UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-QSB/A

         (Mark One)

    ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934.

         FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

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

         For the transition period from                   to
                                       -------------------  --------------------

         Commission File Number 0-31193

                                 USIP.COM, INC.
                    -----------------------------------------
        (Exact name of small business issuer as specified in its charter)

                   UTAH                                 16-1583162
         ------------------------------------      --------------------
         (State or other jurisdiction of               (I.R.S. Employer
         incorporation or organization)             Identification No.)

                                7325 OSWEGO ROAD
                            LIVERPOOL, NEW YORK 13090
                    (Address of principal executive offices)

                                 (315) 451-7515
                           (Issuer's telephone number)
                     ---------------------------------------
               (Former name, former address and former fiscal year
                          if changed since last report)

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

                           Yes   ( X )                   No   (   )

         State the number of shares  outstanding of each of the issuer's classes
         of common equity, as of the latest practicable date:  17,804,388 shares
         of Common Stock, $.01 par value, were outstanding as of June 30, 2005

         Transitional Small Business Disclosure Forms (check one):

                           Yes   (   )                    No   ( X )



<PAGE>

                                 USIP.COM, INC.
                              INDEX TO FORM 10-QSB
                                  JUNE 30, 2005


                          PART I FINANCIAL INFORMATION


ITEM 1.           Financial Statements

                  Consolidated  Balance Sheets                               F-1
                  At December 31, 2004 and June 30, 2005

                  Consolidated Statements of Operations                      F-2
                  For the Three Months and Six Months Ended
                  June 30, 2005 and June 30, 2004

                  Consolidated Statements of Cash Flows                      F-4
                  For Six Months Ended June 30, 2005 and June 30, 2004

                  Notes to Consolidated Financial Statements                 F-5

ITEM 2.           Managements Discussion and Analysis of Financial             3
                  Condition and Results of Operation

ITEM 3.           Controls and Procedures                                     10

                            PART II OTHER INFORMATION

ITEM 1.           Legal Proceedings                                           11

ITEM 2.           Changes in Securities and Use of Proceeds                   11

ITEM 3.           Defaults Upon Senior Securities                             11

ITEM 4.           Submission of Matters to a Vote of Security Holders         11

ITEM 5.           Other Information                                           11

ITEM 6.           Exhibits and Reports on Form 8-K                            11


Signatures                                                                    12











                                       2
<PAGE>

                                 USIP.COM, INC.
                           CONSOLIDATED BALANCE SHEETS
                       JUNE 30, 2005 AND DECEMBER 31, 2004

<TABLE>
<CAPTION>
                                                                                 (Unaudited)
                                                                                   June 30,          December 31,
                                                                                     2005                2004
                                                                              ------------------  ------------------
CURRENT ASSETS
<S>                                                                           <C>                 <C>
  Cash                                                                        $            5,512  $            5,412
  Commissions and Sales Receivable, Net                                                   83,647              57,148
  Inventory                                                                               17,145              17,145
  Prepaid Expenses                                                                         3,655               1,630
                                                                              ------------------  ------------------

TOTAL CURRENT ASSETS                                                                     109,959              81,335
                                                                              ------------------  ------------------

FIXED ASSETS
  Telephone and Office Equipment                                                       1,689,260           1,870,410
  Vehicle                                                                                 76,367              76,367
                                                                              ------------------  ------------------
                                                                                       1,765,627           1,946,777
  Less: Accumulated Depreciation                                                      (1,515,384)         (1,556,998)
                                                                              ------------------  ------------------

               Net Fixed Assets                                                          250,243             389,779
                                                                              ------------------  ------------------

TOTAL ASSETS                                                                  $          360,202  $          471,114
                                                                              ==================  ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts Payable                                                            $          241,508  $          205,871
  Line of Credit                                                                         666,244             643,076
  Accrued Payroll and Payroll Taxes                                                        5,126               6,802
  Accrued State Gross Receipts Taxes                                                       3,255               2,438
  Other Accrued Expenses                                                                   1,349               1,028
  Related Party Note                                                                      62,176               2,500
  Current Portion of Long-Term Debt                                                       98,665              33,193
                                                                              ------------------  ------------------

TOTAL CURRENT LIABILITIES                                                              1,078,323             894,908
                                                                              ------------------  ------------------

Long-Term Liabilities
  Notes Payable                                                                           67,527              75,522
                                                                              ------------------  ------------------

TOTAL LONG-TERM LIABILITIES                                                               67,527              75,522
                                                                              ------------------  ------------------

TOTAL LIABILITIES                                                                      1,145,850             970,430
                                                                              ------------------  ------------------

STOCKHOLDERS' EQUITY
    Common Stock, $.01 par value  25,000,000 shares                                      178,044             178,044
      authorized, 17,804,388 shares issued and outstanding
      at June 30, 2005 and December 31, 2004
  Additional Paid In Capital                                                           1,462,558           1,462,558
  Retained Earnings                                                                   (2,426,250)         (2,139,918)
                                                                              ------------------  ------------------

TOTAL STOCKHOLDERS' EQUITY                                                              (785,648)           (499,316)
                                                                              ------------------  ------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $          360,202  $          471,114
                                                                              ==================  ==================
</TABLE>

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

                                       F-1

<PAGE>




                                 USIP.COM, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                               For the three months ended              For the six months ended
                                                        June 30,                               June 30,
                                                2005                2004                2005               2004
                                          -----------------   -----------------  ------------------ ------------------
SALES
<S>                                       <C>                 <C>                <C>                <C>
  Commissions                             $           8,778   $           6,029  $           17,890 $           10,788
  Coin Collections                                   24,201              33,515              50,339             67,790
  Dial Around                                        23,312              56,157              93,465             64,871
  Equipment Sales                                     4,461               2,338              51,267              6,148
  Phone Card Sales                                    1,555               1,115               3,330              1,555
  Service and Repair Sales                           26,613              29,058              53,382             56,479
      Total Sales                                    88,920             128,212             269,673            207,631
                                          -----------------   -----------------  ------------------ ------------------

COST OF SALES
  Telecommunications Costs                           44,386              53,230              88,865            100,577
  Commissions                                           349               1,137                 920              2,194
  Contractor Fees                                         0               1,927                   0              3,948
  Repairs and Service Supplies                          469               4,031               4,409              6,752
  Depreciation                                       42,836              49,233              86,068             98,465
  Phone Cards and Phone Costs                         6,365                   0              53,863                  0
  Travel                                              3,595               3,255               6,869              6,166
      Total Cost of Sales                            98,000             112,813             240,994            218,102
                                          -----------------   -----------------  ------------------ ------------------

                                                     (9,080)             15,399              28,679            (10,471)
                                          -----------------   -----------------  ------------------ ------------------
</TABLE>













