UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C., 20549
                                  FORM 10-Q SB

(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES  EXCHANGE
ACT OF 1934

                   For the quarter report ended June 30, 2001
                                       or

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

                  For the transition period from to ___________

                        Commission File number 000-28581

                               VOIP TELECOM, INC.
   (Exact name of small business issuer as registrant as specified in charter)

         Nevada                                             86-0880742
(State or other jurisdiction of                            (I.R.S. Employer
incorporation or organization)                            Identification No.)

                350 West 9th Ave., Suite 104, Escondido, CA 92025
                     (Address of principal executive office)

         Registrants telephone no., including area code (760) 291-1710

                                       N/A
                    (Former name, 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),  Yes [X] No [ ] and (2) has been  subject to such filing
requirements for the past 90 days. Yes [X] No [ ]

                      APPLICABLE ONLY TO CORPORATE ISSUERS:

     Indicate the number of shares  outstanding of each of the issuers  classes
of common stock, as of the last practicable date.

           Class                              Outstanding as of  June 30, 2001
Common Stock, $0.0001                                    35,732,972







                                TABLE OF CONTENTS
                          PART 1. FINANCIAL INFORMATION

Heading                                                                 Page

Item 1.                    Consolidated Financial Statements              3

                           Consolidated Balance Sheets  December 31, 2000
                              And June 30, 2001                           4-6

                           Consolidated Statements of Operations   six months
                              Ended June 30, 2001 and June 30, 2000       7

                           Consolidated Statement of Stockholders Equity  8-10

                           Consolidated Statements of Cash Flows  six months
                                Ended June 30, 2000 and June 30, 2001     11-12

                           Notes to Consolidated Financial Statements     13

Item 2.                    Managements Discussion and Analysis and
                              Result of  Operations                       14-15




                           PART II. OTHER INFORMATION

Item 1.                    Legal Proceedings                              16

Item 2.                    Changes in Security                            16

Item 3.                    Defaults Upon Senior Securities                16

Item 4.                    Submission of Matter to a Vote of              16
                               Securities Holders

Item 5.                    Other Information                              16

Item 6.                    Exhibits and Reports on Form 8-K               17

                           Signatures                                     S-1










                          PART 1 FINANCIAL INFORMATION

                           Item 1. Financial Statement


     The  accompanying  unaudited  financial  statements  have been  prepared in
accordance  with the  instructions  for Form  10-Q  pursuant  to the  rules  and
regulations of the Securities and Exchange  Commission  and,  therefore,  do not
include all information and footnotes  necessary for a complete  presentation of
the financial  position,  results of operations,  cash flows,  and  stockholders
equity in conformity  with  generally  accepted  accounting  principles.  In the
opinion  of  management,   all  adjustments  considered  necessary  for  a  fair
presentation  of the results of  operations  and  financial  position  have been
included and all such adjustments are of a normal recurring nature.

     The unaudited balance sheet of the Company as of June 30, 2001, and balance
sheet of the Company as of December 31, 2000, derived from the Companys audited
financial  statements,  the unaudited statement of operations and cash flows for
the six  months  ended  June  30,  2001  and June  30,  2000  the  statement  of
stockholders  equity for the period from May 4, 1997  through  June 30, 2001 are
attached hereto and incorporated herein by this reference.

     Operating  results for the quarter ended June 30, 2001 are not  necessarily
indicative of the results that can be expected for the year ending  December 31,
2001.



                       350 E Street, Chula Vista, CA 91910
                     Tel: (619) 422-1348 Fax: (619) 422-1465
                                ARMANDO C. IBARRA
                          CERTIFIED PUBLIC ACCOUNTANTS
                          ( A Professional Corporation)



Armando C. Ibarra,
C.P.A.
Members of the California Society of
Armando Ibarra, Jr.,
C.P.A.
Certified Public Accountants




To the Board of Directors
VoIP Telecom, Inc.
(Formerly Presidents Telecom, Inc.)



     We have  reviewed  the  accompanying  consolidated  balance  sheets of VoIP
Telecom,  Inc.  (Formerly  Presidents  Telecom,  Inc.) as of June  30,  2001 and
December  31,  2000  and  the  related  statements  of  operations,  changes  in
stockholders equity, and cash flows for the three and six months then ended, in
accordance with Statements on Standards for Accounting Review Services issued by
the American Institute of Certified Public Accountants. All information included
in these financial  statements is the  representation  of the management of VoIP
Telecom, Inc.

     A review  consists  principally  of  inquiries  of  company  personnel  and
analytical  procedures  applied to financial data. It is  substantially  less in
scope than an audit in accordance with generally  accepted  auditing  standards,
the objective of which is the  expression of an opinion  regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion.

     Based on our review, we are not aware of any  modifications  that should be
made  to the  accompanying  financial  statements  in  order  for  them to be in
conformity with generally accepted accounting principles.



