U. S. SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-QSB

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

                  For the quarterly period ended: June 30, 2004

           [ ] QUARTERLY REPORT PURSUANT TO SECTION 13 0R 15(d) OF THE
                      SECURITIES AND EXCHANGE ACT OF 1934

        For the transition period from ______________ to _______________

                        Commission File Number: 000-30061




                       ELEPHANT TALK COMMUNICATIONS, INC.
        (Exact name of small business issuer as specified in its charter)



                                   California
         (State or other jurisdiction of incorporation or organization)

                                   95-4557538
                        (IRS Employer Identification No.)

          438 East Katella Avenue, Suite 217, Orange, California 92867
                    (Address of principal executive offices)

                                 (714) 288-1570
                           (Issuer's telephone number)

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

As of August 11, 2004, Elephant Talk Communications,  Inc. had 48,086,646 shares
of Common Stock Outstanding.

Transitional Small Business Disclosure Format (check one):

                          Yes [ ]        No [ X ]










                                       1
<PAGE>
               ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES

                                TABLE OF CONTENTS

                              Report on Form 10-QSB

                                For quarter ended
                                  June 30, 2004
                                                                          Page
PART 1  FINANCIAL INFORMATION                                             ----

Item 1. Financial Statements

        Consolidated Balance Sheets at June 30, 2004 (Unaudited)             3

        Consolidated Statements of Operations for the Three Months and
        Six Months ended June 30, 2004 and 2003 (Unaudited)                  4

        Consolidated Statements of Cash Flows for the Six Months
        ended June 30, 2004 and 2003 (Unaudited)                             5

        Notes to the Consolidated Financial Statements (Unaudited)           7

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                                 13

Item 3. Controls and Procedures                                             18


PART II OTHER INFORMATION

Item 1. Legal Proceedings                                                   19

Item 2. Changes in Securities                                               19

Item 3. Defaults upon Senior Securities                                     19

Item 4. Submission of Matters to Vote of Security Holders                   19

Item 5. Other Information                                                   19

Item 6. Exhibits and Reports on Form 8-K                                    19

Signatures and Certifications                                               20

Exhibit 32.1 Certification pursuant to Section 906 of the
        Sarbanes-Oxley Act of 2002










                                       2

<PAGE>
                       ELEPHANT TALK COMMUNICATIONS, INC.
                           CONSOLIDATED BALANCE SHEET
                                  JUNE 30, 2004
                                   (UNAUDITED)

                                     ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                    $       24,788
  Accounts receivable, net                                            140,309
  Prepaid expenses and other current assets                            95,908
                                                               --------------
         Total Current Assets                                         261,005
                                                               --------------
PROPERTY AND EQUIPMENT - NET                                          165,724

OTHER ASSETS
  Investment in New Times Navigation Limited                        4,273,900
                                                               --------------
TOTAL ASSETS                                                   $    4,700,629
                                                               ==============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Overdraft                                                    $      129,165
  Accounts payable and customer deposit                               355,564
  Deferred revenue                                                    133,776
  Accrued expenses and other payable                                   27,696
  Due to related parties                                              303,553
                                                               --------------
        Total Current Liabilities                                     949,754
                                                               --------------
LONG-TERM LIABILITIES
  Note payable                                                        860,693
  Convetible Notes payable                                          3,600,000
                                                               --------------
TOTAL LIABILITIES                                                   5,410,447
                                                               --------------
COMMITMENT AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
Preferred stock Class B, no par value, 5,000,000 shares
  authorized, none issued and outstanding                                   -
Common stock, no par value, 250,000,000  shares authorized,
  47,827,555 issued  and outstanding                                9,261,752
Accumulated comprehensive loss, net                                    (6,023)
Accumulated deficit                                                (9,965,547)
                                                               --------------
        Total Stockholders' Deficiency                               (709,818)

                                                               --------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                 $    4,700,629
                                                               ==============
                 The accompanying notes are an integral part of
                    these consolidated financial statements

                                       3
<PAGE>
                       ELEPHANT TALK COMMUNICATIONS, INC.
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
                                   (UNAUDITED)
<TABLE>
<S>                                         <C>           <C>           <C>           <C>
                                            For the Three Months ended   For the Six Months ended
                                                      June 30,                    June 30,
                                                 2004         2003          2004           2003
                                            ------------- ------------- ------------- -------------
REVENUES, NET                               $    172,113  $    148,310  $    351,980  $    524,460

COST OF REVENUE                                  159,167        95,673       274,986       462,487
                                            ------------  ------------  ------------  ------------
GROSS PROFIT                                      12,946        52,637        76,994        61,973
                                            ------------  ------------  ------------  ------------
OPERATING EXPENSES
  Selling, general and administrative            747,618       516,194     1,404,930       764,072
  Depreciation and amortization                  (23,305)       63,448        43,244       126,542
                                            ------------  ------------  ------------  ------------
         Total Operating Expenses                724,313       579,642     1,448,174       890,614
                                            ------------  ------------  ------------  ------------
LOSS FROM OPERATIONS                            (711,367)     (527,005)   (1,371,180)     (828,641)

