**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


WASHINGTON,
      D.C. 20549







**FORM
      10-QSB**




**[X]**   **QUARTERLY
      REPORT UNDER SECTION 13 OR 15(d)**


**OF
      THE SECURITIES EXCHANGE ACT OF 1934**





**** **For the Quarterly Period Ended June 30, 2006**





**OR**


**[ 
      ]TRANSITION
      REPORT UNDER SECTION 13 OR 15(d)**


**OF
      THE
      EXCHANGE ACT**








Commission
      File Number 000-30479


**ETELCHARGE.COM,
      INC.**


(Exact
      name of small business issuer as specified in its charter)




**Nevada**
            **75-2847699**(State
                or other jurisdiction of
            (I.R.S.
                Employerincorporation
                or organization
            Identification
                No.)




**1636
                N. Hampton, Suite 270, Desoto, Texas**
            **75115**(Address
                of principal executive office)
            (Zip
                Code)




Issuer’s
      telephone number: **(972)298-3800**







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


Yes
      [X
      ]No





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





The
      number of shares of the issuer’s common stock outstanding as of August 10, 2006
      was 129,738,746.





Transitional
      Small Business Disclosure Format (Check One): Yes  No[ X]











**Item
        1. Financial Statements**
 **ETELCHARGE.COM,
                  INC.****(A
                  Development Stage Company)****BALANCE
                  SHEETS**(unaudited)June
                  30,
              
              
              December
                  31,2006
              
              
              2005**ASSETS**Current
                  assets:Cash
              
              $
              2,030
              
              $
              13,671Fixed
                  assets, net of accumulated depreciation of $49,469 and
                  $48,248
              
              
              4,970
              
              
              5,141Deposits
              
              
              1,980
              
              
              1,980Total
                  assets
              
              $
              8,980
              
              $
              20,792**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT**Current
                  liabilities:Short
                  term debt- related parties
              
              $
              6,117
              
              $
              6,117Accrued
                  expenses
              
              
              111,140
              
              
              56,284Payroll
                  tax obligation
              
              
              154,437
              
              
              143,970Accounts
                  payable
              
              
              96,498
              
              
              99,942Note
                  payable to shareholder
              
              
              337,125
              
              
              284,546Short
                  term debt
              
              
              2,835
              
              
              2,920Pending
                  stock subscriptions
              
              
              -
              
              
              5,213Total
                  current liabilities
              
              
              708,152
              
              
              598,992Long
                  term note payable
              
              
              86,301
              
              
              -Total
                  liabilities
              
              
              794,453
              
              
              598,992Commitments
              
              
              -
              
              
              -Stockholders'
                  deficit:Common
                  stock, $.003 par value, 250,000,000 shares authorized,129,738,746
                  and 128,921,706 shares issued and outstanding
              
              
              389,216
              
              
              386,765Additional
                  paid in capital
              
              
              11,391,134
              
              
              11,340,625Deficit
                  accumulated during the development stage
              
              
              (12,565,823
              )
              
              (12,305,590
              )Total
                  stockholders' deficit
              
              
              (785,473
              )
              
              (578,200
              )Total
                  liabilities and stockholders' deficit
              
              $
              8,980
              
              $
              20,792
 
 
 
  **ETELCHARGE.COM,
                  INC.****(A
                  Development Stage Company)****STATEMENTS
                  OF OPERATIONS****(Unaudited)**June
                  7, 1999Six
                  months ended
              Three
                  months ended
              
              (Inception)
                  toJune
                  30,
              June
                  30,
              
              June
                  30,2006
              
              
              2005
              
              
              2006
              
              
              2005
              
              
              2006Revenues
              
              $
              16,513
              
              $
              12,488
              
              $
              8,992
              
              $
              5,179
              
              $
              35,822Operating
                  expenses
              
              
              261,428
              
              
              1,943,273
              
              
              138,828
              
              
              30,881
              
              
              12,592,449Net
                  loss from operations
              
              
              (244,915
              )
              
              (1,930,785
              )
              
              (129,836
              )
              
              (25,702
              )
              