/S/ Armando C. Ibarra
ARMANDO C. IBARRA, CPA - APC

August 20, 2001

                      VoIP TELECOM, INC.
             (Formerly Presidents Telecom, Inc.)
                 Consolidated Balance Sheets
                             ASSETS
                            Six Months
                              Ended     Year Ended
                             June 30,   December 31,
                               2001         2000
CURRENT ASSETS
Cash                       $   32,600   $   50,392
Accounts receivable           381,703      145,852
Receivable-related party        1,450        1,450
Loan receivable               153,622      153,622
Prepaid expenses                2,906        2,906
Total Current Assets          572,281      354,222
NET PROPERTY & EQUIPMENT      409,049    1,506,720
TOTAL ASSETS               $  981,330   $1,860,942



                      VoIP TELECOM, INC.
             (Formerly Presidents Telecom, Inc.)
                 Consolidated Balance Sheets
             LIABILITIES AND STOCKHOLDERS' EQUITY
                                                      Six Months
                                                        Ended       Year Ended
                                                       June 30,    December 31,
                                                        2001            2000
CURRENT LIABILITIES
Accounts payable                                    $    849,232    $  1,236,659
Loans payable                                            266,110         233,266
Interest payable                                           3,266               0
Accrued expenses                                          34,026               0
Total Current Liabilities                              1,152,634       1,469,925
LONG-TERM LIABILITIES
Loan payable-related party                                     0         122,785
Total Long-Term Liabilities                                    0         122,785
TOTAL LIABILITIES                                      1,152,634       1,592,710
STOCKHOLDERS' EQUITY
Common stock ($0.0001 par value, 50,000,000 shares
authorized 35,732,972 and 32,674,192 shares
issued
and outstanding for June 30, 2001 and
December 31, 2000, respectively)                           3,574           3,268
Additional paid-in capital                            11,924,657      11,642,494
Deficit accumulated during development stage        (11,377,530)    (11,377,530)
Retained Earnings                                      (722,005)              0
Total Stockholders' Equity                              (171,304)        268,232
TOTAL LIABILITIES
& STOCKHOLDERS' EQUITY                              $    981,330    $  1,860,942




                  VoIP TELECOM, INC.
           (Formerly Presidents Telecom, Inc.)
          Consolidated Statements of Operations
                                   Six Months     Six Months
                                     Ended          Ended
                                     June 30,      June 30,
                                     2001            2000
REVENUES
Sales                          $      440,699 $            0
Total Net Revenues                    440,699              0
OPERATING COSTS
Depreciation & amortization            53,515         80,175
Bank charges                              774              0
Bad debt expense                    1,306,998      2,611,955
Administrative expenses               594,690      1,852,923
Total Operating Costs               1,955,977      4,545,053
OTHER INCOME & (EXPENSES)
Interest income                           308             16
Loss on investment                    (12,867)       (15,000)
Exchange gain or loss                      16              0
Gain on disposal of asset             869,605        333,046
Other expenses                           (723)             0
Interest expense                      (63,066)       (18,202)
Total Other Income & (Expenses)       793,273        299,860
NET INCOME (LOSS)               $    (722,005) $  (4,245,193)
BASIC EARNINGS (LOSS) PER SHARE $     (0.0207)  $   (0.2474)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING          34,946,725     17,157,834





                                    Three months    Three months
                                       Ended           Ended
                                     June 30         June 30
                                        2001          2000

REVENUES
Sales                          $      256,070              0
Total Net Revenues                    256,070              0
OPERATING COSTS
Depreciation & amortization            26,762         80,175
Bank charges                               84              0
Bad debt expense                            0      1,607,745
Administrative expenses               194,375       (229,659)
Total Operating Costs                 221,221      1,458,261
OTHER INCOME & (EXPENSES)
Interest income                           301             16
Loss on investment                    (12,867)             0
Exchange gain or loss                       1              0
Gain on disposal of asset                   0        333,046
Other expenses                           (723)             0
Interest expense                         (216)       (18,202)
Total Other Income & (Expenses)       (13,504)       314,860
NET INCOME (LOSS)                $     21,345 $   (1,143,401)
BASIC EARNINGS (LOSS) PER SHARE   $    0.0006 $      (0.0548)
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING          35,475,549     20,867,534





                               VoIP TELECOM, INC.
                       (Formerly Presidents Telecom, Inc.)
            Consolidated Statement of Changes in Stockholders' Equity
               From May 4, 1987(Inception) through March 31, 2001
                                                          Common      Additional
                                          Common           Stock       Paid-In
                                          Shares           Amount      Capital
Inception, May 4, 1987                           -        $    -       $     -

Common stock issued for cash            12,000,000         1,200          (200)

Net loss from inception on May 4,
1987 through December 31, 1997                   -             -             -

Balance, December 31, 1997              12,000,000         1,200          (200)

Net loss for the year ended December
31, 1998                                         -             -             -

Balance, December 31, 1998              12,000,000         1,200          (200)

Common stock issued for cash
at $ 0.15 per share                      1,200,000           120       149,880

Contributed capital                              -             -            67

Stock issued for cash at $ 1.00 per
share                                      108,002            11        89,989

Stock issued for services at $ 1.00
per share                                    6,000             1         4,999