OTHER INCOME (EXPENSE)
  Interest expense                                     -        (5,410)      (22,274)      (21,368)
  Equity in loss of unconsolidated affiliate      (9,500)      (14,773)       (9,500)      (32,999)
  Loss on settlement with Hartcourt              (11,736)            -             -      (270,613)
  Gain on settlement of vendor payables                -             -       227,655             -
  Other                                                -           389             -           389
                                            ------------  ------------  ------------  ------------
         Total Other Income (Expense)            (21,236)      (19,794)      195,881      (324,591)
                                            ------------  ------------  ------------  ------------
LOSS BEFORE INCOME TAXES                        (732,603)     (546,799)   (1,175,299)   (1,153,232)
                                            ------------  ------------  ------------  ------------
  Income taxes                                         -             -           800           800
                                            ------------  ------------  ------------  ------------
NET LOSS                                    $   (732,603) $   (546,799) $ (1,176,099) $ (1,154,032)
                                            ------------  ------------  ------------  ------------
OTHER COMPREHENSIVE INCOME (LOSS)
  Foreign currency translation gain (loss)        (3,681)            -        (4,492)            -
                                            ------------  ------------  ------------  ------------
                                                  (3,681)            -        (4,492)            -
                                            ------------  ------------  ------------  ------------
COMPREHENSIVE LOSS                          $   (736,284) $   (546,799) $ (1,180,591) $ (1,154,032)
                                            ============  ============  ============  ============
Net loss per common share and equivalents -
basic and diluted                           $      (0.02) $      (0.02) $      (0.02) $      (0.05)
                                            ============  ============  ============  ============
Weighted average shares outstanding during
the period - basic and diluted                46,306,888    24,247,925    49,365,398    24,296,429
                                            ============  ============  ============  ============
</TABLE>










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

                                       4
<PAGE>
                       ELEPHANT TALK COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                                        Six Months Ended
                                                 June 30, 2004   June 30, 2003
                                                 -------------   -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net loss                                       $ (1,176,099)   $ (1,154,032)
  Adjustments to reconcile net loss to net
    cash used  in operating activities:
  Depreciation and amortization                        43,244         126,542
  Issuance of stock for compensation and
    services                                          875,356         158,200
  Provision for uncollectible amounts                 500,000               -
  Write-off of due from related party                       -         560,000
  Loss on settlement with Hartcourt                         -         270,613
  Equity in loss of unconsolidated affiliate            9,500          32,999
  Decrease in accounts receivable                      15,883         137,206
  Decrease in prepaid expenses, deposits and
    other assets                                       13,004         107,187
  Decrease in cash overdraft                         (420,040)        (11,020)
  Decrease in accounts payable and customer
    deposits                                         (125,581)       (657,054)
  Increase (Decrease) in accrued expenses and
    other payable                                    (224,522)        153,263
  Increase (Decrease) in deferred revenue             (27,763)         52,819
                                                 ------------    ------------
     Net cash used in operating activities           (517,018)       (223,277)
                                                 ------------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of property and equipment                   (5,203)         (7,349)
  Purchase of investments                                   -         (10,835)
  Proceeds from sale of investment in
    unconsolidated affiliate                          100,953               -
                                                 ------------    ------------
     Net cash provided by (used in)
       investing activities                            95,750         (18,184)
                                                 ------------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from related parties, net                  186,617         302,733
  Proceeds from sale of shares                        300,000               -
  Payments of notes payable                           (30,333)              -
  Payments on capital leases                          (14,018)        (30,434)
                                                 ------------    ------------
     Net cash provided by financing
       activities                                     442,266         272,299
                                                 ------------    ------------
EFFECT OF EXCHANGE RATES ON CASH                       (4,492)              -
                                                 ------------    ------------





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

                                       5
<PAGE>
                       ELEPHANT TALK COMMUNICATIONS, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)
                                  (continued)

                                                        Six Months Ended
                                                 June 30, 2004   June 30, 2003
                                                 -------------   -------------
NET INCREASE IN CASH                                   16,506          30,838
CASH, BEGINNING OF THE YEAR                             8,282           5,533
                                                 ------------    ------------
CASH, END OF THE YEAR                            $     24,788    $     36,371
                                                 ============    ============

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
-------------------------------------------------
Cash paid during the year for interest           $     22,274    $     21,368

Cash paid during the year for income taxes       $        800    $        800





























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







                                       6
<PAGE>
               ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  JUNE 30, 2004

NOTE 1:  Organization and Nature of Operations
         -------------------------------------
         Elephant   Talk   Communications,   Inc.   (herein   referred   to   as
         "ElephantTalk",   "ETCI"  or  "Company"   formerly   known  as  Staruni
         Corporation),  incorporated  on  February 5, 1962 under the laws of the
         state  of   California   as  Altius   Corporation,   was   involved  in
         manufacturing of freeway signs. In March 1997,  Altius acquired Starnet
         Universe Internet,  Inc., a web developer and Internet Service Provider
         (ISP) and changed its name to Staruni Corporation.  On January 4, 2002,
         Staruni  Corporation  merged  with  Elephant  Talk  Limited,  a limited
         company incorporated in Hong Kong, and filed a Certificate of Amendment
         of Articles of  Incorporation  to amend the corporate  name to Elephant
         Talk Communications, Inc. This name change was done in conjunction with
         the merger and to emphasize  that the  Company's  new focus will be the
         business of Elephant Talk Limited.

         On January 4, 2002,  the Company  exchanged 90% of its common stock for
         100% of the common stock of Elephant Talk Limited by issuing 31,164,210
         shares of common stock to the  shareholders  of Elephant  Talk Limited.
         Elephant Talk Limited is a limited  liability  company  incorporated in
         Hong Kong (ETHK) engaged in long distance telephone  business.  Per the
         agreement,  the  Company  sold  its  Internet  Service  Provider  (ISP)
         business  to a related  party,  Vision  Aerospace,  Inc.  (Vision)  for
         1,000,000  shares of Vision  valued at $10,835.  Vision is owned by the
         former CEO and  President of the  Company.  The value of the shares was
         recorded  at the book value of the  assets  exchanged  to  acquire  the
         shares  of  Vision.  Pursuant  to  the  terms  of  the  share  exchange
         agreement,  control  of the  combined  companies  passed to the  former
         shareholders of Elephant Talk Limited.  This type of share exchange has
         been treated as a capital  transaction  accompanied by recapitalization
         of  Elephant  Talk  Limited  in  substance,   rather  than  a  business
         combination,  and is deemed a "reverse merger" for accounting purposes,
         since the former owners of Elephant Talk Limited controlled majority of
         the total common shares outstanding  immediately  following the merger.
         Recapitalization   accounting   resulted  in   consolidated   financial
         statements being issued under the name of Elephant Talk Communications,
         Inc., but were considered a continuation  of Elephant Talk Limited.  No
         pro  forma  financial  statements  are being  presented  as ETCI has no
         assets  other  than the shares of the  related  third  party  discussed
         above.

