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 **UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
 **Form
        10-KSB**
 
 x  Annual
        report under section 13 or 15(d) of the Securities Exchange Act of 1934 for
        the
        fiscal years ended December 31, 2003 and December 31, 2004.
 
 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
 
 State
        issuer’s revenues for its most recent fiscal year.
 NONE
 
 State
        the
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates computed by reference to the price at which the common equity
        was
        sold, or the average bid and asked price of such common equity, as of a
        specified date within the past 60 days. (See definition of affiliate in Rule
        12b-2 of the Exchange Act.)
 Note:
        If
        determining whether a person is an affiliate will involve an unreasonable
        effort
        and expense, the issuer may calculate the aggregate market value of the common
        equity held by non-affiliates on the basis of reasonable assumptions, if
        the
        assumptions are stated. $12,571,115 as of November 10, 2005.
 
 State
        the
        number of shares outstanding of each of the issuer’s classes of common equity,
        as of the latest practicable date.
 As
        of
        November 10, 2005, there were 128,196,560 outstanding shares.
 
 
 Transitional
        Small Business Disclosure Format (Check one): Yes o;
        No x
  
  
 
 **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.
 
 THE
        BUSINESS
 
 BACKGROUND
  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 for merchants and for
        merchants’ clients to be able to accept those options along with our telephone
        billing option. While generally, our expected users do not have a credit
        card or
        are reluctant to use a credit card online due to security and privacy concerns,
        this additional service would allow the company to provide the traditional
        forms
        of payments and serve as a more complete solution for merchants accepting
        other
        non cash forms of payment.
 
 The
        testing of our initial version of the telephone billing option enabled
        eTelcharge to bill transactions through a 900 number billing arrangement
        with
        AT&T. Our billing arrangement with AT&T was available to customers
        throughout the United States, except those western states for which Qwest
        provided the local service because Qwest did not at the time provide local
        billing services for any 900 numbers.
 
 Internet
        merchants that offered our telephone billing option included our brand icon
        with
        the icons of credit card companies on the check out or pay page of their
        Web
        site. Customers who choose to charge their purchase to their telephone bill
        simply clicked on our icon and the billing information was communicated through
        AT&T to the local telephone service provider, using AT&T's 900 billing
        system. The charge then appeared on the customer's next monthly telephone
        bill
        on a separate page of the bill, with AT&T's logo on the page.
 
 Although
        two other companies use similar 900 billing arrangements to allow customers
        to
        charge purchases to their telephone bills, these charges are limited to the
        purchase of services and some online software products. To our knowledge,
        no
        other company offers customers the opportunity to charge other goods and
        merchandise to their telephone bills.
 
 We
        are in
        the development stage and have not generated any material revenue. We began
        our
        service online in August 2000 and launched our initial telephone billing
        option
        with 19 Internet merchants to offer our local telephone billing service to
        their
        customers. We entered into these agreements commencing in the second quarter
        of
        2001. No single merchant agreement is material to our ongoing business
        operations. We charged these merchants a fee for each transaction ranging
        from
        5% to 8% of the customer purchase which is approximately the same fee AT&T
        charges us for providing to us its 900 billing arrangement. In addition,
        we
        charge the customer a fee of 10% of the product or service purchase price.
        We
        did not earn any revenue from our merchants until October 2001 because it
        took
        us until that time to complete the integration of our system with that of
        our
        online merchants.
 
 Commencing
        in January 2003, AT&T will no longer communicated the 900 charge to the
        local phone companies nor will the local monthly bill include AT&T's logo on
        the 900 billing page. Consequently, we have selected Billing Concepts, Inc.,
        one
        of the largest independent third-party billing services, to handle the billing
        transaction. While AT&T will no longer provide 900 billing in the telephony
        industry AT&T has assisted in the careful transitioning of eTelcharge's
        account to Billing Concepts Inc. Furthermore, this change in third-party
        billing
        services should not in any way affect transaction procedures of the customer
        and
        merchant, as Billing Concepts, Inc. charges similar fees as AT&T. AT&T
        continued to provide 900 transport of our lines insuring premier AT&T
        connection with the "Thank you for using AT&T," message linked to our lines
        until December 31, 2003.
 
