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

                                   FORM 10-QSB

[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of
1934 For the quarterly period ended March 31, 2002.

[ ] Transition report under Section 13 or 15(d) of the Exchange Act For the
transition period from to

Commission file number 000-30479

                               ETELCHARGE.COM, INC
                 (Name of Small Business Issuer in its Charter)

            NEVADA                                        75-2847694
(State or other jurisdiction of                        (I.R.S.  Employer
incorporation or organization)                         Identification No.)

                               ETELCHARGE.COM, INC
                         1636 N. HAMPTON ROAD, SUITE 270
                              DE SOTO, TEXAS 75115.
                                 (972) 298-3800

     (Address and telephone number of issuer's principal executive offices)

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

Yes   X      No
    -----       -----

                     APPLICABLE ONLY TO ISSUERS INVOLVED IN
                        BANKRUPTCY PROCEEDINGS DURING THE
                              PRECEDING FIVE YEARS

         Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange act after the
distribution of securities under a plan confirmed by a court.

Yes   X      No
    -----       -----

                      APPLICABLE ONLY TO CORPORATE ISSUERS

         State the number of shares outstanding of each of the issuer's classes
of common equity, as of March 31, 2002:  11,693,776

         Transitional Small Business Disclosure Format (check one):

Yes   X      No
    -----       -----








<PAGE>


                              ETELCHARGE.COM, INC.
                          (A DEVELOPMENT STAGE COMPANY)




<Table>
<S>                                                                                                    <C>
PART I - FINANCIAL INFORMATION

    Item 1.  Financial Statements

       Balance Sheets                                                                                   2

       Statements of Operations                                                                         3

       Statements of Cash Flows                                                                         4

       Notes to Financial Statements                                                                    6

    Item 2. Management's Discussion and Analysis or Plan of Operations                                  7


PART II - OTHER INFORMATION

    Item 1.  Legal Proceedings                                                                         11

    Item 2.  Changes in Securities                                                                     11

    Item 3.  Defaults Upon Senior Securities                                                           11

    Item 4.  Submission of Matters to a Vote of Securities Holders                                     12

    Item 5.  Other Information                                                                         12

    Item 6.  Exhibits and Reports on Form 8-K                                                          12


SIGNATURES                                                                                             12
</Table>



                                       1

<PAGE>


                          PART I FINANCIAL INFORMATION

Item 1. Financial Statements

                              ETELCHARGE.COM, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                                 BALANCE SHEETS


                                     ASSETS

<Table>
<Caption>
                                                                                  (Unaudited)
                                                                                    March 31,     December 31,
                                                                                      2002           2001
                                                                                  ------------    ------------
<S>                                                                               <C>             <C>

CURRENT ASSETS
   Cash                                                                           $        200    $        200
   Employee advances                                                                     1,390           1,190
                                                                                  ------------    ------------

      Total current assets                                                               1,590           1,390

PROPERTY AND EQUIPMENT, net                                                             24,914          28,014

OTHER ASSETS
   Proprietary rights, net of accumulated amortization of
     $49,000 (unaudited) and $43,750 at March 31, 2002
     and December 31, 2001, respectively                                                14,000          19,250
   Deposits                                                                              1,000           1,000
                                                                                  ------------    ------------

      Total other assets                                                                15,000          20,250
                                                                                  ------------    ------------

TOTAL ASSETS                                                                      $     41,504    $     49,654
                                                                                  ============    ============

                                       LIABILITIES AND SHAREHOLDERS' DEFICIT

CURRENT LIABILITIES
   Bank overdraft                                                                 $      2,045    $      5,955
   Accrued compensation                                                                109,416          86,666
   Payroll tax obligation                                                               67,340          59,526
   Accounts payable                                                                     66,098          51,460
   Pending stock subscriptions                                                          32,449              --
                                                                                  ------------    ------------

      Total current liabilities                                                        277,348         203,607

NOTE PAYABLE TO SHAREHOLDER                                                             34,249          37,000

COMMITMENTS AND CONTINGENCIES (Note 4)

