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: March 31, 2005

   [ ] 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 May 15, 2005, Elephant Talk Communications,  Inc. had 80,943,004 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
                                 March 31, 2005
                                                                        Page
PART 1  FINANCIAL INFORMATION                                           ----

Item 1. Financial Statements

        Consolidated Balance Sheet at March 31, 2005 (Unaudited)           3

        Consolidated Statements of Operations for the Three Months
        ended March 31, 2005 and 2004 (Unaudited)                          5

        Consolidated Statements of Cash Flows for the Three Months
        ended March 31, 2005 and 2004 (Unaudited)                          6

        Notes to the Consolidated Financial Statements (Unaudited)         7

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations                               14

Item 3. Controls and Procedures                                           21


PART II OTHER INFORMATION

Item 1. Legal Proceedings                                                 22

Item 2. Changes in Securities                                             22

Item 3. Defaults upon Senior Securities                                   22

Item 4. Submission of Matters to Vote of Security Holders                 22

Item 5. Other Information                                                 22

Item 6. Exhibits and Reports on Form 8-K                                  22

Signatures and Certifications                                             23














                                       2
<PAGE>
Part 1 FINANCIAL INFORMATION
Item 1. Financial Statements

                  ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
                              CONSOLIDATED BALANCE SHEET
                                    MARCH 31, 2005
                                      (UNAUDITED)

                                        ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                   $     207,758
  Accounts receivable, net                                          200,739
  Due from related parties                                            9,644
  Prepaid expenses and other current assets                          48,676
                                                              -------------
         Total Current Assets                                       466,817
                                                              -------------
PROPERTY AND EQUIPMENT - NET                                        119,431

OTHER ASSETS
  Goodwill                                                        1,360,248
  Earnest deposit for acquisitions                                3,830,969
                                                              -------------
         Total Other Assets                                       5,191,217
                                                              -------------
TOTAL ASSETS                                                  $   5,777,465
                                                              =============

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY

CURRENT LIABILITIES
  Overdraft                                                   $     135,823
  Accounts payable and customer deposits                            134,423
  Advances from third party                                       4,000,000
  Deferred revenue                                                  122,991
  Accrued expenses and other payable                                 99,532
  Current portion of note payable                                   816,339
  Due to related parties                                            190,795
                                                              -------------
     Total Current Liabilities                                    5,499,903

LONG-TERM LIABILITIES
  Note payable                                                      316,670
                                                              -------------
TOTAL LIABILITIES                                                 5,816,573
                                                              -------------
MINORITY INTEREST                                                   118,722
                                                              -------------
COMMITMENT AND CONTINGENCIES                                              -






   The accompanying notes are an integral part of these financial statements.
                                       3
<PAGE>
                  ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
                         CONSOLIDATED BALANCE SHEET (Continued)
                                    MARCH 31, 2005
                                      (UNAUDITED)


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,  56,170,206 issued and outstanding                 10,086,748
Common stock, no par value, 19,137,500 shares
  issued for acquisition                                            956,875
Accumulated comprehensive loss                                      (10,958)
Accumulated deficit                                             (11,190,495)
                                                              -------------
        Total Stockholders' Deficiency                             (157,830)
                                                              -------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                $   5,777,465
                                                              =============



































   The accompanying notes are an integral part of these financial statements.
                                       4
<PAGE>
               ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
               FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
                                   (UNAUDITED)
                                                        2005            2004
REVENUES                                             -----------   -----------
 Telecommunication products                              123,833       179,867
 Technical services                                      176,325             -
                                                     -----------   -----------
       Total Revenues                                    300,158   $   179,867

COST OF REVENUE
 Telecommunication products                               92,611       115,819
 Technical services                                            -             -
                                                     -----------   -----------
       Total Cost of Revenue                              92,611       115,819

                                                     -----------   -----------
GROSS PROFIT                                             207,547        64,048
                                                     -----------   -----------
OPERATING EXPENSES
 Selling, general and administrative                     385,066       657,312
 Depreciation and amortization                            18,443        66,549
                                                     -----------   -----------
       Total Operating Expenses                          403,509       723,861
                                                     -----------   -----------
LOSS FROM OPERATIONS                                    (195,962)     (659,813)

OTHER INCOME (EXPENSE)
 Interest income                                             487             -
 Interest expense                                         (8,339)      (10,538)
 Gain on settlement of vendor payables                         -       227,655
                                                     -----------   -----------
       Total Other Income (Expense)                       (7,852)      217,117
                                                     -----------   -----------
LOSS BEFORE INCOME TAXES                                (203,814)     (442,696)
 Income taxes                                                800           800
LOSS FROM CONTINUING OPERATIONS BEFORE MINORITY      -----------   -----------
  INTEREST                                              (204,614)     (443,496)

Income in subsidiary attributable to minority interest    67,639             -
                                                     -----------   -----------
NET LOSS                                             $  (272,253)  $  (443,496)

OTHER COMPREHENSIVE INCOME (LOSS)
  Foreign currency translation gain (loss)                   644          (811)
                                                     -----------   -----------
                                                             644          (811)
                                                     -----------   -----------
COMPREHENSIVE LOSS                                   $  (271,609)  $  (444,307)
                                                     ===========   ===========
Net loss per common share and equivalents -
  basic and diluted                                  $     (0.00)  $     (0.01)
                                                     ===========   ===========
Weighted average shares outstanding during
  the period -  basic and diluted                     67,319,573     52,423,907
                                                     ===========    ===========