Net loss for the year ended
December 31, 1999                                -             -             -

Balance, December 31, 1999              13,314,002         1,332       244,735

Common stock issued for cash
at $ 0.54 per share                      2,752,276           275     2,752,001

Common stock issued for cash
at $ .20 per share                       3,810,000           381       761,619


Stock offering costs                             -             -      (607,928)


Common stock issued for services
at $ 3.00 per share                         60,000             6       179,994


Common stock issued for services
at $ 1.00 per share                      1,080,600           108     1,080,492

Common stock issued for services
at $ 0.50 per share                         25,000             3        12,497







                                              Stock
                                           Subscription     Retained
                                            Receivable      Earnings     Total


Inception, May 4, 1987                      $     -        $      -      $     -

Common stock issued for cash                      -               -        1,000

Net loss from inception on May 4,
1997 through December 31, 1997                    -          (1,000)    (1,000)

Balance, December 31, 1997                        0          (1,000)           0

Net loss for the year ended December
31, 1998                                          -          (1,450)     (1,450)

Balance, December 31, 1998                        -          (2,450)     (1,450)

Common stock issued for cash
at $ 0.15 per share                        (150,000)              -            0

Contributed capital                               -               -           67

Stock issued for cash at $ 1.00 per
share                                             -               -       90,000

Stock issued for services at $ 1.00
per share                                         -               -        5,000

Net loss for the year ended
December 31, 1999                                 -         (93,461)    (93,461)

Balance, December 31, 1999                 (150,000)        (95,911)         156

Common stock issued for cash
at $ 0.54 per share                               -               -    2,752,276

Common stock issued for cash
at $ .20 per share                                -               -      762,000


Stock offering costs                              -               -    (607,928)


Common stock issued for services
at $ 3.00 per share                               -               -      180,000


Common stock issued for services
at $ 1.00 per share                               -               -    1,080,600

Common stock issued for services
at $ 0.50 per share                               -               -       12,500






           VoIP TELECOM, INC.
  (Formerly Presidents Telecom, Inc.)
        Consolidated Statement of Changes in Stockholders' Equity
           From May 4, 1987(Inception) through March 31, 2001



                                                           Common   Additional
                                            Common         Stock     Paid in
                                            Shares         Amount    Capital
continued

Common stock issued for services
t $ 0.17 per share                          172,834            17        28,788

Common stock issued to acquire 100%
of Central America Fuel Technologies,
Inc. on March 15, 2000                        6,000             1        14,999
Options exercised at $ 0.42 per share        75,000             7        31,243

Options exercised at $ 0.21 per share        60,000             6        12,494

Options exercised at $ 0.21 per share        60,000             6        12,494

Common stock issued for ICE at
$ 0.83 per share                          3,000,000           300     2,499,700

Common stock issued for Access
Network Limited at $ 0.83 per share       4,800,000           480     3,999,520

Common stock issued for debt
settlement at $ 0.20 per share            2,152,140           215       358,475
Common stock issued for debt
settlement at $ 0.83 per share              109,340            11        90,741
Receipt of subscription receivable                -             -             -
Options exercised at $ 0.2084                12,000             1         2,499

Options exercised at $ 0.4167                42,600             4        17,746
Options exercised at $ 0.4167                 2,400             1           999
Common stock issued for cash
at $ 0.10 per share                         120,000            12        11,988

Common stock issued fot cash
at $ 0.10 per share                         500,000            50        49,950

Common stock issued for services
at $ 0.16827 per share                      520,000            52        87,448

Net loss for the year ended
December 31, 2000                                 -             -             -

Balance, December 31, 2000               32,674,192   $     3,268   $11,642,494








                                                Stock
                                              Subscription    Retained
                                                Receivable    Earnings   Total

Common stock issued for services
t $ 0.17 per share                                 -              -       28,805

Common stock issued to acquire 100%
of Central America Fuel Technologies,
Inc. on March 15, 2000                             -              -       15,000
Options exercised at $ 0.42 per share              -              -       31,250
Options exercised at $ 0.21 per share              -              -       12,500
Options exercised at $ 0.21 per share              -              -       12,500

Common stock issued for ICE at
$ 0.83 per share                                   -              -    2,500,000

Common stock issued for Access
Network Limited at $ 0.83 per share                -              -    4,000,000

Common stock issued for debt
settlement at $ 0.20 per share                     -              -      358,690
Common stock issued for debt
settlement at $ 0.83 per share                     -              -       90,752
Receipt of subscription receivable           150,000              -      150,000
Options exercised at $ 0.2084                      -               -       2,500

Options exercised at $ 0.4167                      -              -       17,750
Options exercised at $ 0.4167                      -              -        1,000
Common stock issued for cash
at $ 0.10 per share                                -              -       12,000
Common stock issued for cash
at $ 0.10 per share                                -              -       50,000
Common stock issued for services
at $ 0.16827 per share                             -              -       87,500
Net loss for the year ended
December 31, 2000                                  -    (11,281,619)(11,281,619)