NOTE 2:  Basis of Presentation
         ---------------------
         The accompanying  unaudited consolidated financial statements have been
         prepared in accordance with generally  accepted  accounting  principles
         for interim  financial  information  and with the  instructions to Form
         10-QSB.  Accordingly,  they do not include all of the  information  and
         footnotes  required by generally  accepted  accounting  principles  for
         complete  financial  statements  and  related  notes  included  in  the
         Company's 2003 Form 10-KSB.



                                       7
<PAGE>
         The audited  consolidated  financial  statements of the Company for the
         year ended  December  31,  2003 were  filed on April 15,  2004 with the
         Securities and Exchange  Commission and are hereby  referenced.  In the
         opinion  of  management,   the  accompanying   unaudited   consolidated
         financial statements contain all adjustments (which include only normal
         recurring  adjustments)  considered necessary for fair presentation has
         been included.

         The results of  operations  for the three  months and six months  ended
         June 30,  2004,  are not  necessarily  indicative  of the results to be
         expected  for  the  entire   year.   Certain  2003  amounts  have  been
         reclassified   to  conform  to  current  period   presentation.   These
         reclassifications  have no effect on  previously  reported  net  income
         (loss).

NOTE 3:  Principles of Consolidation
         ---------------------------
         The accompanying consolidated financial statements for the three months
         and six months  ended June 30, 2004  included  the accounts of Elephant
         Talk  Communications,  Inc., its 100% wholly owned subsidiary  Elephant
         Talk  Limited and its 30% equity  investment  in New Times  Navigations
         Limited.  The consolidated  financial statements for the same period in
         2003 included the accounts of Elephant Talk  Communications,  Inc., its
         100%  wholly  owned  subsidiary  Elephant  Talk  Limited and its 35.42%
         equity   investment  in  ETNS  Singapore  Pte,  Ltd.  All   significant
         inter-company   accounts  and  transactions  have  been  eliminated  in
         consolidation. The merger with Elephant Talk Limited has been accounted
         for as a purchase and treated as a reverse acquisition since the former
         shareholders  of Elephant  Talk  Limited  control  the  majority of the
         outstanding shares of common stock of the Company immediately following
         the acquisition on January 4, 2002.

NOTE 4:  Use of Estimates
         ----------------
         In preparing financial statements in conformity with generally accepted
         accounting  principles,  management  is required to make  estimates and
         assumptions  that affect the reported amounts of assets and liabilities
         and the disclosure of contingent  assets and liabilities at the date of
         the financial  statements and revenues and expenses during the reported
         period. Actual results could differ from those estimates.

NOTE 5:  Supplemental Disclosure of Cash Flows
         -------------------------------------
         The Company  prepares its  statements  of cash flows using the indirect
         method as defined under the Financial  Accounting  Standard No. 95. The
         cash flow  statements do not include the following  non-cash  investing
         and financing activities:

         During the six months ended June 30, 2004, the Company issued 1,227,991
         common  shares  valued at $221,000 as  compensation  to  directors  for
         salaries and fees for  attending  Board  meetings.  The Company  issued
         644,005  common  shares  valued at  $154,561 to certain  directors  and
         related  parties  as  settlement  of their  debts to the  Company,  and
         4,883,424  common  shares  valued  at  $1,016,462  to  consultants  for
         providing  consulting  services  and  vendors for  settlement  of their
         debts.

                                       8
<PAGE>
NOTE 6:  Recent Pronouncements
         ---------------------
         On May 15 2003,  the FASB issued FASB  Statement  No. 150 ("SFAS 150"),
         Accounting for Certain Financial  Instruments with  Characteristics  of
         both  Liabilities  and  Equity.  SFAS 150 changes  the  accounting  for
         certain financial  instruments that, under previous guidance,  could be
         classified as equity or  "mezzanine"  equity,  by now  requiring  those
         instruments  to  be  classified  as  liabilities  (or  assets  in  some
         circumstances) in the statement of financial  position.  Further,  SFAS
         150 requires  disclosure  regarding the terms of those  instruments and
         settlement alternatives. SFAS 150 affects an entity's classification of
         the  following  freestanding  instruments:  a)  Mandatorily  redeemable
         instruments  b) Financial  instruments  to  repurchase  an entity's own
         equity instruments c) Financial  instruments embodying obligations that
         the issuer must or could choose to settle by issuing a variable  number
         of its shares or other equity  instruments  based solely on (i) a fixed
         monetary amount known at inception or (ii) something other than changes
         in its own equity  instruments  d) SFAS 150 does not apply to  features
         embedded  in a financial  instrument  that is not a  derivative  in its
         entirety.  The  guidance  in SFAS 150 is  generally  effective  for all
         financial  instruments entered into or modified after May 31, 2003, and
         is otherwise  effective at the  beginning of the first  interim  period
         beginning  after June 15,  2003.  For  private  companies,  mandatorily
         redeemable financial  instruments are subject to the provisions of SFAS
         150 for the fiscal  period  beginning  after  December  15,  2003.  The
         adoption  of SFAS  No.  150  did  not  have a  material  impact  on the
         Company's financial position or results of operations or cash flows.