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

                                       F-2

<PAGE>




                                 USIP.COM, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (UNAUDITED)
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                              For the three months ended             For the six months ended
                                                       June 30,                              June 30,
                                                2005              2004                2005               2004
                                         ------------------ -----------------  ------------------ ------------------
OPERATING EXPENSES
<S>                                      <C>                <C>                <C>                <C>
  Salaries and Wages                     $           37,844 $          41,107  $           81,074 $           86,966
  Payroll Taxes                                       2,372             2,881               7,801              8,270
  Insurance                                          23,999             5,847              34,220             20,437
  Telephone                                           2,598             3,510               5,447              7,067
  Outside Services                                      347             1,269               4,849              5,239
  Utilities                                           1,206             1,441               3,123              2,653
  Vehicle Expenses                                      379               193               1,700              2,088
  Rent                                               22,695            15,771              45,835             31,353
  Professional Fees                                  38,805            17,142              72,233             37,559
  Travel and Entertainment                                0                16                  31                 16
  Office Expense                                      3,670             4,355               8,267              7,551
      Total Operating Expenses                      133,915            93,532             264,580            209,199
                                         ------------------ -----------------  ------------------ ------------------

                                                   (142,995)          (78,133)           (235,901)          (519,670)
                                         ------------------ -----------------  ------------------ ------------------

OTHER INCOME (EXPENSE)
  Gain (Loss) on Sale of Equipment                    5,131               254             (17,725)               454
  Prov For State Tax                                     59             4,541                (751)             5,090
  Interest Expense                                  (16,764)          (12,703)            (31,954)           (25,195)
      Total Other Income                            (11,574)           (7,908)            (50,430)           (19,651)
                                         ------------------ -----------------  ------------------ ------------------

NET INCOME                               $         (154,569)$         (86,041) $         (286,331)$         (239,321)
                                         ================== =================  ================== ==================

Weighted Common Shares Outstanding               17,804,388        17,804,388          17,804,388         17,804,388

Net Loss per Common Share                $         (0.01)   $        (0.00)    $         (0.02)   $         (0.01)
                                         ================== =================  ================== ==================
</TABLE>


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

                                       F-3

<PAGE>




                                  USIP.COM, INC
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                     For the six months ended
                                                                                             June 30,
                                                                                     2005                2004
                                                                              ------------------   -----------------

Cash Flows From Operating Activities:
<S>                                                                           <C>                  <C>
    Net (Loss)                                                                $         (286,331)  $        (239,321)
    Adjustments to reconcile net  (loss) to net
        cash provided (used) by operating activities:
  Depreciation Expense                                                                    86,068              98,465
  (Gain) Loss on Sale of Equipment                                                        17,725                (454)
  (Increase) Decrease in Commission Receivables                                          (26,499)             52,848
  (Increase) Decrease in Prepaid Expense                                                  (2,025)                187
  Increase (Decrease) in Accounts Payable                                                 35,637              (3,946)
  Increase (Decrease) in Accrued Expenses                                                 (1,355)             21,048
  Increase (Decrease) in Gross Receipts Tax                                                  817              (5,190)
                                                                              ------------------   -----------------

            Net cash (used) by operating activities                                     (175,963)            (76,363)
                                                                              ------------------   -----------------

Cash Flows From Investing Activities:
  Proceeds from Sale of Equipment                                                         35,743               6,148
                                                                              ------------------   -----------------

            Net cash (used) by investing activities                                       35,743               6,148
                                                                              ------------------   -----------------

Cash Flows From Financing Activities:
  Proceeds received from Line of Credit                                                   23,168              90,000
 Proceeds from issuance of Related Party Payable                                          70,249                   0
 Payments on Related Party Payable                                                       (10,573)                  0
 Proceeds from issuance of Notes Payable                                                  73,106                   0
 Payments on Notes Payable                                                               (15,630)            (15,257)
                                                                              ------------------   -----------------

            Net cash provided by financing activities                                    140,320              74,743
                                                                              ------------------   -----------------

Net Increase (Decrease)  in cash                                                             100               4,528

Cash - Beginning of Period                                                                 5,412               6,121
                                                                              ------------------   -----------------

Cash - End of Period                                                          $            5,512   $          10,649
                                                                              ==================   =================

Supplemental Disclosures of Cash Flow Information:
  Cash Paid During Period The Period For:
    Interest                                                                  $            3,857   $           4,052

</TABLE>





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

                                       F-4

<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004


NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

USIP.COM, Inc. is currently a provider of both privately owned and company owned
payphones (COCOT's) and stations in New York State and Pennsylvania. The Company
receives  revenues  from the  collection of the payphone  coinage,  a portion of
usage of service  from each  payphone and a percentage  of long  distance  calls
placed from each  payphone from the  telecommunications  service  providers.  In
addition,  the Company  also  receives  revenues  from the service and repair of
privately  owned  payphones,  sales of  payphone  units and the sales of prepaid
phone cards.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

INTERIM REPORTING

The  unaudited  financial  statements as of June 30, 2005 and for the six months
then ended reflect, in the opinion of management, all adjustments (which include
only normal  recurring  adjustments)  necessary  to fairly  state the  financial
position and results of operations for the three months.  Operating  results for
interim  periods are not  necessarily  indicative  of the  results  which can be
expected for full years.

MANAGEMENT ESTIMATES

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

PRINCIPLES OF CONSOLIDATION

The  accompanying  consolidated  Financial  Statements  include the  accounts of
USIP.COM, Inc. and its wholly owned subsidiaries,  Datone, Inc. and NB Payphone,
Inc.   Intercompany   transactions   and  balances   have  been   eliminated  in
consolidation and combination.

CONCENTRATIONS OF CREDIT RISK

The  Company's  payphones  are located  primarily in New York State and parts of
Pennsylvania and usage of those phones may be affected by economic conditions in
those areas. The company has experienced  about a 30% drop in revenue's,  due to
increased  competition  from other  payphone  providers  and  increase  usage of
wireless communications.


                                       F-5

<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004


The Company maintains cash balances with a financial  institution insured by the
Federal  Deposit  Insurance  Corporation up to $100,000.  There are no uninsured
balances at June 30, 2005 or December 31, 2004.
CASH AND CASH EQUIVALENTS

The Company  considers  all highly liquid  instruments  with a maturity of three
months  or  less  when  purchased  to  be  cash   equivalents  for  purposes  of
classification  in the balance sheets and statement of cash flows. Cash and cash
equivalents consists of cash in bank (checking) accounts.

FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at cost.  Depreciation  is calculated on a straight-line
basis over the useful  lives of the  related  assets,  which  range from five to
seven years.

