports that it files or submits  under the
Exchange  Act  is  accumulated  and  communicated  to the  issuer's  management,
including its principle executive and principal financial officers to all timely
decisions regarding disclosure.

         "Internal Control Over Financial  Reporting" is defined in Exchange Act
Rules 13a-15(f) and 15d-15(f) as a process designed by, or under the supervision
of, an issuer's principal executive and principal financial officers, or persons
performing  similar  functions,  and effected by an issuer's board of directors,
management,  and other personnel,  to provide reasonable assurance regarding the
reliability of financial  reporting and the preparation of financial  statements
for  external  purposes  in  accordance  with  generally   accepted   accounting
principles and includes  those  policies and procedures  that (1) pertain to the
maintenance of records that in reasonable  detail  accurately and fairly reflect
the transactions and disposition of an issuer: (2) provide reasonable  assurance
that  transactions are recorded as necessary to permit  preparation of financial
statements in accordance with generally accepted accounting principles, and that
receipts and  expenditures  of the issuer are being made only in accordance with
authorizations  of  management  and  directors  of the  issuer;  and (3) provide
reasonable  assurance  regarding  prevention or timely detection of unauthorized
acquisition,  use,  or  disposition  of the  issuer's  assets  that could have a
material adverse effect on the financial statements.



                                       23
<PAGE>

         We have endeavored to design our Disclosure Controls and Procedures and
Internal Controls Over Financial Reporting to provide reasonable assurances that
their objectives will be met. A control system,  no matter how well designed and
operated,  can provide only  reasonable,  but not absolute,  assurance  that its
objectives will be met. All control systems are subject to inherent limitations,
such as resource constraints,  the possibility of human error, lack of knowledge
or  awareness,  and  the  possibility  of  intentional  circumvention  of  these
controls.  Furthermore, the design of any control system is based, in part, upon
assumptions  about  the  likelihood  of future  events,  which  assumptions  may
ultimately prove to be incorrect.  As a result, we cannot assure you our control
system will detect every error or instance of fraudulent  conduct,  including an
error or  instance of  fraudulent  conduct  which could have a material  adverse
impact on our operations or results.

Changes in Internal Control Over Financial Reporting.

         During  the fiscal  quarter  ended  December  31,  2004,  there were no
changes in our Internal  Control Over  Financial  Reporting  that has materially
affected,  or is reasonably  likely to materially  affect,  our Internal Control
Over Financial Reporting.

         However,  we are still in the process of assessing  the findings of our
independent auditors,  and have made, and are continuing to make, changes in our
Internal Control Over Financial Reporting aimed at enhancing their effectiveness
and ensuring that our systems  evolve with, and meet the needs of, our business.
We are also  continually  striving to improve  our  management  and  operational
efficiency,  and we expect  that our  efforts in this  regard  will  enhance and
strengthen our Internal Control Over Financial  Reporting.  For example, we have
recently  added  to our  accounting  staff,  and we  expect  to hire  additional
professionals, including an experienced chief financial officer, with the aim of
upgrading and reinforcing the technical resources available to our staff. We are
also continuing our efforts to upgrade our information  technology  capabilities
and are in the process of implementing a uniform consolidated  accounting system
at all of our business  units. We will also hire an outside firm, not affiliated
with our independent  auditors,  to complete an objective review of our Internal
Control over  Financial  Reporting  and provide  recommendations  for  continued
improvement   of  financial   processes  and  controls,   in   preparation   for
Sarbanes-Oxley compliance testing.

Evaluation of Disclosure Controls and Procedures.

         The Company's management, with the participation of our chief executive
officer and chief financial  officer,  have evaluated the  effectiveness  of our
Disclosure  Controls  and  Procedures  as of December  31,  2004.  Based on this
evaluation,  our chief  executive  officer  and  chief  financial  officer  have
concluded  that, as of December 31, 2004 our Disclosure  Controls and Procedures
were  designed to ensure that  material  information  relating to the Company is
made known to our chief executive  officer and chief financial officer by others
within the  Company,  particularly  during  the period in which this  report was
being prepared.

ITEM 8B. OTHER INFORMATION
         -----------------

         None.















                                       24
<PAGE>

                                    PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
         ------------------------------------------------------------

Directors, Executive Officers, Promoters and Control Persons

         The  following  table  contains  information  concerning  the Company's
executive officers and directors.

                                                                    Start Date
        Name         Age   Position with Company                   with Company
        ----         ---   ---------------------                   ------------
   Steven Ivester    40    Chairman, Chief Executive Officer,      March 2004
                           Secretary and Sole Director
   Osvaldo Pitters   46    Chief Financial Officer                 May 2004
   Bill Burbank      48    Chief Operating Officer                 December 2004
   Clive Raines      45    President of International Operations   March 2004
   John Todd         33    Chief Technology Officer                March 2004


         Steven Ivester,  Chairman, Chief Executive Officer,  Secretary and Sole
Director,  joined the Company in March 2004 when he made an agreement with prior
management  to contribute  the assets and  intellectual  property  rights of two
start-up companies,  eGlobalphone,  Inc. and VoIP Solutions, Inc. Prior to that,
since early 2001, he was a consultant for other  voice-over-Internet  companies.
From early 1997 until the present,  he has also been engaged as Chief  Executive
Officer  of  Navigator,  PC,  which  supplies  computer-navigation  and  display
equipment to the U.S. military services.

         Osvaldo Pitters,  Chief Financial  Officer and Treasurer,  was employed
from January 2003 to April 2004,  as  Controller  of Cima  Telecom  Group.  From
January  2002 to  January  2003,  he was the Chief  Operating  Officer  of Price
Waterhouse  Coopers-Dominican  Republic.  He also worked  seven years with Price
Waterhouse Chile and two years with Price Waterhouse  London,  England.  He also
worked with Pepsi Co. for sever years in several countries within Latin American
Division.

         Bill Burbank,  Chief Operating Officer.  Burbank He has vast experience
working  in senior  Business  Development  and  Operations  positions  with both
private and public  companies.  He was co-founder of Incite Global  Services,  a
consulting  firm  specializing  in Business  Development,  Operations and Crisis
Management for software  companies in the communication  space. Prior to IGS, he
was  co-founder  and was President of Foresight  Technology.  At  Foresight,  he
played an  instrumental  role in fostering  Foresight's  leadership  in computer
telephone  integration  (CTI)  and  customer  premise-based  speech  recognition
products.  Prior to  Foresight,  Burbank  served as Vice  President of Worldwide
Sales and Marketing for Registry Magic Inc.

