UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


































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


for the
quarterly period ended March 31, 2008





o 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 000-304799





eTELCHARGE.COM


(Exact
name of registrant as specified in its charter)





NEVADA
            75-2847699(State
      or other jurisdiction
            (I.R.S.
      Employerof
      incorporation or organization)
            Identification
      No.)




1636 N. HAMPTON, SUITE 270,
DESOTO, TEXAS75115


(Address
of principal executive office)(zip code)





972-298-3800


(Registrant’s
telephone number, including area code)





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





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.


Large
accelerated
filer                                           o                                                                Accelerated
filer                                o


Non-accelerated
filer                                       
     o(Do not check if a
smaller reporting
company)                                                                                     Smaller
reporting company  x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).  oYesxNo





As of May
5, 2008, there were 290,226,617 outstanding shares.





-1-










PART
I – FINANCIAL INFORMATION





Item
1. Financial Statements


eTELCHARGE.COM


(A
Development Stage Company)


BALANCE
SHEETS





March
      31, 2008
              (unaudited)
            
            
            December
      31, 2007
              (audited)ASSETSCurrent
      assets:Cash
            
            $
            32,017
            
            
            $
            230,227Interest
      receivable
            
            
            5,984
            
            
            
            1,425Prepaid
      expenses and other current assets
            
            
            13,111
            
            
            
            24,444Total
      current assets
            
            
            51,112
            
            
            
            256,096Fixed
      assets, net of accumulated depreciation of $6,356 and $4,551,
      respectively
            
            
            27,156
            
            
            
            25,970Deferred
      financing costs
            
            
            26,815
            
            
            
            28,469Deposits
            
            
            1,980
            
            
            
            1,980Total
      assets
            
            $
            107,063
            
            
            $
            312,515LIABILITIES
      AND STOCKHOLDERS' DEFICITCurrent
      liabilities:Accrued
      expenses
            
            $
            144,221
            
            
            $
            139,732Payroll
      tax obligation
            
            
            41,541
            
            
            
            112,610Accounts
      payable
            
            
            112,682
            
            
            
            53,598Derivative
      liability
            
            
            111,460
            
            
            
            144,643Current
      portion of notes payable
            
            
            4,105
            
            
            
            4,217Total
      current liabilities
            
            
            414,009
            
            
            
            454,800Long-term
      liabilities:7.75%
      Convertible debenture, net of discount of $140,013 and $144,642,
      respectively
            
            
            59,987
            
            
            
            55,358Notes
      payable
            
            
            5,045
            
            
            
            6,042Total
      liabilities
            
            
            479,041
            
            
            
            516,200Commitments
      and contingencies
            
            
            -
            
            
            
            -Stockholders'
      deficit:Common
      stock, $0.003 par value, 400,000,000 shares authorized,286,726,617
      and 282,087,602  issued and outstanding,
      respectively
            
            
            860,179
            
            
            
            846,262Common
      stock issuable, $0.003 par value, 2,500,000 shares
issuable
            
            
            50,000
            
            
            
            -Additional
      paid-in capital
            
            
            14,970,440
            
            
            
            14,620,417Deficit
      accumulated during the development stage
            
            
            (16,252,597
            )
            
            
            (15,670,364
            )Total
      stockholders' deficit
            
            
            (371,978
            )
            
            
            (203,685
            )Total
      liabilities and stockholders' deficit
            
            $
            107,063
            
            
            $
            312,515





See
accompanying notes to the financial statements




-F1-











eTELCHARGE.COM
              (A
      Development Stage Company)
              STATEMENTS
      OF OPERATIONS
              (Unaudited)Three
      months ended
              March
      31,
            
            
            June
      7, 1999
              (Inception)
      to
              March
      31,2008
            
            
            2007
            
            
            2008Revenues
            
            $
            9,164
            
            
            $
            11,550
            
            
            $
            107,276Operating
      expenses
            
            
            582,684
            
            
            
            264,373
            
            
            
            15,988,139Net
      loss from operations
            
            
            (573,520
            
            
            
            (252,823
            
            
            
            (15,880,863Other
      income
            
            
            
            
            
            
            
            
            
            
            61,827Loss
      on extinguishment of debt, net
            
            
            -
            
            
            