INCOME TAXES

Income  taxes are  accounted  for in  accordance  with  Statement  of  Financial
Accounting Standards No. 109, "Accounting for Income Taxes". Under SFAS No. 109,
deferred  income taxes are  recognized  using the asset and liability  method by
applying tax rates to  cumulative  temporary  differences  based on when and how
they are expected to affect the tax return.  Deferred tax assets and liabilities
are adjusted for income tax rate changes.

NET (LOSS) PER COMMON SHARE

Net loss per  common  share has been  calculated  by taking the net loss for the
current period and dividing by the weighted  average  shares  outstanding at the
end of the period.

REVENUE RECOGNITION

The Company derives its primary revenue from the sources described below,  which
includes dial around revenues, coin collections, and telephone equipment repairs
and sales.  Other revenues  generated by the company include,  phone card sales,
and commissions.

Dial around revenues are generated from calls to gain access to a different long
distance carrier than is already  programmed into the phone.  Revenues from dial
around  calls are  recorded  based  upon  estimates  until  the coin  collection
revenues are generated when callers deposit coins into the phones to make calls.
Coin revenues are recorded in an amount equal to the coins  collected.  Revenues
on commissions,  phone card sales, and telephone equipment repairs and sales are
realized when the services are provided.




                                       F-9

<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004


NOTE 2.           INVENTORY

Inventory is valued at the lower of cost, determined on the first-in,  first-out
basis (FIFO), or market value. Inventory consists of the following:


                                       June 30,              December 31,
                                         2005                    2004
                                   -----------------      ------------------
Calling Cards                      $             583      $              583
Parts and Accessories                         16,562                  16,562
                                   -----------------      ------------------
                                   $          17,145      $           17,145
                                   =================      ==================

NOTE 3.           COMMISSIONS AND SALES RECEIVABLE

Commissions and Sales Receivable  consists of the following at June 30, 2005 and
December 31, 2004:


                                     June 30,           December 31,
                                       2005                 2004
                                 -----------------    -----------------
Commissions Receivable           $          70,023    $          54,200
Sales Receivable                            13,623                2,948
                                 -----------------    -----------------
                                 $          83,646    $          57,148
                                 =================    =================

NOTE 4.           LONG-TERM DEBT

Long-term debt as of June 30, 2005 and December 31, 2004 is as follows:

<TABLE>
<CAPTION>

                                                                                          June 30,         December 31,
                                                                                            2005               2004
                                                                                     ------------------  -----------------
<S>                                                                                  <C>                 <C>
Vehicle Note, Monthly payments of $462 with interest at 9.25%                        $            4,845  $           4,845
Vehicle Note, Monthly payments of $261 with interest at 12.4%                                         -                  -
Bank Note, Monthly payments of $1,825 with interest at 7.5%                                      61,790             70,069
Vehicle Note, Monthly payment of $535 w/interest at 8.2%                                         16,471             18,580
Vehicle Note, Monthly payment of $589 w/interest at  8.2%                                        12,766             15,221
Note Payable, Due August 1, 2005, interest at 10%                                                 7,810                  -
Note Payable, Due September1, 2005, interest at 10%                                               7,752                  -
Note Payable, Due October1, 2005, interest at 10%                                                 7,686                  -
Note Payable, Due November 1, 2005, interest at 10%                                               7,625                  -
Note Payable, Due December 1, 2005, interest at 10%                                               7,600                  -
Note Payable, Due July 3, 2005, interest at 10%                                                  31,847                  -
                                                                                     ------------------  -----------------
                                                                                                166,192            108,715

Less current portion of long-term debt                                                           98,665             33,193
                                                                                     ------------------  -----------------

                                                                                     $           67,527  $          75,522
                                                                                     ==================  =================
</TABLE>


                                      F-10

<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004


Aggregate annual maturities  required on long-term debt at December 31, 2004 are
as follows:


2005                                     $           33,193
2006                                                 30,471
2007                                                 28,630
2008                                                 16,421
2009                                                      -
Thereafter                                                -
                                         ------------------
                                         $          108,715
                                         ==================

NOTE 5.           RELATED PARTY NOTE

The Company has several notes with a relative of Joseph Passalaqua, Secretary of
the  Company.  These notes have due dates from June 7, 2005 to July 21, 2006 and
carry  interest  rates between 10% and 16%. As of June 30, 2005 and December 31,
2004 the  outstanding  principal  on the note was $60,000 and $2,500 and accrued
interest was $2,176 and $3 respectively.

The Company has a revolving  line of credit from the Lilly Beter Capital  Group,
Ltd which is affiliated with Lilly O. Beter,  director of the Company,  of which
$567,627 and $548,027 was  outstanding as of June 30, 2005 and December 31, 2004
respectively.  Advances  on the credit  line are  payable on demand and carry an
interest rate of 8%-10%.

The Company has  revolving  lines of credit from  Riviera Bay Holding  Trust,  a
beneficial  owner of common stock,  of which $98,617 and $95,046 was outstanding
as of June 30,  2005 and  December  31,  2004.  Advances  on the credit line are
payable on demand and carry an interest rate of 8%.

NOTE 6.           OPERATING LEASES

The Company  leases office space for its  corporate  offices on a month to month
lease for $7,500 a month.


NOTE 7.           MAJOR DIAL AROUND COMPENSATION PROVIDERS (COMMISSIONS)

The  Company  received  approximately  95% of total dial  around  and  zero-plus
compensation (commissions) from two providers.



                                      F-11

<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004


NOTE 8.           INCOME TAXES

As of December 31, 2004, the Company had a net operating loss  carryforward  for
income tax reporting  purposes of  approximately  $2,179,585  that may be offset
against future taxable income through 2021. Current tax laws limit the amount of
loss  available to be offset  against  future  taxable income when a substantial
change in ownership  occurs.  Therefore,  the amount  available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements,  because the Company  believes  there is a 50% or greater chance the
carry-forwards  will expire unused.  Accordingly,  the potential tax benefits of
the loss carry-forwards are offset by a valuation allowance of the same amount.


                                            2004                2003
                                   ------------------  ------------------
Net Operating Losses                          741,059             603,981
Equipment Obsolescence                        (99,506)            (99,506)
Valuation Allowance                          (641,553)           (504,475)
                                   ------------------  ------------------
                                                    -                   -
                                   ==================  ==================

The  provision  for income  taxes  differs  from the amount  computed  using the
federal US statutory income tax rate as follows:


                                                      2004                2003
                                               --------------  ---------------
Provision (Benefit) at US Statutory Rate             (137,078)        (104,808)
Equipment Obsolescence                                      -                -
Increase (Decrease) in Valuation Allowance            137,078          104,808
                                               --------------  ---------------
                                                            -                -
                                               ==============  ===============

The Company evaluates its valuation  allowance  requirements  based on projected
future operations. When circumstances change and causes a change in management's
judgement  about the  recoverability  of deferred tax assets,  the impact of the
change on the valuation is reflected in current income.