         Clive  Raines,  President  of  International  Operations,  developed an
international  business model for USA Talks. He was relocated as European CEO in
London, UK from 1998 to 2002. During 2003 he worked with Voiceglo as a Director.

         John Todd,  Chief  Technology  Officer,  has been involved in 1999 with
Internet companies,  including Collocation Corporation, Inc. from September 2001
to December 2002 as network  Services  Manager;  10-20.com,  Inc. from September
2001 to present as President; Onyx Networks.





                                       25
<PAGE>
<TABLE>
<CAPTION>

ITEM 10. EXECUTIVE COMPENSATION
         ----------------------
Executive Compensation

         Summary   Compensation  Table.  The  following  table  sets  forth  the
compensation  earned by the Company's Chief Executive Officer for the year ended
December 31, 2004 in salary and bonus for services rendered in all capacities to
the Company for the fiscal years ended December 31, 2004 and  2003:

                                         Annual Compensation                 Long-Term Compensation
                                         -------------------                 ----------------------
                                                                        Securities
                                                                        Underlying
                                                         Other Annual   Options or       All Other
Name/Principal Position     Year     Salary     Bonus    Compensation    Warrants       Compensation
<S>                         <C>     <C>         <C>      <C>             <C>            <C>
Steven Ivester, CEO         2004    $ 125,000    $ 0         $ 0             0               0
Kevin Halter                2003    $       0    $ 0         $ 0             0               0

</TABLE>

<TABLE>
<CAPTION>
                                                                         Value of Unexercised
                                    Number of Securities Underlying    In-the-Money Options at
                                     Unexercised Options at Fiscal              Fiscal
                                              Year End                         Year End
                                              --------                         --------
         Number of
          Shares
        Acquired or    Realized
Name     Exercised      Value      Exercisable      Unexercisable      Exercisable    Unexercisable
----     ---------      -----      -----------      -------------      -----------    -------------
<S>      <C>            <C>        <C>              <C>                <C>            <C>
None
</TABLE>

                                                 Estimated Future Payments under
                              Performance or        Non-Stock Price-Based Plans
                              --------------        ---------------------------
             Number of      Other Period Until
         Shares, Under or     Maturation or      Threshold    Target     Maximum
Name      Other Rights #          Payout         ($ or #)    ($ or #)   ($ or #)
----      --------------         -------         --------    --------   --------
None



Stock Option Plan

         The Company's  Stock Option Plan (the "2004 Option Plan") which becomes
effective in 2005, provides for the grant to eligible employees and directors of
options  for the  purchase  of Common  Stock.  The Option  Plan  covers,  in the
aggregate,  a maximum of  4,000,000  shares of Common Stock and provides for the
granting  of both  incentive  stock  options  (as  defined in Section 422 of the
Internal Revenue Code of 1986) and nonqualified  stock options (options which do
not meet the  requirements of Section 422).  Under the Option Plan, the exercise
price may not be less than the fair market value of the Common Stock on the date
of the grant of the option.

         The Board of Directors  administers  and interprets the Option Plan and
is  authorized  to grant  options  thereunder  to all eligible  employees of the
Company,  including officers.  The Board of Directors  designates the optionees,
the number of shares subject to the options and the terms and conditions of each
option. Each option granted under the Option Plan must be exercised,  if at all,
during a period  established in the grant which may not exceed 10 years from the
later of the date of grant or the date first  exercisable.  An optionee  may not
transfer or assign any option  granted and may not exercise any options  after a
specified period subsequent to the termination of the optionee's employment with
the Company.

ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
         --------------------------------------------------------------

         The following table sets forth certain  information with respect to the
beneficial  ownership  of our  Common  Stock as of  December  31,  2004,  by all
officers and directors  and by all those known by us to be beneficial  owners of
more than 5% of our Common Stock.



                                       26
<PAGE>

         Unless otherwise specified,  the business address of the shareholder is
our address as set forth in this memorandum.  Beneficial ownership is determined
in  accordance  with the rules of the  Securities  and Exchange  Commission  and
generally  means sole or shared power to vote or direct the voting or to dispose
or direct the disposition of any Common Stock.  Except as indicated by footnote,
and subject to community  property laws where  applicable,  the persons named in
the table below have sole voting and investment power with respect to all shares
of Common Stock shown as beneficially owned by them.
                                                                      Beneficial
                                                                      Ownership
                                            Beneficial Ownership(1)      After
                                                Before Offering        Offering

 Beneficial Owner                           Shares      Percentage    Percentage
 ----------------                           ------      ----------    ----------
 Steven Ivester........................  11,675,000       50.0%          50.0%
 Clive Raines..........................   2,200,000(1)     8.6%           8.5%
 John Todd.............................   2,200,000(1)     8.6%           8.5%
 All officers and directors as a group
 (4 persons)                             16,075,000       58.0%          58.0%
------------
(1)    Represents warrants to purchase common shares at $1.00 per share.

         The Company is not aware of any  arrangement  which  might  result in a
change in control in the future.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
         ----------------------------------------------

Certain Relationships and Related Transactions

         Millennia  Tea Masters,  Inc. was organized by Kevin Halter and members
of his family in 1998,  when they purchased  1,000,000  shares at its par value.
Then in March  2004,  the  Company  sold  12,500,000  shares  of stock to Steven
Ivester for par value ($12,500),  plus his agreement to contribute two operating
companies.  Such companies were  contributed  in May 2004,  effective  April 15,
2004. Subsequently the company changed its name to VoIP, Inc.

         As of  December,  2003,  the  Company  has  amounts  due to  affiliated
entities and/or  shareholders and/or officers of approximately  $151,000.  These
advances  are  unsecured,   due  upon  demand  and  are  non-interest   bearing.
Subsequently,  in April 2004,  the Company issued 339,242 shares of common stock
to satisfy the balance due at that date.

Promoters

On February 27, 2004,  the Company issued and sold  12,500,000  shares of common
stock to Steven  Ivester in exchange  for cash of $12,500 and his  agreement  to
contribute the  intellectual  property rights and related assets of two start-up
companies formed to engage in the telecommunications industry. The shares issued
represented approximately 88% of the shares outstanding after the exchange, as a
result of which Mr. Ivester became the controlling shareholder of the Company.

On May 25,  2004 (but  effective  for all  purposes as of April 15,  2004),  the
Company completed the acquisition of two Florida-based entities,  (eGlobalphone,
Inc. and VoIP Solutions, Inc.). Contribution of these start-up companies was the
basis for the original decision to issue a controlling block of shares of common
stock to Mr.  Ivester.  eGlobalphone,  Inc.  and VoIP  Solutions  Inc.  are both
Florida  corporations.