Balance, December 31, 2000                   $     -   $(11,377,530)     268,232








           VoIP TELECOM, INC.
   (Formerly Presidents Telecom, Inc.)
        Consolidated Statement of Changes in Stockholders' Equity
           From May 4, 1987(Inception) through March 31, 2001




                                                         Common     Addtional
                                        Common           Stock      Paid in
                                        shares          Amount      Capital

continued


Common stock issued for services
at $ 0.10 per share                      1,800,000           180       179,820
Common stock issued for services
at $ 0.10 per share                        100,000            10         9,990
Common stock issued for services
at $ 0.10 per share                         20,280             2         2,026
Common stock issued for services
at $ 0.10 per share                        250,000            25        24,975
Common stock issued for debt service
at $ 0.10 per share                        628,500            63        62,787
Common stock issued for services
at $ 0.01 per share                        250,000            25         2,475
Common stock issued for finders fees
at $ 0.01 per share                         10,000             1            90
Net loss for the period ended
June 30, 2001                                    -             -             -
Balance, June 30, 2001                  35,732,972   $     3,574   $11,924,657



                                         Stock
                                      Subscription        Retained
                                        Receivable        Earnings     Total


Common stock issued for services
at $ 0.10 per share                          -              -         180,000
Common stock issued for services
at $ 0.10 per share                          -              -          10,000
Common stock issued for services
at $ 0.10 per share                          -              -           2,028
Common stock issued for services
at $ 0.10 per share                          -              -          25,000
Common stock issued for debt service
at $ 0.10 per share                          -              -          62,850
Common stock issued for services
at $ 0.01 per share                          -              -           2,500
Common stock issued for finders fees
at $ 0.01 per share                          -              -              91
Net loss for the period ended
June 30, 2001                                -       (722,005)       (722,005)
Balance, June 30, 2001                 $     -   $(12,099,535)   $   (171,304)





                   VoIP TELECOM, INC.
           (Formerly Presidents Telecom, Inc.)
          Consolidated Statements of Cash Flows



                                              Six months     Six months
                                                ended          ended
                                               June 30        June 30
                                                2001           2000

     CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss) from operations        $    (722,005) $   (4,245,193)
Depreciation & Amortization Expense             53,515        80,175
(Increase) in accounts receivable             (235,851)     (619,218)
(Increase) in loans receivable                       0    (1,267,918)
Increase in officers advances                        0        19,052
Increase / (decrease) in accounts payable     (387,427)       54,320
Increase in interest payable                     3,266             0
Increase in accrued expenses                    34,026             0
Bad debt                                             0     1,887,135
Common stock issued for services               282,469             0
Net cash provided / (used) by operating       (972,007)   (4,091,647)
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of fixed assets                    (6,000)     (143,088)
Disposal of equipment                        1,050,156             0
Net cash provided / (used) by investing      1,044,156      (143,088)
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in loans payable           (89,941)      452,739
APIC                                                 0     3,760,760
Subscription receivable                              0       150,000
Common stock issued for cash                         0            95
Net cash provided / (used) by financing        (89,941)    4,363,594
activities
Net increase (decrease) in cash                (17,792)      128,859
Cash at beginning of period                     50,392           156
Cash at end of period                    $      32,600 $       129,015
Supplemental Cash Flow Disclosures
Cash paid during year for interest              63,066        18,202
Schedule of Non-Cash Activities
Common Stock issued for services         $     282,469 $             0
Common Stock issued for acquisition of   $           0 $        15,000




                                              Three months   Three months
                                                ended           ended
                                               June 30        June 30
                                                2001          2000



CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (loss) from operations        $      21,345 $    (1,143,401)
Depreciation & Amortization Expense             26,762        80,175
(Increase) in accounts receivable             (202,567)     (619,219)
(Increase) in loans receivable                       0      (867,916)
Increase in officers advances                        0        19,052
Increase / (decrease) in accounts payable      156,220        54,320
Increase in interest payable                     3,266             0
Increase in accrued expenses                    34,026             0
Bad debt                                             0     1,887,135
Common stock issued for services                 2,591             0
Net cash provided / (used) by operating         41,643      (589,854)
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of fixed assets                         0      (143,088)
Disposal of equipment                           (3,440)            0
Net cash provided / (used) by investing         (3,440)     (143,088)
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in loans payable           (45,960)      324,808
APIC                                                 0       333,103
Subscription receivable                              0       150,000
Common stock issued for cash                         0           311
Net cash provided / (used) by financing        (45,960)      808,222
activities
Net increase (decrease) in cash                 (7,758)       75,280
Cash at beginning of period                     40,358        53,735
Cash at end of period                   $      32,600 $       129,015
Supplemental Cash Flow Disclosures
Cash paid during year for interest                 216        18,202
Schedule of Non-Cash Activities
Common Stock issued for services        $       2,591 $             0
Common Stock issued for acquisition of  $           0 $             0
subsidiaries










NOTE 1.  ORGANIZATION AND DESCRIPTION OF BUSINESS

VoIP Telecom,  Inc. (the Company) was incorporated,  May 4, 1987, under the laws
of the state of  Nevada,  as Energy  Realty  Corporation.  On July 31,  1993 the
Companys name changed to Balcor  International and on December 18, 1998 the name
was again changed to Dimension  House,  Inc. As of December 31, 1998 the Company
had no operations and in accordance  with SFAS # 17 was considered a development
stage  company.  As of December  31, 1998 the  Company was  authorized  to issue
100,000,000  shares  of  $0.0001  par  value of  which  10,000,000  shares  were
outstanding.  On October  28, 1999 the  Company  changed its name to  Presidents
Telecom, Inc.