   The accompanying notes are an integral part of these financial statements.
                                       5
<PAGE>
                ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE THREE MONTHS ENDED MARCH 31, 2005 AND 2004
                                   (UNAUDITED)
                                                             2005        2004
CASH FLOWS FROM OPERATING ACTIVITIES:                   ------------ -----------
 Net loss                                               $  (272,253) $ (443,496)
 Adjustments to reconcile net loss to net cash
 used in operating activities:
 Depreciation and amortization                               18,443      66,549
 Minority interest in subsidiary                             67,638
 Issuance of stock for compensation and services            220,000     110,500
 Issuance of stock for consulting services                   20,000     128,640
 Provision for uncollectible amounts                          5,682     285,283
 Changes in operating assets and liabilities:
  (Increase) Decrease in accounts receivable               (180,315)    (27,835)
  Decrease in prepaid expenses, deposits and other assets    28,844      45,788
  Decrease in accounts payable and customer deposits        (61,295)    (57,498)
  Increase (Decrease) in deferred revenue                     3,103     (80,908)
  Increase (Decrease) in accrued expenses and other payable  22,131    (182,362)
  Increase (Decrease) in cash overdraft                       3,012    (339,857)
                                                        -----------  ----------
     Net cash used in operating activities                 (125,009)   (495,196)
                                                        -----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
 Purchase of property and equipment                          (9,817)          -
 Earnest deposit on acquisitions                         (3,830,969)          -
 Proceeds from acquisition of True Precise                  127,711           -
 Proceeds from sale of investment                                 -     100,953
                                                        -----------  ----------
   Net cash provided by (used in) investing activities   (3,713,075)    100,953
                                                        -----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
 Advances received for acquisitions                       4,000,000           -
 Payment on notes payable                                   (27,608)    (15,093)
 Proceeds from sale of shares                                     -     300,000
 Proceeds from related parties, net                           5,175     203,139
                                                        -----------  ----------
   Net cash provided by financing activities              3,977,567     488,046
                                                        -----------  ----------
EFFECT OF EXCHANGE RATES ON CASH                                644        (811)

NET INCREASE IN CASH                                        140,127      92,992
CASH, BEGINNING OF THE YEAR                                  67,631       8,282
                                                        -----------  ----------
CASH, END OF THE YEAR                                   $   207,758  $  101,274
                                                        ===========  ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
--------------------------------------------------
Cash paid during the period for interest                $     8,339  $   10,538
Cash paid during the period for income taxes            $       800  $      800





   The accompanying notes are an integral part of these financial statements.
                                       6

<PAGE>
               ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 MARCH 31, 2005
                                   (UNAUDITED)

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 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.

     On January 5, 2005, the Company completed the purchase of 60% of the equity
     ownership  interest in True Precise  Technology  Limited ("True Price"),  a
     limited liability company  registered in British Virgin Islands,  from Keen
     Solution Group Limited in a stock swap  arrangement.  As consideration  for
     the acquisition,  on July 26, 2004, the Company issued 4,000,000 restricted
     common shares to Keen Solution  valued at $480,000 as the earnest  deposit.
     On May 10, 2005,  the Company  issued an additional  19,137,500  restricted
     Common  Shares  valued  at  $1,366,862  as  the  remaining  balance  of the
     consideration.  Upon completion of the acquisition on January 5, 2005, True
     Precise  became a majority  owned  subsidiary of the Company.  True Precise
     through its wholly  owned  subsidiary,  Urumqi  Jingyi  Technology  Limited
     ("UJT") provides exclusive  technical  consulting and advisory services for
     development and integration of data communications and information systems.

                                       7
<PAGE>
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 2004 Form 10-KSB.

     The audited  consolidated  financial statements of the Company for the year
     ended December 31, 2004 were filed on April 1, 2005 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 ended March 31, 2005,  are
     not  necessarily  indicative  of the results to be expected  for the entire
     year.  Certain 2004 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
     ended March 31, 2005 included the accounts of Elephant Talk Communications,
     Inc.,  its 100% wholly owned  subsidiary  Elephant Talk Limited and its 60%
     owned  subsidiary  True  Precise  Technology   Limited.   The  consolidated
     financial  statements  for the same period in 2004 included the accounts of
     Elephant Talk  Communications,  Inc., and its 100% wholly owned  subsidiary
     Elephant  Talk  Limited.   All  significant   inter-company   accounts  and
     transactions have been eliminated in consolidation.

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 three months ended March 31, 2005, the Company issued  3,801,525
     common shares valued at $220,000 as  compensation to directors for salaries
     and fees for attending  Board  meetings.  The Company issued 400,000 common
     shares  valued at $20,000 to a  consultant  for  providing  consulting  and
     management advisory services.


                                       8
<PAGE>
NOTE 6:  Recent Pronouncements
         ---------------------
     In December  2004,  the FASB issued FASB  Statement No. 123R,  "Share-Based
     Payment,  an Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No.
     123R requires  companies to recognize in the  statement of  operations  the
     grant- date fair value of stock options and other equity-based compensation
     issued to employees.  FAS No. 123R is effective  beginning in the Company's
     second  quarter of fiscal 2006. The Company is in process of evaluating the
     impact of this pronouncement on its financial position.

