**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**










x Annual
      report under section 13 or 15(d) of the Securities Exchange Act of 1934 for
      the
      fiscal year ended December 31, 2006





Commission
      file number 000-304799





**eTELCHARGE.COM,
      INC.**


(Name
      of
      small business issuer in its charter)





**NEVADA**
            **75-2847699**(State
                or other jurisdiction
            (I.R.S.
                Employer incorporationof
                Identification No.)
            or
                organization)




**eTELCHARGE.COM,
      INC.**


**1636
      N. HAMPTON, SUITE 270, DESOTO, TEXAS 75115**


**(972)
      298-3800**


(Address
      and telephone number of principal executive offices)





Securities
      registered under Section 12(b) of the Exchange Act:


**NONE**




Securities
      registered under Section 12(g) of the Exchange Act:





**Common
      Stock, $0.003 Par Value**


(Title
      of
      each class)





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 o ; No x





Check
      if
      there is no disclosure of delinquent filers in response to Item 405 of
      Regulation S-B contained in this form, and no disclosure will be contained,
      to
      the best of registrant's knowledge, in definitive proxy or information
      statements incorporated by reference in Part III of this Form 10-KSB or any
      amendment to this Form 10-KSB. o





Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes o ; No x





Revenues
      for the fiscal year ended December 31, 2006 were $34,633.





The aggregate market value of the voting and non-voting common equity held by
      non-affiliates as of March 28, 2007 was $2,881,802 (based on the closing price
      of $.029 per share on March 28, 2007 as reported on the over-the counter
      Bulletin Board).





As
      of
      March 28, 2007, there were 143,801,605 outstanding shares.





Transitional
      Small Business Disclosure Format (Check one): Yes o No x




-1-




**PART
      I.**


**Item
      1.**  **Description of Business.**





HISTORY





eTELCHARGE.com,
      Inc. (the "Company"), was incorporated under the laws of the State of Nevada
      on
      June 7, 1999. Its offices are located at 1636 N. Hampton Road, Suite 270 DeSoto,
      Texas 75115. The Company has an Internet web site, www.etelcharge.com and its
      stock symbol is: ETLC.





Business
      Development





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. In May of 2003, the company expanded its service by offering
      credit card processing for merchants and becoming a merchant service company.
      This move positioned the company to provide the traditional payment options
      such
      as Visa, MasterCard and American Express.





As
      we are
      in the development stage, the initial telephone billing payment option was
      retired for software improvement and further enhancements based on customer
      input; such enhancements shall focus primarily on speed of transaction and
      confirmation of charge approved to merchant. Once all improvements have been
      integrated and successfully tested the new 1.1 and 2.0 versions of the initial
      telephone payment option will be launched.





Initially,
      with the 1.0 version we targeted Internet merchants who offered CDs, video
      cassette tapes, computer software, books, flowers and food items to offer our
      telephone billing option. Under the initial version, following an online
      purchase by a customer, the charge was included on behalf of the merchant in
      the
      customer's next telephone bill. With AT&T Approximately 30 days after an
      online charge, the process was designed to provide an advance against the
      purchase price prior to the customer paying the telephone bill. After deducting
      our fees, we would 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. Under our agreement with Billing Concepts
      Inc.,
      Billing Concepts will advance seventy percent (70%) of the amount determined
      on
      the first Tuesday after the sixtieth (60th) day from the date Billing Concepts
      receives billing records from eTelcharge.com; fifty percent (50%) of the
      remaining balance of the amount determined on the first Tuesday after the
      ninetieth (90th) day from the date Billing Concepts receives billing records
      from eTelcharge.com; and the remaining balance of the amounts so determined
      on
      the first Tuesday after one hundred twentieth (120th) day from the date Billing
      Concepts receives eTelcharge.com records. All payments to eTelcharge.com are
      subject to deductions from all assigned and allocated assessments and taxes
      charged to the Local Phone Companies.





We
      will
      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.
      We
      will evaluate this reserve on an ongoing basis to reflect our
      experience.





In
      April
      2006, The Company signed a new agreement with AT&T to bill direct again for
      special services such as music, video and movie downloads to the customers
      home
      phone bill.  This
      new
      agreement will initially commence billing in the SW region of the United States
      and cover all other regions of the US in roll out phases from the SE region
      to
      the West Coast territory within AT&T markets.





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, 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 $60, 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.





-2-




STRATEGY





Our
      objective is to integrate our new on line telephone billing option by
      offering it with established traditional credit card payment
      options. We will contact online and offline 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:




·
            Improve
                our telephone billing software with technical enhancements to speed
                up the
                payment confirmation and approval timeframe prior to launching the
                next
                version of the telephone billing payment
                option;




·
            Seek
                to establish a faster payout schedule for merchants who accept the
                1.1 and
                2.0 version for initiating online charges to telephone
                bills;




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




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




MARKETING





Using
      our marketing staff, including our CEO President, we market to online merchants
      through direct presentations. 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 and 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 utilize the assistance of outside marketing and sales organizations,
      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 from the telephone billing option up to
      a
      maximum of $250,000 per year to KIDCARE, a Houston-based charity benefiting
      underprivileged children. Our commitment to KIDCARE may be cancelled by us
      on
      six months notice. We are currently reviewing our commitment and will make
      a
      decision regarding our commitment to the above mentioned charity.




COMPETITION


We
      expect
      to 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' customers a separate charge fee. Payout schedule to merchants
      for
      transactions charged via the telephone billing option are also restricted to
      longer hold periods prior to payout to merchants. Additionally, customer charges
      are limited to no more than $60 per month. However, we will offer a new charge
      option to customers of our merchants who do not have credit cards or are
      reluctant to use credit cards online.





-3-




We
      also
      expect to compete with two other 900 billing services, eCharge and iBill, all
      of
      which are larger than we and offer customers similar opportunities to charge
      to
      their telephone bills online, through arrangements with 900 billing services.
      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 will have
      developed a 900 and 800 number application that allows for the purchase of
      approved qualified 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 requires 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.





EMPLOYEES





As
      of
      March 28, 2007 we have 2 full-time employees and 1 part-time
      employee.




**Item
      2. Description of Property.**





We
      currently lease 3,000 square feet of office space on a three-year lease expiring
      January 31, 2010 at 1636 N. Hampton Road, Suite 270, DeSoto, Texas
      75115.




**Item
      3. Legal Proceedings**





The
      Company is not a party to any pending legal proceedings.




**Item
      4. Submission of Matters to a Vote of Security Holders.**





The
      Company did not submit any matters to a vote of its stockholders during the
      2006
      fiscal year.




-4-


-


**PART
      II.**




**Item
      5. Market for Common Equity and Related Stockholder
      Matters.**




Our
      common shares trade on the over-the-counter under the symbol ETLC. Prior to
      May
      2003, our common stock traded on the over the counter Bulletin Board under
      the
      symbol ETLC. The table below sets forth high and low closing prices for our
      common stock during each of the periods indicated :




QUARTER
                ENDED
            
            
            LOW
            
            
            HIGHJanuary
                1,2005 - March 31,2005
            
            $
            .55
            
            $
            .68April
                1, 2005 - June 30, 2005
            
            
            .13
            
            
            .14July
                1, 2005- September 30, 2005
            
            
            .09
            
            
            .10October
                1, 2005- December 31, 2005
            
            
            .07
            
            
            .10January
                1, 2006 - March 31, 2006
            
            
            .05
            
            
            .18April
                1, 2006- June 30, 2006
            
            
            .04
            
            
            .11July
                1, 2006 - September 30, 2006
            
            
            .05
            
            
            .17October
                1, 2006- December 31, 2006
            
            
            .02
            
            
            .07




As
      of
      March 28, 2007, we had approximately 581 holders of record of voting common
      stock.