            (642,754
            
            
            
            (293,620
            )Interest
      expense, net
            
            
            (8,713
            )
            
            
            (7,927
            
            
            
            (139,941
            )Net
      loss
            
            $
            (582,233
            )
            
            $
            (903,504
            
            
            $
            (16,252,597
            )Basic
      and diluted net loss per share
            
            $
            0.00
            
            
            $
            0.00Weighted
      average shares outstanding
            
            
            285,402,491
            
            
            
            194,678,011See
      accompanying notes to the financial statements




-F2-




eTELCHARGE.COM(A
      Development Stage Company)STATEMENTS
      OF CASH FLOWS(Unaudited)




June
      7, 1999Three
      months ended
            
            
            (Inception)
      toMarch
      31,
            
            
            March
      31,2008
            
            
            2007
            
            
            2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      loss
            
            $
            (582,233
            )
            
            $
            (903,504
            )
            
            $
            (16,252,597
            )Adjustments
      to reconcile net loss to net
              cash
      used in operating activitiesAmortization
      and depreciation
            
            
            8,088
            
            
            
            676
            
            
            
            125,933Issuance
      of common stock for services
            
            
            243,379
            
            
            
            193,760
            
            
            
            9,614,148Issuance
      of stock options for services
            
            
            88,850
            
            
            
            -
            
            
            
            815,100Mark
      derivative instrument to market
            
            
            (33,183
            )
            
            
            -
            
            
            
            (33,183
            )Imputed
      interest
            
            
            -
            
            
            
            6,623
            
            
            
            63,036Loss
      on extinguishment of debt
            
            
            -
            
            
            
            642,754
            
            
            
            293,620Changes
      in:Interest
      receivable
            
            
            (4,559
            )
            
            
            -
            
            
            
            (5,984
            )Prepaid
      expenses and other current assets
            
            
            11,333
            
            
            
            -
            
            
            
            (15,091
            )Accounts
      payable
            
            
            59,084
            
            
            
            8,864
            
            
            
            165,153Accrued
      expenses
            
            
            36,200
            
            
            
            (3,699
            )
            
            
            2,842,006Payroll
      tax obligation
            
            
            (71,069
            )
            
            
            10,473
            
            
            
            41,542Net
      cash used in operating activities
            
            
            (244,110
            )
            
            
            (44,053
            )
            
            
            (2,346,317
            )CASH
      FLOWS FROM INVESTING ACTIVITIESCapital
      lease obligation
            
            
            -
            
            
            
            -
            
            
            
            8,911Disposal
      of property and equipment
            
            
            -
            
            
            
            -
            
            
            
            867Purchase
      of property and equipment
            
            
            (2,991
            )
            
            
            -
            
            
            
            (79,873
            )Net
      cash used in investing activities
            
            
            (2,991
            )
            
            
            -
            
            
            
            (70,095
            )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from sales of common stock
            
            
            50,000
            
            
            
            66,832
            
            
            
            1,946,183Proceeds
      from convertible note payable, (net of offering costs)
            
            
            -
            
            
            
            -
            
            
            
            171,531Net
      loan proceeds from shareholder
            
            
            -
            
            
            
            (10,271
            )
            
            
            337,752Proceeds
      from notes payable-other
            
            
            -
            
            
            
            -
            
            
            
            153,233Payments
      on notes payable-other
            
            
            (1,109
            )
            
            
            (173
            )
            
            
            (43,770
            )Payment
      on note payable to related party for asset purchase
            
            
            -
            
            
            
            (4,654
            )
            
            
            (116,500
            )Net
      cash provided by financing activities
            
            
            48,891
            
            
            
            51,734
            
            
            
            2,448,429NET
      CHANGE  IN CASH AND CASH EQUIVALENTS
            
            
            (198,210
            )
            
            
            7,681
            
            
            
            32,017CASH
      AND CASH EQUIVALENTS, beginning of period
            
            
            230,227
            
            
            
            1,672
            
            
            
            -CASH
      AND CASH EQUIVALENTS, end of period
            
            $
            32,017
            
            
            $
            9,353
            
            
            $
            32,017Supplemental
      schedule of non-cash financing activities:Issuance of
      common stock in exchange forreceivable
      from shareholder
            