 Nonetheless,
        the change to Billing Concepts will impact the payment schedule to future
        merchants and participation of the Local Phone company's, While it has added
        the
        addition of Qwest to our coverage territory we will be unable to launch the
        new
        1.1 version with the following three Local Phone companies: SBC, Sprint and
        Citizens. Currently, the billing company has reported approval from the
        following Local Phone companies: Qwest, Verizon, CBT, BellSouth, Alltel,
        NECA
        and Verisign.
  CURRENT
        OPERATIONS
  As
        we are
        in the development stage, the initial telephone billing payment option will
        be
        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 version of the initial telephone
        payment option will be launched.
 
 Our
        rights to offer AT&T's 900 billing service online were assigned to us by
        Consumer Data Solutions Corp., which originally entered into a 900 number
        billing agreement with AT&T in March 1994. CDS has assigned to us its rights
        under the AT&T agreement until November 2098. We pay a license fee to CDS
        equal to 3% of the gross fees we receive from online telephone billing charge
        transactions. CDS is majority owned and controlled by Carl O. Sherman, our
        Chief
        Executive Officer and a director. Mr. Sherman founded CDS in 1993 to provide
        a
        900 billing service for pizza and other food delivery businesses. The service
        allows customers to bill their food deliveries directly to their telephone
        bill.
        Mr. Sherman continues to act as the Chief Executive Officer of CDS, although
        he
        spends less than 10% of his time on its operations. CDS does not compete
        with us
        as we have the exclusive right to use the 900 billing service for online
        sales
 transactions,
        including online food delivery services. We do not believe any conflicts
        of
        interest could develop between CDS and us for these reasons.
 
 According
        to a March 30, 2001 Wall Street Journal article, more than 70 million adult
        Americans do not have credit cards. Moreover, a majority of credit card holders
        who decline to charge online do so out of security or privacy concerns.
        Initially, we have targeted Internet merchants who offer CDs, video cassette
        tapes, computer software, books, flowers and food items to offer our telephone
        billing option. Following an online purchase by a customer, the charge is
        included on behalf of the merchant in the customer's next telephone bill.
        With
        AT&T Approximately 30 days after an online charge, we receive an advance
        against the purchase price prior to the customer paying the telephone bill.
        After deducting our fees, we forward payment directly to our online merchant.
        If
        the charge is not paid by the customer for any reason, including a default
        or
        refusal to pay due to a dispute, the telephone company will charge back its
        advance to us. In this event, our merchant and we will not receive the purchase
        price for the goods or services. 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
        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.
        We
        will evaluate this reserve on an ongoing basis to reflect our
        experience.
 
 The
        privacy and security of our billing service could be breached by third parties
        seeking confidential account information such as passwords and financial
        account
        information. Such a breach could subject us to liability from customers and
        merchants and could harm our reputation, thereby inhibiting the use of our
        billing service. However, 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.
 
 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
                  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.
 
 Although
        AT&T terminated its billing services for all 900 number merchants in January
        2003, requiring us to select another billing service provider, this transition
        was made easier due to AT&T's involvement in transitioning the account to
        Billing Concepts Inc.
 
 MARKETING
 
 Using
        our
        marketing staff, including our 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.
  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.
 
 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 number application that allows for the purchase of 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
        November 1, 2005, we have 5 full-time employees and 21 part-time
        employees.
 
 **Item
        2. Description of Property.**
 
 We
        currently lease 3,000 square feet of office space on a three-year lease expiring
        January 31, 2007 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
        2003
        or 2004 fiscal years.
 
 **PART
        II.**
 
 **Item
        5. Market for Common Equity and Related Stockholder
        Matters.**
 
  Our
        common shares trade on the over-the-counter Pink Sheets under the symbol
        ETLC.PK. Prior to May 2003, our common stock traded on the over the counter
        Bulletin Board under the symbol ETLC. We were notified in May 2003 that we
        no
        longer qualified for the Bulletin Board minimum listing requirements. The
        table
        below sets forth high and low closing prices for our common stock during
        each of
        the periods indicated, as reported the over-the-counter bulletin board or
        the
        Pink Sheets by NASDAQ. Such price quotations represent inter-dealer prices
        without retail markup, markdown or commission and may not necessarily represent
        actual transactions.
  