We
      have
      not paid dividends on our common stock and do not anticipate the payment of
      cash
      dividends in the foreseeable future. We anticipate all earnings, if any, over
      the next 12 to 24 months will be retained for future investments in business.
      Any future determination to pay cash dividends will be at the discretion of
      the
      Board of Directors and will be dependent upon our results of operations,
      financial conditions, contractual restrictions, and other factors deemed
      relevant by the Board of Directors. We are under no collateral restrictions
      in
      declaring or paying dividends to our common shareholders. There are no material
      restrictions limiting, or that are likely to limit, the Company’s ability to pay
      dividends on our securities, except for any applicable limitations under Nevada
      corporate law.




During
      fiscal year 2006 we issued 8,000,000 shares of common stock for cash, 417,040
      shares of common stock to settle a stock payable from the prior year, and
      1,091,313 shares of common stock was sold and/or issued for
      services.




**Item
      6. Management's Discussion and Analysis or Plan of
      Operation.**





Management’s
      discussion and Analysis contains various “forward looking statements” within the
      meaning of Section 21E of the Securities Exchange Act of 1934, as amended,
      regarding future events or the future financial performance of the Company
      that
      involve risk and uncertainties. Certain statements included in this Form 10-KSB,
      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-KSB.





-5-




The
      Company had a net loss of $440,170 for the year ended December 31, 2006, a
      decrease of $1,667,817 compared to a net loss of $2,107,987 for the year ended
      December 31, 2005. The decreased loss primarily resulted from less non-cash
      charges associated with the issuance of common stock for services. The Company,
      as a development company, has generated $34,633 in operating revenues for the
      twelve months ended of December 31, 2006. Our ability to operate profitably
      depends on generating sales and achieving sufficient gross profit margins.
      We
      cannot assure you that we will achieve or maintain profitable operations in
      the
      future





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, 2005, 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 both online
      and
      offline merchants and customers.  We will maintain a billing fee of 2.5% to
      8% of the purchase price of the goods or services charged, not including taxes.
      We will also charge a transaction fee of $.25 to $.50 for each shopper
      occasion.  We plan to maintain the same fee of a five percent (5%) to ten
      percent (10%) service charge computed by total charge billed. Additional revenue
      will be generated from our credit card merchant services.  We charge
      merchants a monthly fee ranging from $29 to $89 per month for leasing our credit
      card machines, a discount fee ranging from 1.69% to 3% for credit card
      processing, a transaction fee of twenty five cents ($0.25), and a statement
      fee
      ranging from $10 to $15 per month .





Our
      cost
      of billing is comprised of Billing Concepts 6% of billed revenue and Local
      Phone
      Company charges, which vary from $0.45 cents up to $1.65.  Billing Concepts
      will earn this fee for aggregating billing for the local telephone companies
      to
      include in our customers monthly statements.





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.





We
      have
      tested our initial phone billing option 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. In 2005, 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 2007, most of who will be signed up through the
      efforts of our resellers. Our resellers will take a three day training course
      from us, either online or at our corporate offices, before commencing to market
      any of our merchant service payment options of Visa, MasterCard, American
      Express or the new online 2.0 version for telephone billing services. We
      currently have three such resellers who are existing Web merchants, authorized
      agents and a shopping cart software company. We intend to attract additional
      resellers through advertising in trade journals as well as attending trade
      shows
      within our industry. Resellers are paid a commission of approximately 20% of
      the
      revenue generated from new web merchants referred by them. These agreements
      with
      resellers also provide a nominal residual fee to the agent so long as we retain
      those web merchants referred by same. The reseller agreements are cancelable
      by
      either party on 30 days notice to the other.





Upon
      launch of the 2.0 version telephone billing option, and assuming financing
      is
      available, we intend to initiate an online advertising campaign, using mass
      e-mails to inform online users of our billing service. We will also seek to
      enter agreements with other online entities, web sites and independent sales
      and
      marketing organizations to generate market awareness and usage of the
      eTelcharge.com 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.





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, 2006. We have generated $53,942
        in
        revenue since our inception. Since inception through the year ended December
        31,
        2006 we incurred a cumulative net loss of $12,745,760 including a net loss
        of
        $440,170 for the year ended December 31, 2006.




Our
      operations have been funded solely through the issuance of our common shares.
      Total cash proceeds, net of offering costs, for the issuance of common shares
      totaled $1,159,397 from inception through December 31, 2006. 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.





-6-




**Item
      7. Financial Statements.**








INDEX
      TO
      FINANCIAL STATEMENTS





PAGEREPORT
                OF INDEPENDENT REGISTERED PUBLIC ACCOUNTNG FIRM
            F-2FINANCIAL
                STATEMENTSBalance Sheet
            F-3Statements of Operations
            F-4Statement of Changes in Shareholders' Deficit
            F-5Statements of Cash Flows
            F-6Notes to Financial Statements
            F-7











F-1


REPORT
      OF
      INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM








To  The
      Board
      of Directors


eTelcharge.com,
      Inc.


(A
      Development Stage Company)


Desoto,
      Texas





We
      have
      audited the accompanying balance sheet of eTelcharge.com, Inc. (A Development
      Stage Company) as of December 31, 2006 and the related statements of operations,
      stockholders’ deficit, and cash flows for the two years then ended and for the
      period from June 7, 1999 (Inception) through December 31, 2006. The financial
      statements for the period June 7, 1999 (inception) through December 31, 2002,
      were audited by other auditors whose reports expressed unqualified opinions
      on
      those statements. Our opinion on the statements of operations, stockholders'
      deficit, and cash flows for the period June 7, 1999 (inception) through December
      31, 2006, insofar as it relates to amounts for prior periods through December
      31, 2002, is based solely on the reports of other auditors. These financial
      statements are the responsibility of eTelcharge.com, Inc.’s management. Our
      responsibility is to express an opinion on these financial statements based
      on
      our audits.





We
      conducted our audits in accordance with standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audits to obtain reasonable assurance about whether the
      financial statements are free of material misstatement. An audit includes
      examining, on a test basis, evidence supporting the amounts and disclosures
      in
      the financial statements. An audit also includes assessing the accounting
      principles used and significant estimates made by management, as well as
      evaluating the overall financial statement presentation. We believe that our
      audits provide a reasonable basis for our opinion.





In
      our
      opinion, the financial statements referred to above present fairly, in all
      material respects, the financial position of eTelcharge.com, Inc., as of
      December 31, 2006 and the results of its operations and its cash flows for the
      periods described, in conformity with accounting principles generally accepted
      in the United States of America.





The
      accompanying financial statements have been prepared assuming that
      eTelcharge.com, Inc. will continue as a going concern. As discussed in Note
      2 to
      the financial statements, eTelcharge.com, Inc. suffered recurring losses and
      has
      a working capital deficit which raises substantial doubt about its ability
      to
      continue as a going concern. Management’s plans regarding those matters also are
      described in Note 2. The financial statements do not include any adjustments
      that might result from the outcome of this uncertainty.