         In December  2003,  the  Financial  Accounting  Standards  Board (FASB)
         issued a revised  Interpretation  No. 46,  "Consolidation  of  Variable
         Interest  Entities"  (FIN  46R).  FIN 46R  addresses  consolidation  by
         business  enterprises of variable  interest  entities and significantly
         changes the  consolidation  application  of  consolidation  policies to
         variable  interest  entities and, thus improves  comparability  between
         enterprises  engaged in similar  activities  when those  activities are
         conducted through variable interest entities. The Company does not hold
         any variable interest entities.

NOTE 7:  Sale of Equity Interest in ETNS Singapore Pte, Ltd.
         ---------------------------------------------------
         On February 18, 2004, the Company's  wholly owned  subsidiary  Elephant
         Talk Limited completed the sale of all of its 35.42% equity interest in
         ETNS  Singapore  Pte, Ltd. for a cash  consideration  of $100,953.  The
         Company  did not  record  any gain or loss from the sale of its  equity
         investment during the six months ended June 30, 2004.

NOTE 8:  Investment in New Times Navigation Limited
         ------------------------------------------
         On May 24, 2004,  the Company  completed  its purchase of 30% of all of
         the  issued  and  outstanding  shares  of  common  stock  of New  Times
         Navigation  Limited ("New Times") for a total  consideration  valued at
         $4,283,400 from four  shareholders of Renren Holdings  Limited,  parent
         company of New Times  ("Shareholders").  The purchase consideration was
         payable at the  closing  date of May 24,  2004 to the  Shareholders  as
         follows:  $683,400 of the purchase consideration consisted of 5,100,000


                                       9
<PAGE>
         restricted  common shares valued at the five days average closing price
         on the date of closing,  at $0.134 per common share,  and $3,600,000 of
         the  purchase  consideration  to be settled by  issuance  of  unsecured
         Convertible Promissory Notes ("Promissory Notes") bearing 2.5% interest
         due in full on March 28, 2005. The  redemption of the Promissory  Notes
         is  conditional  upon the Company  raising  money from the public on or
         before March 28, 2005.  Failing which, the Shareholders  shall have the
         right to convert the Promissory  Notes into Company's  common shares at
         the agreed conversion price of $0.50 per common share.

         The  Company's  30%  interest in New Times is  accounted  for using the
         equity  method of  accounting  and is  stated  at cost  plus  equity in
         undistributed earnings (losses) since acquisition.  The Company's share
         of the loss was $9,500 from May 24, 2004 (date of acquisition)  through
         June 30, 2004.

         A summary of unaudited financial statements of New Times as of June 30,
         2004 is as follows:

                                                                   June 30, 2004
                                                                    -----------

      Current assets                                                $    87,436
      Non-current assets                                                860,417
                                                                    -----------
           Total Assets                                                 947,853
                                                                    ===========
      Current liabilities                                                     0
      Non-current liabilities                                         1,282,051
      Stockholder's deficit                                            (334,198)
                                                                    -----------
           Total Liabilities and Stockholders' Deficit              $   947,853
                                                                    ===========


      Statement of Operations - From May 24, 2004 (date of acquisition)
                                through June 30, 2004

      Revenues                                                      $         0
                                                                    -----------
      Operating expenses                                                 31,668
                                                                    -----------

      Net Loss                                                      $   (31,668)
                                                                    ===========

      Company's share of loss at 30%                                $    (9,500)
                                                                    ===========

      Investment in New Times - at cost,
                                at the date of acquisition          $ 4,283,400

      Share of loss in investment as of June 30, 2004                    (9,500)

      Investment in New Times - at cost on June 30, 2004            $ 4,273,900
                                                                    ===========

                                       10
<PAGE>
NOTE 9:  Related Party Transactions
         --------------------------
         The Company has advanced  funds  amounting to $446,520 to entities that
         the Company's  officers and/or  shareholders have an ownership interest
         in.  The  Company  has  provided  a  reserve  for  uncollectible  funds
         amounting to $400,000 for such funds advanced as of June 30, 2004.

         The Company has a standby  line of credit for  $591,026  with a bank in
         Hong  Kong  which  expires  on  January  16,  2005  and  is  personally
         guaranteed by four of the Company's shareholders.  The Company utilizes
         the standby line of credit for security purposes and short-term working
         capital  requirements of the Company and its affiliates.  The Company's
         affiliate had signed a promissory note of $408,975, fully guaranteed by
         the  Company,  requiring  monthly  installments  of $12,535  and due on
         December 24, 2006. The affiliate has defaulted on the promissory  note,
         and,  therefore,  the Company has the  obligation to pay the promissory
         note in full.  The  Company  has  provided  a full  allowance  for such
         uncollectible  funds in the accompanying  financial  statements at June
         30, 2004.

NOTE 10: Stockholders' Equity
         --------------------
         Stock  Split:  As  a  condition   precedent  to  the  merger,   Staruni
         Corporation  authorized a reverse  stock split of their  common  shares
         pursuant  to  which  for  every  ten  (10)  shares  of the  issued  and
         outstanding  common shares were exchanged for one (1) common share.  On
         January 22, 2002,  the Company  effected a one (1) for ten (10) reverse
         stock split of its outstanding common stock. This reduced the number of
         shares  outstanding  from 34,626,899  shares to 3,464,000  shares after
         having 1,311 partial  shares  redeemed.  The basic and diluted net loss
         per  share  per  these  financial   statements  has  been  restated  to
         retroactively effect the reverse stock split.

         Issuance of common  stock:  During the six months  ended June 30, 2004,
         the  Company  issued  1,227,991  common  shares  valued at  $221,000 as
         compensation  to directors  for salaries and fees for  attending  Board
         meetings.  The common shares were valued at the closing market price of
         the common  shares on the first day of each month  starting  January 1,
         2004.  The Company  issued  644,005 common shares valued at $154,561 to
         certain  directors and related  parties as settlement of their debts to
         the Company,  and  4,883,424  common  shares  valued at  $1,016,462  to
         consultants  and  vendors for  settlement  of their  debts.  The common
         shares were valued at the 10 days average market closing price from the
         date of issuance.