Pursuant to an  acquisition  agreement  and plan of merger dated as of March 15,
2000  between the Company  then known as  Presidents  Telecom,  Inc. and Central
America Fuel Technology, Inc. (CAFT), a Nevada corporation,  all the outstanding
common shares of CAFT were exchanged for 5,000 restricted common shares of VoIP.

On April 1, 2000, the Company acquired 100% of the issued and outstanding shares
of  International  Communications  and  Equipment,  Inc.  (ICE) in exchange  for
3,000,000  shares of VoIPs common stock.  ICE is establishing an  International
telecommunications  network  using the Voice  Over  Internet  Protocol.  ICE has
recently received  approval for a Russian joint venture,  which will be serviced
through a whollyowned  German subsidiary using the latest in Clarent technology
and equipment.

ICE was founded in 1996.  Under a joint venture  agreement  negotiated  with the
Crosna Group, a banking-satellite-telecom  conglomerate in Moscow, ICE shall own
50% of the Crosna project and shall be the managing venture  partner.  The joint
venture  will  provide  the  Company  long  distance  carrier  serves for the 89
regional  carriers serving the Russian  Federation over a landline and satellite
network. The Companys initial equipment configuration,  already installed, will
offer  telephony  long  distance  calling  services  to  people in  Moscow,  St.
Petersburg, Yaroslavl, Volgograd and outbound to other countries.

On April 1, 2000, the Company acquired 100% of the issued and outstanding shares
of Access  Network  Limited in exchange  for  4,800,000  shares of the  Companys
common stock. The Company provides long distance voice communication services.

On April 17, 2000, the Company changed its name to VoIP Telecom, Inc.

On January 1, 2001,  the Company  rescinded  the  acquisition  of  International
Communications  and Equipment,  Inc.  (ICE).  The Company removed the assets and
liabilities of ICE from the consolidated statement.  VoIP recorded income in the
amount of $ 869,605 that derived from the rescinded deal with ICE.






NOTE 1.  ORGANIZATION AND DESCRIPTION OF BUSINESS (CONTINUED)

Through subsidiaries,  the Company delivers international long distance services
via flexible,  server-based  networks  consisting of re-sale  arrangements  with
other long distance providers, various foreign termination relationships, VoIPs
own international servers and leased/owned  transmission  facilities.  Employing
digital  switching  and  transmission  technologies  supported by  comprehensive
monitoring and technical  support  personnel,  the Company provides  services in
foreign countries.


NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Accounting Method

The  Companys  financial  statements  are prepared  using the accrual  method of
accounting. The company has elected a December 31, year end.

b. Basic Loss per Share

In February  1997,  the FASB issued SFAS No. 128,  Earnings  Per Share,  which
specifies the computation, presentation and disclosure requirements for earnings
(loss) per share for entities  with  publicly  held common  stock.  SFAS No. 128
supersedes the provisions of APB No. 15, and requires the  presentation of basic
earnings (loss) per share and diluted earnings (loss) per share. The Company has
adopted the provisions of SFAS No. 128 effective December 6, 1993 (inception).

Basic net loss per share excludes  dilution and is computed by dividing net loss
by the weighted average number of common shares  outstanding during the reported
periods.  Diluted net loss per share reflects the potential  dilution that could
occur if a stock  option  and  other  commitments  to issue  common  stock  were
exercised.

c. Basis of Consolidation

The  consolidated  financial  statements  of VoIP  Telecom,  Inc.  include those
accounts  of  VoIP  Telecom,  Inc.,  Access  Network  Limited.  All  significant
intercompany transactions have been eliminated.

d. Cash Equivalents

The Company  considers  all highly liquid  investments  with a maturity of three
months or less when purchased to be cash equivalents.





NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

e. Estimates and Adjustments

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect  the  reported  amounts  of assets  and  liabilities  and  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.

f. Basis of  Presentation  and  Considerations  Related to  Continued  Existence
(going concern)

The Companys financial  statements have been presented on the basis that it is a
going concern, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business.

The Companys  management  intends to raise  additional  operating  funds through
operations and/or debt offerings.

g.  Income Taxes

The Company  accounts  for income  taxes using the asset and  liability  method.
Under the asset and liability  method,  deferred income taxes are recognized for
the tax consequences of temporary  differences by applying  enacted  statutory
tax rates  applicable  to future  years to  differences  between  the  financial
statement carrying amounts and the tax bases of existing assets and liabilities.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management,  it is more likely than not that some portion or all of the deferred
tax assets will not be realized. See note 3 regarding income tax benefit.

h. Property & Equipment

Property  and  equipment  are  recorded at cost.  Minor  additions  renewals are
expensed in the year incurred.  Major additions and renewals are capitalized and
depreciated over their estimated useful lives.  Depreciation and amortization is
calculated using  straight-line and accelerated  methods for income tax purposes
(five years for vehicles and equipment,  and seven years for office  furniture).
Total depreciation for the six months ended 2001 is $ 53,515.