/s/
      Malone & Bailey, PC


www.malone-bailey.com


Houston,
      Texas





April
      4,
      2007




F-2





**eTELCHARGE.COM,
                INC.****(A
                Development Stage Company)****BALANCE
                SHEET****For
                the year ended December 31, 2006****December
                31,**
            ********
            ****
            ****
            **2006****ASSETS**Current
                assets:Cash
            
            $
            1,672Fixed
                assets, net of accumulated depreciation of $50,821
            
            
            3,618Deposits
            
            
            1,980Total
                assets
            
            $
            7,270**LIABILITIES
                AND STOCKHOLDERS' DEFICIT**Current
                liabilities:Accrued
                expenses
            
            $
            82,009Payroll
                tax obligation
            
            
            172,517Accounts
                payable
            
            
            122,933Note
                payable to shareholder
            
            
            336,279Short
                term debt
            
            
            152,763Total
                current liabilities
            
            
            866,501Commitments
                and contingencies
            
            
            -Stockholders'
                deficit:Common
                stock, $.003 par value, 250,000,000 shares authorized,138,430,059
                shares issued and outstanding
            
            
            415,290Additional
                paid in capital
            
            
            11,471,239Deficit
                accumulated during the development stage
            
            
            (12,745,760
            )Total
                stockholders' deficit
            
            
            (859,231
            )Total
                liabilities and stockholders' deficit
            
            $
            7,270








See
            accompanying summary of accounting policies
 and
            notes
            to financial statements
 F-3





**eTELCHARGE.COM,
                INC.****(A
                Development Stage Company)****STATEMENTS
                OF OPERATIONS****June
                7, 1999**
            ********
            **Years
                ended**
            ****
            **(Inception)
                to**
            ********
            **December
                31,**
            ****
            **December
                31,**
            ********
            ****
            ****
            **2006**
            ****
            ****
            **2005**
            ****
            ****
            **2006**Revenues
            
            $
            34,633
            
            $
            19,309
            
            $
            53,942Operating
                expenses
            
            
            440,091
            
            
            2,125,033
            
            
            12,771,112Net
                loss from operations
            
            
            (405,458
            )
            
            (2,105,724
            )
            
            (12,717,170
            )Other
                income
            
            
            2,762
            
            
            13,221
            
            
            60,200Interest
                expense
            
            
            (37,474
            )
            
            (15,484
            )
            
            (88,790
            )Net
                loss
            
            $
            (440,170
            )
            $
            (2,107,987
            )
            $
            (12,745,760
            )Basic
                and diluted net loss per share
            
            $
            (0.00
            )
            $
            (0.02
            )Weighted
                average shares outstanding
            
            
            130,409,037
            
            
            116,923,974





F-4




**eTELCHARGE.COM,
                INC.****(A
                Development Stage Company)****STATEMENTS
                OF CHANGES IN STOCKHOLDERS' DEFICIT****Period
                from June 7, 1999 (Inception) through December 31,
                2006**





**Price
                per share**
            ****
            ****
            **Number
                of Common Shares Issued**
            ****
            ****
            **Amount**
            ****
            ****
            **Additional
                Paid-in Capital**
            ****
            ****
            **Accumulated
                Deficit**
            ****
            ****
            **Total**Issuance
                of founder shares
            
            $
            0.00
            
            
            30,851,880
            
            $
            92,556
            
            $
            (69,417
            )
            $
            -
            
            $
            23,139Deemed
                distribution related to purchaseof
                asset from affiliate in 1999
            
            
            -
            
            
            -
            
            
            -
            
            
            (53,500
            )
            
            -
            
            
            (53,500
            )Issuance
                of common stock for propertyand
                equipment in 2001
            
            
            0.38
            
            
            12,800
            
            
            38
            
            
            4,762
            
            
            -
            
            
            4,800Issuance
                of common stock for cash:November
                27, 1999
            