         On August 4, 2004, the Company issued  warrants to purchaser  2,200,000
shares of common  stock for a exercise  price of $1.00 per share to each of John
Todd and Clive Raines.

         Messrs. Ivester, Todd and Raines may be considered to be "promoters" by
the Company.


                                       27
<PAGE>

ITEM 13. EXHIBITS
         ---------

(a)      The following documents are filed as part of this Annual Report on Form
         10-KSB:

         1.       Financial  Statements:  The financial statements filed as part
                  of  this  report  are  listed  in  the  "Index  to   Financial
                  Statements" on Page F-1 hereof.

         2.       Exhibits required to be filed by Item 601 of Regulation S-B2

Other Material Contracts

21.1     Subsidiaries of Registrant.

23.1     Consent of Berkovits, Lago & Company, LLP

23.2     Consent of  Tschopp, Whitcomb & Orr

31.1     Certification  of Chief  Executive  Officer  under  Section  302 of the
         Sarbanes-Oxley Act of 2002

31.2     Certification  of the Chief Financial  Officer under Section 302 of the
         Sarbanes-Oxley Act of 2002

32.1     Certification  of Chief Executive  Officer under 18 U.S.C. ss. 1350, as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2     Certification  of Chief Financial  Officer under 18 U.S.C. ss. 1350, as
         adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



ITEM 14.  PRINCIPAL ACCOUNTANT FEES AND SERVICES
          --------------------------------------

         The Audit Committee has appointed Berkovits Lago & Company,  LLP as the
Company's independent auditor's for 2004.

         For 2004,  Berkovits Lago & Company, LLP has billed the Company for the
services described below:

         Audit Fees.  Berkovits  Lago & Company  billed $10,000 as a retainer in
connection with the Company's audit for the year ended 2004.

         Audit-Related Fees.  None.
         ------------------

         Tax Fees.  None.
         --------

         All Other Fees.
         ---------------

         The Audit  Committee is required to pre-approve the audit and non-audit
services to be performed by the independent  auditor in order to assure that the
provisions of such services  does not impair the  auditor's  independence.  This
review and approval will take place on an annual basis and  periodically  during
the year.




                                       28
<PAGE>

                                    VoIP INC.

                                TABLE OF CONTENTS

Financial Statements of VoIP, Inc.

                                                                           Page

Reports of Independent Registered Public Accounting Firms                  F-2,3

Financial Statements:

         Consolidated Balance Sheets - December 31, 2004 and 2003          F-4

         Consolidated  Statements  of Operations - Years Ended             F-5
         December 31, 2004 and 2003

         Consolidated Statements of Shareholders' Equity
         Years Ended December 31, 2004 and 2003                            F-7

         Consolidated Statements of Cash Flows - Years Ended
         December 31, 2004 and 2003                                        F-6

         Notes To Consolidated Financial Statements                        F-8














                                      F-1
<PAGE>


             REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
             -------------------------------------------------------



Board of Directors
VoIP, Inc. and Subsidiaries
Fort Lauderdale, Florida

We have audited the  accompanying  consolidated  balance sheet of VoIP, Inc. and
Subsidiaries   ("the  Company")  as  of  December  31,  2004,  and  the  related
consolidated statements of operations,  shareholders' equity, and cash flows for
the year ended December 31, 2004. These  consolidated  financial  statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company has determined that it
is not  required  to  have,  nor were we  engaged  to  perform,  an audit of its
internal control over financial reporting.  Our audit included  consideration of
internal  control  over  financial  reporting  as a basis  for  designing  audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the  effectiveness  of the Company's  internal  control
over financial  reporting.  Accordingly,  we do not express such an opinion.  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 consolidated financial statements referred to above presents
fairly, in all material respects,  the consolidated  financial position of VoIP,
Inc.  and  its  subsidiaries,  as of  December  31,  2004,  and the  results  of
operations and cash flows for the year then ended in conformity  with accounting
principles generally accepted in the United States of America.



 /s/ Berkovits, Lago & Company, LLP

Fort Lauderdale, Florida
March 16, 2005


                                      F-2



<PAGE>

                          TSCHOPP, WHITCOMB & ORR, P.A.
                     2600 Maitland Center Parkway, Suite 330
                               Maitland, FL 32751


               Report of Independent Certified Public Accountants
               --------------------------------------------------


Board of Directors and Stockholder
Millennia Tea Masters, Inc.

We have audited the accompanying balance sheet of Millennia Tea Masters, Inc. as
of December  31,  2003 and the  related  statements  of  operations,  changes in
stockholders'  equity,  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 Millennia Tea Masters, 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.

The  accompanying  financial  statements  have been  prepared  assuming that the
Company will continue as a going concern.  The Company has  experienced  limited
sales and  incurred  cumulative  operating  losses since its  inception  through
December 31, 2003.  The Company has been  dependent  upon the proceeds  from the
sales of common  stock and  advances  from  related  parties to provide  working
capital.  This situation raises a substantial  doubt about the Company's ability
to continue as a going  concern.  The  financial  statements  do not include any
adjustments that might result from the outcome of this uncertainty.

/s/  Tschopp, Whitcomb & Orr, P.A.

January 30, 2004
Maitland, Florida



                                      F-3

<PAGE>
<TABLE>
<CAPTION>

                                    VoIP Inc.
                           Consolidated Balance Sheets
                           December 31, 2004 and 2003



                                                          Dec. 31, 2004    Dec. 31, 2003
                                                          -------------    -------------
<S>                                                       <C>              <C>
      ASSETS

Current Assets:
      Cash and cash equivalents                           $   1,141,205    $        --
      Accounts receivable, net of allowance of $136,795         818,071             --
      Due from related parties                                  245,402             --
      Inventory                                                 187,451             --
      Assets from discontinued operations                       412,419          259,459
      Other current assets                                       43,702             --
                                                          -------------    -------------
Total Current Assets                                          2,848,250          259,459
                                                          -------------    -------------

Property and equipment, net                                     419,868             --
Intangibles                                                   6,923,854             --
Other assets                                                     23,580             --
                                                          -------------    -------------

TOTAL ASSETS                                              $  10,215,552    $     259,459
                                                          =============    =============


      LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
      Accounts payable and accrued expenses               $   1,224,974    $        --
      Bank loans and note payable                               760,000             --
      Liabilities from discontinued operations                     --            151,167
      Other current liabilities                                 123,140             --
                                                          -------------    -------------
Total Liabilities                                             2,108,114          151,167
                                                          -------------    -------------


Shareholders' equity:
Common stock - $0.001 par value
      100,000,000 shares authorized
      24,258,982 and 1,730,939 issued
      and outstanding respectively                               24,259            1,731
Additional paid-in capital                                   12,722,565          731,208
Accumulated deficit                                          (4,639,386)        (624,647)
                                                          -------------    -------------
Total shareholders' equity                                    8,107,438          108,292
                                                          -------------    -------------

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                $  10,215,552    $     259,459
                                                          =============    =============
</TABLE>


 The accompanying notes are an integral part of these financial statements.