SHAREHOLDERS' DEFICIT
  Common stock -- $.003 par value; 10,000,000 shares authorized; 11,693,776
  (unaudited) and 11,267,561 issued and outstanding
    at March 31, 2002 and December 31, 2001, respectively                               35,082          33,803
  Additional paid-in capital                                                         2,880,627       2,248,175
  Deficit accumulated during development stage                                      (3,185,802)     (2,472,931)
                                                                                  ------------    ------------

      Total shareholders' deficit                                                     (270,093)       (190,953)
                                                                                  ------------    ------------

TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT                                       $     41,504    $     49,654
                                                                                  ============    ============
</Table>



                                       2

<PAGE>


                              ETELCHARGE.COM, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                      STATEMENTS OF OPERATIONS (UNAUDITED)



<Table>
<Caption>
                                                                                            Period from
                                                                Three          Three        June 7, 1999
                                                             months ended   months ended   (inception) to
                                                               March 31,      March 31,      March 31,
                                                                 2002           2001           2002
                                                             ------------   ------------   -------------
<S>                                                          <C>            <C>            <C>
REVENUES                                                     $         --   $         --   $

GENERAL AND ADMINISTRATIVE EXPENSES                               713,427        153,457      3,192,486
                                                             ------------   ------------   ------------

   Loss from operations                                           713,427        153,457      3,192,486

OTHER INCOME                                                          556            115          6,684
                                                             ------------   ------------   ------------

   Loss before provision for income taxes                         712,871        153,342      3,185,802

PROVISION FOR INCOME TAXES                                             --             --             --
                                                             ------------   ------------   ------------

   Net loss                                                  $    712,871   $    153,342   $  3,185,802
                                                             ============   ============   ============

Net loss per share - basic and diluted                       $       0.06   $       0.01
                                                             ============   ============

Weighted average shares outstanding - basic and diluted        11,648,269     10,388,841
                                                             ============   ============
</Table>



                                       3

<PAGE>


                              ETELCHARGE.COM, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                      STATEMENTS OF CASH FLOWS (UNAUDITED)


<Table>
<Caption>
                                                                                       Period from
                                                       Three months    Three months    June 7, 1999
                                                          ended           ended       (inception) to
                                                         March 31,       March 31,       March 31,
                                                           2002            2001            2002
                                                       ------------    ------------   --------------
<S>                                                    <C>             <C>            <C>

CASH FLOWS FROM OPERATING ACTIVITIES
   Net loss                                            $   (712,871)   $   (153,342)   $ (3,185,802)
   Adjustments to reconcile net loss to net
     cash used in operating activities
       Depreciation and amortization                          8,350           8,318          69,211
       Issuance of common stock for services                605,025          35,633       2,116,956
   Changes in:
     Employee advances                                         (200)             --          (1,390)
     Prepaid expenses                                            --           2,000              --
     Other assets                                                --              --          (1,000)
     Accounts payable                                        14,638         (11,404)         66,098
     Accrued compensation                                    22,750          13,540         109,416
     Payroll tax obligation                                   7,814              --          67,340
     Accrued liabilities                                         --          (6,506)             --
                                                       ------------    ------------    ------------

         Net cash used in operating activities              (54,494)       (111,761)       (759,171)
                                                       ------------    ------------    ------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                            --            (744)        (40,325)
                                                       ------------    ------------    ------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Increase (decrease) in bank overdraft                     (3,910)             --           2,045
   Proceeds from issuance of common stock                    28,706          46,500         846,453
   Payments on note payable to shareholder                   (2,751)             --          (3,751)
   Proceeds from note payable to shareholder                     --              --          38,000
   Cash received on pending stock subscriptions              32,449              --          32,449
   Cash received on receivable from shareholder                  --              --           1,000
   Payments on payable to related party                          --          (4,000)       (116,500)
                                                       ------------    ------------    ------------

       Net cash provided by financing activities             54,494          42,500         799,696
                                                       ------------    ------------    ------------

INCREASE (DECREASE) IN CASH                                      --         (70,005)            200

Beginning cash                                                  200          77,820              --
                                                       ------------    ------------    ------------

Ending cash                                            $        200    $      7,815    $        200
                                                       ============    ============    ============
</Table>



                                       4

<PAGE>


                              ETELCHARGE.COM, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                      STATEMENTS OF CASH FLOWS (UNAUDITED)