     In December  2004,  the FASB issued SFAS  Statement No. 153,  "Exchanges of
     Non-monetary  Assets." The  Statement is an amendment of APB Opinion No. 29
     to eliminate the exception for non-monetary exchanges of similar productive
     assets  and  replaces  it  with  a  general   exception  for  exchanges  of
     non-monetary  assets  that do not have  commercial  substance.  The Company
     believes that the adoption of this standard will have no material impact on
     its financial statements.

     In March 2004, the Emerging Issues Task Force ("EITF")  reached a consensus
     on Issue No. 03-1, "The Meaning of Other-Than-Temporary  Impairment and its
     Application to Certain Investments." The EITF reached a consensus about the
     criteria that should be used to determine  when an investment is considered
     impaired,   whether  that  impairment  is  other-than-temporary,   and  the
     measurement of an impairment  loss and how that criteria  should be applied
     to  investments  accounted  for under SFAS No. 115  "Accounting  in certain
     investments  in debt and  equity  securities".  EITF  03-01  also  included
     accounting    considerations    subsequent    to   the    recognition    of
     other-than-temporary  impairment  and requires  certain  disclosures  about
     unrealized  losses that have not been  recognized  as  other-than-temporary
     impairments.  Additionally, EITF 03-01 includes new disclosure requirements
     for investments  that are deemed to be temporarily  impaired.  In September
     2004,  the  Financial   Accounting   Standards  Board  (FASB)  delayed  the
     accounting  provisions of EITF 03-01;  however the disclosure  requirements
     remain effective for annual reports ending after June 15, 2004. The Company
     will evaluate the impact of EITF 03-01 once final guidance is issued.

NOTE 7:  Advance from Third Parties
         --------------------------
     On Jan 17, 2005,  the Company  signed a Memorandum of  Understanding  (MOU)
     with an investment holding company in Europe whereby the investment holding
     company  agreed to  acquire  195,947,395  restricted  Common  Shares of the
     Company for  $7,837,896.  On March 3, 2005, the investment  holding company
     advanced the Company $3,900,000 as its earnest deposit towards its purchase
     of the Company's  195,947,395 Common Shares. The Company and the investment
     holding company are conducting their due diligence of each other and expect
     to sign a definitive  agreement by June 15, 2005 upon  completion  of their
     due diligence. The investment holding company will own approximately 58% of
     the  outstanding  Common  Shares  of the  Company  upon  completion  of the
     transaction. The Company has recorded the advance under current liabilities
     in the accompanying financial statements at March 31, 2005.

     On January 28, 2005, an investor based in Europe  advanced  $100,000 to the
     Company as an  unsecured  loan  payable  within six months from the date of
     advance.  The Company has recorded the advance under current liabilities in
     the accompanying financial statements at March 31, 2005.


                                       9
<PAGE>
NOTE 8:  Earnest Deposits for Acquisitions
         ---------------------------------
     On January 17, 2005, the Company entered into a Memorandum of Understanding
     ("MOU") with an investor  based in Europe  whereby,  the Company  agreed to
     acquire all of the issued and outstanding shares of a European telecom from
     the  investor.  On March 10, 2005,  the Company made an earnest  deposit of
     $3,640,000  to the investor for its  proposed  acquisition  of the European
     telecom.  On March 30, 2005, the Company advanced an additional  $65,000 to
     the European telecom for its working capital  requirements.  The Company is
     conducting  its due diligence of its proposed  acquisition  of the European
     telecom and expects to execute a definitive  agreement  upon  completion of
     its due diligence.

     On March 30,  2005,  the Company  made an earnest  deposit of $125,969 to a
     telecommunications service provider, a company registered in British Virgin
     Islands,  for its proposed  acquisition of 100% of equity  ownership of the
     telecom  service  provider's  business.  The Company is conducting  its due
     diligence  of the  telecom  service  provider  and  expects  to  execute  a
     definitive agreement upon completion of its due diligence.

     The Company has recorded $3,830,969 as earnest deposits for acquisitions in
     the accompanying financial statements as of March 31, 2005.


NOTE 9:  Investment in True Precise Technology Ltd.
         ------------------------------------------
     On April 3, 2004, the Company  signed a Share  Exchange  Agreement with its
     intent to acquire 60% of the equity  ownership  interest in Urumqi  General
     Systems  Technology  Company  Ltd., a company  registered  in PRC from Keen
     Solution  Group Limited (Keen  Solution),  a company  registered in British
     Virgin  Island.  The  transaction  was  restructured  whereas Keen Solution
     formed  True  Precise  Technology  Limited  ("True  Precise"),   a  limited
     liability  company  registered in British  Virgin  Island,  as a vehicle to
     complete  the  Company's  acquisition.  On  January 5,  2005,  the  Company
     completed  its purchase of 60% equity  ownership  interest in True Precise,
     from Keen Solution in a Share Exchange Agreement.  As consideration for the
     acquisition,  on July 26, 2004, the Company had issued 4,000,000 restricted
     common shares to Keen Solution  valued at $480,000 as the earnest  deposit.
     On May 10, 2005,  the Company  issued an additional  19,137,500  restricted
     Common  Shares  valued  at  $956,875  as  the  remaining   balance  of  the
     consideration   to  complete  its   obligation.   Upon  completion  of  the
     acquisition  on January  5,  2005,  True  Precise  became a majority  owned
     subsidiary of the Company.