                                      F-4
<PAGE>
<TABLE>
<CAPTION>

                                    VoIP Inc.
                      Consolidated Statements of Operations
                 For the Years Ended December 31, 2004 and 2003

                                                                   Year ended           Year ended
                                                                December 31, 2004    December 31, 2003
                                                                -----------------    -----------------
<S>                                                             <C>                  <C>
Revenues                                                        $       2,619,393    $            --

Cost of Sales                                                           1,870,269                 --
                                                                -----------------    -----------------

Gross Profit                                                              749,124                 --

Operating expenses
      Compensation and related expenses                                 2,721,296                 --
      General and administrative expenses                               2,187,878                 --
                                                                -----------------    -----------------

Loss from continuing operations before income
      taxes and discontinued operations                                (4,160,050)                --

Provision for income taxes                                                   --                   --
                                                                -----------------    -----------------

Net loss before discontinued operations                                (4,160,050)                --

Income (Loss) from discontinued operations,
      net of income taxes                                                 145,311             (352,968)
                                                                -----------------    -----------------

Net Loss                                                        $      (4,014,739)   $        (352,968)
                                                                =================    =================


Basic and diluted loss per share:

Loss before discontinued operations                             $           (0.28)   $            --

Income (loss) from discontinued operations,
      net of income taxes                                       $            0.01    $           (0.20)
                                                                -----------------    -----------------

Total                                                           $           (0.27)   $           (0.20)
                                                                =================    =================

Weighted average number of shares outstanding                          14,597,312            1,730,939
                                                                =================    =================
</TABLE>


 The accompanying notes are an integral part of these financial statements.

                                      F-5
<PAGE>
<TABLE>
<CAPTION>
                                    VoIP Inc.
                      Consolidated Statements of Cash Flows
                     Years ended December 31, 2004 and 2003

                                                               Year ended      Year ended
                                                              December 31,    December 31,
                                                                  2004            2003
                                                              ------------    ------------
<S>                                                           <C>             <C>
Cash flows from operating activities:
Continuing operations:
Net loss                                                      $ (4,160,050)   $       --
Adjustments to reconcile net loss to net
    cash used in operating activities                                 --              --
    Depreciation                                                    82,832            --
    Provision for bad debt                                         136,795            --
    Common shares issued for services                              494,166            --
    Warrants issued to employees                                 1,936,000            --
    Shares issued for intellectual property                        105,000            --
Changes in operating assets and liabilities
net of assets and liabilities acquired:
    Accounts receivable                                           (555,007)           --
    Due from related parties                                      (245,402)           --
    Inventory                                                      144,913            --
    Other current assets                                             8,531            --
    Accounts payable                                              (296,305)           --
    Other current liabilities                                     (315,587)           --
                                                              ------------    ------------
Net cash used in continuing operating activities                (2,664,114)           --
                                                              ------------    ------------

Discontinued operations:
    Income (loss) from discontinued operations                     145,311        (352,968)
    Changes in assets, liabilities, and net results               (408,000)        274,262
                                                              ------------    ------------
    Net cash used in discontinued operating activities            (262,689)        (78,706)

                                                              ------------    ------------
    Net used in operating activities                            (2,926,803)        (78,706)
                                                              ------------    ------------

Cash flows from investing activities -  continuing operations:
    Cash from acquisitions                                         104,872            --
    Purchase of property and equipment                            (157,881)           --
    Cash for intellectual property                                 (50,000)           --
    Purchase of other assets                                       (21,100)           --
                                                              ------------    ------------
Net cash used in continuing investing activities                  (124,109)           --
                                                              ------------    ------------
Discontinued operations:
    Cash from affiliates                                              --            82,196
                                                              ------------    ------------
Net cash provided by discontinued investing activities                --            82,196
                                                              ------------    ------------
Net cash provided by (used in) investing activities               (124,109)         82,196
                                                              ------------    ------------

Cash flows from financing activities:
    Proceeds from issuance of notes payable                        560,000            --
    Proceeds from sales of common stock                          3,628,618            --
                                                              ------------    ------------
Net cash provided by investing activities                        4,188,618            --

Net increase in cash                                             1,137,706           3,490

Cash at beginning of year                                            3,499               9
                                                              ------------    ------------

Cash at end of year                                           $  1,141,205    $      3,499
                                                              ============    ============

Non-cash investing and financing activities:
    Common stock issued for services                          $    494,166    $       --
                                                              ============    ============
    Warrants issued to employees                              $  1,936,000    $       --
                                                              ============    ============
    Shares issued for intellectual property                   $    105,000    $       --
                                                              ============    ============
</TABLE>

 The accompanying notes are an integral part of these financial statements.

                                      F-6
<PAGE>
<TABLE>
<CAPTION>

                                   VoIP, Inc.
           Consolidated Statements of Changes in Shareholders' Equity
                     Years Ended December 31, 2004 and 2003


                                                                                      Additional
                                                      Common Stock   Common Stock      Paid-in     Accumulated
                                                         Shares         Amount         Capital       Deficit           Total
                                                      ------------   ------------   ------------   ------------    ------------
<S>                                                   <C>            <C>            <C>            <C>             <C>
Balance as of December 31, 2002                          1,730,939   $      1,731   $    731,208   $   (271,679)   $    461,260

Loss for the for the year                                     --             --             --         (352,968)       (352,968)
                                                      ------------   ------------   ------------   ------------    ------------
Balance as of December 31, 2003                          1,730,939          1,731        731,208       (624,647)        108,292
                                                      ------------   ------------   ------------   ------------    ------------

Common stock issued                                     12,500,000         12,500           --             --            12,500

Common Stock issued for services received                  568,235            568        342,432           --           343,000

Common stock issued to investors for cash received       5,520,566          5,521      3,610,598           --         3,616,119

Common stock issued for services                           339,242            339        150,827           --           151,166

Common Stock issued for acquisition of DTNet Tech        2,500,000          2,500      4,747,500           --         4,750,000

Common Stock issued for acquisition of VoipAmericas      1,000,000          1,000      1,099,000           --         1,100,000

Stock issued to two company officers                          --             --        1,936,000           --         1,936,000

Warrants issued for intellectual property                  100,000            100        105,000           --           105,100

Loss for the year                                             --             --             --       (4,014,739)     (4,014,739)
                                                      ------------   ------------   ------------   ------------    ------------


 Balance December 31, 2004                              24,258,982   $     24,259   $ 12,722,565   $ (4,639,386)   $  8,107,438
                                                      ============   ============   ============   ============    ============
</TABLE>



 The accompanying notes are an integral part of these financial statements.