<Table>
<S>                                                  <C>            <C>            <C>
SUPPLEMENTAL SCHEDULE OF NON-CASH
   FINANCING ACTIVITIES:
       Issuance of common stock in exchange for
         receivable from shareholder                 $         --   $         --   $      1,000
                                                     ============   ============   ============
       Issuance of payable to related party in
         exchange for proprietary rights             $         --   $         --   $    116,500
                                                     ============   ============   ============
       Issuance of common stock recorded as
         prepaid expense                             $         --   $     71,266   $     71,266
                                                     ============   ============   ============
       Property and equipment acquired through
         issuance of common stock                    $         --   $         --   $      4,800
                                                     ============   ============   ============
SUPPLEMENTAL SCHEDULE OF CASH FLOWS
       Cash paid during the period for:
         Interest                                    $         --   $         --   $         --
                                                     ============   ============   ============
         Income taxes                                $         --   $         --   $         --
                                                     ============   ============   ============
</Table>



                                       5

<PAGE>


                              ETELCHARGE.COM, INC.
                          (A DEVELOPMENT STAGE COMPANY)

                          NOTES TO FINANCIAL STATEMENTS


1. HISTORY AND ORGANIZATION

Etelcharge.com, Inc. (the "Company") was incorporated in the State of Nevada on
June 7, 1999. The Company was formed for the purpose of providing an internet
credit option for online shoppers to charge items sold over the internet to
their telephone bill. As of the date of this report, the Company had not
commenced significant operations and marketing its products to target customers.
As such, the Company is considered to be in the development stage.

2. BASIS OF PRESENTATION

The accompanying interim financial statements have been prepared by the Company
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission (the "SEC"). Certain information and footnote disclosures
normally included in financial statements prepared in conformity with generally
accepted accounting principles ("GAAP") have been omitted or condensed pursuant
to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these statements be read in conjunction with the Company's
audited financial statements and notes thereto included in the Company's Form
10-KSB for the year ended December 31, 2001.

In management's opinion, these interim financial statements reflect all
adjustments (consisting of normal and recurring adjustments) necessary for a
fair presentation of the financial position and results of operations for each
of the periods presented. The accompanying unaudited interim financial
statements for the three months ended March 31, 2001 are not necessarily
indicative of the results which can be expected for the entire year.

3. GOING CONCERN

The Company is currently in the development stage and has generated no revenues.
The Company has incurred $3,185,802 in losses since its inception. In addition,
at March 31, 2002, the Company's liabilities exceeded its assets by $270,093,
certain obligations are past due and the Company currently has no funds
available to execute its business plan. The ability of the Company to continue
as a going concern is dependent on its ability to raise the necessary capital to
finance the implementation of its business plan. Since inception, the Company
has raised approximately $846,000 of capital primarily through contacts of the
Company's CEO. The Company believes but cannot assure that it has the ability to
raise capital from many of these same individuals who previously purchased
stock. Additionally, the Company may rely upon its CEO to advance funds to the
Company in order to meet ongoing obligations until sufficient capital is raised
from other sources. However there is no agreement in this regard and no
assurance that any such funding will be available in the future. The Company
also anticipates generating revenues during the second quarter of 2002 which
will assist in meeting its current operating obligations. The Company may also
receive funds generated from exercise of the stock options discussed in Note 6.
The financial statements do not include any adjustments to reflect the possible
effects on the recoverability and classification of assets or classification of
liabilities which may result from the possible inability of the Company to
continue as a going concern.

4. COMMITMENTS AND CONTINGENCIES

Effective December 28, 1999, the Company entered into employment contracts with
its CEO and two employees for terms ranging from 1 to 5 years which require the
Company to issue 260,000 shares of common stock as compensation over the terms
of the contracts. In the event of termination, the stock issuances will be
prorated based on the portion of the contract term served. The Company has
accrued $109,416 of compensation at March 31, 2002, including $22,750 for the
three months ended March 31, 2002, which represents the estimated fair value of
the portion of the shares earned but not yet issued at March 31, 2002. 75,000
shares of stock have been issued under these agreements as of March 31, 2002.



                                       6

<PAGE>



5. SHARES ISSUED FOR SERVICES

Effective January 7, 2002, the Company issued 398,350 shares of its common stock
to an employee for services rendered during the first quarter of 2002. These
services, valued at $597,525, (based upon the most recent cash price received by
the Company for its shares) were charged to operations during the first quarter
of 2002.