            $
            -
            
            
            $
            -
            
            
            $
            1,000Issuance of
      payable to related party in exchangefor
      proprietary rights
            
            
            -
            
            
            
            -
            
            
            
            116,500Property and
      equipment acquired throughissuance
      of common stock
            
            
            -
            
            
            
            -
            
            
            
            21,595Issuance
      of common stock for accrued expenses
            
            
            31,711
            
            
            
            1,760
            
            
            
            3,898,812Issuance
      of common stock for pending stocksubscriptions
            
            
            -
            
            
            
            5,213
            
            
            
            153,220Supplemental
      cash flow disclosures:Cash
      paid for interest
            
            
            31,398
            
            
            
            -
            
            
            
            90,543




See
accompanying notes to the financial statements


-F3-








eTELCHARGE.COM


(A
Development Stage Company)


NOTES
TO FINANCIAL STATEMENTS






NOTE
1 - HISTORY AND ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES




eTelcharge.com
(“eTelcharge” or the “Company”) was incorporated in Nevada on June 7, 1999.
eTelcharge 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 March 31, 2008, eTelcharge has not commenced significant operations.
eTelcharge is in the process of raising financing to fund future operations and
marketing of its product to target customers. As such, eTelcharge is considered
to be in the development stage.





Basis
of Presentation





The
accompanying unaudited interim financial statements of eTelcharge have been
prepared in accordance with accounting principles generally accepted in the
United States of America and the rules of the Securities and Exchange
Commission, and should be read in conjunction with the audited financial
statements and notes thereto contained in eTelcharge’s most recent Annual Report
filed with the SEC on Form 10-KSB.  In the opinion of management, all
adjustments, consisting of normal recurring adjustments, necessary for a fair
presentation of financial position and the results of operations for the interim
periods presented have been reflected herein.  The results of
operations for interim periods are not necessarily indicative of the results to
be expected for the full year.  Notes to the financial statements that
would substantially duplicate the disclosure contained in the audited financial
statements for 2007 as reported in the 10-KSB have been omitted.





NOTE 2 - GOING
CONCERN





As shown
in the accompanying financial statements, eTelcharge incurred a net loss of
$582,233 for the three months ended March 31, 2008, has an accumulated deficit
of $16,252,597 and a working capital deficit of $362,897.  These conditions
raise substantial doubt as to eTelcharge's ability to continue as a going
concern.  Management is trying to raise additional capital through
financing and further development and marketing of its products and services in
order to generate revenue.  The financial statements do not include any
adjustments that might be necessary if eTelcharge is unable to continue as a
going concern.










NOTE
3 - PROPERTY AND EQUIPMENT





Property
and equipment consisted of the following at March 31, 2008:





Description
            
            
            LifeComputer equipment
            
            
            3-5
      years
            
            $
            29,430Office furniture and equipment
            
            
            5
      years
            
            
            4,08233,512Less: accumulated depreciation
            
            
            
            
            
            6,356$
            27,156




Depreciation
expense is recorded using the straight-line method and totaled $1,805 and $676
for the 3 months ended March 31, 2008 and 2007, respectively.




NOTE
4 - ACCRUED COMPENSATION





During
the three months ended March 31, 2008, eTelcharge issued 4,639,015 shares of
common stock valued at $275,090 to employees and consultants for services
rendered of the total amount issued, $243,379 was for current period services
and $31,711 was for services performed in prior periods which were accrued at
December 31, 2007.





As of
March 31, 2008, the Company accrued $36,606 payable in cash and $80,359 payable
in 638,181 shares of common stock for compensation for services rendered to the
Company.




-F4-





NOTE
5 - PAYROLL TAX OBLIGATION





During
2007, the Company remitted previously unpaid Federal and State employer and
employee payroll taxes for the years 2001 through mid-2007. In March 2008, the
Company received an abatement of penalties on this obligation and, as a result,
wrote-off accrued penalties of $68,026.  The Company has recorded
accrued interest from the date the taxes were due, through the date the taxes
were paid. The total amount recorded for this obligation at March 31, 2008 and
December 31,2007 was $40,000 and $108,026, respectively.