     Consideration paid for True Precise Technology Ltd.:
                                                                    2005
                                                                -----------

     Common Shares issued - 23,137,500 shares                   $ 1,436,875
                                                                ===========






                                       10

<PAGE>

     Fair value of net assets received
          on acquisition date:                                 January 5, 2005
                                                                  -----------
     Cash                                                           $ 127,711
                                                                  -----------
                                                                      127,711
     Minority interest                                                (51,084)
                                                                  -----------
                                                                       76,627
     Goodwill                                                       1,360,248
                                                                  -----------
     Total consideration paid                                     $ 1,436,875
                                                                  ===========

NOTE: 10:  Segment Information
           -------------------
     The Company complies with SFAS No. 131,  "Disclosures  about Segments of an
     Enterprise  and  Related  Information."  Based upon  definitions  contained
     within SFAS No. 131,  the  Company has  determined  that it operates in two
     segments consisting of Telecommunications Products and Technical Consulting
     Services.  The Company evaluates  performance based on sales,  gross profit
     margins and operating  profits.  All  inter-segment  transactions have been
     eliminated in the consolidated financial statements.

<TABLE>
                                            Telecom-     Technical      Corporate
                                          munications    Consulting        and
     Segment Information                    Products      Services        Other           Total
                                          -----------   -----------    -----------    -----------
     <S>                                  <C>           <C>            <C>            <C>
     Three months ended March 31, 2005:
     Revenue                              $   176,325   $   123,833    $      --      $   300,158
                                          -----------   -----------    -----------    -----------

     Income (Loss) from operations        $  (169,097)  $   143,603    $  (229,308)   $  (203,814)
                                          -----------   -----------    -----------    -----------

     Depreciation & amortization          $    18,343   $      --      $       100    $    18,443
                                          -----------   -----------    -----------    -----------

     Assets                               $   277,815   $   296,806    $ 6,711,824    $ 7,286,445
                                          -----------   -----------    -----------    -----------

     Capital expenditures                 $     9,817   $      --      $      --      $     9,817
                                          -----------   -----------    -----------    -----------


     Three months ended March 31, 2004:
     Revenue                              $   179,867   $      --      $      --      $   179,867
                                          -----------   -----------    -----------    -----------

     Income (Loss) from operations        $  (184,766)  $      --      $  (257,930)   $  (442,696)
                                          -----------   -----------    -----------    -----------

     Depreciation & amortization          $    66,449   $      --      $       100    $    66,549
                                          -----------   -----------    -----------    -----------

     Assets                               $   480,337   $      --      $     5,304    $   485,641
                                          -----------   -----------    -----------    -----------

     Capital expenditures                 $      --     $      --      $      --      $      --
                                          -----------   -----------    -----------    -----------
</TABLE>
                                       11


NOTE 11: Related Party Transactions
         --------------------------
     The Company has advanced  funds  amounting to $374,389 to entities that the
     Company's officers and/or  shareholders have an ownership interest in prior
     to 2002.  The  Company  has  provided  a reserve  for  uncollectible  funds
     amounting to $364,745 for such funds advanced as of March 31, 2005.

     The Company's  affiliate had signed a promissory note of $408,975 which was
     fully guaranteed by the Company. The note requires a monthly installment of
     $12,535 with the remaining  balance due on December 24, 2006. The affiliate
     is in  arrears  in  making  monthly  payments,  and in case of  default  of
     payments on the  promissory  note, the Company will be obligated to pay the
     unpaid  balance  of the note in  full.  The  Company  has  provided  a full
     allowance for the unpaid balance of $336,970 on the promissory  note in the
     accompanying financial statements at March 31, 2005.

NOTE 12: Stockholders' Equity
         --------------------
     Issuance of common stock: During the three months ended March 31, 2005, the
     Company issued  3,801,525  common shares valued at $220,000 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, 2005.  The  Company  issued
     400,000  common  shares  valued at $20,000 to a  consultant  for  providing
     consulting and advisory services.  The common shares were valued at the ten
     day average market closing price from the date of issuance.

     Pursuant to cancellation  of Company's  investment in New Times in December
     2004, the  shareholders of New Times were required to return to the Company
     5,100,000 common shares as part of Company's  consideration towards its 30%
     investment  interest  in New Times.  On  February  22,  2005,  the  Company
     cancelled 2,252,500 common shares received from New Times shareholders. The
     Company expects to receive and cancel the remaining 2,847,500 common shares
     held by New Times  shareholders,  by June 15,  2005.  The Company has taken
     protective  measures to ensure that the remaining  2,847,500  common shares
     are restricted and non tradable as of March 31, 2005.

     On  January 5, 2005,  the  Company  completed  its  purchase  of 60% equity
     ownership  interest in True Precise from Keen Solution in a stock  exchange
     agreement.  As  consideration  for the  acquisition,  on July 26, 2004, the
     Company issued 4,000,000  restricted  common shares to Keen Solution valued
     at $480,000 as its earnest deposit.  Although the acquisition was completed
     on January 5, 2005, the Company issued the remaining additional  19,137,500
     restricted  Common Shares  valued at $956,875 on May 10, 2005.  The Company
     recorded its  Investment in True Precise at $1,436,875 as of March 31, 2005
     in the accompanying financial statements.