6. STOCK OPTIONS

Under the terms of a stock option agreement effective August 1, 2001, the
Company granted options to a consulting firm to purchase 2,300,000 shares of
common stock. 1,500,000 options have an exercise price of $2 per share and
800,000 options have an exercise price of $2.50 per share. The Company has
estimated the fair value of this option grant using the Black-Scholes
option-pricing model with the following assumptions: dividend yield of 0%;
expected volatility of 0%; risk free interest rate of 5%; and an expected life
of 3 years. On the grant date, the exercise price of these options exceeded the
fair value calculated under the Black-Scholes model and thus, no compensation
expense has been recorded associated with this stock option grant.

7. PAYROLL TAX OBLIGATION

The Company has not remitted a portion of its Federal and State employer and
employee payroll taxes for the year ended December 31, 2001 and the three months
ended March 31, 2002. The Company has determined this obligation to be the
actual amounts of the tax withheld from the employees and the employer portion
of the Social Security Federal Tax obligation in addition to a 25% penalty and
interest accrual. The total obligation associated with these delinquent amounts
at March 31, 2002 is $67,340 and has been reflected in the accompanying
financial statements as Payroll Tax Obligation.

ITEM 2. Management's Discussion and Analysis or Plan of Operations.

This Quarterly Report on Form 10-QSB contains certain "forward-looking"
statements as such term is defined in the Private Securities Litigation Reform
Act of 1995 and information relating to the Company and its subsidiaries that
are based on the beliefs of the Company's management as well as assumptions made
by and information currently available to the Company's management. When used in
this report, the words "anticipate," "believe," "estimate," "expect" and
"intend" and words or phrases of similar intent, as they relate to the Company
or its subsidiaries or Company management, are intended to identify
forward-looking statements. Such statements reflect the current risks,
uncertainties and assumptions related to certain factors including, without
limitations, changes or anticipated changes in regulatory environments,
competitive factors, general economic conditions, customer relations,
relationships with vendors, the interest rate environment, governmental
regulation and supervision, seasonality, distribution networks, product
introductions and acceptance, technological change, changes in industry
practices, onetime events and other factors described herein and in other
filings made by the company with the Securities and Exchange Commission. Based
upon changing conditions, should any one or more of these risks or uncertainties
materialize, or should any underlying assumptions prove incorrect, actual
results may vary materially from those described herein as anticipated,
believed, estimated, expected or intended. The Company does not intend to update
these forward-looking statements.

Current Operations

    We were organized in June 1999 to provide customers of online merchants with
the ability to charge their Internet purchases to their local telephone bill,
rather than to a credit card. Generally, our users do not have a credit card or
are reluctant to use a credit card online due to security and privacy concerns.
We enable these charge transactions through a 900 number billing arrangement
with AT&T. Our billing arrangement with AT&T is available to customers
throughout the United States, except those western states for which Qwest
provides the local service because Qwest does not provide local billing services
for any 900 number.



                                       7

<PAGE>


    Internet merchants that offer our telephone billing option include our brand
icon with the icons of credit card companies on the check out or pay page of
their Web site. Customers who wish to charge their purchase to their telephone
bill simply click on our icon and the billing information is communicated
through AT&T to the local telephone service provider, using AT&T's 900 billing
system. The charge then appears on the customer's next monthly telephone bill on
a separate page of the bill, with AT&T's logo on the page.

    Although three other companies use similar 900 billing arrangements to allow
customers to charge purchases to their telephone bills, these charges are
limited to the purchase of services and some online software products. To our
knowledge, no other company offers customers the opportunity to charge other
goods and merchandise to their telephone bills.

    We are in the development stage and have not generated any revenue. We began
our service online in August 2000 and currently have agreements with 19 Internet
merchants to offer our local telephone billing service to their customers. We
entered into these agreements commencing in the second quarter of 2001. No
single merchant agreement is material to our ongoing business operations. We
charge these merchants a fee for each transaction ranging from 5% to 8% of the
customer purchase which is approximately the same fee AT&T charges us for
providing to us its 900 billing arrangement. In addition, we charge the customer
a fee of 10% of the product or service purchase price. We did not earn revenue
from our merchants until October 2001 because it took us until that time to
complete the integration of our system with that of our online merchants.