 **2004**
              
              **2003****QUARTER
                  ENDED**
              
              **LOW**
              
              **HIGH**
              
              **LOW**
              
              **HIGH**March 31
              
              $
              0.12
              
              $
              0.14
              
              $
              1.75
              
              $
              1.75June 30
              
              0.15
              
              0.16
              
              0.51
              
              0.55September 30
              
              0.04
              
              0.05
              
              0.06
              
              0.08December 31
              
              0.20
              
              0.21
              
              0.02
              
              0.05
  As
        of
        November 10, 2005, we had approximately 580 holders of record of voting common
        stock.
   We
        has
        not paid dividends on our common stock and does not anticipate the payment
        of
        cash dividends in the foreseeable future, as we contemplate retaining all
        earnings to finance the continued growth of our business.
  During
        fiscal years 2003 and 2004 no stock was sold and/or issued for
        services.
 
 **Item
        6. Management’s Discussion and Analysis or Plan of
        Operation.**
 
 The
        Company had a net loss of $772,712 for the year ended December 31, 2004,
        a
        decrease of $1,498,629 compared to a net loss of $2,271,341 for the year
        ended
        December 31, 2003. The decreased loss primarily resulted decreased non-cash
        charges associated with the issuance of common stock for services. The Company,
        as a development company, has generated no material operating revenues as
        of
        December 31, 2004.
 
 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, 2004, 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 5% to
        8% of the purchase price of the goods or services charged, not including
        taxes,
        and an approximately new transaction fee of $.50 per transaction service
        charge.  We plan to maintain the same fee of a ten percent (10%) service
        charge to be added to total charge added to phone bill 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.  Commencing in January 2003, AT&T terminated
        providing this billing service in the industry, and we have contracted with
        a
        private third-party billing service, Billing Concepts, Inc., in place of
        AT&T. 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),
        a
        statement fee ranging from $10 to $15 per month.
 
 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
        over 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.
 
 Although
        we have not generated revenue, 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 2003, most of whom 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 take a three day training course from us, either online
        or
        at our corporate offices, before commencing to market our 900 billing services
        to Web merchants. Our agreements with resellers provide for the 20% commission,
        a nominal residual fee so long as we retain Web merchants referred by the
        reseller and are cancelable by either party on 30 days notice to the
        other.
 
 Commencing
        with the launch of the 1.1 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 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 1.1 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, 2004. We have not generated any
        revenue since our inception and since inception through the year ended December
        31, 2004 we incurred a cumulative net loss of $10,197,603 to date including
        a
        net loss of $772,712 for the year ended December 31, 2004.
  Our
        operations have been funded solely through the issuance of our common shares.
        Total cash proceeds for the issuance of common shares totaled $1,113,247
        from
        inception through December 31, 2004. 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
        7. Financial Statements.**
 
 Report
                  of Malone & Bailey PC, Independent AuditorsConsolidated
                  Financial Statements:Balance
                  Sheets at December 31, 2004 and 2003Statements
                  of Operations for the Years Ended
                December 31,
                  2004 and 2003Statement
                  of Stockholders’ Deficit for the
                Years
                  Ended December 31, 2004 and 2003Statements
                  of Cash Flows for the Years Ended
                December 31,
                  2004 and 2003Notes
                  to Financial Statements
 
 
 **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,
        2004. This evaluation was carried out under the supervision and with the
        participation of our Chief Executive. Based upon that evaluation, our Chief
        Executive and Financial Officer concluded that our 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
        our reports have not been prepared or submitted on a timely basis we were
        unable
        to properly accrue unpaid compensation expenses or properly calculate and
        record
        the value of stock issued for services. 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.
 