                                      F-7

<PAGE>

Note A - Organization and Description of Business

The  Company  was  incorporated  on August 3, 1998  under its  original  name of
Millennia Tea Masters, Inc. under the laws of the State of Texas.

The Company began  operations in October 1998 with its initial order of imported
teas from Sri Lanka.

On February 27, 2004 the Company  entered into a stock  purchase  agreement that
provided for the sale of  12,500,000  shares of its common stock in exchange for
$12,500  and a  commitment  by the  purchaser  to  contribute  the assets of two
start-up companies in the telecommunications  business,  eGlobalphone,  Inc. and
VOIP Solutions, Inc. into the Company.

On April  13,  2004 the  Company  changed  its name to VoIP,  Inc.  and began to
develop and  manufacture  innovative IP telephony  customer  premise  equipment,
provide premium voice over the internet  subscriber based telephony services and
state of the art long range  WiFi  technology  solutions,  for  residential  and
enterprise customers, including multimedia applications.

During  December  2004 the  Company  decided to exit the tea import  business in
order to focus its efforts and resources in the "Voice over  Internet  Protocol"
(VoIP) telecommunications industry. In connection with the decision, the Company
sold  its  imported  tea  inventory  and  began  to wind  down  its  tea  import
operations. The assets,  liabilities,  and results of operations of the imported
tea business has been classified as discontinued  operations on the accompanying
consolidated financial statements.

The  Company  offers  quality  Voice  over IP (VoIP)  based  solutions  offering
residential  and business  customers more user friendly and  affordable  ways to
communicate.  VoIP,  Inc. also  manufactures  products and provides  services to
Internet  Service  Providers,  Telecommunication  Service  Providers  and  Cable
Operators in  strategic  countries  around the world.  VoIP,  Inc.,  through its
subsidiaries,   provides  a  comprehensive   portfolio  of  IP  multimedia-based
solutions   ranging  from  subscriber   based  voice  services,   to  SIP  based
infrastructure  design and deployment,  to broadband  customer premise equipment
design and implementation services, as well as engineering design, manufacturing
and distribution of wireless broadband technology.

The Company's operations consist of one segment.



Note B - Summary of Significant Accounting Policies

Principles of Consolidation
---------------------------

The consolidated  financial  statements  include the accounts of the Company and
its wholly owned subsidiaries,  eGlobalphone, Inc. ("eGlobal") , VoIP Solutions,
Inc.,  VCG  Technologies   d/b/a  DTNet   Technologies   ("DTNet"),   Inc.,  and
VoxConsulting  d/b/a/VoIP Americas, Inc. ("VoIP Americas") from their respective
dates of acquisition.  All significant  inter-company  balances and transactions
have been eliminated in consolidation.

Use of Estimates
----------------

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities;  disclosure of contingent
assets and liabilities at the date of the financial statements; and the reported
amounts of  revenues  and  expenses.  Actual  results  could  differ  from those
estimates.

Cash and cash equivalents
-------------------------

For purposes of reporting cash flows, the Company considers all cash on hand, in
banks,  including amounts in book overdraft  positions,  certificates of deposit
and other highly liquid debt instruments with a maturity of three months or less
at the  date of  purchase  to be  cash  and  cash  equivalents.  Cash  overdraft
positions  may occur from time to time due to the timing of making bank deposits
and releasing checks, in accordance with the Company's cash management policies.


                                      F-8

<PAGE>

Accounts Receivable
-------------------

Accounts  receivable are stated at the amount management expects to collect from
outstanding  balances.  Management provides for probable  uncollectible  amounts
using the reserve  method based on its  assessment of the current  status of the
individual  receivables and after using  reasonable  collection  efforts.  As of
December  31,  2004 the  balance of the  allowance  for  uncollectible  accounts
amounted to $136,795. There was no allowance as of December 31, 2003.

Inventory
---------

Inventory  consists  of  finished  goods  and is  valued at the lower of cost or
market using the first-in, first-out method.

Advertising expenses
--------------------

Advertising and marketing expenses are charged to operations as incurred.

Income Taxes
------------

Income taxes - The Company and its subsidiaries  file  consolidated  federal and
state  income tax  returns.  The  Company  has adopted  Statement  of  Financial
Accounting  Standards  No.  109  in  the  accompanying   consolidated  financial
statements.  The only temporary differences included therein are attributable to
differing methods of reflecting  depreciation for financial statement and income
tax purposes.

Earnings (loss) per share
-------------------------

Basic  earnings  (loss) per share is computed by dividing the net income  (loss)
for  the  year  by  the  weighted-average  number  of  shares  of  common  stock
outstanding.  The calculation of fully diluted earnings (loss) per share assumes
the  dilutive  effect of the  exercise of  outstanding  options and  warrants at
either the beginning of the respective period presented or the date of issuance,
whichever is later.  Common stock  equivalents  represent the dilutive effect of
the assumed  exercise of the outstanding  stock options and warrants,  using the
treasury stock method.

Fair Value of Financial Instruments
-----------------------------------

The carrying amount of cash,  accounts  receivable,  accounts  payable and notes
payable, as applicable,  approximates fair value due to the short term nature of
these items  and/or the current  interest  rates  payable in relation to current
market conditions.

Revenue Recognition
-------------------

Revenue  from  product  sales  is  recognized  when  persuasive  evidence  of an
arrangement exists,  delivery to customer has occurred, the sales price is fixed
and determinable, and collectibility of the related receivable is probable.

The  recognition of revenues from Internet  telephony  services are deferred for
new  subscribers  of  eGlobalphone  and  Voipsolutions  until it deems  that the
customer has accepted the service.  Subsequent  revenues are  recognized  at the
beginning of each customer's month.