              (12,556,627
              )Other
                  income
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              57,438Interest
                  expense
              
              
              (15,318
              )
              
              (8,933
              )
              
              (8,771
              )
              
              (1,735
              )
              
              (66,634
              )Net
                  loss
              
              $
              (260,233
              )
              $
              (1,939,718
              )
              $
              (138,607
              )
              $
              (27,437
              )
              $
              (12,565,823
              )Basic
                  and diluted net loss per share
              
              $
              (0.00
              )
              $
              (0.02
              )
              $
              (0.00
              )
              $
              (0.00
              )Weighted
                  average shares outstanding
              
              
              129,698,214
              
              
              105,367,823
              
              
              129,738,746
              
              
              119,366,541
 
 
 
  
 **ETELCHARGE.COM,
                  INC.****(A
                  Development Stage Company)****STATEMENTS
                  OF CASH FLOWS****(Unaudited)**June
                  7, 1999Six
                  months ended
              
              (Inception)
                  toJune
                  30,
              
              June
                  30,2006
              
              
              2005
              
              
              2006CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (260,233
              )
              $
              (1,939,718
              )
              $
              (12,565,823
              )Adjustments
                  to reconcile net loss to netcash
                  used in operating activities:Amortization
                  and depreciation
              
              
              1,221
              
              
              1,756
              
              
              112,469Issuance
                  of common stock for services
              
              
              27,000
              
              
              1,841,200
              
              
              7,864,531Imputed
                  interest
              
              
              11,747
              
              
              6,380
              
              
              23,761Changes
                  in:Other
                  assets
              
              
              -
              
              
              (100
              )
              
              (1,980
              )Accounts
                  payable
              
              
              (3,445
              )
              
              16,142
              
              
              96,498Accrued
                  expenses
              
              
              63,858
              
              
              1,277
              
              
              2,779,281Payroll
                  tax obligation
              
              
              10,466
              
              
              2,543
              
              
              154,437Net
                  cash used in operating activities
              
              
              (149,386
              )
              
              (70,520
              )
              
              (1,536,826
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of property and equipment
              
              
              (1,050
              )
              
              -
              
              
              (49,639
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from sales of common stock
              
              
              -
              
              
              6,150
              
              
              1,119,397Net
                  loan proceeds from shareholder
              
              
              52,579
              
              
              60,577
              
              
              343,242Proceeds
                  from notes payable
              
              
              86,301
              
              
              -
              
              
              89,221Payments
                  on note payable
              
              
              (85
              )
              
              -
              
              
              (85
              )Payment
                  on payable to related party for asset
                purchase
              
              
              -
              
              
              -
              
              
              (116,500
              )Cash
                  received on pending stock subscriptions
              
              
              -
              
              
              2,005
              
              
              153,220Net
                  cash provided by financing activities
              
              
              138,795
              
              
              68,732
              
              
              1,588,495NET
                  CHANGE IN CASH AND CASH EQUIVALENTS
              
              
              (11,641
              )
              
              (1,788
              )
              
              2,030CASH
                  AND CASH EQUIVALENTS, beginning of period
              
              
              13,671
              
              
              3,255
              
              
              -CASH
                  AND CASH EQUIVALENTS, end of period
              
              $
              2,030
              
              $
              1,467
              
              $
              2,030Supplemental
                  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 accrued compensation
              
              
              9,000
              
              
              2,659,141
              
              
              2,668,141Issuance
                  of common stock for pending stocksubscriptions
              
              
              5,213
              
              
              148,007
              
              
              153,220Supplemental
                  cash flow disclosures:Cash
                  paid for income taxes
              
              
              -
              
              
              -
              
              
              -Cash
                  paid for interest
              
              
              2,225
              
              
              127
              
              
              7,950





ETELCHARGE.COM,
        INC.
 (A
        Development Stage Company)
 NOTES
        TO
        FINANCIAL STATEMENTS
 