NOTE 9.            GOING CONCERN CONSIDERATIONS

The  accompanying  financial  statements  have been prepared in conformity  with
accounting   principles   generally   accepted  in  the  United  States,   which
contemplates the Company as a going concern.  However, the Company has sustained
substantial  operating  losses in recent  years,  it has  increased  its line of
credit  borrowings to meet operating  costs,  while revenue's have declined over
13% for the year  ended  December  31,  2003  and  over  32% for the year  ended
December  31, 2004.  The Company  also had one of its credit lines  converted to
fixed note during 2003. The company has a current ratio of .091 and .200 for the
years  ended  December  31,  2004 and 2003,  and has a deficit in  stockholders'
equity.  The Companies  ability to continue as a going concern is dependent upon
obtaining the

                                      F-12

<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004

additional capital as well as additional revenue to be successful in its planned
activity.  Management  believes that actions presently being taken to revise the
Company's operating and financial requirements provide them with the opportunity
to continue as a going concern.

These financial statements do not reflect adjustments that would be necessary if
the  Company  were unable to continue  as a "going  concern".  While  management
believes that the actions  already  taken or planned,  will mitigate the adverse
conditions  and  events  which  raise  doubt  about the  validity  of the "going
concern" assumption used in preparing these financial  statements,  there can be
no assurance that these actions will be successful.

If the Company were unable to continue as a "going  concern",  then  substantial
adjustments  would be necessary to the carrying  values of assets,  the reported
amounts of its liabilities,  the reported revenues and expenses, and the balance
sheet classifications used.


NOTE 10.            MERGER AGREEMENT

On May 24, 2004 the Company signed an Agreement and Plan of Merger ("Agreement")
with Cornerstone  Services Group, Inc.  ("Cornerstone").  Under the terms of the
proposed Merger  Cornerstone was to merge into the Company,  with the Company to
remain  the  surviving  corporation.   Thereafter  the  name  of  the  surviving
corporation was to be changed to Cornerstone Services Group, Inc. Since entering
the  Agreement the parties have been  pursuing the Merger,  but were  ultimately
unable to complete the transaction due to Cornerstone's  deteriorating financial
condition.  On June 22,  2005 the  parties  mutually  agreed  to  terminate  the
Agreement  and to cease  further  efforts to effect the Merger.  No  termination
penalties will be incurred by USIP.


                                      F-13

<PAGE>


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION

FORWARD LOOKING STATEMENTS

         The following is a discussion and analysis of the results of operations
of our company and should be read in conjunction  with our financial  statements
and related  notes  contained  in the Form  10-QSB.  This Form  10-QSB  contains
forward  looking  statements  that  involve  risks  and  uncertainties.  You can
identify  these  statements by the use of  forward-looking  words such as "may",
"will", "expect",  "anticipate",  "estimate",  "believe",  "continue",  or other
similar words.  You should read  statements  that contain these words  carefully
because they discuss our future expectations,  contain projections of our future
results of  operation or  financial  condition or state other  "forward-looking"
information.  We  believe  that  it  is  important  to  communicate  our  future
expectations to our investors.  However,  there may be events in the future that
we are unable to  accurately  predict or  control.  Those  events as well as any
cautionary  language  in this  Quarterly  statement  provide  examples of risks,
uncertainties  and events that may cause our actual results to differ materially
from the expectations we describe in our forward-looking  statements. You should
be aware that the  occurrence of the events  described in this Form 10-QSB could
have a material adverse effect on our business,  operating results and financial
condition. Actual results differ materially from current expectations. Among the
factors that could effect our actual  results and could cause  results to differ
from those contained in the forward-looking  statements  contained herein is our
ability to expand  our  customer  base,  which will be  dependent  on  business,
financial  and other  factors  beyond our  control,  including  , among  others,
seasonal  aspects such as the winter months that tend to reduce the frequency of
outdoor  payphone  use on the  east  coast,  ability  to  increase  our size and
marketing area by purchasing payphones and locations from independent  telephone
companies,  and  whether the public uses our  payphones,  together  with all the
risks  inherent in the  establishment  of a new  enterprise and marketing of new
products.


BASIS OF PRESENTATION

         The  unaudited  consolidated  financial  statements  of USIP.Com,  Inc.
("USIP",  the "Company",  "our", or "we"), include the accounts of USIP.Com Inc.
and its two wholly owned  subsidiaries:  Datone Inc.  and NB Payphones  Ltd. All
significant   inter-company   amounts  have  been   eliminated.   The  unaudited
consolidated  financial  statements  of USIP present  herein,  should be read in
conjunction with the audited consolidated financial statements of USIP as of and
for the year  ended  December  31,  2004.  In the  opinion  of  management,  the
unaudited   consolidated  financial  statements  presented  herein  reflect  all
adjustments (consisting only of normal recurring adjustments) necessary for fair
presentation.  Interim  results are not  necessary  indicative  of results to be
expected for the entire year.

         We prepare our  consolidated  financial  statements in accordance  with
generally  accepted  accounting  principles,  which require that management make
estimates and  assumptions  that affect reported  amounts.  Actual results could
differ from these estimates.

         Certain  of  the  statements   contained   below  are   forward-looking
statements  (rather  than  historical  facts)  that are  subject  to  risks  and
uncertainties  that could cause actual results to differ  materially  from those
described in the forward-looking statements.

IMPACT OF INFLATION

         Inflation is not considered a material  factor  affecting the Company's
business.  General  operating  expenses such as salaries,  employee benefits and
occupancy costs are, however, subject to normal inflationary pressures

SEASONALITY

         The Company's revenues from payphone operation are affected by seasonal
variations,  geographic distribution of payphones and type of location.  Because
the Company  operates in the  northeastern  part of the country with many of the


                                       3
<PAGE>

payphones located outdoor, weather patterns affect our revenue streams. Revenues
drop off  significantly  during  winter and  conversely  show an increase in the
spring and  summer.  Revenues  are  generally  lowest in the first  quarter  and
highest in the third quarter.

         As of June 30, 2005,  we owned and operated a network of  approximately
468  payphones.  Our  installed  payphone  base  generates  revenue  from  three
principle sources: coin-calls and non-coin calls, sales and service of payphones
and pre-paid phone cards.

1. COMMISSION INCOME.

         Commission   income   includes   commissions   from  operator   service
telecommunications  companies  and  commissions  for toll  free  calls  from all
payphones.  The commissions  for operator  services are paid 45 days in arrears.
Dial Around  compensation  is billed  quarterly and received  three and one half
months behind the billed quarter.