 **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
              OfficeCarl
                  O. Sherman
              39
              Chief
                  Executive OfficerMichelle
                  R. Sherman
              35
              Secretary
                  and DirectorThomas
                  Jackson
              34
              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 Manangement 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.
 
 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
        years
        2003 and 2004. 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.
 
 No
        change
        requiring the filing of a Form 4 occurred in fiscal years 2003 nor
        2004.
 
 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. Until recently we had less than 3 employees
        and
        have not had sufficient capital to complete compliance. We intend to complete
        a
        code of ethics and file it as an exhibit to one of our tardy 2005 10QSB’s which
        we intend to file with the Commission within the next 60-90 days.
 
 **Item
        10. Executive Compensation.**
 
 SUMMARY
        COMPENSATION TABLE
   **LONG
                    TERM COMPENSATION******
                **ANNUAL
                    COMPENSATION**
                **AWARDS**
                **PAYOUTS****(a)**
                **(b)**
                **(c)**
                **(d)**
                **(e)**
                **(f)**
                **(g)**
                **(h)**
                **(i)****NAME**
                ****
                ****
                ****
                ****
                ****
                **SECURITIES**
                ****
                ******AND**
                ****
                ****
                ****
                **OTHER**
                **RESTRICTED**
                **UNDERLYING**
                ****
                **ALL****PRINCIPAL**
                ****
                ****
                ****
                **ANNUAL**
                **STOCK**
                **OPTIONS/**
                **LTIP**
                **OTHER****POSITION**
                **YEAR**
                **SALARY($)**
                **BONUS($)**
                **COMPENSATION($)**
                **(AWARD(S)**
                **SARS(#)**
                **PAYOUTS($)**
                **COMPENSATION($)**Carl
                    O. ShermanChief
                    ExecutiveOfficer
                2003
                32,944
                -0-
                -0-
                2,340,000
                    shares (1)
                -0-
                
                -0-2004
                8,310
                -0-
                -0-
                -0-
                -0-
                -0-
                -0-
  (1) 
        Valued at $50,000.
  None of our executive officers or directors has been granted stock options,
        warrants or similar securities.
 
 
 **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 November 10, 2005, by each person known by eTelcharge
        to be the beneficial owner of more than five percent of any class of our
        voting
        securities as of March 1, 2004. 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
                44,262,916
                34.5
                %
                34.5
                %Michelle
                    R. Sherman(2)
                Voting
                    Common Stock
                44,262,916
                34.5
                %
                34.5
                %Thomas
                    Jackson
                Voting
                    Common Stock
                126,212
                
                *
                
                *All
                    officers and Directors
                  as
                    a group (3)
                
                44,389,128
                34.5
                %
                34.5
                %
  *
        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 44,262,916 shares.
 
 
 **Item
        12. Certain Relationships and Related Transactions.**
 
 During
        November 2001, Carl O. Sherman, our Chief Executive Officer, advancedthe
        Company
        $38,000 in exchange for a note payable. The note payable is
 uncollateralized,
        requires monthly interest payments at 12.25% and does not have a
        specific maturity date.
 
 In
        November 1999, we entered into a license agreement with Consumer Data Solutions
        Corp. under which CDS granted us an exclusive license to use its 900 number
        telephone billing software and assigned us its 900 telephone billing agreement
        with AT&T, in exchange for a cash payment of $116,500 and a royalty equal
        to
        3% of our net income during the license period which we are obligated to
        pay to
        CDS. The license expires November 2098. Carl O. Sherman, our Chief Executive
        Officer and a director, is the controlling stockholder, Chief Executive
        Officer and a director of CDS. We believe that the terms of the license
        agreement with CDS are fair, reasonable and consistent with terms we could
        negotiate with unaffiliated third parties. In the future, any transactions with
        affiliated companies will be approved by a majority of the independent members
        of our board of directors.
 
 During
        fiscal years 2003 and 2004 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.
 
 
 **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 years ended December 31, 2004 and 2003 amounted to
        $
        13,500.
 
 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, 2004 and
        2003.
 
 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.
 