 
  NOTE
        1-BASIS OF PRESENTATION
  The
        accompanying unaudited interim consolidated financial statements of
        Etelcharge.com, Inc. have been prepared in accordance with accounting principles
        generally accepted in the United States of America and the rules of the
        Securities and Exchange Commission, and should be read in conjunction with
        the
        audited financial statements and notes thereto contained in Etelcharge’s Annual
        Report filed with the SEC on Form 10-KSB. In the opinion of management, all
        adjustments, consisting of normal recurring adjustments, necessary for a
        fair
        presentation of financial position and the results of operations for the
        interim
        periods presented have been reflected herein. The results of operations for
        interim periods are not necessarily indicative of the results to be expected
        for
        the full year. Notes to the financial statements that would substantially
        duplicate the disclosure contained in the audited financial statements for
        2005
        as reported in the 10-KSB have been omitted.
  NOTE
        2 -
        ACCRUED COMPENSATION AND PENDING STOCK SUBSCRIPTIONS
  During
        the quarter ended March 31, 2006, Etelcharge issued 417,040 shares of common
        stock valued at $5,213 to several investors under pending stock subscriptions.
        There are no stock subscriptions outstanding at June 30, 2006.
  During
        the quarter ended March 31, 2006, Etelcharge issued 100,000 shares of common
        stock valued at $9,000 to an employee for accrued compensation. As of June
        30,
        2006, there were 753,126 shares of common stock valued at $72,682 accrued
        for
        compensation and $33,333 accrued for cash compensation.
  NOTE
        3 -
        NOTE PAYABLE
  On
        March
        31, 2006, Etelcharge signed a promissory note to American Home Market in
        the
        amount of $250,000. Of this amount, the lender advanced $86,301 during the
        quarter ended June 30, 2006. The note provides for an interest rate of 8%
        interest per annum, with interest only monthly payments commencing February
        1,
        2007. The entire principal is due in full on December 1, 2007. Interest of
        $1,375 was accrued as of June 30, 2006.
  NOTE
        4 -
        EQUITY
  During
        the quarter ended March 31, 2006, Etelcharge issued 300,000 shares of common
        stock valued at $27,000 for services.
 
  
 
  **Item
        2. Plan of Operation.**
  Plan
        of
        Operation 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-QSB, 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-QSB
  We
        lost
        $260,233 during the six months ended June 30, 2006, a decrease of $1,679,485
        compared to a net loss of $1,939,718 for the six months ended June 30, 2005.
        The
        decreased loss primarily resulted from fewer non-cash charges associated
        with
        the issuance of common stock for services in 2006 compared to 2005.
  We
        lost
        $138,607 during the three months ended June 30, 2006, an increase of $111,170
        compared to a net loss of $27,437 for the three months ended June 30, 2005.
        The
        increased loss primarily resulted from increased professional fees related
        to
        public company reporting, increased interest expense due to new borrowings
        and
        imputed interest due to shareholder, and the initial cost of a new billing
        and
        collection services agreement with AT&T.
  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 that 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 3% to
        4% of the purchase price of the goods or services charged, not including
        taxes,
        and an approximate new transaction fee of $.25 per transaction service
        charge.  We plan to maintain a five percent 5% to ten percent 10% service
        charge to be added to total charges added to phone bills utilizing our telephone
        billing option, while limiting purchases to sixty dollars $60 per month. 
Our cost for phone billing are 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 providing the bills that
        the local telephone companies will include in their monthly billing statements
        to their customers.  Additional revenue will be generated from our credit
        card merchant services.  We plan to 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.
  In
        April
        2006 we entered into a Billing and Collection Services agreement with AT&T
        and paid an initial set up fee for the AT&T Southwest region in the amount
        of $20,000. The final set up fee is an additional $20,000 with a forecasted
        implementation date of October 2006.
  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. Recently, however, we began to provide
        the
        code ourselves which we believe will significantly shorten the time necessary
        for merchants to join our billing system. We expect, but cannot assure, that
        we
        will add new Web merchants in 2006, most of who will be signed up through
        the
        efforts of our resellers. We currently have three such resellers who are
        existing Web merchants, authorized agents and a shopping cart software company
        who are paid a commission of approximately 20% of the revenue generated from
        new
        Web merchants referred by them. 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 payment options including the new 1.1 and 2.0 versions
        of our
        payment options offered to merchants, 900 billing services to Web merchants,
        or
        our merchant service options for Visa, MasterCard or American Express. Our
        agreements with resellers provide 20% commission, a nominal residual fee
        so long
        as we retain Web merchants referred by the reseller and are cancelable by
        either
        party on 30 days notice to the other.
  