            
            0.01
            
            
            1,600,000
            
            
            4,800
            
            
            5,200
            
            
            -
            
            
            10,000December
                10, 1999
            
            
            0.06
            
            
            160,000
            
            
            480
            
            
            9,520
            
            
            -
            
            
            10,000December
                17, 1999
            
            
            0.01
            
            
            2,400,000
            
            
            7,200
            
            
            22,800
            
            
            -
            
            
            30,000January
                14, 2000
            
            
            0.04
            
            
            146,668
            
            
            440
            
            
            5,060
            
            
            -
            
            
            5,500January
                28, 2000
            
            
            0.12
            
            
            80,000
            
            
            240
            
            
            9,730
            
            
            -
            
            
            9,970February
                7, 2000
            
            
            0.01
            
            
            960,000
            
            
            2,880
            
            
            9,120
            
            
            -
            
            
            12,000March
                14, 2000
            
            
            0.06
            
            
            40,000
            
            
            120
            
            
            2,380
            
            
            -
            
            
            2,500April
                13, 2000
            
            
            0.04
            
            
            1,472,000
            
            
            4,416
            
            
            59,584
            
            
            -
            
            
            64,000June
                30, 2000
            
            
            0.38
            
            
            780,000
            
            
            2,340
            
            
            290,160
            
            
            -
            
            
            292,500September
                30, 2000
            
            
            0.38
            
            
            300,000
            
            
            900
            
            
            111,600
            
            
            -
            
            
            112,500December
                31, 2000
            
            
            0.38
            
            
            20,000
            
            
            60
            
            
            7,440
            
            
            -
            
            
            7,500February
                1, 2001
            
            
            0.13
            
            
            192,000
            
            
            576
            
            
            23,424
            
            
            -
            
            
            24,000March
                14, 2001
            
            
            0.38
            
            
            60,000
            
            
            180
            
            
            22,320
            
            
            -
            
            
            22,500April
                1, 2001
            
            
            0.38
            
            
            39,336
            
            
            118
            
            
            14,634
            
            
            -
            
            
            14,752April
                24, 2001
            
            
            0.38
            
            
            40,000
            
            
            120
            
            
            14,880
            
            
            -
            
            
            15,000May
                20, 2001
            
            
            0.37
            
            
            42,668
            
            
            128
            
            
            15,872
            
            
            -
            
            
            16,000May
                25, 2001
            
            
            0.38
            
            
            40,000
            
            
            120
            
            
            14,880
            
            
            -
            
            
            15,000June
                11, 2001
            
            
            0.38
            
            
            120,000
            
            
            360
            
            
            44,640
            
            
            -
            
            
            45,000June
                18, 2001
            
            
            0.38
            
            
            80,000
            
            
            240
            
            
            29,760
            
            
            -
            
            
            30,000August
                31, 2001
            
            
            0.38
            
            
            40,000
            
            
            120
            
            
            14,880
            
            
            -
            
            
            15,000September
                20, 2001
            
            
            0.38
            
            
            80,000
            
            
            240
            
            
            29,760
            
            
            -
            
            
            30,000September
                21, 2001
            
            
            0.50
            
            
            20,000
            
            
            60
            
            
            9,940
            
            
            -
            
            
            10,000November
                21, 2001
            
            
            0.34
            
            
            59,140
            
            
            177
            
            
            19,848
            
            
            -
            
            
            20,025December
                3, 2001
            
            
            0.38
            
            
            13,332
            
            
            40
            
            
            4,960
            
            
            -
            
            
            5,000January
                30, 2002
            
            
            0.38
            
            
            16,000
            
            
            48
            
            
            5,952
            
            
            -
            
            
            6,000February
                1, 2002
            
            
            0.30
            
            
            66,664
            
            
            200
            
            
            19,801
            
            
            -
            
            
            20,001February
                26, 2002
            
            
            0.31
            
            
            8,796
            
            
            26
            
            
            2,679
            
            
            -
            
            
            2,705April
                1, 2002
            
            
            0.13
            
            
            80,000
            
            
            240
            
            
            9,760
            
            
            -
            
            
            10,000April
                9, 2002
            
            
            0.38
            
            
            21,832
            
            
            65
            
            
            8,257
            
            
            -
            
            
            8,322July
                1, 2002
            
            
            0.21
            
            
            119,200
            
            
            358
            
            
            24,342
            
            
            -
            
            
            24,700July
                10, 2002
            
            
            0.37
            
            
            107,732
            
            
            323
            
            
            40,075
            
            
            -
            
            
            40,398August
                16, 2002
            
            
            0.21
            
            
            3,764
            
            
            11
            
            
            789
            
            
            -
            
            
            800September
                5, 2002
            
            
            0.88
            
            
            4,000
            
            
            12
            
            
            3,488
            
            
            -
            
            
            3,500September
                10, 2002
            
            
            0.38
            
            
            13,332
            
            
            40
            
            
            4,960
            
            
            -
            
            
            5,000September
                20, 2002
            
            
            0.37
            
            
            53,336
            
            
            160
            
            
            19,840
            
            
            -
            
            
            20,000September
                30, 2002
            
            
            0.38
            
            
            21,332
            
            
            64
            
            
            7,936
            
            
            -
            
            
            8,000December
                20, 2002
            
            
            0.37
            
            
            114,432
            
            
            343
            
            
            41,956
            
            
            -
            
            
            42,299Issuance
                of common stock for services:December
                10, 2000
            
            
            0.38
            
            
            84,200
            
            
            253
            
            
            31,322
            
            
            -
            
            
            31,575December
                10, 2000
            
            
            0.38
            
            
            1,400,000
            
            
            4,200
            
            
            520,800
            
            
            -
            
            
            525,000February
                14, 2001
            
            
            0.13
            
            
            1,221,520
            
            
            3,665
            
            
            149,048
            
            
            -
            
            
            152,713February
                22, 2001
            
            
            0.13
            
            
            600,000
            
            
            1,800
            
            
            73,200
            
            
            -
            
            
            75,000June
                6, 2001
            
            
            0.38
            
            
            100,000
            
            
            300
            
            
            37,200
            
            
            -
            
            
            37,500June
                12, 2001
            
            
            0.38
            
            
            20,000
            
            
            60
            
            
            7,440
            
            
            -
            
            
            7,500August
                31, 2001
            
            
            0.38
            
            
            1,400,000
            
            
            4,200
            
            
            520,800
            
            
            -
            
            
            525,000September
                10, 2001
            
            
            0.25
            
            
            300,000
            
            
            900
            
            
            73,413
            
            
            -
            
            
            74,313September
                11, 2001
            
            
            0.38
            
            
            160,000
            
            
            480
            
            
            59,520
            
            
            -
            
            
            60,000September
                12, 2001
            
            
            0.38
            
            
            9,200,000
            
            
            27,600
            
            
            3,422,400
            
            
            -
            
            
            3,450,000January
                7, 2002
            
            
            0.38
            
            
            1,573,400
            
            
            4,720
            
            
            592,805
            
            
            -
            
            
            597,525January
                30, 2002
            
            
            0.38
            
            
            20,000
            
            
            60
            
            
            7,440
            
            
            -
            
            
            7,500April
                1, 2002
            
            
            0.38
            
            
            33,000
            
            
            99
            
            
            12,276
            
            
            -
            
            
            12,375May
                29, 2002
            
            
            0.38
            
            
            120,000
            
            
            360
            
            
            44,640
            
            
            -
            
            
            45,000September
                30, 2002
            
            
            0.38
            
            
            40,000
            
            
            120
            
            
            14,880
            
            
            -
            
            
            15,000December
                31, 2002
            
            
            0.38
            
            
            338,400
            
            
            1,015
            
            
            125,885
            
            
            -
            
            
            126,900Share
                adjustment
            
            
            -
            
            
            275,060
            
            
            825
            
            
            (634
            )
            
            -
            
            
            191Cancellation
                of common stock
            
            
            -
            
            
            (120,000
            )
            
            (360
            )
            
            360
            
            
            -
            
            
            -Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (7,153,550
            )
            
            (7,153,550
            )Balances,
                December 31, 2002
            
            
            
            
            
            57,045,824
            
            
            171,137
            
            
            6,556,866
            
            
            (7,153,550
            )
            
            (425,547
            )Issuance
                of common stock for services
            
            
            0.03
            
            
            9,200,800
            
            
            27,602
            
            
            202,498
            
            
            -
            
            
            230,100Issuance
                of common stock for cash
            
            
            0.38
            
            
            273,064
            
            
            819
            
            
            101,956
            
            
            
            
            
            102,775Net
                loss
            
            
            -
            
            
            -
            
            
            -
            
            
            -
            
            
            (2,271,341
            )
            
            (2,271,341
            )Balances,
                December 31, 2003
            
            
            
            
            
            66,519,688
            
            
            199,559
            
            
            6,861,319
            
            
            (9,424,891
            )
            
            (2,364,013
            )Net
                loss
            
            
            
            
            
            -
            
            
            -
            
            
            -
            
            
            (772,712
            )
            
            (772,712
            )Balances,
                December 31, 2004
            
            
            
            
            
            66,519,688
            
            $
            199,559
            
            $
            6,861,319
            
            $
            (10,197,603
            )
            $
            (3,136,725
            )Issuances
                of common stock for cash:January
                21, 2005
            
            
            .08-.013
            
            
            320,000
            
            
            960
            
            
            2,540
            
            
            -
            
            
            3,500February
                28, 2005
            
            
            0.013
            
            
            112,000
            
            
            336
            
            
            1,064
            
            
            -
            
            
            1,400March
                18, 2005
            
            
            0.013
            
            
            100,000
            
            
            300
            
            
            950
            
            
            -
            
            
            1,250Issuance
                of common stock for stock payable from prior yearJanuary
                19, 2005
            
            
            .0083-.0125
            
            
            2,660,560
            
            
            7,982
            
            
            25,275
            
            
            -
            
            
            33,257January
                21, 2005
            
            
            0.0125
            
            
            380,000
            
            
            1,140
            
            
            3,610
            
            
            -
            
            
            4,750February
                28, 2005
            
            
            .0125-.38
            
            
            357,864
            
            
            1,074
            
            
            90,426
            
            
            -
            
            
            91,500March
                18, 2005
            
            
            0.0125
            
            
            200,000
            
            
            600
            
            
            1,900
            
            
            -
            
            
            2,500December
                9, 2005
            
            
            .0125-.38
            
            
            120,000
            
            
            360
            
            
            15,640
            
            
            -
            
            
            16,000Issuance
                of common stock for servicesFebruary
                28, 2005
            
            
            0.2
            
            
            9,200,000
            
            
            27,600
            
            
            1,812,400
            
            
            
            
            
            1,840,000March
                29, 2005
            
            
            0.15
            
            
            8,000
            
            
            24
            
            
            1,176
            
            
            
            
            
            1,200January
                19,2005
            
            
            .02-.3125
            
            
            487,747
            
            
            1,463
            
            
            95,410
            
            
            
            
            
            96,873January
                21, 2005
            
            
            .0125-.3125
            
            
            14,013,714
            
            
            42,041
            
            
            1,514,774
            
            
            
            
            
            1,556,815January
                28, 2005
            
            
            0.04
            
            
            120,000
            
            
            360
            
            
            4,440
            
            
            
            
            
            4,800February
                28, 2005
            
            
            .02-.3125
            
            
            21,693,333
            
            
            65,080
            
            
            639,653
            
            
            
            
            
            704,733March
                29, 2005
            
            
            .04-.15
            
            
            28,800
            
            
            86
            
            
            1,066
            
            
            
            
            