         On March 3, 2004, the Company issued 2,000,000  restricted  (under Rule
         144 one year restriction) common shares under a stock sale agreement to
         an accredited investor under a private placement for a consideration of
         $300,000.   The  Company  also  issued  during  the  quarter  5,100,000
         restricted  common shares valued at $683,400 as  consideration  towards
         the  purchase of 30% equity  interest in New Times  Navigation  Limited
         (See Note 8).

         Pursuant  to the terms of the  Spin-Off  Agreement  with The  Hartcourt
         Companies,  Inc.  ("Hartcourt"),  on September  25,  2002,  the Company


                                       11

<PAGE>
         issued  5,000,000  restricted  common  shares  to  Hartcourt  valued at
         $320,000 based on the market value on the date of issue.  On January 4,
         2003,  the Company  received  from  Hartcourt  17,895,579 of its common
         shares held by Hartcourt  pursuant to the  finalization of the terms of
         the Spin-Off Agreement. Upon consummation of the transaction on January
         4, 2003, the Company  recorded its  17,895,579  common shares as shares
         authorized but unissued  shares valued at $1,288,482.  As a part of the
         settlement,  the Company  settled a note receivable  including  accrued
         interest  thereon,  of $1,387,500  and a note payable of $349,000.  The
         Company also returned  1,000,000 shares of common stock of Hartcourt it
         was  holding,  valued at  $60,0000 to  Hartcourt  and assumed a loan of
         $140,595  from a third  party.  As a result  of the  completion  of the
         spin-off  agreement  with  Hartcourt that completed on January 4, 2003,
         the Company recorded a loss of $270,613 as loss on settlement. On March
         30, 2004, the Company cancelled  17,895,579 of its common shares valued
         at  $1,288,482  that  were  received  as  part of the  settlement  with
         Hartcourt.

NOTE 11: Basic and Diluted Net Loss Per Share
         ------------------------------------
         Basic and  diluted  net loss per share  for the  three  months  and six
         months  ended June 30, 2004 and 2003 were  determined  by dividing  net
         loss for the  periods  by the  weighted  average  number  of basic  and
         diluted shares of common stock outstanding.  Weighted average number of
         shares  used to compute  basic and  diluted  loss per share is the same
         since the effect of dilutive securities is anti-dilutive.

NOTE 12: Going Concern
         -------------
         The accompanying  financial statements have been prepared in conformity
         with  generally  accepted  accounting   principle,   which  contemplate
         continuation  of the  Company as a going  concern.  The  Company has an
         accumulated  deficit of  $9,965,547  including a net loss of $1,176,099
         for the  six  months  ended  June  30,  2004.  In  view of the  matters
         described  below,  recoverability  of a major  portion of the  recorded
         asset amounts shown in the accompanying balance sheet is dependent upon
         continued  operations of the Company,  which in turn is dependent  upon
         the Company's ability to raise additional capital, obtain financing and
         to succeed in its future operations.

         The financial statements do not include any adjustments relating to the
         recoverability  and classification of recorded asset amounts or amounts
         and  classification  of liabilities  that might be necessary should the
         Company be unable to continue as a going concern.

         Management  has taken the  following  steps to revise its operating and
         financial requirements, which it believes are sufficient to provide the
         Company with the ability to continue as a going concern. Management has
         devoted  considerable  efforts  during the period  ended June 30,  2004
         towards (i) obtaining  additional  equity financing (ii) controlling of
         salaries and general and  administrative  expenses (iii)  management of
         accounts  payable and (iv)  settlement  of vendors  debt by issuance of
         common shares.




                                       12
<PAGE>
NOTE 13: Subsequent Events
         -----------------
         On May 18, 2004,  the Company  entered  into a definitive  agreement to
         acquire a  majority  equity  interest  in  General  Systems  technology
         Limited,  known  as  WestSMS,  a  leading  mobile  value-added  service
         provider  in  China.  The  Company  will  use this  acquisition  as the
         cornerstone  in its  transition  to  higher  margin  telecommunications
         services in China.  The  acquisition  is expected to close by September
         30, 2004 after  completion of due diligence and obtaining the necessary
         regulatory approvals.

         On July 1, 2004, the Company issued  259,091  restricted  common shares
         valued at $28,500 to its officers and  directors for  compensation  for
         July 2004.

PART 1

ITEM 2   Management Discussion and Analysis or Plan of Operation

         Elephant  Talk   Communications,   Inc.  (ETCI)  is  a  facility  based
         international  long  distance  carrier  offering  highly  reliable  and
         competitively  priced  services on the  wholesale  market.  The Company
         provides    services   to    first-tier    local   and    international
         telecommunications  carriers, enabling those carriers and other service
         providers to offer voice and fax services to their  end-customers.  The
         operations  include  international  long  distance on both sides of the
         Pacific,  serving  over 20 foreign  countries  through an advanced  and
         flexible  network.  The Company has been expanding its foothold in Asia
         with  more  profitable   routes  and  the  development  of  value-added
         services,  such as PC-to-Phone  service,  voice over Internet  protocol
         (VoIP),  Broadband  Internet and Short  messaging  service  (SMS).  The
         Company is actively  pursuing new sales channels for the  higher-margin
         prepaid  calling  card  market,  expanding  from  the U.S.  to  several
         countries in South East Asia.

         Pursuant to an agreement and plan of  reorganization,  effective August
         27, 2001,  and through the  subsequent  acquisition  that  completed on
         January 4, 2002, Staruni Corporation, a California corporation acquired
         Elephant Talk Limited,  a limited  company  incorporated  in Hong Kong.
         This type of share  exchange has been treated as a capital  transaction
         accompanied by  recapitalization of Elephant Talk Limited in substance,
         rather  than  a  business   combination,   and  is  deemed  a  "reverse
         acquisition"  for  accounting  purposes  since  the  former  owners  of
         Elephant  Talk Limited  controlled  majority of the total common shares
         outstanding  immediately  following the  acquisition.  The  acquisition
         caused no change in any of the  shares of the  Company's  common  stock
         outstanding  on the  acquisition  date,  and no other  securities  were
         converted as a result of the acquisition.