NOTE 3 -   INCOME TAXES

                                           June 30,     December 31,_
                                            2001            2000
Deferred tax assets:
Net operating loss carryforwards      $    722,005    $ 11,377,530
Other                                       -0-            -0-
Valuation allowance                       (722,005)    (11,377,530)

Net deferred tax assets               $     -0-       $    -0-

Realization of deferred tax assets is dependent upon  sufficient  future taxable
income during the period that deductible temporary differences and carryforwards
are expected to be available to reduce  taxable  income.  As the  achievement of
required  future taxable income is uncertain,  the Company  recorded a valuation
allowance.


NOTE 4 -  NOTES PAYABLE

Notes payable as of June 30, 2001, consist of the following:

Unsecured  promissory  note of $165,000  dated November 2, 2000 with an interest
rate at the annual  floating rate of US Prime+ 4%. The maturity date is November
2, 2001.

Unsecured  promissory  note of $15,000 dated  November 13, 2000 with an interest
rate at 10%. The maturity date is November 2, 2001.

Unsecured  promissory  note of $50,000 dated  November 22, 2000 with an interest
rate at 10% per annum.  The maturity  date is November  22,  2001,  or under the
terms of a funding  commitment  to fund up to $4,000,000 by way of a convertible
debenture. Conversion can be exercised at a price of $0.25 per share.


NOTE 5 -  GOING CONCERN

As shown in the  accompanying  financial  statements  the Company has incurred a
deficit of  $12,099,535  since its inception in 1987. The ability of the Company
to continue as a going  concern is dependent on the  significant  generation  of
revenue from the Companys  international long distance services.  The financial
statements do not include any adjustments that might be necessary if the Company
is unable to continue as a going concern.




NOTE 6 -  PROPERTY & EQUIPMENT

Property  is  stated  at cost.  Additions,  renovations,  and  improvements  are
capitalized.  Maintenance  and repairs,  which do not extend  asset  lives,  are
expensed as incurred. Depreciation is provided on a straight-line basis over the
estimated useful lives ranging from 27.5 years for commercial rental properties,
5 years for tenant improvements, and 5 - 7 years on furniture and equipment.


                                                                   June 30, 2001
                                                --------------------------------
                                                --------------------------------
Equipment                                                             $ 535,240
                                     ------------------------------------------
                                     ------------------------------------------
Office furniture                                                         18,728
                ----------------------------------------------------------------
                                                                      $ 575,481
                                     ------------------------------------------
Less Accumulated Depreciation                                          (144,918)
                                               --------------------------------
                                               --------------------------------

                                     ------------------------------------------
                                     ------------------------------------------
Net Property and Equipment                                            $ 409,049
                                               ================================


NOTE 7 -  RELATED PARTY TRANSACTIONS

     a. On September 1, 2000 the Company entered into a twelve month  consulting
agreement.  Alexander  Anderson  will  serve  the  Company  in the  capacity  of
consultant in  consideration of which the Company will pay to the consultant the
sum of $10,000  monthly or such  greater  sum as may be approved by the Board of
Directors of the Company.

     b. The Company has received  advances of $ 184,785 from a stockholder as of
June 30,  2001.  As of June 30, 2001 the Company  has not  established  specific
repayment terms.


 NOTE 8 -  STOCK TRANSACTIONS

As of December 31, 1998 the Company had 12,000,000 shares  outstanding.  On June
17, 1998,  the Company issued  1,200,000  shares of common stock valued at $0.15
per share for cash.

On June 17,  1998 the Company  issued  108,002  shares of common  stock for cash
valued at $1.00 per share.

On June 17, 1998.  The Company  issued 6,000 shares of common stock for services
valued at $1.00 per share.

As of  December  31,  1999 the Company  had  13,314,002  shares of common  stock
outstanding.




NOTE 8 -  STOCK TRANSACTIONS (CONTINUTED)

On March 31, 2000, the Company issued  2,752,276 shares of common stock for cash
valued at $0.54 per share.

On March 31, 2000, the Company issued  3,810,000 shares of common stock for cash
valued at $0.20 per share.

On April 20, 2000 the Company  issued 60,000 shares of common stock for services
valued at $3.00 per share.

On April 28,  2000,  the Company  issued  1,080,600  shares of common  stock for
services valued at $1.00 per share.

On May 17, 2000,  the Company  issued 25,000 shares of common stock for services
valued at $0.50 per share.

On May 19, 2000,  the Company issued 172,834 shares of common stock for services
valued at $0.17 per share.

On June 2, 2000 the Company  issued 6,000 shares of common stock to acquire 100%
of Central America Fuel Technologies, Inc. valued at $2.50 per share.