            1,152June
                6, 2005
            
            
            .0175
            
            
            12,000,000
            
            
            36,000
            
            
            174,000
            
            
            
            
            
            210,000December
                9, 2005
            
            
            .02-.3225
            
            
            600,000
            
            
            1,800
            
            
            82,968
            
            
            
            
            
            84,768Imputed
                interest on shareholder loan
            
            
            
            
            
            
            
            
            -
            
            
            12,014
            
            
            -
            
            
            12,014Net
                loss
            
            
            
            
            
            
            
            
            -
            
            
            -
            
            
            (2,107,987
            )
            
            (2,107,987
            )Balances,
                December 31, 2005
            
            
            
            
            
            128,921,706
            
            
            386,765
            
            
            11,340,625
            
            
            (12,305,590
            )
            
            (578,200
            )Issuance
                of common stock for stock payable from prior yearJanuary
                9, 2006
            
            
            .065
            
            
            417,040
            
            
            1,251
            
            
            3,962
            
            
            
            
            
            5,213Issuances
                of common stock for cash
            
            
            0.005
            
            
            8,000,000
            
            
            24,000
            
            
            16,000
            
            
            
            
            
            40,000Issuances
                of common stock services
            
            
            0.085
            
            
            1,091,313
            
            
            3,274
            
            
            84,325
            
            
            
            
            
            87,599Imputed
                interest on shareholder loan
            
            
            
            
            
            
            
            
            
            
            
            26,327
            
            
            
            
            
            26,327Net
                loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (440,170
            )
            
            (440,170
            )Balances,
                December 31, 2006
            
            
            
            
            
            138,430,059
            
            
            415,290
            
            
            11,471,239
            
            
            (12,745,760
            )
            
            (859,231
            )








F-5





**eTELCHARGE.COM,
        INC.** **(A
          Development Stage Company)** **STATEMENTS
            OF CASH FLOWS**
  **June
                  7, 1999**
              ********
              ****
              **Year
                  ended**
              ****
              **(Inception)
                  to**
              ********
              ****
              **December
                  31,**
              ****
              **December
                  31,**
              ********
              ****
              **2006**
              ****
              **2005**
              ****
              **2006**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (440,170
              )
              $
              (2,107,987
              )
              $
              (12,745,760
              )Adjustments
                  to reconcile net loss to netcash
                  used in operating activities:Amortization
                  and depreciation
              
              
              2,573
              
              
              3,666
              
              
              113,821Issuance
                  of common stock for services
              
              
              69,786
              
              
              1,841,200
              
              
              7,925,130Imputed
                  interest
              
              
              26,327
              
              
              12,014
              
              
              38,341Changes
                  in:Other
                  assets
              
              
              -
              
              
              -
              
              
              (1,980
              )Accounts
                  payable
              
              
              22,991
              
              
              (31,775
              )
              
              122,933Accrued
                  expenses
              
              
              43,538
              
              
              62,734
              
              
              2,741,150Payroll
                  tax obligation
              
              
              28,547
              
              
              14,953
              
              
              172,518Net
                  cash used in operating activities
              
              
              (246,408
              )
              
              (205,195
              )
              
              (1,633,847
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of property and equipment
              
              
              (1,050
              )
              
              (2,845
              )
              
              (49,639
              )Net
                  cash used in investing activities
              
              
              (1,050
              )
              
              (2,845
              )
              
              (49,639
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from sales of common stock
              
              
              40,000
              
              
              8,255
              
              
              1,312,617Net
                  loan proceeds from shareholder
              
              
              45,616
              
              
              207,282
              
              
              336,279Proceeds
                  from notes payable-other
              
              
              150,313
              
              
              2,920
              
              
              153,233Payments
                  on notes payable-other
              
              
              (470
              )
              
              -
              
              
              (470
              )Payment
                  on payable to related party for asset purchase
              
              
              -
              
              
              -
              
              
              (116,500
              )Net
                  cash provided by financing activities
              
              
              235,459
              
              
              218,457
              
              
              1,685,159NET
                  CHANGE IN CASH AND CASH EQUIVALENTS
              
              
              (11,999
              )
              
              10,417
              
              
              1,673CASH
                  AND CASH EQUIVALENTS, beginning of period
              
              
              13,672
              
              
              3,255
              
              
              -CASH
                  AND CASH EQUIVALENTS, end of period
              
              $
              1,673
              
              $
              13,672
              
              $
              1,673
 Supplemental
                  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
              
              
              -
              
              
              -
              
              
              4,800Issuance
                  of common stock for stock payablefrom
                  prior year
              
              
              5,213
              
              
              148,007
              
              
              153,220Issuance
                  of common stock for compensation
              
              
              52,533
              
              
              2,659,141
              
              
              2,711,674Supplemental
                  cash flow disclosures:Cash
                  paid for income taxes
              
              
              -
              
              
              -
              
              
              -Cash
                  paid for interest
              
              
              4,947
              
              
              3,470
              
              
              10,672
 See
        accompanying summary of accounting policies and notes to financial
        statements.
  F-6


**eTELCHARGE.COM,
      INC.**


**(A
      Development Stage Company)**


**NOTES
      TO FINANCIAL STATEMENTS**






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




eTelcharge.com,
      Inc. (“eTelcharge”) 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
      December 31, 2006, eTelcharge has not commenced significant operations.
      eTelcharge is in the process of raising equity financing to fund future
      operations and marketing of its product to target customers. As such, eTelcharge
      is considered to be in the development stage.





***Use
      of Estimates and Assumptions***





Management
      uses estimates and assumptions in preparing financial statements in accordance
      with generally accepted accounting principles. Those estimates and assumptions
      affect the reported amounts of assets and liabilities, the disclosure of
      contingent assets and liabilities, and the reported amounts of revenues and
      expenses. Actual results could vary from the estimates that were
      used.




***Cash
      and Cash Equivalents***




eTelcharge
      considers cash in banks, certificates of deposit and other highly liquid
      investments with maturities of three months or less when purchased to be cash
      and cash equivalents.




***Property
      and Equipment***





Property
      and equipment are recorded at cost. Depreciation is computed using the
      straight-line method over estimated lives of three to five years. 
Expenditures that increase values or extend useful lives are capitalized.
      Routine maintenance and repairs are charged to expense when
      incurred.





***Impairment
      of Long-Lived Assets***





eTelcharge
      reviews the carrying value of its long-lived assets annually or whenever events
      or changes in circumstances indicate that the historical cost-carrying value
      of
      an asset may no longer be appropriate.  eTelcharge assesses recoverability
      of the carrying value of the asset by estimating the future net cash flows
      expected to result from the asset, including eventual disposition.  If the
      future net cash flows are less than the carrying value of the asset, an
      impairment loss is recorded equal to the difference between the asset's carrying
      value and fair value.  There was no impairment of long-lived assets for the
      year ending December 31, 2006.





***Proprietary
      Rights***





Proprietary
      rights consist of certain exclusive rights that allow eTelcharge's customers
      to
      charge meals and other consumer oriented goods to proprietary "900" telephone
      numbers obtained from AT&T. These rights expired in January 2003, and were
      fully amortized at December 31, 2002. The proprietary rights were recorded
      at
      costs and amortized using the straight-line method over their estimated useful
      life of three years, which was the contractual life of the underlying agreement
      with AT&T.   See Note 11 for details. eTelcharge entered into a
      new agreement in April 2006 with AT&T for billing via “800” telephone
      numbers for micro payment billing for downloadable music, video and movies.
      The
      agreement includes billing for satellite radio and other content. A non-compete
      agreement was signed for billing of food, CD’s, tapes, books and flowers.