Property, plant, and equipment
------------------------------

Property, plant, and equipment are stated at cost. Depreciation is provided over
the estimated useful lives of the related assets using the straight line method.
The  useful  life of assets  ranges  from  three to five  years.  The  leasehold
improvements are amortized over the life of the related lease.

Business combinations
---------------------

The Company  accounts for business  combinations in accordance with Statement of
Financial  Accounting  Standard No. 141 Business  Combinations ("SFAS No. 141").
SFAS No. 141 requires  that the purchase  method of  accounting  be used for all
business combinations. SFAS No. 141 requires that goodwill and intangible assets


                                      F-9

<PAGE>

with indefinite  useful lives no longer be amortized,  but instead be tested for
impairment at least annually by comparing  carrying value to the respective fair
value in accordance  with the  provisions  of Statement of Financial  Accounting
Standards No. 142, "Goodwill and Other Intangible Assets" ("SFAS No. 142"). This
pronouncement  also requires that the intangible  assets with  estimated  useful
lives be amortized over their respective estimated useful lives.

Impairment of long-lived assets
-------------------------------

VoIP, Inc. reviews the recoverability of its long-lived  assets,  such as plant,
equipment and  intangibles  when events or changes in  circumstances  occur that
indicate that the carrying value of the asset group may not be recoverable.  The
assessment of possible  impairment is based on the Company's  ability to recover
the carrying value of the asset or asset group from the expected  future pre-tax
cash  flows   (undiscounted   and  without  interest  charges)  of  the  related
operations.  If these cash flows are less than the carrying value of such asset,
an impairment loss is recognized for the difference between estimated fair value
and carrying  value.  The  measurement  of  impairment  requires  management  to
estimate future cash flows and the fair value of long-lived assets.

Recent accounting pronouncements
--------------------------------

In November 2004, FASB issued Statement No. 151, "Inventory Costs - an amendment
of ARB No. 43,  Chapter 4." Statement No. 151 requires that abnormal  amounts of
costs,  including idle facility expense,  freight,  handling costs and spoilage,
should be recognized as current period charges. The provisions of this Statement
are effective for inventory  costs incurred  during fiscal years beginning after
June 15, 2005.  The Company  does not expect the  adoption of this  Statement to
have a material impact on its financial statements.


In December  2004,  FASB issued  Statement No. 153,  "Exchanges  of  Nonmonetary
Assets - an amendment of Accounting  Principles  Board ("APB")  Opinion No. 29."
Statement  No. 153 amends APB  Opinion No. 29 to  eliminate  the  exception  for
nonmonetary  exchanges  of  similar  productive  assets and  replaces  it with a
general  exception  for  exchanges  of  nonmonetary  assets  that do not  have a
commercial  substance.  A nonmonetary  exchange has commercial  substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange.  The provisions of this Statement are effective for nonmonetary
exchanges occurring in fiscal periods beginning after June 15, 2005. The Company
does not expect the adoption of this Statement to have a material  impact on its
financial statements.

In December  2004,  FASB  issued  Statement  No.  123R,  "Share-Based  Payment."
Statement No. 123R revises Statement No. 123,  supersedes APB Opinion No. 25 and
amends  Statement  No. 95.  Statement  No.  123R  requires  the cost of employee
services  received in exchange for an award of equity  instruments be recognized
over the period  during  which an employee  is  required  to provide  service in
exchange for the award.  The  provisions  of this  Statement  are  effective for
public  entities that do not file as small business  issuers as of the beginning
of the first interim  period or annual  reporting  period that begins after June
15, 2005.  The Company does not expect the adoption of this  Statement to have a
material impact on its financial statements.

Stock Based Compensation
------------------------

         The Company  applies the fair value  method of  Statement  of Financial
Accounting  Standards No. 123,  "Accounting for Stock Based Compensation" ("SFAS
No.  123") in  accounting  for its stock  options.  This  standard  states  that
compensation  cost is measured at the grant date based on the value of the award
and is recognized over the service period,  which is usually the vesting period.
The fair value for each  option  granted is  estimated  on the date of the grant
using the  Black-Scholes  option  pricing  model.  The fair  value of all vested
options granted has been charged to salaries,  wages, and benefits in accordance
with SFAS No. 123.

                                      F-10

<PAGE>

Note C - Property and Equipment, net

As of December 31, 2004 property and equipment consists of the following:

Office Equipment                   $ 519,810
Furniture & Fixtures                  56,748
Vehicles                               4,769
Leasehold Improvements                 4,562
                                   ---------
Total                                585,889
Less accumulated depreciation       (166,021)
                                   ---------

Total                              $ 419,868
                                   =========


Depreciation  expense for 2004  amounted to $82,832.  There was no  depreciation
expense for 2003.

Note D - Intangibles

As of December 31, 2004 intangibles consist of the following:

Goodwill-acquisition of DTNet Technologies, Inc.   $5,210,553
Goodwill-acquisition of Voipamericas, Inc.          1,408,301
Intellectual property                                 305,000
                                                   ----------

Total                                              $6,923,854
                                                   ==========

The goodwill on the acquisition of DTNet Technologies, Inc. ("DTNet") represents
the fair market  value of DTNet  liabilities  as of the date of the  acquisition
plus $4,750,000 which represents the market value of 2,500,000 shares of Company
stock issued pursuant to this acquisition.

The goodwill on the acquisition of VoIPAmericas, Inc. (VoIP Americas) represents
the  fair  market  value  of  VoIPAmericas  liabilities  as of the  date  of the
acquisition  plus  $1,100,000  which  represents  the market  value of 1,000,000
shares of the Company's stock issued pursuant to this acquisition.

Intellectual  property is carried at cost which is  comprised of $50,000 paid in
cash in 2004,  $150,000 due in the first quarter of 2005, and the value assigned
to 100,000  Company common shares and 400,000  warrants  issued pursuant to this
transaction. The valuation of the shares was $1.05 while the value was $105,000.
The  value  of  the  warrants  was  determined  using  the  Black-Scholes  model
calculated  as of October 14, 2004.  As these  warrants  were not "in the money"
these  warrants  have  been  assigned  a value  of  zero.  This  model  uses the
annualized deviation  calculation and utilizes industry averages as a comparison
for adequate statistical results in the valuation.  This is a standard financial
model that considers the statistical  annual volatility of the market changes in
a stock price. (See Note H)

Intellectual property consists of the following:

a)   all   rights  of  the   Company   of  Record  in  the   telephone   numbers
     1(800)TALKTIME, 1(888)TALKTIME, and 1(877)TALKTIME.COM

b)   all rights to the URL's (domain names)  800TALKTIME.COM,  1800TALKTIME.COM,
     and 1-800-TALKTIME.COM

c)   all rights to U.S.  Trademark  Registration No.  2,209,316  directed to the
     mark 1-800-TALKTIME and the goodwill associated therewith.