NOTE 13: Basic and Diluted Net Loss Per Share
         ------------------------------------
     Basic and diluted net loss per share for the three  months  ended March 31,
     2005 and 2004 was  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.

                                       12
<PAGE>
NOTE 14: Employee Benefit Plan
         ---------------------
     The Company  adopted an employee  benefit plan "The 2000  Employee  Benefit
     Plan" (the "Plan") on May 30, 2000.  Under the Plan,  the Company may issue
     shares or grant  options to acquire  the  Company's  common  stock,  no par
     value,  from time to time to employees of the Company or its  subsidiaries.
     In addition,  at the  discretion of the Board of  Directors,  shares may be
     granted  under this Plan to other  individuals,  including  consultants  or
     advisors, who contribute to the success of the Company or its subsidiaries,
     provided  that bona fide  services  shall be  rendered by  consultants  and
     advisors and such  services  must not be in  conjunction  with the offer or
     sale of securities in a capital raising transaction. No stock may be issued
     or options granted under the Plan to consultants, advisors or other persons
     who directly or  indirectly  promote or maintain a market for the Company's
     securities.  The Plan is  intended to aid the  Company in  maintaining  and
     developing a management team,  attracting  qualified officers and employees
     capable of assuring the future success of the Company,  and rewarding those
     individuals who have contributed to the success of the Company. The Plan is
     administrated  under the  direction of the Board of  Directors.  A total of
     4,000,000  (four million)  common shares and 4,000,000 (four million) stock
     options to acquire common shares may be subject to, or issued  pursuant to,
     benefits  granted  under the Plan.  At any time any stock option is granted
     under the terms of this Plan,  the Company  will  reserve for  issuance the
     number of shares of Stock  subject to such option  until it is exercised or
     expired.  The Plan  Administrator  shall  determine  from  time to time the
     terms,  conditions and price of the options  granted.  Options shall not be
     construed to be stock and cannot be exercised  after the  expiration of its
     term.  Under the Plan,  300,000 shares of common stock and 4,000,000  stock
     options remain available for grant at March 31, 2005.

NOTE 15: 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
     $11,190,495  including a net loss of $272,253  for the three  months  ended
     March 31, 2005. This raises a substantial doubt about the Company's ability
     to continue as a going  concern.  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 March 31, 2005 towards
     (i) obtaining  additional equity financing (ii) controlling of salaries and
     general and  administrative  expenses (iii)  management of accounts payable
     (iv)  settlement  of  vendors  debt by  issuance  of common  shares and (v)
     acquire profitable companies that bring synergies to the Companies products
     and services.
                                       13
<PAGE>
NOTE 16: Subsequent Events
         -----------------
     On  April  1,  2005 and May 8,  2005,  the  Company  issued  1,685,714  and
     1,102,084  restricted  common shares valued at $106,000 to its officers and
     directors for compensation for April and May 2005.

     On May 10, 2005, the Company  issued  19,137,500  restricted  common shares
     valued at $956,875 as remaining  consideration  towards its purchase of 60%
     ownership interest in True Precise.


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.

     On April 3, 2004, the Company  signed a Share  Exchange  Agreement with its
     intent to acquire 60% of the equity  ownership  interest in Urumqi  General
     Systems  Technology  Company  Ltd., a company  registered  in PRC from Keen
     Solution  Group Limited (Keen  Solution),  a company  registered in British
     Virgin  Island.  The  transaction  was  restructured  whereas Keen Solution
     formed  True  Precise  Technology  Limited  ("True  Precise"),   a  limited
     liability  company  registered in British Virgin  Islands,  as a vehicle to
     complete  the  Company's  acquisition.  On  January 5,  2005,  the  Company
     completed  its purchase of 60% equity  ownership  interest in True Precise,
     from Keen Solution in a Share Exchange Agreement.  As consideration for the
     acquisition,  on July 26, 2004, the Company had issued 4,000,000 restricted
     common shares to Keen Solution  valued at $480,000 as the earnest  deposit.


                                       14
<PAGE>
     On May 10, 2005, the Company issued the  additional  19,137,500  restricted
     Common  Shares  valued  at  $956,875  as  the  remaining   balance  of  the
     consideration   to  complete  its   obligation.   Upon  completion  of  the
     acquisition  on January  5,  2005,  True  Precise  became a majority  owned
     subsidiary of the Company.

     True Precise's wholly owned subsidiary,  Urumqi Jingyi  Technology  Limited
     ("UJT")  signed an exclusive  service  agreement with Urumqi General System
     Technology  Ltd.   ("General   System")  to  provide  exclusive   technical
     consulting and advisory  services to General System for an agreed amount of
     management  fee payable to UJT. The primary  business of General  System is
     development and integration of data communications and information systems.
     A  significant  portion  of  General  System  business  is  generated  from
     providing short messaging  services to its subscribers in western provinces
     of China.  The Company will use this  acquisition as the cornerstone in its
     transition to higher margin telecommunications services in China.