F-7





**** ***Income
      Taxes***





eTelcharge
      accounts for income taxes in accordance with the asset and liability method.
      Deferred income tax assets and liabilities are computed periodically for
      differences between the financial statement and tax bases of assets and
      liabilities that will result in taxable or deductible amounts in the future
      based on enacted tax laws and rates applicable to the periods in which the
      differences are expected to affect taxable income. Valuation allowances are
      established when necessary to reduce deferred tax assets to the amount expected
      to be realized. Income tax expense is the tax payable or refundable for the
      period plus or minus the change during the period in deferred tax assets and
      liabilities.





***Revenue
      Recognition***





eTelcharge
      recognizes revenue in accordance with Staff Accounting Bulletin (SAB) No. 101,
      “Revenue Recognition in Financial Statements.” Non-refundable, one-time
      processing fee revenue from online merchants will be recognized using the
      straight-line method over the term of the online merchant agreement. Billing
      fee
      and service charge revenue from online merchants is recognized as online
      purchases from customers are processed and typically ranges from 3% to 4% of
      the
      purchase price, plus $0.15 to $0.25 per transaction and will be non-refundable.
      Customer fee revenue is recognized upon shipment by the online merchant to
      the
      customer, typically between 5% to 10% of the purchase price, and is refundable
      should the merchant approve the customer dispute. All funds will be remitted
      directly to eTelcharge. eTelcharge expects to enter into 2 to 3 year agreements
      with merchants, with such agreements not containing cancellation clauses. The
      direct costs of providing these services includes a transaction charge by the
      carrier of approximately 2% of the purchase price and a usage charge per minute
      that will be expensed as incurred. Revenue will be derived from the discount
      rate affiliated with all other payment options rendered to merchants processing
      credit card transactions via merchant service banks contracted by eTelcharge.
      A
      residual revenue of approximately .1% of the discount rate of approximately
      2.3%
      and an additional residual of $.05 cents per transaction fee of the $0.25
      charged to merchant clients is also recognized. Revenue is recognized based
      on
      the net fee charged by eTelcharge.





***Stock-Based
      Compensation***





eTelcharge
      issues stock as compensation to employees and outside consultants for services
      rendered. These shares are recorded at the fair value of the stock as measured
      on the date or dates the services were rendered.





eTelcharge
      adopted the disclosure requirements of Financial Accounting Standard No. 123,
      Accounting for Stock-Based Compensation (FAS No. 123) and FAS No. 148 with
      respect to pro forma disclosure of compensation expense for options issued.
      For
      purposes of the pro forma disclosures, the fair value of each option grant
      is
      estimated on the grant date using the Black-Scholes option-pricing
      model.





Effective
      January 1, 2006, eTelcharge adopted SFAS No. 123R, Share-Based Payment. SFAS
      No.
      123R generally requires entities to recognize the cost of employee services
      received in exchange for awards of stock options, or other equity instruments,
      based on the grant-date fair value of those awards. This cost is recognized
      over
      the period which an employee is required to provide services in exchange for
      the
      award, generally the vesting period. Prior to January 2006, eTelcharge accounted
      for employee stock option grants in accordance with APB No. 25, and had adopted
      only the disclosure provisions of SFAS No. 123, Accounting for Stock-Based
      Compensation. There were no options or warrants granted or outstanding during
      the years ended December 31, 2006 or 2005.





***Net
      Loss Per Share***





Basic
      and
      diluted loss per share is computed by dividing net loss by the weighted average
      number of basic and diluted common shares outstanding.  There were no
      dilutive securities for the years ended December 31, 2006 and 2005.





***Recent
      Accounting Pronouncements***





eTelcharge
      does not expect the adoption of recently issued accounting pronouncements to
      have a significant impact on eTelcharge’s results of operations, financial
      position or cash flow.





F-8




**NOTE
      2 - GOING CONCERN**





As
      shown
      in the accompanying financial statements, eTelcharge incurred net losses of
      $440,170 and $2,107,987 in fiscal 2006 and 2005, respectively, has an
      accumulated deficit of $12,745,760 and a working capital deficit of
      $864,829.  These conditions raise substantial doubt as to eTelcharge's
      ability to continue as a going concern.  Management is trying to raise
      additional capital through sales of common stock.  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 December 31, 2006:





**Description**
            
            
            **Life**
            
            
            **2006**Computer equipment
            
            
            3
                years
            
            $
            37,294Office furniture and equipment
            
            
            5
                years
            
            
            17,14554,439Less: accumulated depreciation
            
            
            
            
            
            (50,821
            )$
            3,618




Depreciation
      expense is recorded using the straight line method and totaled $2,573 and $3,666
      in fiscal 2006 and 2005, respectively.




**NOTE
      4 - ACCRUED COMPENSATION**





During
      the year ended December 31, 2006 eTelcharge issued 1,091,313 shares of common
      stock valued at $87,599 to employees for services.




As
      of
      December 31, 2006, eTelcharge accrued $36,606 payable in cash and $34,720
      payable in 501,869 shares of common stock for compensation provided during
      2006.





**NOTE
      5 - PAYROLL TAX OBLIGATION**





eTelcharge
      has not remitted a portion of its Federal and State employer and employee
      payroll taxes for the years 2001 through 2006. eTelcharge has determined this
      obligation to be the actual amounts of the tax withheld from the employees
      and
      the employer portion of the Federal Tax obligation in addition to an estimated
      25% penalty and interest accrual. The total obligation associated with these
      delinquent amounts at December 31, 2006 and 2005 was $172,517 and
      $143,970.





**NOTE
      6 - NOTE PAYABLE**




On
      March
      31, 2006, eTelcharge signed an unsecured promissory note to American Home Market
      in the amount of $250,000. Of this amount, the lender advanced $150,313 during
      the year ended December 31, 2006. The note provides for an interest rate of
      8%
      per annum, with interest only monthly payments commencing February 1, 2007.
      The
      entire principal is due in full on December 1, 2007. Interest of $6,933 was
      accrued as of December 31, 2006. On March 20, 2007, eTelcharge issued 50,000,000
      shares of common stock in satisfaction of the note and all accrued interest.
      (see Note 12 Subsequent Events)




F-9




**NOTE
      7 - NOTE PAYABLE TO SHAREHOLDER**





At
      December 31, 2006, eTelcharge has an unsecured demand note payable to a
      shareholder in the amount of $336,279, with interest imputed at 8.00% with
      no
      specified maturity date.  The shareholder makes advances to eTelcharge on
      an as needed basis and is periodically repaid portions of the outstanding
      balance. In March 2007, this note was retired in full in exchange for 50,000,000
      shares of common stock. (see Note 12 Subsequent Events)




**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 $7,308,428 at December 31, 2006, and will expire in the years
      2020
      through 2026.





At
      December 31, 2006, deferred tax assets consisted of the following:





Deferred tax assetsNet operating losses
            
            $
            1,096,264Less: valuation allowance
            
            
            (1,096,264
            )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 December 31, 2006, eTelcharge will be required to
      issue up to 501,869 shares of common stock in 2007 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
      August
      2000, eTelcharge entered into a lease for office space.  The lease was for
      three years with base rent of $1,000 per month and a security deposit of
      $1,000.  The lease was continued on a month-to-month basis until February
      2004 when the lease space was increased and renewed.  The renewal period
      expires in January 2007 with base rent of $3,675 per month and a security
      deposit of $1,000. In February 2007 eTelcharge entered into a new three-year
      lease agreement with base rent of $4,098 that expires January 31, 2010. See
      note
      13, Subsequent Events.