 
 
 
  **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 23st day of November 2005.
   ETELCHARGE.COM,
        INC.
  By: /s/
        Carl O. Sherman
 Carl
        O.
        Sherman
 Chief
        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
        23st
        day of November 2005.
  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
     
  INDEX
        TO
        FINANCIAL STATEMENTS
 
 
 
 
 PAGEREPORT
                  OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
              F-2FINANCIAL
                  STATEMENTSBalance Sheets
              F-3Statements of Expenses
              F-4Statement of Changes in Shareholders' Equity (Deficit)
              F-5Statements of Cash Flows
              F-7Notes to Financial Statements
              F-8
 
 
 
 
 
 
 
 
 
 
 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, 2004 and 2003, and the related statements
        of
        expenses, stockholders’ deficit, and cash flows for the years then ended and the
        period from June 7, 1999 (Inception) through December 31, 2004.  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 expenses,
        stockholders' deficit, and cash flows for the period June 7, 1999 (inception)
        through December 31, 2004, 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.’s, as of
        December 31, 2004 and 2003, 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 3 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 3.  The financial statements do
        not include any adjustments that might result from the outcome of this
        uncertainty.
 
 
 Malone
        & Bailey, PC
 www.malone-bailey.com
 Houston,
        Texas
 
 October
        14, 2005
 F-2
  
  
 **eTelcharge.COM,
                  INC.****(A
                  Development Stage Company)****BALANCE
                  SHEETS**
 
 **December
                  31,**
              
              **December
                  31,****2004**
              
              **2003****ASSETS**Current
                  assets:Cash
              
              
              
              
              $
              3,255
              
              $
              276Fixed
                  assets, net of accumulated depreciation of $44,582 and
                  $39,224
              
              5,962
              
              
              11,320Deposits
              
              
              
              
              
              1,980
              
              
              1,000Total
                  assets
              
              
              
              
              $
              11,197
              
              $
              12,596**LIABILITIES
                  AND STOCKHOLDERS' DEFICIT**Current
                  liabilities:Accrued
                  expenses
              
              
              
              
              $
              2,652,691
              
              $
              2,021,033Payroll
                  tax obligation
              
              
              
              
              
              129,018
              
              
              118,196Accounts
                  payable
              
              
              
              
              
              131,717
              
              
              109,475Note
                  payable to shareholder
              
              
              
              
              
              83,381
              
              
              43,405Pending
                  stock subscriptions
              
              
              
              
              
              151,115
              
              
              84,500Total
                  current liabilities
              
              
              
              
              
              3,147,922
              
              
              2,376,609Commitments
              
              -
              
              
              -Stockholders'
                  deficit:Common
                  stock, $.003 par value, 250,000,000 shares authorized,66,519,688
                  shares issued and outstanding
              
              
              
              
              
              199,559
              
              
              199,559Additional
                  paid in capital
              
              
              
              
              
              6,861,319
              
              
              6,861,319Deficit
                  accumulated during the development stage
              
              
              
              
              
              (10,197,603
              )
              
              (9,424,891
              )Total
                  stockholders' deficit
              
              
              
              
              
              (3,136,725
              )
              
              (2,364,013
              )Total
                  liabilities and stockholders' deficit
              
              
              
              
              $
              11,197
              
              $
              12,596
 
 
 
 F-3
 
 **eTelcharge.COM,
                  INC.****(A
                  Development Stage Company)****STATEMENTS
                  OF EXPENSES**
 
 **June
                  7, 1999****Year
                  ended**
              
              **Year
                  ended**
              
              **(Inception)
                  to****December
                  31,**
              
              **December
                  31,**
              
              **December
                  31,****2004**
              
              **2003**
              
              **2004**Operating
                  expenses
              
              $
              787,730
              
              $
              2,264,108
              
              $
              10,205,988Net
                  loss from operations
              
              
              (787,730
              )
              
              (2,264,108
              )
              
              (10,205,988
              )Other
                  income
              
              
              23,444
              
              
              9,871
              
              
              44,217Interest
                  expense
              
              
              (8,426
              )
              
              (17,104
              )
              