NOTE
6 – STOCK OPTIONS





As of
March 31, 2008, there were 25,310,000 options outstanding of which 24,608,000
were vested. For the three months ended March 31, 2008, the total compensation
expense for stock options was $88,850.  There were no stock options
exercised for the three months ended March 31, 2008 and 2007.





Stock
Option Activity


The
following is a summary of all stock option transactions for the three months
ended March 31, 2008:


Outstanding at December 31, 2007
            
            
            
            25,010,000Granted at market price
            
            
            
            300,000Cancelled
      or
      expired
            
            
            
            -Exercised
            
            
            
            -Outstanding
      at March 31,
      2008
            
            
            
            25,310,000





At March
31, 2008, the Company had 21,200,000 stock options outstanding for which the
exercise price was lower than the market value of the Company’s common
stock. The intrinsic value for these options is $539,068. For additional or
supplemental information regarding the Company’s Stock Options, see our
Form 10-KSB for the fiscal year ended December 31, 2007.





NOTE
7 - DERIVATIVES


On
December 28, 2007, eTelcharge entered into a securities purchase agreement with
Golden Gate Investors (“GGI”).  Under the purchase agreement,
eTelcharge issued to GGI a debenture (the “Debenture”), convertible into
eTelcharge’s common stock, in the amount of $1.5 million.  GGI paid
for the debenture by delivering a cash payment of $200,000 and a note for $1.3
million from GGI to eTelcharge.  At any time, GGI may convert a
portion of the Debenture equal to the amount of cash paid to eTelcharge on the
initial issuance of the Debenture and pursuant to payments made under the note
from GGI, into common stock at a conversion price equal the lesser of $0.50 per
share or 80% of the three lowest Volume Weighted Average Prices (“VWAP”) of
eTelcharge’s common stock during the 20 trading days preceding the election to
convert. As of March 31, 2008 and December 31, 2007, $200,000 of the Debenture
was convertible.




The
Debenture further provides for eTelcharge to have the right, but not the
obligation, to choose to prepay any portion of the Debenture that the holder has
elected to convert, for an amount equal to 120% of such amount, when the VWAP is
below $0.05 per share.  The Debenture also provides that the holder
may not exercise the conversion privilege to the extent that it would acquire
“beneficial ownership” of eTelcharge’s common stock of more than 4.99%, which
may be increased to 9.99% on not less than 61 days prior notice, or such
limitation may be removed entirely on 61 days prior notice by the
holder.




Under the
Purchase Agreement, GGI is required to purchase up to three additional
debentures, each in the amount of $1.5 million, on terms analogous to the
Debenture, upon satisfaction of the requirement that the Debenture, and each
succeeding debenture which has been issued subsequent to the Debenture, has no
more than $250,000 outstanding, i.e., the requirement arises when the prior
debenture has been converted or otherwise redeemed so that no more than $250,000
is outstanding.  GGI has the right to eliminate its obligations to
purchase each of the three additional debentures by a payment of
$100,000.




The
promissory note delivered by GGI to pay for the Debenture bears interest at the
rate of 8% per annum and is payable at maturity, January 31, 2012, with interest
payable to eTelcharge monthly.  Interest on the Principal Amount of
the Debenture is also payable monthly to GGI, at the rate of 7.75% per annum in
cash, or at the option of the holder, in shares of eTelcharge’s common stock
valued at the then applicable conversion price.  The maturity date of
the Debenture is December 26, 2011.




The
Debenture provides for various events of default, such as failure to pay
principal or interest when due, if it is determined that any representations
warranties or covenants made in the Purchase Agreement or other related
documents were false or misleading, certain insolvency conditions, if
eTelcharge’s common stock is no longer traded, if eTelcharge fails to file
required reports under the securities laws, if eTelcharge defaults on any
indebtedness exceeding $100,000, or if the VWAP of the common shares is $0.01
per share or less during the term of the Debenture.  In such event,
the Debenture holder would have the right to accelerate amounts due under the
Debenture and require immediate redemption of the Principal Amount of the
Debenture, at 120% of such amount, or 110% in the case of the default relating
solely to the VWAP of the common shares being $0.01 or less.