         Elephant Talk Limited was  established  in Hong Kong in 1994.  Elephant
         Talk Limited owned  switching  facilities in China,  Hong Kong,  United
         States of  America,  Taiwan and  Singapore,  which now are owned by the
         Company as a result of the merger.  ETCI  utilizes  both IP and circuit
         switched   technologies   over  a   common   platform,   and   provides
         international long distance services in wholesale market principally to


                                       13
<PAGE>
         carriers;  prepaid  and post paid phone  cards;  and other  value added
         services

         Elephant Talk Limited's customers include some of the largest first and
         second  tier  telecommunications  carriers  in  the  U.S.  and  several
         carriers in South East Asia,  including  two of the four fixed  network
         operators in Hong Kong. Since its establishment,  Elephant Talk Limited
         expanded   its   network  by   installing   more   switches   and  hubs
         internationally.  Because of this,  Elephant  Talk  Limited has secured
         termination   options  outside  Asia  by  entering  into  international
         operating  agreements with foreign-based  telecommunications  carriers,
         including AT&T Corporation,  Global Crossing, Frontier Telecom Ltd. and
         MCI WorldCom Inc.

         Capitalizing  on a unique  position to gain market  share in Asia,  the
         Company has leveraged  Elephant Talk Limited's  early entrant status by
         forging a stronger  position in the People's  Republic of China ("PRC")
         by forging an increasing  number of strategic  relationships.  In 1996,
         only  one-third of Elephant Talk  Limited's  traffic  terminated in the
         PRC. The traffic  increased to  approximately  70% in 1998, and to over
         80% in  1999-2000  and  declined  ever since then.  In keeping with the
         extremely    difficult    economic    and   market    conditions    for
         telecommunications   industry  in  Hong  Kong,  the  Company   reported
         disappointing   second  quarter  operating   results.   The  management
         discussions  contained  herein refer to only the operations of Elephant
         Talk Communications, Inc. and its subsidiaries.

         On May 18, 2004,  the Company  entered  into a definitive  agreement to
         acquire a  majority  equity  interest  in  General  Systems  technology
         Limited,  known  as  WestSMS,  a  leading  mobile  value-added  service
         provider  in  China.  The  Company  will  use this  acquisition  as the
         cornerstone  in its  transition  to  higher  margin  telecommunications
         services in China.  The  acquisition  is expected to close by September
         30, 2004 after  completion of due diligence and obtaining the necessary
         regulatory approvals.

         On May 24, 2004,  the Company  completed  its purchase of 30% of all of
         the  issued  and  outstanding  shares  of  common  stock  of New  Times
         Navigation  Limited  ("New  Times")  from four  shareholders  of Renren
         Holdings Limited, parent company of New Times  ("Shareholders"),  for a
         total consideration  valued at $4,283,400.  The purchase  consideration
         was payable at the closing date of May 24, 2004 to the  Shareholders as
         follows:  $683,400 of the purchase consideration consisted of 5,100,000
         restricted  common shares valued at the five-day  average closing price
         of common shares at the closing  date, at $0.134 per common share,  and
         $3,600,000 of the purchase  consideration  to be settled by issuance of
         unsecured  Convertible   Promissory  Notes  ("Promissory  Notes").  The
         redemption  of the  Promissory  Notes is  conditional  upon the Company
         raising  money from the  public on or before  March 28,  2005.  Failing
         which, the Shareholders  shall have the right to convert the Promissory
         Notes into Company's  common shares at the agreed  conversion  price of
         $0.50 per common share.

         New Times is a subsidiary  of RenRen  Holdings  Limited,  the principal
         activities of RenRen Holdings consist of investments,  media, property,


                                       14
<PAGE>
         financial services and  entertainment.  New Times was formed to oversee
         the project of Renren TV (RTV) from the initial  stage  throughout  its
         development.  RTV is the gateway to  broadcast  24-hours  high  quality
         world-class TV programs through the broadband Internet. RTV provides 30
         channels aiming to capture Sports News,  Music,  Movies,  entertainment
         and  documentaries  confined to the Asian  market  areas such as Japan,
         Singapore,  Korea,  Mainland  China  and  Taiwan  to suit the  taste of
         oriental customers.  RTV is the first Internet protocol television that
         exists in Hong Kong to provide broadband users better-than-VCD  quality
         video through the broadband network at a minimum cost.  Broadband TV is
         a new form of entertainment providing interactive media content through
         broadband Internet.  Providing media through Internet is cost effective
         and  highly  efficient  while  giving  customers  other  choice  on  TV
         programs.  Broadband TV is still in its maturity  stage and the current
         lack of  regulations  in this sector may hamper our  operations in this
         market.  Nevertheless,  we believe  such  limitations  will ease in the
         future and allow more room for product development.

         Results of Operations: The results of operations of the Company for the
         three  months  and six  months  ended June 30,  2004  consisted  of the
         operations of ETCI, its wholly owned  subsidiary  Elephant Talk Limited
         and its 30% equity investment in New Times Navigation  Limited from May
         24, 2004 (date of acquisition). The results of operations for the three
         months and six months ended June 30, 2003  consisted of the  operations
         of ETCI,  its wholly owned  subsidiary  Elephant  Talk  Limited,  and a
         35.42%  equity  investment  in ETNS  Singapore  Pte,  Ltd.  The Company
         reported net losses of $732,603 and $1,176,099  during the three months
         and six months ended June 30, 2004  compared to  net losses of $546,799
         and $1,154,032 for the same periods in 2003.