              (35,832
              )Net
                  loss
              
              $
              (772,712
              )
              $
              (2,271,341
              )
              $
              (10,197,603
              )Basic
                  and diluted net loss per share
              
              $
              (0.01
              )
              $
              (0.04
              )Weighted
                  average shares outstanding
              
              
              66,519,688
              
              
              61,810,435
 
 
 F-4
 
 
 **eTelcharge.COM,
                  INC.****(A
                  Development Stage Company)****STATEMENT
                  OF CHANGES IN STOCKHOLDERS' DEFICIT****Period
                  from June 7, 1999 (Inception) through December 31,
                  2004**
 
 **Price
                    per share**
                
                **Number
                    of Common Shares Issued**
                
                **Par**
                
                **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
                
                
                -
                
                
                31,575
   F-5
    December
                    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 (Restated)
                
                
                
                
                
                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
                )
 
 
 F-6
 
    
 **eTelcharge.COM,
                  INC.****(A
                  Development Stage Company)****STATEMENTS
                  OF CASH FLOWS**
 
 **June
                  7, 1999****Year
                  ended**
              
              **Year
                  ended**
              
              **(Inception)
                  to****December
                  31,**
              
              **December
                  31,**
              
              **December
                  31,****2004**
              
              **2003**
              
              **2004**CASH
                  FLOWS FROM OPERATING ACTIVITIES:Net
                  loss
              
              $
              (772,712
              )
              $
              (2,271,341
              )
              $
              (10,197,603
              )Adjustments
                  to reconcile net loss to netcash
                  used in operating activities:Amortization
                  and depreciation
              
              
              5,358
              
              
              9,677
              
              
              107,582Issuance
                  of common stock for services
              
              
              -
              
              
              230,100
              
              
              5,996,331Changes
                  in:Employee
                  advances
              
              
              -
              
              
              472
              
              
              -Other
                  assets
              
              
              (980
              )
              
              -
              
              
              (1,980
              )Accounts
                  payable
              
              
              22,241
              
              
              22
              
              
              131,717Accrued
                  compensation
              
              
              631,658
              
              
              1,833,216
              
              
              2,652,691Payroll
                  tax obligation
              
              
              10,822
              
              
              22,152
              
              
              129,018Net
                  cash used in operating activities
              
              
              (103,613
              )
              
              (175,702
              )
              
              (1,182,244
              )CASH
                  FLOWS FROM INVESTING ACTIVITIESPurchase
                  of property and equipment
              
              
              -
              
              
              (4,791
              )
              
              (45,744
              )Net
                  cash used in investing activities
              
              
              -
              
              
              (4,791
              )
              
              (45,744
              )CASH
                  FLOWS FROM FINANCING ACTIVITIES:Proceeds
                  from sales of common stock
              
              
              -
              
              
              102,775
              
              
              1,113,247Net
                  loan proceeds from shareholder
              
              
              39,977
              
              
              13,294
              
              
              83,381Payment
                  on payable to related party for asset purchase
              
              
              -
              
              
              -
              
              
              (116,500
              )Cash
                  received on pending stock subscriptions
              
              
              66,615
              
              
              64,500
              
              
              151,115Net
                  cash provided by financing activities
              
              
              106,592
              
              
              180,569
              
              
              1,231,243NET
                  INCREASE IN CASH AND CASH EQUIVALENTS
              
              
              2,979
              
              
              76
              
              
              3,255CASH
                  AND CASH EQUIVALENTS, beginning of period
              
              
              276
              
              
              200
              
              
              -CASH
                  AND CASH EQUIVALENTS, end of period
              
              $
              3,255
              
              $
              276
              
              $
              3,255Supplemental
                  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
              
              
              
              
              
              
              
              
              4,800Supplemental
                  cash flow disclosures:Cash
                  paid for income taxes
              
              
              -
              
              
              -
              
              
              -Cash
                  paid for interest
              
              
              182
              
              
              1,669
              
              
              5,725
  
 
 
 F-7
 
 
 
 **eTelcharge.COM,
        INC.**
 **(A
        Development Stage Company)**
 **NOTES
        TO FINANCIAL STATEMENTS**
 
 
  **NOTE
        1 - HISTORY AND ORGANIZATION**
  
 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, 2004, 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.
  NOTE
        2 -
        SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  **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.
 