-F5-











The
Debenture is secured by a pledge of 3,000,000 shares of common stock provided by
a stockholder of eTelcharge.  The promissory note issued by GGI is
secured by all of the assets of GGI.




eTelcharge
has identified that the Debenture contains more than one embedded derivative
feature which SFAS 133 requires to be accounted for as
derivatives.  The derivative features that have been bundled together
in the compound embedded derivative include: (1) the conversion feature of the
debenture; (2) the put options to redeem the debenture after an event of default
or failure to deliver stock; and (3) the call option to prepay the debenture
subsequent to a conversion request when the VWAP is below $0.05. These embedded
derivatives have been bifurcated from the host debt contract and accounted for
as derivative liabilities in accordance with EITF 00-19.  Since
multiple derivatives exist within the Debenture, they have been bundled together
as a single hybrid compound instrument in accordance with SFAS No. 133
Derivatives Implementation Group Implementation Issue No. B-15.  The
value of the compound embedded derivative liability was bifurcated from the
debenture and recorded as a derivative liability, which results in a reduction
of the initial carrying amount (as unamortized discount) of the related
debenture at inception.




The
impact of the application of SFAS 133 and EITF 00-19 on the balance sheet as of
March 31, 2008, December 31, 2007 and December 28, 2007, the date of the
agreement, was as follows:







03/31/08
            
            
            12/31/07
            
            
            12/28/07Net
      balance
            
            $
            200,000
            
            
            $
            200,000
            
            
            $
            200,000Less
      unamortized discount
            
            
            140,013
            
            
            
            144,642
            
            
            
            144,845Convertible
      debt
            
            $
            59,987
            
            
            $
            55,358
            
            
            $
            55,155





The
unamortized discount is being amortized to interest expense using the effective
interest method over the life of the debenture.




Lattice
Valuation Model




eTelcharge
valued the compound embedded derivative features in the 2007 Debenture using a
Lattice Model. The lattice model values the compound embedded derivatives based
on a probability weighted discounted cash flow model. This model is based on
future projections of the five primary alternatives possible for settlement of
the features included within the compound embedded derivative, including: (1)
payments are made in cash, (2) payments are made in stock, (3) the holder
exercises its right to convert the debenture, (4) eTelcharge exercises its right
to convert the debenture and (5) eTelcharge defaults on the debenture.
eTelcharge uses the model to analyze (a) the underlying economic factors that
influence which of these events will occur, (b) when they are likely to occur,
and (c) the common stock price and specific terms of the debenture such as
interest rate and conversion price that will be in effect when they
occur.




Based on
the analysis of these factors, eTelcharge uses the model to develop a set of
potential scenarios. Probabilities of each scenario occurring during the
remaining term of the debenture are determined based on management’s
projections. These probabilities are used to create a cash flow projection over
the term of the debenture and determine the probability that the projected cash
flow would be achieved. A discounted weighted average cash flow for each
scenario is then calculated and compared to the discounted cash flow of the
debenture without the compound embedded derivative in order to determine a value
for the compound embedded derivative.




The
primary determinants of the economic value of a compound embedded derivative
under the lattice model are (1) the price of eTelcharge's common stock, (2) the
volatility of eTelcharge's common stock price, (3) the likelihood that
eTelcharge will be required to pay registration delay expenses, (4) the
likelihood that an event of default or a change in control will occur, (5) the
likelihood that the conversion price will be adjusted, (6) the likelihood that
eTelcharge's common stock will be listed on an exchange, (7) the likelihood that
eTelcharge will be able to obtain alternative financing and (8) the likelihood
that eTelcharge would be able to force conversion of the debenture.




-F6-













The fair
value of the compound derivative embedded in the Debenture as of March 31, 2008,
December 31, 2007 and December 28, 2007 determined using the lattice valuation
model was based on the following management assumptions:




March
      31, 2008
            
            December
      31, 2007
            
            December
      28, 2007Assumptions:The
      price of the eTelcharge’s common stock would increase at a rate
      commensurate with the cost of equity, with a volatility
of:
            130%
            
            142%
            
            142%Percent
      likelihood that an event of default or a fundamental change would occur,
      increasing over time:
            5%
            
            5%
            
            5%eTelcharge
      would redeem the Debenture if eTelcharge’s common stock price is
      below:
            $0.05
            
            $0.05
            
            $0.05






Based on
these management assumptions, the fair value of the embedded derivative as of
March 31, 2008, December 31, 2007 and December 28, 2007 was calculated by
management to be $111,460, $144,643 and $144,845, respectively.