                                      F-11

<PAGE>

Note E - Accounts Payables and Accrued Expenses

As of December 31, 2004 accounts  payables and accrued  expenses  consist of the
following:


Account Payables Trade             $  988,815
Accrued Expenses                      233,711
Other                                   2,448
                                   ----------

Total                              $1,224,974
                                   ==========



Note F - Bank Loans and Note Payable

As of December 31, 2004 bank loans and note payable consists of the following:

a) Bank Loan:

   Revolving Line of Credit        $  187,000
   Promissory Note                     13,000
                                   ----------
                                      200,000

b) Note Payable                       560,000
                                   ----------

      Total                        $  760,000
                                   ==========

     a)   The  revolving  line of credit with the Bank of Tampa is interest only
          payable at prime plus 1.0% monthly.  The promissory note is payable in
          monthly  installments of approximately  $6,200 including interest at a
          rate of 7.5%. The loans are  collateralized by receivables,  inventory
          and equipment. Both balances were fully paid in January 2005.

     b)   In December 2004 the Company issued a note payable to a shareholder in
          the amount of $560,000  at an  interest  rate of 3.75% with a maturity
          date of December  2005. As mentioned in Note K on January 6, 2005, the
          Company  issued  another note payable  amounting to  $1,040,000 to the
          same  shareholder  under the same terms and conditions as the previous
          one.


Note G - Acquisitions

On May 25,  2004 (but  effective  for all  purposes as of April 15,  2004),  the
Company completed the acquisition of two Florida-based entities,  (eGlobalphone,
Inc. and VoIP Solutions, Inc.). Contribution of these start-up companies was the
basis for the original decision to issue a controlling block of shares of common
stock to Mr.  Ivester.  eGlobalphone,  Inc.  and VoIP  Solutions  Inc.  are both
Florida corporations.

In  June  2004,  the  Company  acquired  DTNet  Technologies,   Inc.  a  Florida
Corporation.  The  acquisition  was  financed  through the issuance of 2,500,000
shares of the Company's  common stock with a value of $4,750,000 in exchange for
all issued and outstanding shares of DTNet common stock.

In September  2004,  the Company  closed the  acquisition  of VoIP  Americas,  a
Florida  corporation.  The  acquisition  was  financed  through the  issuance of
1,000,000  shares of the  Company's  restricted  common  stock with the value of
$1,100,000 in exchange for all issues and outstanding shares of VoIP Americas.


Note H - Warrants

On August 4th, 2004, the Company issued 4,400,000  warrants to two executives to
acquire 2,200,000 Company common shares at $1.00 each. The compensation expenses
of $1,936,000, is in the accompanying Consolidated Statement of Operations.


                                      F-12

<PAGE>

A summary of the Company's warrants as of December 31, 2004 is presented below:


                                                               2004
                                                  ------------------------------

                                                                     Weighted
                                                                      average
                                                     Warrants     exercise price
                                                  -------------   --------------

Warrants outstanding at beginning of year                  --
Granted to two Company officers                       4,400,000   $         1.00
Granted to a third party                                400,000   $         1.75
Expired                                                    --
Exercised                                                  --
                                                  -------------   --------------

Warrants outstanding at end of year                   4,800,000   $         1.06
                                                  =============   ==============


The  value of  warrants  issued  to the  Company  officers  and the value of the
400,000   warrants   granted  to  the  third  party  was  estimated   using  the
Black-Scholes  option  pricing model with the following  assumptions;  risk free
rate 3.35%,  no dividend  yield,  expected life of five years and  volatility of
175% and 152% respectively.


Note I - Commitments

The Company is obligated under  non-cancelable  operating  leases for its office
facilities  and two  apartments  used by its  employees.  Future  minimum  lease
payments under the Company's  non-cancelable  operating lease as of December 31,
2004 are as follows:

                    Year ending Dec 31
                    ------------------

                    2005     $  52,772
                    2006        15,155
                             ---------
                             $  67,927
                             =========


Note J - Due From Related Parties

As of December 31, 2004 the due from related parties consists of the following:



        DTNet, Inc. (*)           $  134,317
        DTNet International (*)      119,974
        Mozart Communication          21,794
        Com Laser                      5,850
        Due to related parties       (36,533)
                                  ----------
                                  $  245,402
                                  ==========

* The above entities are related to a shareholder of the Company. These advances
are unsecured, due upon demand and are non-interest bearing.


                                      F-13

<PAGE>

Note K - Income Taxes

The  components  of the  Company's  consolidated  income  tax  provision  are as
follows:


                                                       Year ended December 31,
                                                         2004           2003
                                                     -----------    -----------

Current Benefits                                     $(1,365,000)      (119,000)
Valuation allowance                                    1,365,000        119,000
                                                     -----------    -----------
Total                                                       --             --
                                                     ===========    ===========

                                                         2004           2003
                                                     -----------    -----------
Long-term deferred tax assets arising from
  net operatiing loss carry forward                  $(1,485,000)   $  (119,000)

Valuation allowance                                    1,485,000        119,000
                                                     -----------    -----------
Total                                                       --             --
                                                     ===========    ===========


The  reconciliation  of income tax  provision at statutory  rate to the reported
income tax expense is as follows:


                                    Year ended December 31
                                       2004         2003
                                    ---------    ---------
Computed at statutory rate                 34%          34%
State tax net of federal benefits        --           --
Valuation allowance                       (34%)        (34%)
                                    ---------    ---------
       Total                             --           --
                                    =========    =========



At December  31, 2004 and  December  31,  2003  deferred  tax assets are related
solely to the  Company's  net  operating  loss carry  forward  of  approximately
$4,014,739  and $303,000,  respectively,  which have been reduced by a valuation
allowance.  If these carry forwards are not utilized,  they will begin to expire
in 2018.


Note L - Stockholders' Equity

On February 27, 2004,  the Company issued and sold  12,500,000  shares of common
stock to Steven  Ivester in exchange  for cash of $12,500 and his  agreement  to
contribute the  intellectual  property rights and related assets of two start-up
companies formed to engage in the telecommunications industry. The shares issued
represented approximately 88% of the shares outstanding after the exchange, as a
result of which Mr. Ivester became the controlling shareholder of the Company.