         Revenues  and  Cost of  revenues:  The  Company  reported  revenues  of
         $172,113 and $351,980 during the three months and six months ended June
         30, 2004  compared to $148,310  and  $524,460  for the same  periods in
         2003. Revenues consisted of  telecommunications  services such as voice
         and data  transmission  like IDD,  pre-paid  calling  cards,  eTalk and
         facsimile  services  provided  to a wide range of  customers  including
         major  telecommunication  companies  to  retail  customers  in the  US,
         Europe,  China,  Indonesia,  New  Zealand  and  Hong  Kong.  The  major
         component in the decline of revenues during the current year comes from
         price  competition for long distance business voice services and a loss
         of a number of key  customers.  The  Company's  international  business
         continues to experience  significant  pricing pressure on its products.
         The sales  decline  was also a result of SARS in Hong Kong in 2003 when
         new  customers  acquisition  campaigns  were  postponed.  The wholesale
         market  continued  to be  extremely  price  competitive,  and this,  in
         addition to  bankruptcies  in some  customers and industry  players,  a
         reduction in circuits  connected to customers related to their internal
         network   consolidation,   contributed   to  the   quarter-over-quarter
         decrease.   Wholesale  revenues  during  2004  were  also  impacted  by
         continuous  proactive revenue  initiatives,  which were made to improve
         the quality of the wholesale  revenue stream as the Company shifted its
         focus from revenue growth to cash generation.

         Part of the Company's  revenue reduction is attributable to a strategic
         decision on the Company's part to  de-emphasize  certain  services with


                                       15

<PAGE>
         longer settlement terms (such as certain  wholesale  customers and most
         retail   post-paid   customers).   Partially   offsetting   the   items
         contributing  to the decrease in total revenue was the  introduction of
         eTalk - a PC to phone service  offered in China  through  pre-paid call
         arrangements, which saw a slight revenue increase in the quarter and is
         expected  to  be  more   significant   in  future   quarters  from  the
         introduction of chat-line services.

         Cost of revenue was  $159,167 and $274,986 for the three months and six
         months  ended June 30, 2004  compared to $95,673 and  $462,487  for the
         same periods in 2003. Cost of revenues  included the costs in providing
         resale  arrangements  with long  distance  service  providers,  cost of
         leasing  transmission  facilities,  international  gateway switches for
         voice, data  transmission and facsimile  services and discounts offered
         on eTalk cards sold.  Gross margins for the three months and six months
         ended June 30, 2004 was 7.5% and 21.9%  compared to 35.5% and 11.8% for
         the same  periods in 2003.  The  increase  in gross  margin for the six
         months ended June 30, 2004 was due to the change in the revenue mix for
         the services  provided to the customers as well as the direct result of
         the pricing  pressure in the telecom  markets  without  adequate volume
         offsets.  The unexpired fixed facility contracts had adversely impacted
         our cost since we  accounted  for  facility  lines not used through our
         re-focus,  the impact  would be on a  short-term  basis as most of such
         contracts  expired  in  2003.  Although  our  mix  improved  towards  a
         preferred   blend  of  pre-paid  mode  versus   post-paid   mode,   our
         international  business  continues to  experience  significant  pricing
         pressure  on  its   products.   Both  the  local   voice   revenue  and
         long-distance   revenue  decreases  were   significantly   impacted  by
         continued  weakness  in the  telecommunications  industry  and  ongoing
         economic  and  competitive  pressures  from  other   telecommunications
         services providers in Hong Kong and the world.

         Selling,  general and administrative  expenses (S,G&A):  S,G&A expenses
         were $747,618 and  $1,404,930 for the three months and six months ended
         June 30, 2004 compared to $516,194 and $764,072 for the same periods in
         2003.  S,G&A expenses as a percentage of revenues  increased during the
         three  months and six months  ended June 30, 2004  compared to the same
         periods in 2003,  primarily due to the Company's revenue base reduction
         by 33% and Company paying $588,440 in fees to consultants and financial
         advisors for identifying  potential  targets for  acquisitions in VoIP,
         broadband and SMS business.  The Company also provided for an allowance
         for  uncollectible  debt from an affiliate for $285,283  during the six
         months ended June 30, 2004 as the Company had guaranteed  payments on a
         promissory  note  signed by the  affiliate.  Furthermore,  the  Company
         reduced  its  payroll  and  other  expenses  through  right-sizing  the
         organization. Depreciation expense was $43,244 for the six months ended
         June 30, 2004 compared to $126,542 for the same period in 2003.

         Other Income and Expenses:  The Company  settled its debts with vendors
         and  recorded a gain of $227,655  during the six months  ended June 30,
         2004. No such settlements were made during the same period in 2003. The
         Company  recorded a loss of  $9,500  on its  equity  investment  in New
         Times from May 24, 2004 (date of  acquisition)  to June 30,  2004.  The
         Company  sold its equity  investment  in ETNS  Singapore  Pte,  Ltd. in
         January  2004 and did not earn any gain or loss  during  the six months


                                       16
<PAGE>
         ended  June 30,  2004.  The  Company  recorded a loss of $32,999 on its
         equity  investment  for the six months ended June 30, 2003.  Due to the
         completion of spin-off with  Hartcourt on January 4, 2003,  the Company
         cancelled its  promissory  note and recorded a loss of $270,613 as part
         of the final settlement upon  separation.  Interest expense for the six
         months ended June 30, 2004 was $22,274 compared to $21,368 for the same
         period in 2003.