All of
the above assumptions are reviewed quarterly and are subject to change based
primarily on management’s assessment of the probability of the events described
occurring. Accordingly, changes to these assessments could materially affect the
valuation.





Fair
Value Measurements





In
September 2006, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 157 “Fair Value Measurements” (SFAS
157).  SFAS 157 introduces a framework for measuring fair value and
expands required disclosure about fair value measurements of assets and
liabilities.  SFAS 157 for financial assets and liabilities is
effective for fiscal years beginning after November 15, 2007, and the Company
has adopted the standard for those assets and liabilities as of January 1, 2008
and the impact of adoption was not significant.  At March 31, 2008,
the Company’s derivative liability of $111,460 is carried at fair value measured
on a recurring basis.  The fair value is determined based on Level 2
inputs as defined in the valuation hierarchy of SFAS
157.  Accordingly, the Company considers the financial assets and
liabilities as reported in the Company’s financial statements to approximate
their respective fair value.





In
February 2008, the FASB decided that an entity need not apply this standard to
nonfinancial assets and liabilities that are recognized or disclosed at fair
value in the financial statements on a nonrecurring basis until the subsequent
year.   The Company continues to evaluate this standard with
respect to its effect on nonfinancial assets and liabilities, but does not
expect it to have a material impact on its results of operations or financial
condition.





In
February 2007, FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities Including an Amendment of FASB Statement No.
115.” The fair value option permits entities to choose to measure eligible
financial instruments at fair value at specified election dates. The adoption of
SFAS 159 in first quarter 2008 by the Company had no impact on the financial
statements.




-F7-











NOTE
8 - INCOME TAXES





eTelcharge
uses the liability method, where deferred tax assets and liabilities are
determined based on the expected future tax consequences of temporary
differences between the carrying amounts of assets and liabilities for financial
and income tax reporting purposes. eTelcharge has incurred significant net
losses in past years and, therefore, has no tax liability. The net deferred tax
asset generated by the loss carry-forward has been fully reserved. The
difference between the statutory tax rate and the effective tax rate relates to
the valuation allowance applied against the deferred tax assets generated from
net operating losses. The cumulative net operating loss carry-forward is
approximately $10,815,267 and $10,233,034 at March 31, 2008
and  December 31, 2007, respectively, and will expire in the years
2020 through 2028.





At March
31, 2008 and December 31, 2007, deferred tax assets consisted of the
following:





March
      31, 2008
            
            
            December
      31, 2007Net
      operating losses
            
            $
            1,622,290
            
            
            $
            1,499,274Less:
      valuation allowance
            
            
            (1,622,290
            )
            
            
            (1,499,274
            )Net
      deferred tax asset
            
            $
            -
            
            
            $
            -





NOTE
9 - COMMITMENTS AND CONTINGENCIES





eTelcharge
has a business relationship (affinity program) with a charitable organization
that requires eTelcharge to contribute $.05 per revenue generating transaction
to the charity up to $250,000 per year.





eTelcharge
has several agreements with employees and consultants that require eTelcharge to
issue shares of common stock if the agreements are fulfilled by the employees
and consultants.  At March 31, 2008, eTelcharge will be required to issue
up to 1,824,998 shares of common stock over the next 12 months under existing
agreements.





eTelcharge
is obligated to issue 10,000 shares of common stock to each director each year
for director services provided to eTelcharge.  eTelcharge typically has
four directors.





In
February 2007, eTelcharge entered into a modified lease agreement extending the
lease expiration to January 2010. The new base rent is $4,098 per
month.





Under the
new lease, future minimum lease commitments are as follows:





2008
      – 9 months
            $36,8822009
            $49,1762010
            $4,098





Rent
expense totaled approximately $9,021 and $11,189 for each of the three months
ended March 31, 2008 and 2007, respectively.