 Commencing
        with the launch of the 1.1 and 2.0 version telephone billing option, and
        assuming financing is available, we intend to initiate an online advertising
        campaign, using mass e-mails to advise online users of our billing service.
        We
        also intend to commence at that time an effort to attract resellers through
        attendance at industry and trade shows and through advertising in trade
        journals. We are uncertain as to how many resellers we will be able to attract
        through these efforts.
  We
        also
        seek to enter into agreements with other online entities, web sites and
        independent sales and marketing organizations to generate market awareness
        and
        usage of our 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.
  Over
        the
        next two years, we intend to make adjustments and improvements in our product
        software and marketing efforts. In order to identify the areas that need
        improvement, we anticipate meeting with online retailers who accepted our
        initial version and online shoppers to conduct online consumer interviews.
        In
        the near term, we will expand our efforts to reach online retailers, focusing
        upon the larger national retailers.  Upon the launch of the 1.1and 2.0
        version, assuming funds are available, we will also demonstrate our billing
        system at industry affiliated trade shows.
  The
        initiation of our plan of operation is dependent upon our raising sufficient
        working capital to allow us to institute the plan. However, there can be
        no
        assurance that we will be successful in doing so. Due to our lack of capital
        and
        our need for working capital to continue our business plan, our auditors
        issued
        a going concern qualification as part of their audit opinion of our financial
        statements for the year ended December 31, 2005. We have generated $35,822
        in
        revenue since our inception and since inception through the six months ended
        June 30, 2006 we incurred a cumulative net loss of $12,565,823 including
        a net
        loss of $260,233 for the six months ended June 30, 2006.
  On
        March
        31, 2006, Etelcharge executed a promissory note to American Home Market in
        the
        amount of $250,000. Of this amount, the lender advanced $86,301 during the
        quarter ended June 30, 2006. The note provides for an interest rate of 8%
        interest per annum, with interest only monthly payments commencing February
        1,
        2007. The entire principal is due in full on December 1, 2007. Interest of
        $1,375 was accrued as of June 30, 2006.
  Prior
        to
        this borrowing our operations have been funded solely through the issuance
        of
        our common shares and advances from our CEO. Total cash proceeds for the
        issuance of common shares totaled $1,272,617 from inception through June
        30,
        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.
  **Item
        3. Controls and Procedures**
 Etelcharge
        has adopted and implemented internal disclosure controls and procedures designed
        to provide reasonable assurance that all reportable information will be
        recorded, processed, summarized and reported within the time period specified
        in
        the SEC’s rules and forms. Under the supervision and with the participation of
        management, including our Chief Executive and Chief Financial Officer,
        Etelcharge has evaluated the effectiveness of the design and operation of
        its
        disclosure controls and procedures pursuant to Exchange Act Rule 13a-15(e)
        as of
        the end of the fiscal quarter covered by this report Based on that evaluation,
        the Chief Executive Officer and Chief Financial Officer have concluded that
        these disclosure controls and procedures are not effective in timely alerting
        management to material information relating to us required to be included
        in our
        periodic SEC filings because we were unable to properly accrue unpaid
        compensation expenses. 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 changes in internal controls or in other factors during or since
        the end of the fiscal quarter covered by this report that have had a material
        effect or are reasonably likely to have a material effect on internal controls
        subsequent to the end of the fiscal quarter covered by this report.










**SIGNATURES**







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








**ETELCHARGE.COM,
              INC.**Date: August
              11, 2006
            By:
            /s/ Carl
              O. ShermanCarl
              O. ShermanChief
              Executive Officer





**ETELCHARGE.COM,
              INC.**Date: August
              11, 2006
            By:
            /s/ Michelle
              R. ShermanPrincipal
              Financial Officer