     On January 17, 2005, the Company entered into a Memorandum of Understanding
     ("MOU") with an investor in Europe  whereby,  the Company agreed to acquire
     all of the issued and  outstanding  shares of a European  telecom  from the
     investor.  On March 10,  2005,  the  Company  made an  earnest  deposit  of
     $3,640,000  to the  investor for its  proposed  investment  in the European
     telecom.  On March 30, 2005, the Company advanced an additional  $65,000 to
     the European telecom for its working capital  requirements.  The Company is
     conducting  its due diligence of its proposed  acquisition  of the European
     telecom and expects to execute a definitive  agreement  upon  completion of
     its due diligence. The transaction is expected to close by June 15, 2005.

     The European telecom is a telecommunications service provider that provides
     various  premium rate  services  such as 0900 service and VoIP  services to
     corporations  and content  providers within the European Union. The Company
     believes that it can extract  considerable  synergies with this acquisition
     by integrating its VoIP platforms and extend its reach from China to Europe
     and vice-versa.

     The Company signed a Letter of Intent to acquire 100% of equity interest in
     a telecom service provider,  a company registered in British Virgin Islands
     with administrative offices in Vaduz, Furstentum Liechtenstein. The telecom
     service provider is a marketing vehicle for a unique low rate international
     telephone service based on the Company's technical platform. The Company is
     currently  performing its due diligence of the telecom service provider and
     plans to sign a definitive  agreement upon completion of its due diligence.
     The  transaction  is expected to close by June 30, 2005. On March 30, 2005,
     the Company  advanced  $125,969 to Phonetone as earnest deposit towards its
     acquisition.

     Results of  Operations:  The results of  operations  of the Company for the
     three months ended March 31, 2005  consisted of the operations of ETCI, its
     wholly owned subsidiary  Elephant Talk Limited and its 60% owned subsidiary
     True  Precise from  January 5, 2005 (date of  acquisition).  The results of
     operations  for the three  months ended  January 31, 2004  consisted of the
     operations of ETCI, and its wholly owned subsidiary  Elephant Talk Limited.
     The Company  reported net loss of $272,253 for the three months ended March
     31, 2005 compared to a net loss of $443,496 for the same period in 2004.



                                       15
<PAGE>
     Revenues and Cost of revenues:  The Company  reported  revenues of $300,158
     during the three months  ended March 31, 2005  compared to $179,867 for the
     same  period in 2004.  Revenues  consisted  of sales of  telecommunications
     products 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.  In  addition,  the
     Company  provided  technical  consulting  and  business  advisory  services
     relating to data  communication  and  information  systems.  The  technical
     consulting and business advisory service business  contributed  $176,325 to
     the  increase in revenues  during the three  months  period ended March 31,
     2005.

     Cost of  revenues  was $92,611  for the three  months  ended March 31, 2005
     compared to $115,819 for the same period in 2004. 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. Cost of revenues relating to telecommunication
     products were $92,611 for the three months ended March 31, 2005 compared to
     $115,819  for the same  period in 2004.  The cost of  revenues  relating to
     technical consulting and business advisory services were zero for the three
     months ended March 31, 2005. Gross margins for the three months ended March
     31, 2005 for  telecommunications  products  was $31,222 or 25%  compared to
     64,048 or 36% for the same period in 2004. The increase in gross margin for
     the three  months ended March 31, 2005 was due to the change in the revenue
     mix for the  services  provided to the  customers  in the telecom  markets.
     Although  our mix  improved  towards  providing  technical  consulting  and
     business advisory  services relating to data  communication and information
     systems,  a preferred  blend of pre-paid mode versus  post-paid mode as our
     international business continues to experience significant pricing pressure
     on its products.

     Selling,  general and administrative  expenses (S,G&A): S,G&A expenses were
     $385,066 for the three months ended March 31, 2005 compared to $657,312 for
     the same period in 2004.  S,G&A expenses  decreased during the three months
     ended March 31, 2005 compared to the same periods in 2004, primarily due to
     reduction  its  payroll  and  other  expenses   through   right-sizing  the
     organization.  Depreciation  expense was $18,443 for the three months ended
     March  31,  2005  compared  to  $66,549  for the same  period  in 2004 as a
     majority of the assets were fully depreciated in 2004.

     Other  Income and  Expenses:  Interest  expense for the three  months ended
     March 31, 2005 was $8,339  compared to $10,538 for the same period in 2004.
     The  Company  recorded a gain of  $227,655  in  settling  claims of vendors
     during  the  three  months  ended  March  31,  2004  compared  to  no  such
     settlements made during the three months ended March 31, 2005.

     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 accredited 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


                                       16
<PAGE>
     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
     three  month  period  amounted  to  $125,009  primarily  due to increase in
     accounts  receivable of $180,315,  decrease in prepaid expenses and carrier
     deposits of $28,844,  decrease in accounts payable and customer deposits of
     $61,295,  increase in accrued  expenses and other  payable of $22,131,  and
     increase  deferred  revenue  and  cash  overdraft  of  $3,103  and  $3,012.
     Additionally, the Company's current liabilities exceeded its current assets
     by $5,033,086 at March 31, 2005. These factors and the Company'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 the Company's ability to continue as a going concern.

     Investing  activities.  Net cash used in  investing  activities  during the
     three  months  ended March 31,  2005 was  $3,713,075  primarily  due to the
     Company making earnest deposits to acquire telecom companies in Europe. The
     Company received proceeds of $127,711 from its acquisition of True Precise.
     In addition,  the Company  used  proceeds to acquire  equipment  for $9,817
     during the three months ended March 31, 2005.