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NOTE
10 - COMMON STOCK




Since
inception and through March 31, 2008, the following share activity
occurred:




Shares
            
            
            AmountShares
      for cash
            
            
            70,909,824
            
            
            $
            1,940,506Shares
      for services
            
            
            155,063,859
            
            
            
            11,991,649Shares
      for items paid on the Company’s behalf
            
            
            10,860,134
            
            
            
            215,528Settlement
      of debt
            
            
            50,000,000
            
            
            
            800,000Shares
      for assets
            
            
            12,800
            
            
            
            4,800Amortization
      of stock options
            
            
            
            
            
            
            815,100Share
      cancellation
            
            
            (120,000
            )
            
            
            -Imputed
      Interest
            
            
            -
            
            
            
            63,036Totals
            
            
            286,726,617
            
            
            $
            15,830,619





During
the first quarter of 2008, eTelcharge issued 4,639,015 shares valued at $275,090
for services rendered to the Company.  Of the total amount issued,
$243,379 was for current period services, and $31,711 was for services performed
in prior periods which were accrued at December 31, 2007.








NOTE 11 - SUBSEQUENT
EVENTS





Common
Stock and Pending Stock Subscriptions





Subsequent
to March 31, 2008, eTelcharge issued 1,000,000 shares of common stock valued at
$50,000 in connection with a consulting agreement.





On April
9, 2008 the Company entered into an agreement with Good News Capital, LLC for
business development and to introduce the Company to potential sources of
funding to help in implementing the Company’s business plan, in exchange for
2,500,000 restricted shares of the Company’s common stock.















-F9-








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





Management’s
discussion and analysis of financial condition and results of operations
contains various “forward looking statements” within the meaning of Section 21E
of the Exchange Act of 1934, regarding future events or the future financial
performance of the Company that involve risk and
uncertainties.  Certain statements included in this Form 10-Q,
including, without limitation, statements related to anticipated cash flow
sources and uses, and words included but not limited to “ anticipates”,
“believes”, “plans”, “expects”, “continue”, “will”, and similar expressions are
intended to identify forward- looking statements within the meaning of section
27A of the Securities Act of 1933 and Section 21E of the Securities act of 1934
regarding events, conditions, and financial trends that may affect our future
plans of operations, business strategy, operation results and financial
position.  We caution readers that a variety of factors could cause
our actual results to differ materially from the anticipated results or other
matters expressed in forward-looking statements.





The
following information should be read in conjunction with our financial
statements and notes thereto appearing elsewhere in this Form 10-Q.





We had a
net loss of $582,233 during the three months ended March 31, 2008, a decrease of
$321,271 compared to a loss of $903,504 for the three months ended March 31,
2007.  The decreased loss primarily resulted from loss on
extinguishment of debt in 2007 in the amount of $642,754, offset by an increase
in 2008 of the cost of common stock and stock options issued for compensation
and consulting services of approximately $140,000, an increase in payroll of
approximately $84,000, an increase in professional fees of approximately
$178,000, and a $33,000 credit to the statement of operations marking the
derivative instrument to market.





Working
capital deficit at March 31, 2008 was $362,897 compared to $198,704 at December
31, 2007.  The decline in working capital is the result of using cash
on hand to fund our day to day operations, thereby using most of the cash on
hand at year-end by March 31, 2008.





Our
ability to operate profitably depends on generating sales and achieving
sufficient gross profit margins.  We cannot assure that we will
achieve or maintain profitable operations in the future.





Our
ability to continue in operation is dependent upon our ability to raise
sufficient working capital to cover our expenses. 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, our auditors included an
explanatory paragraph as to our ability to continue as a going concern as part
of their audit opinion of our financial statements for the year ended December
31, 2007. We have generated $107,276 of revenue since our inception and since
inception through the three months ended March 31, 2008 we incurred a cumulative
net loss of $16,252,597 including a net loss of $582,233 for the three months
ended March 31, 2008.





Our
operations have been primarily funded through the issuance of our common shares.
Total cash proceeds for the issuance of common shares totaled $1,940,506 from
inception through March 31, 2008, and $50,000 from December 31, 2007 through
March 31, 2008. In order to continue in business we must continue to raise
capital, as revenue from operations will be insufficient in the short term 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 three months
unless we raise additional funds, or unless our revenue grows
significantly.