         Liquidity and Capital Resources:  The Company believes that current and
         anticipated  future cash  requirements for the next three months cannot
         be met with the cash on hand and from revenue from current customers to
         fund the  internal  operations.  The Company  plans to raise  necessary
         funds by  selling  its own  common  shares to  selected  investors  and
         bringing in business  partners whose  contributions  include  necessary
         cash.  The issuance of additional  common stock will result in dilution
         of our existing shareholders. There can be no assurance that additional
         funding will be available on favorable  terms,  if at all. No assurance
         can be given, however, that the Company will have access to the capital
         markets in future,  or that  financing  will be available on acceptable
         terms to satisfy the Company's  cash  requirements  needed to implement
         its business strategies.  The Company's inability to access the capital
         markets or obtain  acceptable  financing could have a material  adverse
         affect on its results of operations and financial condition,  and could
         severely threaten the Company's ability as a going concern.

         The  Company's  forecast  of the  period  of  time  through  which  its
         financial  resources  will be adequate to support its  operations  is a
         forward-looking  statement that involves risks and  uncertainties,  and
         actual results could vary as a result of a number of factors.

         Operating activities:  Net cash used in operating activities during the
         six month period amounted to $517,018  primarily due to the decrease in
         prepaid expenses and carrier deposits of $13,004,  decrease in accounts
         receivable  of $15,883,  decrease in cash  overdraft of  $420,040,  and
         decrease in accounts payable, accrued expenses and deferred revenues of
         $377,866.  Additionally, the Company's current liabilities exceeded its
         current  assets  by  $688,749  at June  30,  2004.  These  factors  and
         ElephantTalk's  inability  to meet its debt  obligations  from  current
         operations,  and the need to raise  additional  funds to accomplish its
         objectives,  create a substantial doubt about ElephantTalk's ability to
         continue as a going concern.

         Investing activities.  Net cash provided by investing activities during
         the six months  ended June 30,  2004 was $95,750  primarily  due to the
         sale of Company's equity interest in ETNS Singapore Pte, Ltd.

         Financing activities.  Net cash provided by financing activities during
         the six months  ended June 30,  2004 was  $442,266.  The  Company  sold
         2,000,000  restricted  common  shares  to an  accredited  investor  for
         $300,000,  received  $186,617 from related parties and made payments of
         $30,033  towards  notes  payable  and  $14,018 in  payments  on capital
         leases.

         As a result of the above  activities,  the  Company  experienced  a net
         increase in cash of $16,506 for the six months ended June 30, 2004. The


                                       17
<PAGE>
         ability  of  the Company  to  continue  as a  going  concern  is  still
         dependent on its success in  obtaining  additional  financing  from the
         institutional  investors or by selling its common shares and fulfilling
         its plan of restructuring as outlined above.




PART 1

ITEM 3   Controls and Procedures

         Evaluation of disclosure controls and procedures: The Company maintains
         controls and procedures designed to ensure that information required to
         be  disclosed in this report is recorded,  processed,  accumulated  and
         communicated to our management,  including our chief executive  officer
         and our chief financial  officer,  to allow timely decisions  regarding
         the required disclosure. Within the 90 days prior to the filing date of
         this  report,  our  management,  with the  participation  of our  chief
         executive  officer  and  chief  financial   officer,   carried  out  an
         evaluation  of the  effectiveness  of the design and operation of these
         disclosure  controls and procedures.  Our chief  executive  officer and
         chief  financial  officer  concluded,  as of fifteen  days prior to the
         filing  date  of  this  report,  that  these  disclosure  controls  and
         procedures are effective.

         Changes  in  internal  controls:  Subsequent  to the date of the  above
         evaluation,  the Company  made no  significant  changes in its internal
         controls or in other  factors  that could  significantly  affect  these
         controls,  nor did it take any  corrective  action,  as the  evaluation
         revealed no significant deficiencies or material weaknesses.



























                                       18
<PAGE>
               ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
                          OTHER INFORMATION (UNAUDITED)
                                  JUNE 30, 2004
PART II

ITEM 1   Legal Proceedings

         None

ITEM 2   Changes in Securities

         During the six months ended June 30, 2004, the Company issued 1,227,991
         common  shares  valued at $221,000 as  compensation  to  directors  for
         salaries and fees for  attending  Board  meetings.  The Company  issued
         644,005  common  shares  valued at  $154,561 to certain  directors  and
         related  parties  as  settlement  of their  debts to the  Company,  and
         4,883,424  common  shares  valued  at  $1,016,462  to  consultants  for
         providing  consulting  services  and  vendors for  settlement  of their
         debts. The Company issued 2,000,000 restricted (under Rule 144 one year
         restriction)   common  shares  under  a  stock  sale  agreement  to  an
         accredited investor under a private placement for cash consideration of
         $300,000. The Company issued 5,100,000 common shares valued at $683,400
         as partial consideration towards purchase of 30% investment interest in
         New Times  Navigations  Limited.  Furthermore,  the  Company  cancelled
         17,895,579 common shares valued at $1,288,482 that was received as part
         of its settlement with Hartcourt.

ITEM 3   Defaults Upon Senior Securities

         Not applicable

ITEM 4   Submission of Matters to Vote of Securities Holders

         None

ITEM 5   Other Information

         None

ITEM 6   Exhibits and Reports on Form 8-K

         a) Exhibits
         None

         b) Reports on Form 8-K

            o  On  May  14,  2004,   change  of  independent  Certified   Public
               Accountants, Film No. 04804308.  Incorporated by reference.

            o  On  June 2, 2004,  acquisition  of  New Times Navigation Limited,
               Film No. 04844014.  Incorporated by reference.






                                       19
<PAGE>
               ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
                          OTHER INFORMATION (UNAUDITED)
                                  JUNE 30, 2004


                                    SIGNATURE

In accordance  with the  requirements  of the Exchange Act, the  registrant  has
caused  this  report  signed on its behalf by the  undersigned,  thereunto  duly
authorized.



                                        Elephant Talk Communications, Inc.

Date:  August 16, 2004                  By: /s/ Russelle Choi
                                        --------------------------------
                                        Russelle Choi
                                        President & Chief Executive Officer






































                                       20