     Financing activities.  Net cash provided by financing activities during the
     three  months  ended March 31, 2005 was  $3,977,567.  The Company  received
     $3,900,000  as advance from an investor to acquire  195,947,395  restricted
     Common Shares of the Company.  The Company made payments of $27,608 towards
     notes payable and received $5,175 from related parties.

     As a result of the above activities, the Company experienced a net increase
     in cash of $140,127 for the three months ended March 31, 2005.  The ability
     of the  Company to continue as a going  concern is still  dependent  on its
     success in obtaining additional financing from the institutional investors,
     acquiring  profitable  operations  or by  selling  its  common  shares  and
     fulfilling its plan of restructuring as outlined above.












                                       17
<PAGE>
     Critical accounting policies and estimates:
     -------------------------------------------
     Our  discussion  and  analysis  of  financial   condition  and  results  of
     operations are based on our consolidated  financial statements,  which have
     been prepared in accordance with accounting  principles  generally accepted
     in the  United  States.  The  preparation  of  these  financial  statements
     requires  us to make  estimates  and  judgments  that  affect the  reported
     amounts of assets and liabilities  and the disclosure of contingent  assets
     and liabilities at the date of the consolidated  financial statements,  and
     the reported amounts of revenue and expenses during the period reported. By
     their  nature,  these  estimates  and  judgments are subject to an inherent
     degree of  uncertainty.  We based our estimates and judgments on historical
     experience,  market  trends,  and  other  factors  that we  believed  to be
     reasonable under the circumstances. The results of these estimates form the
     basis for judgments about the carrying value of assets and liabilities that
     are not readily apparent from other sources. Actual results may differ from
     these  estimates  under  different  assumptions  or  conditions.   We  have
     discussed the  development,  selection,  and disclosure of these  estimates
     with the Audit  Committee of our Board of Directors.  We believe there have
     been no material changes to our critical  accounting policies and estimates
     during the three months ended March 31, 2005 compared to those discussed in
     our Annual Report on Form 10-KSB for the year ended December 31, 2004.

     We believe the  following  critical  accounting  policies  reflect our more
     significant  judgments  and  estimates  used  in  the  preparation  of  our
     financial statements.

     Revenue recognition.
     Our revenue  recognition  policy is  significant  because  revenue is a key
     component  of our results of  operations  and because  revenue  recognition
     determines  the  timing  of  certain  expenses,  such  as  commissions  and
     royalties.  We  derive  our  revenue  primarily  from  sales  of  technical
     consulting  services and  telecommunication  products.  As described below,
     significant  management  judgments and  estimates  must be made and used in
     connection  with  revenue  recognized  in  any  accounting  period.  If our
     management makes different judgments or uses different estimates,  material
     differences  may result in the amount  and  timing of our  revenue  for any
     period.  We  recognize  revenue from the sale of our  technical  consulting
     services and telecommunication products when:

         o      we have persuasive  evidence that an arrangement exists. For all
                sales,  we  use  a  binding   purchase  order  and  sales  order
                confirmation  as  evidence  of  an  arrangement.  Sales  through
                certain of our  distributors are evidenced by a master agreement
                governing  the  relationship,  together  with  binding  purchase
                orders on a transaction-by-transaction basis;

         o      the  revenue  is  fixed  and  determinable.  At the  time of the
                transaction,  we  assess  whether  the fee  associated  with our
                revenue  transactions  is fixed  and  determinable  based on the
                payment terms associated with the transaction.

         o      collection  of the resulting  receivable is reasonably  assured.
                We  assess collection  based on  a  number of factors, including
                past   transaction   history   with   the   customer   and   the


                                       18
<PAGE>
                credit-worthiness of the customer.  We do not request collateral
                from our customers.  If we determine that collection of a fee is
                not  reasonably  assured,  then we  defer the fee and  recognize
                revenue  at  the time  collection  becomes  reasonably  assured,
                which generally is upon receipt of cash.

     Sales return and other allowances.  In preparing our consolidated financial
     statements,  our management estimates potential  telecommunications product
     returns and records a  provision  for those  returns in the period in which
     related  revenues are recorded.  Our management  analyzes  historical sales
     returns,  current  economic  trends,  and  changes in  customer  demand and
     acceptance of our telecommunications  products when evaluating the adequacy
     of the sales returns and other allowances estimate.

     Our  arrangements  generally  do not give  customers  the  right to  return
     telecommunications   products  or  to  cancel  firm  orders  for  technical
     consulting  services.  However,  we do offer  customers the right to return
     telecommunications  products that do not function properly within a limited
     time after delivery.

     Allowance for doubtful accounts.
     Our management  estimates the  uncollectability  of our accounts receivable
     for losses that may result from the  inability of our customers and related
     party  affiliates,  (herein  referred to as  "Customers")  to make required
     payments. Management specifically analyzes accounts receivable and analyzes
     historical bad debts, Customer concentrations,  Customer credit-worthiness,
     current  economic  trends  and  changes  in  Customer  payment  terms  when
     evaluating  the adequacy of the  allowance  for doubtful  accounts.  If our
     customers'  financial  condition  deteriorates  such that it impairs  their
     ability to make payments to us, additional allowances may be required.