On June 30, 2000 the Company had 75,000 shares of common stock exercised  valued
at $0.42 per share.

On June 30, 2000 the Company had 60,000 shares of common stock exercised  valued
at $0.21 per share.

On June 30, 2000 the Company had 60,000 shares of common stock exercised  valued
at $0.21 per share.

On June 30, 2000 the Company issued  3,000,000 shares of common stock to acquire
International Communication & Equipment valued at $0.83 per share.

On June 30, 2000 the Company issued  4,800,000 shares of common stock to acquire
Access Network Limited valued at $0.83 per share.

On August 30, 2000 the Company issued  2,152,140 shares of common stock for debt
settlement valued at $0.20 per share.






NOTE 8 -  STOCK TRANSACTIONS (CONTINUTED)

On August 30, 2000 the Company  issued  109,340  shares of common stock for debt
settlement valued at $0.83 per share.

On  October 1, 2000 the  Company  had 12,000  shares of common  stock  exercised
valued at $0.2084 per share.

On October 4, 2000 the Company had 42,600  shares of common  stock  exercised at
$0.4167 per share.

On October  12,  2000 the Company  had 2,400  shares of common  stock  exercised
valued at $0.4167 per share.

On December 27, 2000 the Company  issued 120,000 shares of common stock for cash
valued at $0.10 per share.

On December 27, 2000 the Company  issued 500,000 shares of common stock for cash
valued at $0.10 per share.

On December 31, 2000 the Company  issued 520,000 shares of common stock for cash
valued at $0.16827 per share.

On January 25,  2001 the Company  issued  1,800,000  shares of common  stock for
services valued at $0.10 per share.

On February 9, 2001 the Company  issued  628,500 shares of common stock for debt
settlement valued at $0.10 per share.

On February  20,  2001 the  Company  issued  20,280  shares of common  stock for
services valued at $0.10 per share.

On March 9, 2001 the Company  issued 100,000 shares of common stock for services
valued at $0.10 per share.

On March 10, 2001 the Company issued 250,000 shares of common stock for services
valued at $0.10 per share. As of March 31, 2001 there were 35,472,972  shares of
common stock outstanding.

On June 30, 2001 the Company  issued 250,000 shares of common stock for services
valued at $0.01 per share.

On June 30, 2001 the Company  issued  10,000 shares of common stock for services
valued at $0.10 per share.


NOTE 9 -  ISSUANCE OF SHARES FOR SERVICES  STOCK OPTIONS

The company  has a  nonqualified  stock  option  plan,  which  provides  for the
granting of options to key employees, consultants, and nonemployees directors of
the Company.  The valuations of shares for services are based on the fair market
value of services.  The Company has elected to account for the stock option plan
in accordance  with paragraph 30 of SFAS 123 were the  compensation to employees
should be recognized over the period(s) in which the related  employee  services
are rendered.  In accordance  with  paragraph 19 of SFAS 123 the fair value of a
stock option granted is estimated using an option-pricing model.

A total of  2,170,280  shares were issued for  services  to  management  and key
employees for the six months ended June 30, 2001.



                      350 E. Street, Chula Vista, CA 91910
                     Tel: (619) 422-1348 Fax: (619) 422-1465
                                ARMANDO C. IBARRA
                          CERTIFIED PUBLIC ACCOUNTANTS
                          (A Professional Corporation)


Armando C. Ibarra,
C.P.A.
Members of the California Society of
Armando Ibarra, Jr.,
C.P.A.
Certified Public
Accounts



August 28, 2001


To Whom It May Concern:

The firm of Armando C. Ibarra, Certified Public Accountant,  APC consents to the
inclusion of my report of August 20, 2001, on the  financial  statements of VoIP
Telecom,  Inc., as of June 30, 2001, in any filings that are necessary now or in
the near future with the U.S. Securities and Exchange Commission.




Very truly yours,


/S/ Armando Ibarra
ARMANDO IBARRA, C.P.A.








                 ITEM 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Going Concern and Ability of the Company to Continue

     The Company has a net operating loss carry forward of  $(12,099,535)  since
inception through June 30, 2001.

     The Companys consolidated financial statements are prepared using generally
accepted accounting  principles applicable to a going concern which contemplates
the realization of assets and liquidation of liabilities in the normal course of
business.  The  Company has not  established  revenues  sufficient  to cover its
operating costs and allow it to continue as a going concern. Management believes
that the Company will soon be able to generate revenues  sufficient to cover its
operating costs. In the interim, the Company intends to raise additional capital
through private placements of its common stock.

Liquidity and Capital Resources

     As of June 30, 2001 the Company has $572,281 in current assets  compared to
$354,222 in current  assets as of December  31,  2000.  The  $572,281 in current
assets in  compromised  of $32,600 in cash,  $381,703  in  accounts  receivable,
$155,072 in loans receivable and prepaid expenses in the amount of $2,906. As of
June 30,  2001 the Company has current  liabilities  of  $1,152,634  compared to
$1,469,925  as of December  31, 2000.  However,  the Company has a net equity of
$(171,304) as of June 30, 2001 compared to $268,232 as of December 31, 2000.