    Commencing in January 2003, AT&T will no longer communicate the 900 charge
to the local phone companies nor will the local monthly bill include AT&T's logo
on the 900 billing page. Rather, we will select one of many third-party billing
services to handle the billing transaction. AT&T will continue to provide all
other support services for the 900 billing and the change in third-party billing
services will not in any way effect transaction procedures of the customer and
merchant. The new third-party billing services for 2003 may charge smaller fees
than AT&T, although we cannot be sure of this yet.

    Our rights to offer AT&T's 900 billing service online were assigned to us by
Consumer Data Solutions Corp., which originally entered into a 900 number
billing agreement with AT&T in March 1994. CDS has assigned to us its rights
under the AT&T agreement until November 2098. We pay a license fee to CDS equal
to 3% of the gross fees we receive from online telephone billing charge
transactions. CDS is majority owned and controlled by Carl O. Sherman, our Chief
Executive Officer and a director. Mr. Sherman founded CDS in 1993 to provide a
900 billing service for pizza and other food delivery businesses. The service
allows customers to bill their food deliveries directly to their telephone bill.
Mr. Sherman continues to act as the Chief Executive Officer of CDS, although he
spends less than 10% of his time on its operations. CDS does not compete with us
as we have the exclusive right to use the 900 billing service for online sales
transactions, including online food delivery services. We do not believe any
conflicts of interest could develop between CDS and us for these reasons.

    According to a March 30, 2001 Wall Street Journal article, over 70 million
adult Americans do not have credit cards. Moreover, a majority of credit card
holders who decline to charge online do so out of security or privacy concerns.
Initially, we have targeted Internet merchants who offer CDs, video cassette
tapes, computer software, books, flowers and food items to offer our telephone
billing option. Following an online purchase by a customer, the charge is
included on behalf of the merchant in the customer's next telephone bill.
Approximately 30 days after an online charge, we receive an advance against the
purchase price prior to the customer paying the telephone bill. After deducting
our fees, we forward payment directly to our online merchant. If the charge is
not paid by the customer for any reason, including a default or refusal to pay
due to a dispute, the telephone company will charge back its advance to us. In
this event, our merchant and we will not receive the purchase price for the
goods or services. We intend to establish a reserve of 3% of fees due to us from
merchants to cover defaults, refusals to pay, disputes and other charge backs
due to customer nonpayment. This reserve is larger than that of our competitors,
which averages approximately 2% of such fees according to these competitors. We
intend to evaluate this reserve on an ongoing basis to reflect our experience.

    The privacy and security of our billing service could be breached by third
parties seeking confidential account information such as passwords and financial
account information. Such a breach could subject us to liability from customers
and merchants and could harm our reputation, thereby inhibiting the use of our
billing service. However,



                                       8

<PAGE>

since the customer only provides a telephone number, and not charge card
information, and since the maximum amount we allow any customer to charge in any
month is only $150, we do not believe it likely that third parties will seek to
access this information. In order to make any breach of our system more
difficult, our system only approves charges that originate from the customer's
home computer and verifies the charge through a telephone call that must be
generated from the customer's telephone number.

Strategy

    Our objective is to significantly grow the number and dollar amount of
online transactions charged by customers to their telephone bills. We believe we
can attract online merchants by offering their customers a new billing option
which is safe, secure and confidential and which has been previously unavailable
to customers who do not have credit cards. In order to achieve our objective we
intend to:

    o   Continue to stress the security and privacy advantages of our telephone
        billing service;

    o   Maintain a customer-friendly system for initiating online charges to
        telephone bills;

    o   Stress our strategic relationship with AT&T which allows for online
        charges to telephone bills through AT&T's 900 billing system; and

    o   Provide responsive customer service to our online merchants through use
        of an employee assigned to each merchant.

    Although AT&T will terminate its billing services for all 900 number
merchants in January 2003, requiring us to select another billing service
provider, the charge transactions will continue to be supported by AT&T. There
are a number of billing service providers available to us, and we believe we
will have no difficulty in selecting such a provider by the fourth quarter of
2002.