On April 1, 2004, the Company issued 142,902 shares to two accredited  investors
in satisfaction of accounts payable totaling $71,421.

In May 2004,  the  Company  issued  1,143,250  shares to  twenty-two  individual
accredited investors.

In May 2004, the Company  issued  168,235  shares to one  individual  accredited
investor in exchange for services.

In May, 2004, the Company issued 67,300 shares to fourteen individual accredited
investors at a price of $3.00 per share.

On May 19, 2004, the Company  issued 196,340 shares to two accredited  investors
in satisfaction of accounts payable totaling $79,745.

On June 25, 2004, the Company closed the acquisition of DTNet Technologies, Inc.
("DTNet") a Florida  corporation.  The  acquisition  was  effective  through the
issuance of 2,500,000 shares of VoIP, Inc.  restricted  common stock in exchange
for all issued and outstanding shares of DTNet common stock.

In July 2004,  the Company  issued  668,688  shares to six  individual  existing
accredited investors.  Also effective July 2004, registrant issued 41,688 shares
to four accredited individual investors.

On August 4, 2004,  the Company issued  4,400,000  warrants to two executives to
acquire  4,400,000 shares at $1.00 per share. As explained in Note J, subsequent
events,  in February  2005,  2,200,000 of warrants were exchanged for restricted
shares.



                                      F-14

<PAGE>

In August 2004, the Company  issued 50,000 shares to one  individual  accredited
investor in satisfaction of accounts payable totaling $50,000.

In August  2004,  the Company  issued  653,319  shares to  forty-six  individual
accredited investors.

In September 2004, the Company issued 38,461 shares to one accredited investor.

On September 1st, 2004, the Company closed the  acquisition of VoIP Americas,  a
Florida  corporation.  The acquisition took the form of an exchange of 1,000,000
shares  of  VoIP  restricted  common  stock  in  exchange  the  all  issued  and
outstanding shares of VoIP Americas common stock.

In  October  2004,  the  Company  issued  251,831  shares to  twelve  accredited
investors.

In October 2004, the Company issued 100,000 shares to one individual  accredited
investors.

In November 2004, the Company issued of 2,249,500 to five accredited investors.

In  November  2004,  the  Company  issued  318,500  shares to twelve  accredited
investors.

In December 2004, the Company issued 79,659 shares to five accredited investors.

In  December  2004,  the Company  issued  400,000  shares to sixteen  accredited
investors.



Note M - Discontinued Operations

In December 2004, the Company  decided to exit the tea business and sold all its
tea inventory, Therefore, those transactions have been presented as discontinued
operations for the years ended December 31, 2004 and 2003.

Assets,  liabilities,  and results of the  discontinued  tea  operations  of the
Millennia Tea Master division are as follows:


Assets from discontinued operation:
                                                             2004        2003
                                                          ---------   ---------

Cash                                                      $   4,419   $   3,499
Notes receivable from purchaser of tea
  (non-interest bearing due in four equal                   408,000        --
  installments through December 31, 2005)

Tea inventory at net realizable value                          --       251,534

Other assets                                                   --         4,426
                                                          ---------   ---------

Total                                                     $ 412,419   $ 259,459
                                                          =========   =========

Liabilities from discontinued operations:

Due to related parties                                    $    --     $ 151,167
                                                          ---------   ---------

Total                                                     $    --     $ 151,167
                                                          =========   =========



                                      F-15

<PAGE>

Results from discontinued operations:

Revenues                                                  $ 408,613   $   8,678

Cost of sales                                               263,302      11,213
                                                          ---------   ---------

Gross profit                                                145,311      (2,535)

Other expenses                                                 --       350,433
                                                          ---------   ---------

Income (loss) from discontinued operations:               $ 145,311   $(352,968)
                                                          =========   =========



Note N - Subsequent Events

On  January 6,  2005,  the  Company  issued a Note  Payable  to its  controlling
shareholder  in the amount of $1,040,000 at an interest rate of 3.75%,  maturing
in December 2005.

On January 26,  2005,  the Company  filed a Form S-8  registration  statement in
connection with the Company's Stock Option Plan. The plan provides for the grant
to eligible employees and directors of options for the purchase of Common Stock.
The Option Plan  covers,  in the  aggregate,  a maximum of  4,000,000  shares of
Common Stock and provides for the granting of both  incentive  stock options (as
defined in Section 422 of the Internal  Revenue  Code of 1986) and  nonqualified
stock options (options which do not meet the requirements of Section 422). Under
the Option Plan,  the exercise  price may not be less than the fair market value
of the Common Stock on the date of the grant of the option.

On February 14, 2005, an officer  exercised a Stock Purchase Warrant to purchase
2,200,000 shares of VoIP, Inc. common stock by surrendering  such Warrant,  and,
based upon an agreement with the Company,  receiving in return 750,000 shares of
restricted common stock in a net exercise.

On February 23, 2005, VoIP, Inc. and its subsidiary eGlobalPhone,  Inc. executed
an Asset Purchase  Agreement for the purchase of certain  intellectual  property
rights  associated with the trade names TALKTIME and  TALKTIME.COM.  In exchange
for the rights, the Registrant issued 100,000 shares of restricted common stock,
warrants  to  purchase  400,000  shares at $1.70 per  share,  and  agreed to pay
$200,000 cash.  Negotiations  started during the last quarter of 2004, therefore
all the cash  disbursements,  liabilities,  shares issued,  and commitments were
recorded in that period.










                                      F-16

<PAGE>

                                   SIGNATURES

         Pursuant to the  requirements  of the  Securities  Act, the Company has
duly caused this  Annual  Report to be signed on its behalf by the  undersigned,
thereunto duly authorized, in the City of Fort Lauderdale,  State of Florida, on
March 29, 2005.


                                         VOIP, INC.



                                         By: /S/ Steven Ivester
                                            ------------------------------------
                                            Steven Ivester,
                                            Chairman and Chief Executive Officer


         Pursuant to the  requirements  of the Securities  Exchange Act of 1934,
this  Annual  Report  has been  signed  below by the  following  persons  in the
capacities and on the dates indicated.

Name                             Office                           Date

 /s/ Steven Ivester             Chairman, Chief Executive         March 29, 2005
------------------------        Officer and Director
Steven Ivester                  (Principal Executive Officer)



 /s/ Osvaldo Pitters            Vice President and Chief          March 29, 2005
------------------------        Financial Officer
Osvaldo Pitters                 (Principal Financial and
                                Accounting Officer)