Rent
      expense totaled approximately $47,775 and $29,400 each for the years ended
      December 31, 2006 and 2005.




F-10




**NOTE
      10- COMMON STOCK**




Since
      inception and through December 31, 2006, the following share activity
      occurred:




**Shares**
            
            
            **Amount**Shares for cash
            
            
            22,356,092
            
            $
            1,282,256Shares for services
            
            
            116,181,167
            
            
            10,561,132Shares
                for assets
            
            
            12,800
            
            
            4,800Share cancellation
            
            
            (120,000
            )
            
            -Imputed
                Interest
            
            
            -
            
            
            38,341Totals
            
            
            138,430,059
            
            
            11,886,529





During
      2006, eTelcharge issued 1,091,313 shares valued at $87,599 for services and
      8,417,040 shares for $45,213 in cash.





**NOTE
      11 - PAYABLE TO RELATED PARTY AND PROPRIETARY RIGHTS**





During
      1999, eTelcharge purchased proprietary rights from a related company, Consumer
      Data Solutions Corp. ("CDS"), which has the same majority shareholder as
      eTelcharge. This agreement requires eTelcharge to pay CDS for a period of 99
      years, 3% of any and all income, less customary and normal business expenses
      associated with the usage of proprietary rights (which equates to 3% of net
      income of eTelcharge) beginning January 1, 2001.





As
      these
      rights were purchased from a related entity, the asset was recorded by
      eTelcharge at the book value of CDS. Accordingly, the asset was recorded at
      $63,000 with the difference between the recorded cost and the payable to related
      party being reflected as a debit to additional paid-in capital. Amounts payable
      to CDS totaled $0 at December 31, 2006.





**NOTE
      12 - SUBSEQUENT EVENTS**





*Common
      Stock and Pending Stock Subscriptions*





Subsequent
      to December 31, 2006, eTelcharge issued 5,366,400 shares of common stock for
      cash of $26,832. Additionally, in January 2007 eTelcharge received $30,000
      in cash under a pending stock subscription agreement for the purchase of
      8,000,000 shares of common stock for a total of $40,000. The final $10,000
      payment was received in March 2007. eTelcharge also issued 12,000,000 shares
      of
      common stock in connection with a consulting agreement covering the period
      from
      March 20, 2007 through April 20, 2008, and 110,000 shares of common stock for
      services.





*Note
      Payable*





In
      March
      2007, after receiving a demand notice for the payment of its promissory note
      payable to American Home Market, eTelcharge negotiated the retirement of the
      note payable, including accrued interest, in exchange for 50,000,000 shares
      of
      eTelcharge common stock, which was issued on March 20, 2007. The outstanding
      balance of the note payable at the time of settlement was $157,246, which
      included $6,933 of accrued interest. The agreement, entered into on March 14,
      2007, represents a final settlement of the note payable. In the first quarter
      of
      2007, eTelcharge will recognize a loss on extinguishment of debt in the amount
      of $642,754.





F-11




*Commitments*





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





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





2007
            $36,4592008
            $49,1762009
            $49,1762010
            $4,098




**Item
      8. Changes in and Disagreements with Accountants on Accounting and Financial
      Disclosure.**





There
      were no reportable events of the type described in Item 304(a)(1)(iv) of
      Regulation S-B.




**Item
      8A.**  **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 December 31,
      2006. 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 we concluded
      that
      such disclosure controls and procedures were not effective 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, because of several adjustments required by our auditors predominantly
      in
      the areas of debt and equity. Specifically, our independent auditors identified
      deficiencies in our internal controls and disclosure controls related to expense
      recognition and issuances of our common stock. Appropriate adjustments and
      footnote disclosures have been recorded and disclosed in our Annual Report
      on
      Form 10-KSB. We are in the process of improving our internal controls in an
      effort to remediate these deficiencies through improving supervision and
      training of our accounting staff. We are continuing our efforts to improve
      and
      strengthen our control processes and procedures to fully remedy these
      deficiencies. Our management and directors will continue to work with our
      auditors and other outside advisors to ensure that our controls and procedures
      are adequate and effective. There have been no significant changes in our
      internal controls or in other factors that could significantly affect internal
      controls subsequent to the date we carried out our evaluation.




-7-




**PART
      III.**




**Item
      9. Directors, Executive Officers, Promoters and Control Persons; Compliance
      with
      Section 16(a) of the Exchange Act.**





The
      following table sets forth information regarding our executive officers and
      directors:





**Name**
            **Age**
            **Office**Carl
                O. Sherman
            40
            Chief
                Executive OfficerMichelle
                R. Sherman
            37
            Secretary
                and DirectorThomas
                Jackson
            36
            Director




Directors
      hold office for a period of one year from their election at the annual meeting
      of stockholders and until their successors are duly elected and qualified.
      Officers are elected by, and serve at the discretion of, the Board of Directors.
      None of the above individuals has any family relationship with any other except
      Carl O. Sherman is married to Michelle R. Sherman. Directors do not receive
      payment for attending Board meetings, but are reimbursed for out-of-pocket
      expenses. Each member receives 10,000 shares for each year served.





The
      following is a summary of the business experience of each of our executive
      officers and directors for at least the last five years:





CARL
      O.
      SHERMAN co-founded our company and has served as Chief Executive Officer and
      a
      director since our inception in June 1999. Mr. Sherman has also been the Chief
      Executive Officer of Consumer Data Solutions Corp., a Dallas, Texas-based
      company engaged in consumer services, since 1993. He devotes 90% of his time
      to
      our affairs and 10% of his time to the affairs of CDS. Mr. Sherman was a Senior
      National Account Executive for Sprint Corporation from 1988 to 1993. He is
      married to Michelle R. Sherman.





MICHELLE
      R. SHERMAN co-founded our company and has served as Secretary and a director
      since our inception in June 1999. Ms. Sherman has also been employed by Consumer
      Data Solutions Corp. as Operations Director and an account executive since
      July
      1996. From 1993 to 1996 she was a project supervisor and customer service
      representative for ATC, Inc./AT&T Universal Card Project. Ms. Sherman is
      married to Carl O. Sherman our CEO.





THOMAS
      JACKSON was appointed to our Board in September 2003 to fill a vacancy on the
      Board and is currently self employed in private practice as a Family
      Psychologist and has been working in behavioral health for nine years. He also
      has twelve years of experience in the technology industry and has been employed
      as a Network Infrastructure Design Engineer with @Track Communications. Mr.
      Jackson's background includes positions titles as Technology Researcher,
      Computer Programmer, Technical Sales, and Project Management for Technology
      projects. Mr. Jackson also served as a Technology Professor for DeVry Institute
      from 1994 to 1999. Mr. Jackson graduated with a Bachelor of Computer Science
      Degree from DeVry Institute in 1994, Masters of Telecommunication Management
      Degree from Keller Graduate School of Management in 2003 and a Doctorate in
      Theology from Catella University in 2003.





The
      company does not have an audit committee financial expert serving on its audit
      committee. The company is still in development stage and does not yet require
      the services of an audit committee financial expert.





-8-




Compliance
      with Section 16(a) of the Exchange Act




None
      of
      the persons that were a director, officer, beneficial owner of more than ten
      percent of any class of equity securities of the registrant registered pursuant
      to section 12, have filed Forms 3,4 or 5 in a timely manner during fiscal year
      2006. The Company intends to file the required forms in the very near future
      as
      part of an effort to fully comply with all filing requirements pursuant to
      the
      Securities Exchange Act of 1934 as amended.