Marketing

    Using our in-house marketing staff of five individuals including our
President, we market to online merchants through direct presentations by our
staff. We attract online merchants through direct sales calls, referrals from
Web design firms, advertisements in trade journals, media reports about our
company and word of mouth.

    In the future, we intend to use mass e-mail communications to inform
Internet users of our charge payment option, in order to encourage customers to
request that our payment option be included on the merchant Web sites on which
the customer shops. We also intend to use banner and other online advertisements
to market to online virtual shopping mall providers in order to reach online
merchants. We will also increase our advertising in print and Internet-based
trade publications subscribed to by online merchants and may also use television
commercials to inform merchants and customers that purchases can be charged to
the customers' telephone bill.

    Our marketing efforts stress the simplicity and privacy of using a telephone
number and password for online charges rather than using a credit card. We also
stress to our online merchants the substantial number of individuals who do not
have credit cards. Finally, we include in our sales presentations our commitment
to donate $.05 per billing transaction up to a maximum of $250,000 per year to
KIDCARE, a Houston-based charity benefitting underprivileged children. Our
commitment to KIDCARE may be cancelled by us on six months notice.

    We have filed a service mark application with the U.S. Patent Office for our
online icon, "eTELCHARGE." The application is currently pending and we cannot
assure that it will be granted.

Competition

    We compete with the U.S.-based multinational credit card companies as a
charge option to customers electing to charge on the merchant's Web site. In
soliciting merchants, we are disadvantaged by the fact that we charge the
merchant more than a credit card company would for the same transactions and we
also charge the merchants'



                                       9

<PAGE>

customers a separate charge fee. Additionally, customer charges are limited to
no more than $150 per month. However, we offer a new charge option to customers
of our merchants who do not have credit cards or are reluctant to use credit
cards online.

    We also compete with three other 900 billing services, eCharge, iBill and
Secure Bill, all of which are larger than we and offer customers similar
opportunities to charge to their telephone bills online, through arrangements
with AT&T's 900 billing service. However, 900 billing charges through these
companies are generally limited to services, rather than products, and to some
digital goods offered for sale online. We believe we have a competitive
advantage in that we have developed a 900 number application that allows for the
purchase of all goods offered by our online merchants. Moreover, we believe that
our software is more customer friendly than our competitors because our customer
simply clicks on the eTELCHARGE icon and provides a password and e-mail address.
iBill and Secure Bill require the customer to call a 900 number while online to
obtain a special pin number to complete the transaction.

    There can be no assurance that competitors will not develop software in the
future that will allow them to include all merchant offered products and
services for online charging. Moreover, many of our competitors are larger,
better financed, have been in business longer and have significantly more
working capital and more experienced personnel than we.

Government Regulation

    We are not directly regulated by any governmental agencies nor are we
subject to statutes, rules or regulations which regulate the manner in which we
do business. However, our online merchants are subject to numerous governmental
regulations required of merchants in general such as truth in advertising
requirements, product safety and the like. We do not believe that we would be
held liable for violations by our merchants of any such government regulations
or with respect to disputes between our merchants and online customers.
Nevertheless, we may be named in such proceedings in which case we could be
required to expend substantial fees in defending ourselves and could be liable
for substantial money judgments.

Plan Of Operation

    We were organized in June 1999 and are in the development stage. Investors
should note that our auditor's report for the year ended December 31, 2001
included a paragraph which expressed substantial doubt as to our ability to
continue as a going concern. We expect that our revenue will be generated from
online merchants and customers. We charge merchants a one-time processing fee of
$199 to $2,499 depending upon the anticipated number of the merchant's online
transactions, a billing fee of 5% to 8% of the purchase price of the goods or
services charged, not including taxes, and an approximately $.15 per transaction
service charge. We charge customers who purchase goods or services online a fee
equal to 10% of the goods or services purchased and we limit their purchases to
no more than $150 per month. Our costs for online transactions are comprised of
AT&T's billing and collection charge of 8% of the amount of the transaction and
a fixed fee of $.45 per transaction. AT&T earns this fee for providing the bills
which the local telephone companies include in their monthly billing statements
to their customers. Commencing in January 2003 AT&T will terminate providing
this billing service, and we will use a private, third-party billing service in
place of AT&T. All other aspects of AT&T's 900 services will remain the same, as
will customer and merchant transaction procedures. It is possible that we will
pay lower fees to a third-party billing service commencing in 2003, but we
cannot be sure of this yet.