     Management  realizes the  Companys  operations  do not generate  sufficient
revenues to cover operating costs. The Companys auditors have also expressed the
Companys  going  concern and ability of the Company to continue in the  reviewed
financial statement.

Results of Operations

     For the six  months  ended June 30,  2001,  the  Company  had  revenues  of
$440,699  compared  to $0 for the same  period of 2000.  Total  operating  costs
decreased  from  $4,545,053 to $1,955,977 for the six months ended June 30, 2001
compared to June 30, 2000. Bad debt expense decreased  $1,304,957  predominately
due to the recission of the ICE acqusition. Also, administrative costs decreased
$1,258,233 for the period ending




                                                        21
June 30, 2001 compared to the same period of 2000.  This again can be attributed
to the ICE  recission  and the Company  expensed the access and ICE  acquisition
costs in 2000. This again can be attributed to the ICE recission and also due to
the fact the  Company  expensed  the access and ICE  acquisition  costs in 2000.
Depreciation and amortization  decreased  approximately $26,500 for the 6 months
ended June 30, 2001 compared to the same period of 2000, due to equipment of ICE
not being on the books as per the recission.  The Company had a gain of $869,605
on the  disposal of ICE  division  compared to a gain of $333,406 in 2000 on the
sale of an asset.  Interest expense also increased $44,864 for the six months of
2001 compared to 2000.

     For the three  months  ended June 30,  2001 the  Company  had  revenues  of
$256,070  compared  to $0 for  the  same  period  of  2000.  Operating  expenses
decreased $1,237,040.  This is predominately due to a $1,607,745 decrease in bad
debt  expense as of the three  months  ended June 30, 2001  compared to the same
period of 2000.  The  Company had total  other  expenses of $13,504  compared to
total other income of $314,860 for the three months ended June 30, 2001 compared
to the same period of 2000. The other income in 2000 was largely  derived from a
gain of $333,046 from the disposal of an asset.


Net Operating Loss

     The Company has  accumulated  approximately  $12,099,535  of net  operating
losses  caryforwards  as of June 30, 2001,  which maybe offset  against  taxable
income and income  taxes in future  years.  The use of these to losses to reduce
future income taxes will depend on the  generation of sufficient  taxable income
prior to the expiration of the net loss carryforwards.  The carryforwards expire
in the year  2021.  In the event of certain  changes in control of the  Company,
there will be an annual limitation on the amount of carryforwards,  which can be
used.


Sale of Common Capital Stock

     On June 10, 2001 the Company  issued 250,000 shares of common stock at $.01
for a total of $2,500 to Common House Publishing, Inc., for consulting services.
The Company also issued  10,000 shares of common stock at $.01 to Brent Purin as
a finder fee for a total of $100.  The above  issued  shares were  issued  under
Section 4(2) and 4(6) of the 1933 Securities Act.

     As of June 30,  2001 the  Company  had  35,732,972  shares of common  stock
outstanding.

Risk Factors and Cautionary Statements

     Forward-looking  statements  in this  report are made  pursuant to the safe
harbor provisions of the Private  Securities  Litigation Reform Act of 1995. The
Company
                                       22
wished to advise readers that actual results may differ  substantially from such
forward-looking   statements.   Forward-looking  statements  involve  risks  and
uncertainties  that could cause actual results to differ  materially  from those
expressed on or implied by the  statements,  including,  but not limited to, the
following:  the ability of the Company to successfully meet its cash and working
capital needs,  the ability of the Company to  successfully  market its product,
and other risks  detailed in the  Companys  periodic  report  filings  with the
Securities and Exchange Commission.


                            PART II OTHER INFORMATION

                            ITEM 1. LEGAL PROCEEDINGS

     There are  presently no pending legal  proceedings  to which the Company or
any of its subsidiaries are a party, to the best of knowledge of the Company. No
actions against the Company are contemplated or threatened.

                          ITEM 2. CHANGES IN SECURITIES

     On June 10, 2001 the Company  issued 250,000 shares of common stock at $.01
for a total of $2,500 to Common House Publishing, Inc., for consulting services.
The Company also issued  10,000 shares of common stock at $.01 to Brent Purin as
a finder fee for a total of $100.  The above  issued  shares were  issued  under
Section 4(2) and 4(6) of the 1933 Securities Act.

     As of June 30,  2001 the  Company  had  35,732,972  shares of common  stock
outstanding.



                     ITEM 3. DEFAULTS UPON SENIOR SECURITIES

         None.

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

         None.

                            ITEM 5. OTHER INFORMATION


         None.


                                                        23




                       ITEM 6. EXHIBITS AND REPORTS ON 8-K

a.       Form 10K SB filed by reference on April 18, 2001.
















                                                        24

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
registrant  has duly  caused  this  Report  to be  signed  in its  behalf by the
undersigned hereto duly authorized.



                                                      VOIP TELECOM, INC.


Dated: August 30, 2001

                                                     By:__________________
                                                       Michael Tan
                                                       President


                                    ........