2. COIN CALLS.

         Coin calls represent calls paid for by customers who deposit coins into
the  payphones.  Coin call  revenue is  recorded  as the actual  amount of coins
collected from the payphones.  Some coin  collections  are made on a daily basis
and others more often if the  particular  payphone has  significant  usage.  The
coins are counted in house and deposited weekly.

3. PAYPHONE SALES, REPAIRS AND PRE-PAID PHONE CARD SALES.

         We  derive  income  from the  sale and  repair  of a  payphone.  We can
negotiate  the  sale,  of a  payphone  to a site  owner  when  it  becomes  cost
prohibitive to maintain or if a customer offers to buy the phone at a price that
is favorable to our company. The new owner or lessee becomes responsible for the
maintenance and operational costs of the payphone.  We sell pre-paid phone cards
at some of our payphone  locations.  Sales and repairs of payphones and the sale
of pre-paid  phone cards are not  subject to the same  collection  delays as the
other types of operating income.

COSTS RELATED TO OUR OPERATION.

         The principle  costs related to the ongoing  operation of the Company's
payphones  include  telephone  charges,  commissions,  service,  maintenance and
network costs.  Telephone charges consist of payments made by the Company to LEC
or competitive  local exchange  carriers and long distance carrier for access to
and use of their  telecommunications  networks.  Commission  expense  represents
payments to owners or  operators of the premises at which a payphone is located.
Service,  maintenance  and network  cost  represent  the cost of  servicing  and
maintaining the payphones on an ongoing basis.


THREE MONTHS ENDED JUNE 30, 2005 COMPARED TO THREE MONTHS ENDED JUNE 30, 2004

REVENUES

         Our total revenue  decreased by $39,292 or approximately  30.65%,  from
$128,212 in the three  months ended June 30, 2004 to $88,920 in the three months
ended June 30, 2005.  This  decrease was  primarily  attributable  to removal of
unprofitable  phone locations and lower call volumes on our payphones  resulting
from the growth in wireless communications.  We reduced our network of payphones
from approximately 548 in June 30, 2004 to 468 as of June 30, 2005.

         Our  commissions  increased  by $2,749 or  approximately  45.59%,  from
$6,029 in the three  months  ended June 30,  2004 to $8,778 in the three  months
ended June 30,  2005.  This  increase was  primarily  due to an increase in long
distance phone calls derived from advertisements on our network of payphones.

         Our coin call  revenues  decreased by $9,314 or  approximately  27.79%,
from  $33,515 in the three  months  ended June 30,  2004 to $24,201 in the three


                                       4
<PAGE>

months  ended June 30, 2005.  The  decrease in coin call  revenue was  primarily
attributable  to the reduced  number of payphones  we operated  coupled with the
increased  competition  from  wireless  communication  services.  We reduced our
network of payphones from  approximately  548 in June 30, 2004 to 468 as of June
30, 2005.

         Our non-coin call revenue,  which is comprised primarily of dial-around
revenue and operator service revenue decreased $32,845 approximately 58.49% from
$56,157 in the three  months  ended June 30, 2004 to $23,312 in the three months
ended June 30, 2005.  This decrease was primarily  attributable to the reduction
in  payphones,  reduced call volumes and  increased  competition  from  wireless
communications services.

         Service & Repair Sales  decreased by $2,445,  when compared to the same
period in 2004.  Equipment  sales  increased by $2,123 from $2,338 for the three
months  ending June 30, 2004 to $4,461 in the three months ending June 30, 2005.
Our phone card revenue increased by $440 when compared to 2004.


COSTS OF SALES

         Our overall cost of sales  decreased  for the three months  ending June
30, 2005 by $14,813 or  approximately  13.13% when  compared to the three months
ended June 30, 2004. Our  telecommunication  costs decreased by $8,844, the cost
of  providing  telephone  service to 468  payphones  in 2005 as  compared to 548
payphones in 2004. This number reflects an overall reduction of 80 payphones due
to our ongoing strategy of identifying and removing unprofitable payphones. Once
a low revenue payphone is identified,  we offer the site owner an opportunity to
purchase the  equipment.  If the site owner does not purchase the  payphone,  we
remove it from the site.


         Our  commissions  decreased by $788 due to a reduction  in  non-company
owned payphones sites.  Our contractor's  fees decreased by $1,927 when compared
to the  same  period  in  2004  This  decrease  is due  to  the  elimination  of
contractors and the  re-organization  of routes to manage them more efficiently.
Depreciation  expense  decreased  by $6,397 when  compared to the same period in
2004. This decrease is due to certain assets being fully  depreciated and our on
going strategy of identifying  unprofitable  payphones,  and selling them to the
site  owners.  Once a payphone is sold to the site owner it is removed  from our
assets  and  depreciation  schedules.  We  own  telephone  equipment  and  motor
vehicles,  which provide a service for a number of years. The term of service is
commonly referred to as the "useful life" of the asset. Because an asset such as
telephone  equipment  or motor  vehicle is expected to provide  service for many
years, it is recorded as an asset, rather than an expense, in the year acquired.
A portion of the cost of the  long-lived  asset is reported as an expense during
the cost of an asset to  expense  over  its life in a  rational  and  systematic
manner.

         Our cost of sales for repairs,  service,  travel and supplies decreased
by $3,222.  Our phone  card and phone cost  expenses  increased  by $6,365  when
comparing year 2005 to 2004.  This increase is primarily due to cost of sales on
a large one time sale of payphones.


OPERATION AND ADMINISTRATIVE EXPENSES

         Operating  expenses  increased by $40,383 or approximately  43.18% over
the same period in 2004.  Approximately 53.64% of this increase is related to an
increase of  professional  fees directly  related with the proposed  merger with
Cornerstone  Service Group, Inc. The merger agreement was terminated on June 22,
2005 by mutual agreement due to Cornerstone's deteriorating financial condition.
Salaries and related  payroll  taxes were reduced by $3,772 when compared to the
same expenses for 2004.  Our insurance  expense  increased by $18,152 when being
compared to the same period in 2004.  Rent  increased by $6,924 when compared to
2004. Professional fees increased by $21,663 over 2004. These are fees we pay to
accountants  and attorneys  throughout  the year for  performing  various tasks.
Expenses  for  outside  services  decreased  by $922 over 2004.  Our  telephone,
utilities, office, vehicle and travel & entertainment expenses, together account
for a decrease of $1,662 when compared to the same period ending June 30, 2004.