    We intend to establish a reserve of 3% of fees due to us from merchants to
cover defaults, refusals to pay, disputes and other charge backs due to customer
nonpayment. This reserve is larger than that of our competitors, which averages
approximately 2% of such fees according to these competitors. We have not made
any independent assessment of the sufficiency of the reserve amount, because we
have not yet generated on line billing transactions that create receivables due
from merchants. Accordingly, although we believe our reserve will be adequate to
cover defaults and other charge backs, we cannot give any such assurance. We
intend to evaluate this reserve on an ongoing basis to reflect our experience.



                                       10

<PAGE>

    Although we have generated only negligible revenue, we currently have
billing agreements with 19 Web merchants, all of which have been integrated into
our billing system. Previously, it took a number of months to integrate our
merchants, as they were required to write some of the computer code necessary to
join our system. Recently, however, we began to provide the code ourselves which
we believe will significantly shorten the time necessary for merchants to join
our billing system. We expect, but cannot assure, that we will add new Web
merchants in 2002, most of whom will be signed up through the efforts of our
resellers. We currently have 11 such resellers who are existing Web merchants,
Web designers and shopping cart software companies who are paid a commission of
approximately 20% of the revenue generated from new Web merchants referred by
them. Our resellers take a three day training course from us, either online or
at our corporate offices, before commencing to market our 900 billing services
to Web merchants. Our agreements with resellers provide for the 20% commission,
a nominal residual fee so long as we retain Web merchants referred by the
reseller and are cancellable by either party on 30 days notice to the other.

    Commencing in the second quarter of 2002, and assuming financing is
available, we intend to initiate an online advertising campaign, using mass
e-mails to advise online users of our billing service. We also intend to
commence at that time an effort to attract resellers through attendance at
industry and trade shows and through advertising in trade journals. We are
uncertain as to how many resellers we will be able to attract through these
efforts.

    We also seek to enter into agreements with other online entities and Web
sites to generate market awareness and usage of our eTELCHARGE icon. We will
also continue to promote our brand through the issuance of press releases to
related trade publications, general interest media publications, print media and
Internet media.

    Over the next two years, we intend to make adjustments and improvements in
our product software and marketing efforts. In order to identify the areas that
need improvement, we anticipate meeting with online retailers and AT&T and to
conduct online consumer interviews. In the near term, we will expand our efforts
to reach online retailers, focusing upon the larger national retailers.
Commencing in the second quarter of 2002, assuming funds are available, we will
also demonstrate our billing system at industry affiliated trade shows.

    The initiation of our plan of operation is dependent upon our raising
sufficient working capital to allow us to institute the plan. However, there can
be no assurance that we will be successful in doing so. Due to our lack of
capital and our need for working capital to continue our business plan, our
auditors issued a going concern qualification as part of their audit opinion of
our financial statements for the year ended December 31, 2001. We have not
generated any revenue since our inception and we incurred a net loss of
$2,472,931 for the year ended December 31, 2001 and incurred a net loss of
$712,871 during the first quarter of 2002. To date, our operations have been
funded solely through the issuance of our common shares. To date, total cash
proceeds for the issuance of common shares totals $846,453. In order to
institute our business plans we must continue to raise capital, as revenue from
operations will be insufficient in the short run to meet our working capital
needs. However, we cannot assure that any such capital will be available to us.
Based upon our current cash resources, we cannot meet our cash requirements or
institute our business plan for more than six months unless we raise additional
funds from the sale of our securities, as we have done in the past, or unless
our revenue grows significantly.

                           PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

NONE.

Item 2. Changes in Securities.

NONE.

Item 3. Defaults Upon Senior Securities.

NONE.



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<PAGE>

Item 4. Submission of Matters to a Vote of Securities Holders.

NONE.

Item 5. Other Information.

NONE.

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

NONE.

                                   SIGNATURES

In accordance with Section 12 of the Securities and Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.


                                           Etelcharge.com, Inc.



Date: June 10, 2002                         By        /s/ Carl O. Sherman
                                             -----------------------------------
                                              Carl O. Sherman, Sr., President



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