     Stock-based Compensation:

     The Company follows the prescribed  accounting and reporting  standards for
     all  stock-based  compensation  plans,  including  employee  stock options,
     restricted  stock,  employee stock  purchase  plans and stock  appreciation
     rights  in  accordance  with  SFAS  No.  148  "Accounting  for  Stock-Based
     Compensation". SFAS No. 148 provide alternative methods of transition for a
     voluntary  change  to  the  fair  value  based  method  of  accounting  for
     stock-based  employee  compensation.  In addition,  this Statement requires
     prominent disclosures in both annual and interim financial statements about
     the method of accounting  for  stock-based  employee  compensation  and the
     effect of the method used, on reported results.

     Issuance of Shares for Services:

     The Company  accounts  for the  issuance of equity  instruments  to acquire
     goods and services based on the fair value of the goods and services or the
     fair value of the equity  instrument at the time of issuance,  whichever is
     more reliably measurable.







                                       19
<PAGE>
     Impact of Accounting Pronouncements
     -----------------------------------

     Recent accounting pronouncements.
     In December  2004,  the FASB issued FASB  Statement No. 123R,  "Share-Based
     Payment,  an Amendment of FASB Statement No. 123" ("FAS No. 123R"). FAS No.
     123R requires  companies to recognize in the  statement of  operations  the
     grant- date fair value of stock options and other equity-based compensation
     issued to employees.  FAS No. 123R is effective  beginning in the Company's
     second  quarter of fiscal 2006. The Company is in process of evaluating the
     impact of this pronouncement on its financial position.

     In December  2004,  the FASB issued SFAS  Statement No. 153,  "Exchanges of
     Non-monetary  Assets." The  Statement is an amendment of APB Opinion No. 29
     to eliminate the exception for non-monetary exchanges of similar productive
     assets  and  replaces  it  with  a  general   exception  for  exchanges  of
     non-monetary  assets  that do not have  commercial  substance.  The Company
     believes that the adoption of this standard will have no material impact on
     its financial statements.

     In September  2004, the EITF Issue No. 04-08,  "The Effect of  Contingently
     Convertible  Debt on Diluted Earnings per Share." ("EITF 04-08") was issued
     stating that  contingently  convertible  debt should be included in diluted
     earnings  per share  computations  regardless  of whether the market  price

     trigger has been met. This Issue is effective for reporting  periods ending
     after  December 15, 2004. As a result of adopting EITF 04-08,  we will need
     to include the dilution  effect of our outstanding  contingent  convertible
     debt in our diluted earnings per share  calculations  regardless of whether
     the market price  trigger has been met going  forward.  In  addition,  this
     change will be applied  retroactively to all prior periods. The retroactive
     application  of EITF 04-08 may result in dilution of earnings per share for
     the quarter ended  September 30, 2004 and may have no impact to the diluted
     earnings per share for all other prior periods.

     In September  2004, the EITF delayed the effective date for the recognition
     and measurement  guidance previously  discussed under EITF Issue No. 03-01,
     "The Meaning of  Other-Than-Temporary  Impairment  and Its  Application  to
     Certain  Investments" ("EITF 03-01") as included in paragraphs 10-20 of the
     proposed  statement.  The  proposed  statement  will clarify the meaning of
     other-than-temporary  impairment and its application to investments in debt
     and equity securities,  in particular  investments within the scope of FASB
     Statement No. 115,  "Accounting for Certain  Investments in Debt and Equity
     Securities,"  and investments  accounted for under the cost method.  We are
     currently evaluating the effect of this proposed statement on our financial
     position  and results of  operations.  If the proposed  EITF 03-01  becomes
     effective  and is  adopted,  we may have to  record  additional  impairment
     charges for certain of our investments in marketable debt securities.









                                       20
<PAGE>
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.



































                                       21
<PAGE>
               ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
                          OTHER INFORMATION (UNAUDITED)
                                 MARCH 31, 2005

PART II

ITEM 1   Legal Proceedings

     None

ITEM 2   Changes in Securities

     During the three months ended March 31, 2005, the Company issued  3,801,525
     common shares valued at $220,000 as  compensation to directors for salaries
     and fees for attending  Board  meetings.  The Company issued 400,000 common
     shares  valued at $20,000 to a  consultant  for  providing  consulting  and
     advisory  services.  The common  shares were valued at the ten days average
     market closing price from the date of issuance.

     On  February  22,  2005,  the Company  cancelled  2,252,500  common  shares
     received from shareholders of New Times pursuant to Company's  cancellation
     of its investment in New Times in December 2004.


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

   Exhibit No.                  Description of Document
   -----------                  -----------------------

      31.1     Certification of C.E.O. Pursuant to Section 302 of the Sarbanes-
               Oxley Act of 2002
      31.2     Certification of Principal Accounting Officer Pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002
      32.1     Certification Pursuant to 18 U.S.C. Section 1350, as Adopted
               Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


     b) Reports on Form 8-K
     None




                                       22
<PAGE>
               ELEPHANT TALK COMMUNICATIONS, INC. AND SUBSIDIARIES
                          OTHER INFORMATION (UNAUDITED)
                                 MARCH 31, 2005


                                    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:  May 20, 2005                  By: /s/ Russelle Choi
                                     --------------------------------
                                     Russelle Choi
                                     President & Chief Executive Officer






































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