                                       5
<PAGE>

SIX MONTHS ENDED JUNE 30, 2005 COMPARED TO SIX MONTHS ENDED JUNE 30, 2004

REVENUES

         Our total revenue  increased by $62,042 or  approximately  29.9%,  from
$207,631  in the six months  ended June 30,  2004 to  $269,673 in the six months
ended June 30, 2005. This increase was primarily  attributable to an increase in
the dial-around rate set by the Federal Communications  Commission ("FCC"), from
$.24 per  dial-around  call to $.494 per  dial-around  call.  In addition to the
increase  in the  dial-around  rate the  Company  had a large  one time  sale of
payphones in the first quarter of 2005.

         Our  commissions  increased  by $7,102 or  approximately  65.84%,  from
$10,788 in the six months ended June 30, 2004 to $17,890 in the six months ended
June 30, 2005.  This  increase was primarily due to an increase in long distance
phone calls derived from advertisements on our network of payphones.

         Our coin call revenues  decreased by $17,451 or  approximately  25.74%,
from  $67,790 in the six months ended June 30, 2004 to $50,339 in the six months
ended  June  30,  2005.   The  decrease  in  coin  call  revenue  was  primarily
attributable  to the reduced  number of payphones  we operated  coupled with the
increased  competition  from  wireless  communication  services.  We reduced our
network of payphones from  approximately  548 in June 30, 2004 to 468 as of June
30, 2005.

         Our non-coin call revenue,  which is comprised primarily of dial-around
revenue and operator service revenue  increased  $28,594  approximately 44% from
$64,871 in the six months ended June 30, 2004 to $93,465 in the six months ended
June 30, 2005.  This increase was primarily  attributable  to an increase in the
dial-around rate set by the Federal Communications Commission ("FCC"), from $.24
per  dial-around  call to $.494  per  dial-around  call.  This  increase  became
effective September 27, 2004.

         Service & Repair Sales  decreased  by $3,097 when  compared to the same
period in 2004.  Equipment  sales  increased by $45,119,  from $6,148 in the six
months  ending June 30, 2004 to $61,267 in the six months  ending June 30, 2005.
This  increase is primarily  attributed to a one time large sale of payphones in
the first  quarter of 2005.  Our phone card  revenue  increased  by $1,775  when
compared to 2004.


COSTS OF SALES

         Our overall cost of sales  increased in the six months  ending June 30,
2005 by $22,892 or  approximately  10.5% when  compared to the six months ending
June 30,,  2004.  This  increase in our overall cost is primarily due to cost of
payphones sold. Our  telecommunication  costs decreased by $11,712,  the cost of
providing  telephone  service  to 468  payphones  in  2005  as  compared  to 548
payphones in 2004. This number reflects an overall reduction of 80 payphones due
to our ongoing strategy of identifying and removing unprofitable payphones. Once
a low revenue payphone is identified,  we offer the site owner an opportunity to
purchase the  equipment.  If the site owner does not purchase the  payphone,  we
remove it from the site.


         Our  commissions  decreased by $1,274 due to a reduction in non-company
owned payphones sites.  Our contractor's  fees decreased by $3,948 when compared
to the  same  period  in  2004  This  decrease  is due  to  the  elimination  of
contractors and the  re-organization  of routes to manage them more efficiently.
Depreciation  expense  decreased by $12,397 when  compared to the same period in
2004. This decrease is due to certain assets being fully  depreciated and our on
going strategy of identifying  unprofitable  payphones,  and selling them to the
site  owners.  Once a payphone is sold to the site owner it is removed  from our
assets  and  depreciation  schedules.  We  own  telephone  equipment  and  motor
vehicles,  which provide a service for a number of years. The term of service is
commonly referred to as the "useful life" of the asset. Because an asset such as
telephone  equipment  or motor  vehicle is expected to provide  service for many
years, it is recorded as an asset, rather than an expense, in the year acquired.
A portion of the cost of the  long-lived  asset is reported as an expense during
the cost of an asset to  expense  over  its life in a  rational  and  systematic
manner.

         Our cost of sales for repairs,  service,  travel and supplies decreased
by $1,640 a direct result of the  management  team's  ongoing  efforts to reduce


                                       6
<PAGE>

cost. Our phone card and phone cost expenses increased by $53,863 when comparing
year 2005 to 2004.  This  increase is primarily  due to cost of sales on a large
one time sale of payphones.


OPERATION AND ADMINISTRATIVE EXPENSES

         Operating expenses increased by $55,381 or approximately 26.5% over the
same  period in 2004.  Approximately  62.6% of this  increase  is  related to an
increase of  professional  fees directly  related with the proposed  merger with
Cornerstone  Service Group, Inc. The merger agreement was terminated on June 22,
2005 by mutual agreement due to Cornerstone's deteriorating financial condition.
Salaries and related  payroll  taxes were reduced by $6,361 when compared to the
same period in 2004. Our insurance expense increased by $13,783 when compared to
the same fiscal  period 2004.  Rent  increased by $14,482 when compared to 2004.
Professional  fees  increased  by $34,674  over  2004.  These are fees we pay to
accountants  and attorneys  throughout  the year for  performing  various tasks.
Expenses  for  outside  services  decreased  by $390 over 2004.  Our  telephone,
utilities, office, vehicle and travel & entertainment expenses, together account
for a decrease of $807 when compared to the same period ending June 30, 2004.



TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT

         On May 24, 2004,  USIP.Com,  Inc. ("USIP") signed an Agreement and Plan
of Merger ("Agreement") with Cornerstone  Services Group, Inc.  ("Cornerstone").
Under the terms of the proposed Merger, Cornerstone was to merge into USIP, with
USIP to remain the surviving  corporation.  Thereafter the name of the surviving
corporation was to be changed to Cornerstone Service Group, Inc.

         Since entering the Agreement the parties have been pursuing the Merger,
but were  ultimately  unable to complete the  transaction  due to  Cornerstone's
deteriorating  financial condition. On June 22, 2005 the parties mutually agreed
to terminate the Agreement and to cease further efforts to effect the Merger. No
termination penalties will be incurred by USIP.

         The  Securities and Exchange  Commission  maintains an Internet site at
http://www.sec.gov  where the public can review a copy of our reports  including
the June 23, 2005 form 8-K which details the termination of the merger agreement
between USIP and Cornerstone.


GOING CONCERN QUALIFICATION

         In their  Independent  Auditor's  Report  for the  fiscal  year  ending
December 31,  2004,  Robison,  Hill & Co.  states that we have  incurred  annual
losses since inception  raising  substantial doubt about our ability to continue
as a going concern.


LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW

         Our primary  sources of liquidity  have been cash from  operations  and
borrowing  from various credit  facilities.  As of June 30, 2005, we have a note
payable to Key Bank in the amount of $62,744.  In  addition,  we have  unsecured
lines of credit with Lilly Beter  Capital  Group,  Ltd.  and Riviera Bay Holding
Trust, as of June 30, 2005 we have drawn on these line in the amount of $567,627
and  $98,617  respectively.  The  Company  has a note with a relative  of Joseph
Passalaqua, Secretary of the Company, as of June 30, 2005 the outstanding amount
was $61,748.



RISKS ASSOCIATED WITH OUR BUSINESS



                                       7
<PAGE>

         In addition to the other  information  in this  report,  the  following
risks should be considered carefully in evaluating our business and prospects:

UNLESS  WE CAN  REVERSE  OUR  HISTORY  OF  LOSSES,  WE MAY  HAVE TO  DISCONTINUE
OPERATIONS.

              If we are  unable  to  achieve  or  sustain  profitability,  or if
operating  losses increase in the future,  we may not be able to remain a viable
company and may have to discontinue  operations.  Our expenses have historically
exceeded our  revenues and we have had losses in all fiscal years of  operation,
including  those in fiscal years 2003 through 2004, and the losses are projected
to continue in 2005.  Our net losses were $308,260 and $403,170 for fiscal years
ended 2003, 2004 respectively.  We have been concentrating on the development of
our products, services and business plan. Our management believes that we can be
profitable and that our business plan will be successful;  however,  there is no
assurance that we will be successful in  implementing  our business plan or that
we will be profitable now or in the future.

WE WILL NEED ADDITIONAL CAPITAL FINANCING IN THE FUTURE.

         We may be  required  to seek  additional  financing  in the  future  to
respond to increased expenses or shortfalls in anticipated revenues,  accelerate
product development and deployment,  respond to competitive  pressures,  develop
new or  enhanced  products,  or  take  advantage  of  unanticipated  acquisition
opportunities.  We cannot  be  certain  we will be able to find such  additional
financing on reasonable  terms, or at all. If we are unable to obtain additional
financing  when  needed,  we could be  required to modify our  business  plan in
accordance with the extent of available financing.

IF WE ENGAGE IN ACQUISITIONS, WE MAY EXPERIENCE SIGNIFICANT COSTS AND DIFFICULTY
ASSIMILATING THE OPERATIONS OR PERSONNEL OF THE ACQUIRED COMPANIES,  WHICH COULD
THREATEN OUR FUTURE GROWTH.

         If we make any acquisitions,  we could have difficulty assimilating the
operations,  technologies  and  products  acquired or  integrating  or retaining
personnel of acquired companies. In addition,  acquisitions may involve entering
markets in which we have no or limited direct prior  experience.  The occurrence
of any one or more of these factors could disrupt our ongoing business, distract
our  management and employees and increase our expenses.  In addition,  pursuing
acquisition  opportunities  could  divert our  management's  attention  from our
ongoing  business  operations  and result in  decreased  operating  performance.
Moreover, our profitability may suffer because of  acquisition-related  costs or
amortization of acquired goodwill and other intangible assets.  Furthermore,  we
may have to incur debt or issue equity  securities in future  acquisitions.  The
issuance of equity securities would dilute our existing stockholders.

IF  WE  CANNOT  ATTRACT,  RETAIN,  MOTIVATE  AND  INTEGRATE  ADDITIONAL  SKILLED
PERSONNEL, OUR ABILITY TO COMPETE WILL BE IMPAIRED.

         Many of our current and potential  competitors have more employees than
we do. Our success  depends in large part on our ability to attract,  retain and
motivate highly qualified  management and technical  personnel.  We face intense
competition for qualified personnel. The industry in which we compete has a high
level of employee mobility and aggressive recruiting of skilled personnel. If we
are unable to  continue  to employ our key  personnel  or to attract  and retain
qualified  personnel  in the  future,  our ability to  successfully  execute our
business plan will be jeopardized and our growth will be inhibited.

WE MAY BE UNABLE TO ADEQUATELY  PROTECT OUR PROPRIETARY RIGHTS OR MAY BE SUED BY
THIRD PARTIES FOR INFRINGEMENT OF THEIR PROPRIETARY RIGHTS.

         The telecommunications  industry is characterized by the existence of a
large number of patents and frequent  litigation  based on  allegations of trade
secret, copyright or patent infringement. We may inadvertently infringe a patent
of which we are unaware. In addition,  because patent applications can take many
years to issue,  there may be a patent  application  now pending of which we are
unaware that will cause us to be infringing when it is issued in the future.  If


                                       8
<PAGE>

we make any  acquisitions,  we could have similar problems in those  industries.
Although we are not currently involved in any intellectual  property litigation,
we may be a party to  litigation  in the  future  to  protect  our  intellectual
property or as a result of our alleged  infringement  of another's  intellectual
property, forcing us to do one or more of the following:

o        Cease  selling,  incorporating  or  using  products  or  services  that
         incorporate the challenged intellectual property;
o        Obtain from the holder of the infringed  intellectual  property right a
         license to sell or use the relevant  technology,  which license may not
         be available on reasonable terms; or
o        Redesign those products or services that incorporate such technology.

         A  successful  claim of  infringement  against  us, and our  failure to
license the same or similar  technology,  could  adversely  affect our business,
asset value or stock value. Infringement claims, with or without merit, would be
expensive to litigate or settle, and would divert management resources.

         Our employees may be bound by confidentiality  and other  nondisclosure
agreements  regarding the trade secrets of their former employers.  As a result,
our employees or we could be subject to allegations  of trade secret  violations
and other  similar  violations  if claims  are made  that  they  breached  these
agreements.

BECAUSE OUR OFFICERS AND DIRECTORS ARE INDEMNIFIED  AGAINST  CERTAIN LOSSES,  WE
MAY BE EXPOSED TO COSTS ASSOCIATED WITH LITIGATION.

         If our directors or officers become exposed to liabilities invoking the
indemnification  provisions,  we could be exposed to  additional  unreimbursable
costs,  including legal fees. Our articles of  incorporation  and bylaws provide
that our directors  and officers will not be liable to us or to any  shareholder
and will be  indemnified  and held harmless for any  consequences  of any act or
omission by the  directors and officers  unless the act or omission  constitutes
gross negligence or willful misconduct.  Extended or protracted litigation could
have a material adverse effect on our cash flow.

WE WILL DEPEND ON OUTSIDE MANUFACTURING SOURCES AND SUPPLIERS.