The
      Company has not adopted a code of ethics that applies to the principal executive
      officer, principal financial officer, principal accounting officer or persons
      performing similar functions. To date we have not had sufficient capital to
      complete compliance.




**Item
      10. Executive Compensation.**





The
      following table sets forth the compensation paid to the Chief Executive Office
      for services rendered during fiscal years ended December 31, 2006 and
      2005.





SUMMARY
      COMPENSATION TABLE




****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              **Stock**
              ****
              ****
              **Option**
              ****
              ****
              **All
                  Other**
              ****
              ****
              ****
              ******Name
                  and Position**
              ****
              ****
              **Year**
              ****
              ****
              **Salary**
              ****
              ****
              **Bonus**
              ****
              ****
              **Awards
                  ($**
              **)**
              ****
              **Awards
                  ($**
              **)**
              ****
              **Compensation**
              ****
              ****
              **Total**Carl
                  O. Sherman
              
              
              2006
              
              $
              60,000
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              60,000Chief
                  Executive Officer
              
              
              2005
              
              
              34,058
              
              
              -
              
              
              368,000(1)
              
              
              -
              
              
              -
              
              
              402,058
 (1)
        Based
        on 9,200,000 shares granted to Mr. Sherman in 2005 for prior year services
        rendered





Outstanding
      Equity Awards





There
      were no outstanding equity awards, unexercised options, unvested stock, or
      equity incentive plan awards as of December 31, 2006 for any of the executive
      officers named in the Summary Compensation Table above.





Employment
      Agreements





None





Compensation
      of Directors





-9-




The
      following table sets forth the compensation paid to each director (other than
      compensation set forth under Executive Compensation) for services rendered
      during the fiscal year ended December 31, 2006.




**Fee
                  Earned**
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ****
              ********
              ****
              **or
                  Paid**
              ****
              ****
              **Stock**
              ****
              ****
              **Option**
              ****
              ****
              **All
                  Other**
              ****
              ****
              ****
              ******Name**
              ****
              ****
              **in
                  Cash**
              ****
              ****
              **Awards
                  ($)**
              
              ****
              **Awards
                  ($)**
              
              ****
              **Compensation**
              ****
              ****
              **Total**Carl
                  O. Sherman
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -
              
              $
              -Michelle
                  R. Sherman
              
              
              -
              
              
              850
              (1)
              
              -
              
              
              -
              
              
              850Thomas
                  Jackson
              
              
              -
              
              
              850
              (1)
              
              -
              
              
              -
              
              
              850
 (1) Based on
      10,000 shares granted to the named directors in 2006


**Item
      11. Security Ownership of Certain Beneficial Owners and Management and Related
      Stockholder**




The
      following table sets forth the number of shares of each class of stock
      beneficially owned as of March 28, 2007 by (i) each person known by
      eTelcharge.com to be the beneficial owner of more than five percent of any
      class
      of our voting securities, (ii) each director of the company, (iii) the Company’s
      executive officer named in the Summary Compensation Table, and (iv) by all
      executive officers and directors of the company as a group Except as noted
      below, to our knowledge, each stockholder listed below has sole voting and
      investment power with respect to all shares of stock shown beneficially owned
      by
      the stockholder.




**Name
                and Address of**
              **Beneficial
                Owner (1)**
            
            
            **Title
                of Class**
            
            
            **Amount
                and**
              **Nature
                of**
              **Beneficial
                Owner**
            
            
            **Percentage**
              **of
                Class**
            
            
            **Percentage
                of**
              **Common**
              **Voting
                Power**Carl
                O. Sherman(2)
            
            
            Voting
                Common Stock
            
            
            44,282,916
            
            
            30.8
            %
            
            30.8
            %Michelle
                R. Sherman(2)
            
            
            Voting
                Common Stock
            
            
            44,282,916
            
            
            30.8
            %
            
            30.8
            %Thomas
                Jackson
            
            
            Voting
                Common Stock
            
            
            146,212
            
            
            *
            
            
            *All
                officers and Directorsas
                a group (3)
            
            
            
            
            
            44,429,128
            
            
            30.9
            %
            
            30.9
            %


*
      Less
      than 1%





(1)
      Unless otherwise stated the address for all beneficial owners listed is 1636
      N.
      Hampton Road, Suite 270, DeSoto, Texas 75115.


(2)
      Carl
      O. Sherman and Michelle R. Sherman are husband and wife and each share in the
      beneficial ownership of all 44,282,916 shares.





**Item
      12. Certain Relationships and Related Transactions.**





At
      December 31, 2005, the Company owed Carl O. Sherman, our Chief Executive
      Officer, $290,663.





During
      the year ended December 31, 2006, Carl Sherman loaned an additional $45,616.
      At
      December 2006, the Company owed Mr. Sherman $ 336,279.





During
      fiscal year 2006 there were no transactions between our company and any
      officers, directors or other affiliates. Carl O. Sherman who is our CEO and
      Michelle R. Sherman our CFO are husband and wife.





-10-




**Item
      13. Exhibits.**





31.1
            
            Certification
                of our Chief Executive Officer and Principal Executive Officer, under
                Section 302 of the Sarbanes-Oxley Act of 2002.31.2
            
            Certification
                of our Secretary and Principal Accounting and Financial Officer,
                under
                Section 302 of the Sarbanes-Oxley Act of 2002.32.1
            
            Certification
                of our Chief Executive Officer and Principal Executive Officer, under
                Section 906 of the Sarbanes-Oxley Act of 2002.32.2
            
            Certification
                of our Secretary and Principal Accounting and Financial Officer,
                under
                Section 906 of the Sarbanes-Oxley Act of
                2002.





**Item
      14. Principal Accountant Fees and Services.**





Audit
      Fees





The
      aggregate fees billed by our independent auditors, Malone & Bailey PC, for
      professional services rendered for the audit of our annual financial statements
      on Form 10-KSB for the year ended December 31, 2006 amounted to
      $6,750 .





All
      Other
      Fees





No
      fees
      were billed by our auditors for products and services other than those described
      above under "Audit Fees" for the years ended December 31, 2006.





Board
      of
      Directors Pre-Approval Policies and Procedures





In
      October 2005, the Board of Directors adopted polices and procedures for
      pre-approving all audit and non-audit services provided by our independent
      auditors prior to the engagement of the independent auditors with respect to
      such services. Under the policy, our independent auditors are prohibited from
      performing certain non-audit services and are pre-approved to perform certain
      other non-audit and tax related services provided that the aggregate fees for
      such pre-approved non-audit and tax related services do not exceed a pre-set
      minimum. All audit services, audit-related services, tax services and other
      services provided by Malone & Bailey PC have been pre-approved by the Board
      of Directors.







-11-


SIGNATURES
  In
        accordance with Section 13 or 15(d) of the Exchange Act, the registrant has
        caused this report to be signed on its behalf by the undersigned, thereunto
        duly
        authorized, on the 11th day of April 2007.
 **ETELCHARGE.COM,
                INC.**Date: April
                11, 2007
              By:
              /s/ Carl
                O.
                ShermanCarl
                O. ShermanChief
                     Executive Officer
  In
        accordance with the Exchange Act, this report has been signed by the following
        persons on behalf of the registrant and in the capacities indicated, on the
        2nd
        day of November 2006.
  Signature
              Capacity/s/
                  Carl O. Sherman
              Chief
                  Executive OfficerCarl
                  O. Sherman
              (Principal
                  Executive Officer)/s/
                  Michelle R. Sherman
              Director
                  and SecretaryMichelle
                  R. Sherman
              (Principal
                  Financial Officer)/s/
                  Thomas Jackson
              DirectorThomas
                  Jackson
 
 -12-