Off-Balance
Sheet Arrangements





None.





Item
3. Quantitative and Qualitative Disclosures About Market Risk.





Not
applicable.




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Item
4T. Controls and Procedures





As
required by Rule 13a-15 under the Securities Exchange Act of 1934 (the
“Exchange Act”), we carried out an evaluation of the effectiveness of the design
and operation of our disclosure controls and procedures as of March 31,
2008. This evaluation was carried out under the supervision and with the
participation of our Chief Executive Officer and Chief Financial Officer. Based
on their evaluation of our disclosure controls and procedures and on the
material weakness disclosed in our December 31, 2007 Form 10KSB, we concluded
that such disclosure controls and procedures were ineffective as of March 31,
2008 to ensure that information required to be disclosed by us in reports that
we file or submit under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in Securities and Exchange Commission
rules and forms.




Changes
in Internal Control Over Financial Reporting





During
our most recent fiscal quarter, there has not occurred any change in our
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.





PART
II – OTHER INFORMATION




Item 1. Legal Proceedings





The Company received notice in early April, 2008
that a complaint has been filed in the County Court at Law No. 3, Dallas County
Texas, by several former consultants who provided software programming services
to the Company alleging that the Company owes each plaintiff compensation equal
to one million shares of the Company's common stock, or a total of five million
shares. The Company is not aware of the names of each plaintiff because it has
not yet been served with the complaint. The Company is aware that the former CEO
of the Comapny has agreed in principle with the plaintiffs to settle by payment
to the plaintiffs of common stock held by him. There can be no assurance that
the settlement in principle will be finalized.




Item
2. Unregistered Sales of Equity Securities and Use of Proceeds





During
the quarter ended March 31, 2008, eTelcharge issued to three
consultants shares of common stock in consideration of services
provided.  These shares were issued without registration in reliance
upon the exemption afforded by the provisions of Section 4(2) of the Securities
Act, based on the fact that the issued shares were not sold or offered pursuant
to general solicitation, and that the consultants had sufficient sophistication
and access to information about eTelcharge.  In addition, such shares
bear a legend indicating such restrictions on transferability.




Date
            Number
      of Shares Issued
            Value
      of Services ($)January
      8, 2008
            3,315,468
            197,000March
      11, 2008
            1,323,547
            78,090





In
addition, the Company received $20,000 cash on March 27, 2008 and $30,000 cash
on March 31, 2008 from one “accredited investor” in exchange for 1,000,000 and
1,500,000 shares of unregistered common stock, respectively.  Although
the funds were received by March 31, 2008, the stock was not issued until April
22, 2008.  This purchase and sale was made without registration in
reliance upon the exemption afforded by the provisions of Section 4(2) of the
Securities Act of 1933, as amended (the “Securities Act”), and Rule 506
promulgated thereunder, based on the fact that the issued shares were not sold
or offered pursuant to general solicitation, and in reliance upon the
representations of such investors as to such investor’s status as an accredited
investor and investment experience, that such investor had access to information
about the Company, that such investor was purchasing such securities for its own
account and not with a view to resale or distribution or any part thereof in
violation of the Securities Act and an acknowledgement by such investor that
resale of such securities may not be made unless registered under the Securities
Act or another exemption from registration is available.  In addition,
such shares bear a legend indicating such restrictions on
transferability.




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Item
6. Exhibits


Exhibit
No.                                Description





31.1
            Rule
      13a-14(a)/15d-14(a) Certification of Robert M. Howe III31.2
            Rule
      13a-14(a)/15d-14(a) Certification of Robyn Priest32.1
            Section
      1350 Certification of Robert M. Howe III32.2
            Section
      1350 Certification of Robyn Priest




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SIGNATURES




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





eTELCHARGE.COM


(Registrant)








Date: May
5,
2008                                                                           /s/ Robert M. Howe
III


By: Robert M. Howe III


Title: President and Chief Executive
Officer











Date: May
5,
2008                                                                           /s/ Robyn
Priest


By: Robyn Priest


Title: Senior Vice President - Finance
and Chief Financial Officer





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