         We may contract with third party  manufacturers to produce our products
and we will  depend  on  third  party  suppliers  to  obtain  the raw  materials
necessary  for the  production  of our  products.  We do not know  what  type of
contracts we will have with such third party manufacturers and suppliers. In the
event we  outsource  the  manufacturing  of our  products,  we will have limited
control over the actual production process.  Moreover,  difficulties encountered
by any one of our third party  manufacturers,  which result in product  defects,
delayed or reduced  product  shipments,  cost  overruns or our inability to fill
orders on a timely basis,  could have an adverse impact on our business.  Even a
short-term  disruption in our  relationship  with third party  manufacturers  or
suppliers  could have a material  adverse  effect on our  operations.  We do not
intend to maintain an inventory of sufficient size to protect  ourselves for any
significant period of time against supply interruptions,  particularly if we are
required to obtain alternative sources of supply.

OUR STOCK PRICE MAY BE VOLATILE.

         The  market   price  of  our  common   stock  will   likely   fluctuate
significantly in response to the following factors, some of which are beyond our
control:

o        Variations in our quarterly operating results;
o        Changes in financial estimates of our revenues and operating results by
         securities analysts;
o        Changes in market valuations of telecommunications equipment companies;
o        Announcements by us of significant contracts,  acquisitions,  strategic
         partnerships, joint ventures or capital commitments;
o        Additions or departures of key personnel;
o        Future sales of our common stock;


                                       9
<PAGE>

o        Stock market price and volume fluctuations attributable to inconsistent
         trading volume levels of our stock;
o        Commencement of or involvement in litigation.

         In addition,  the equity markets have  experienced  volatility that has
particularly   affected  the  market  prices  of  equity  securities  issued  by
technology  companies and that often has been unrelated or  disproportionate  to
the operating  results of those companies.  These broad market  fluctuations may
adversely affect the market price of our common stock.

WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS ON OUR COMMON STOCK.

         We have not paid any dividends on our Common Stock since  inception and
do not  anticipate  paying any dividends on our Common Stock in the  foreseeable
future.  Instead,  we  intend  to  retain  any  future  earnings  for use in the
operation and expansion of our business.


WE ARE CURRENTLY SUBJECT TO SEC REGULATIONS  RELATING TO LOW-PRICED  STOCKS, THE
MARKET FOR OUR COMMON STOCK COULD BE ADVERSELY AFFECTED.

         The  Securities  and  Exchange   Commission  has  adopted   regulations
concerning  low-priced (or "penny")  stocks.  The regulations  generally  define
"penny stock" to be any equity  security that has a market price less than $5.00
per share, subject to certain exceptions.  If our shares are offered at a market
price less than $5.00 per share,  and do not qualify for any exemption  from the
penny  stock  regulations,  our shares may  become  subject to these  additional
regulations relating to low-priced stocks.

         The penny stock regulations require that broker-dealers,  who recommend
penny stocks to persons other than  institutional  accredited  investors  make a
special  suitability  determination  for the purchaser,  receive the purchaser's
written agreement to the transaction prior to the sale and provide the purchaser
with risk disclosure  documents that identify risks associated with investing in
penny  stocks.  Furthermore,  the  broker-dealer  must obtain a signed and dated
acknowledgment from the purchaser  demonstrating that the purchaser has actually
received the required risk disclosure document before effecting a transaction in
penny stock. These requirements have historically resulted in reducing the level
of trading activity in securities that become subject to the penny stock rules.

         The additional burdens imposed upon broker-dealers by these penny stock
requirements may discourage  broker-dealers  from effecting  transactions in the
common  stock,  which could  severely  limit the market  liquidity of our common
stock and our  shareholders'  ability to sell our common stock in the  secondary
market.


ITEM 3.   CONTROLS AND PROCEDURES

The  Company's  Chief  Executive   Officer  and  Chief  Financial   Officer  are
responsible for establishing and maintaining  disclosure controls and procedures
for the Company.

         (a) Evaluation of Disclosure Controls and Procedures

         As of the end of the period covered by this report, the Company carried
         out an evaluation,  under the supervision and with the participation of
         the Company's  management,  including the Company's  President,  of the
         effectiveness  of the design and operation of the Company's  disclosure
         controls and  procedures  pursuant to Rule 13a-15 under the  Securities
         Exchange Act of 1934, as amended (the "Exchange  Act").  Based upon the
         evaluation,  the Company's  President  concluded that, as of the end of
         the period,  the  Company's  disclosure  controls and  procedures  were
         effective in timely  alerting him to material  information  relating to
         the Company  required  to be  included in the reports  that the Company
         files and submits pursuant to the Exchange Act.

         (b) Changes in Internal Controls

                                       10
<PAGE>


         Based on his evaluation as of June 30, 2005,  there were no significant
changes in the Company's  internal  controls over financial  reporting or in any
other areas that could  significantly  affect the  Company's  internal  controls
subsequent to the date of his most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.



PART II OTHER INFORMATION.

ITEM 1.  LEGAL PROCEEDINGS
                  Not applicable.

ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES ANS USE OF PROCEEDS.
                  Not applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES.
                  Not applicable.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
                  Not applicable.

ITEM 5.  OTHER INFORMATION
                  Not applicable.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits

EXHIBIT
NO.               DESCRIPTION

3        Articles of  Incorporation  (incorporated  by reference to Exhibit 3 of
         the Company's Form 10-SB) filed on July 28, 2000.
3.1      Amended Articles of Incorporation (incorporated by reference to Exhibit
         3.1 of the Company's Form 10-SB) filed on July 28, 2000.
3.2      Amended Articles of Incorporation (incorporated by reference to Exhibit
         3.2 of the Company's Form 10-SB) filed on July 28, 2000.
3.3      Bylaws  (incorporated  by reference to Exhibit 4 of the Company's  Form
         10-SB) filed on July 28, 2000.
4        Specimen Stock  Certificate  (incorporated by reference to Exhibit 5 of
         the Company's Form 10-SB). filed on July 28, 2000.
31.1     Sarbanes-Oxley Act of 2002 Section 302 Certification for Craig Burton
31.2     Sarbanes-Oxley   Act  of  2002  Section  302  Certification  for  Kathy
         Christopher
32.1     Sarbanes-Oxley Act of 2002 Section 906 Certification for Craig Burton
32.2     Sarbanes-Oxley   Act  of  2002  Section  906  Certification  for  Kathy
         Christopher

(b)      Reports on Form 8K

Form 8-K dated May 24, 2004 was filed  pursuant to Item 5 (Other  Events).
Form 8-K dated June 23, 2005 was filed pursuant to Item 5 (Other Events)









                                       11
<PAGE>

                                   SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.


                                            USIP.Com, Inc.

                                            (Registrant)



Dated:   August 2, 2005                   /s/ CRAIG BURTON
                                         -------------------
                                         Craig Burton
                                         President, USIP. Com Inc.



Dated:  August 2, 2005                  /s/ KATHY CHRISTOPHER
                                        ---------------------
                                        Controller, USIP.Com, Inc.