 *Restatements* of 2002
        were made.  See note 13 for details.
  **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
        years ending December 31, 2004 and 2003.
 
 ***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
   F-8
 
 obtained
        from AT&T. These rights expired in January 2003, and were fully amortized at
        December 31, 2002. The proprietary rights were being 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 12 for details.
  ***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 will be recognized as online
        purchases from customers are processed and will typically range from 5% to
        8% of
        the purchase price, plus $0.15 per transaction and will be non-refundable.
        Customer fee revenue will be recognized upon shipment by the online merchant
        to
        the customer and will typically be 10% of the purchase price and will be
        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 6% of the purchase price and a usage
        charge per minute that will be expensed as incurred.
 
 *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.
 
 eTelcharge
        applies APB No. 25 in accounting for its employee stock option plans and,
        accordingly, no compensation cost has been recognized in eTelcharge’s financial
        statements for stock options under any of the stock plans which on the date
        of
        grant the exercise price per share was equal to or exceeded the fair value
        per
        share. There were no options or warrants granted during the years ended December
        31, 2004 and 2003.
  ***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, 2004 and
        2003.
  ***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-9
 
  **NOTE
        3 - GOING CONCERN**
 
 As
        shown
        in the accompanying financial statements, eTelcharge incurred recurring net
        losses of $772,712 and $2,271,341 in fiscal 2004 and 2003, respectively,
        has an
        accumulated deficit of $10,197,603 and a working capital deficit of
        $3,136,725.  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
        4 - PROPERTY AND EQUIPMENT**
 
 Property
        and equipment consisted of the following at December 31, 2004 and
        2003:
 
 ****
              **Amounts
                  on December 31,****Description**
              **Life**
              **2004**
              **2005**-------------------------------------
              ---------
              ----------
              -----------Computer equipment
              3
                  years
              $
                  33,399
              $ 
                  33,399Office furniture and   equipment
              5
                  years
              17,145
              17,145----------
              ----------50,544
              50,544Less: accumulated depreciation
              
              (44,582)
              (39,224)----------
              -----------$ 
                  5,962
              $ 
                  11,320======
              =======
 
 Depreciation
        expense totaled $5,358 and $9,677 in fiscal 2004 and 2003, respectively.
  **NOTE
        5 - ACCRUED COMPENSATION AND PENDING STOCK
        SUBSCRIPTIONS**
  As
        of
        December 31, 2004 and 2003, eTelcharge was obligated to issue 48,861,927
        and
        613,333 shares of common stock valued at $2,648,691 and $187,817, respectively,
        to several employees and consultants for accrued compensation under various
        agreements from 2001 to 2004.
  As
        of
        December 31, 2004 and 2003, eTelcharge was obligated to issue 3,967,064 and
        25,448,333 shares of common stock for proceeds received of $151,115 and
        $1,829,217, respectively, from several investors under pending stock
        subscriptions from 2002 to 2004.
  **NOTE
        6 - PAYROLL TAX OBLIGATION**
 
 eTelcharge
        has not remitted a portion of its Federal and State employer and employee
        payroll taxes for the years 2001 through 2004. 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, 2004 and 2003 is $129,018 and $118,196,
        respectively.
 
 
 F-10
  
   **NOTE
        7 - NOTE PAYABLE TO SHAREHOLDER**
 
 At
        December 31, 2004 and 2003, eTelcharge has an unsecured note payable to a
        shareholder in the amount of $83,381 and $43,404, respectively, with interest
        only payments due monthly at 12.25% 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.
  **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
        cumulative net operating loss carry-forward is approximately $1,390,000 and
        $1,250,000 at December 31, 2004 and 2003, respectively, and will expire in
        the
        years 2019 through 2024.
 
 At
        December 31, 2004 and 2003, deferred tax assets consisted of the
        following:
 
 2004
              2003Deferred tax assetsNet operating losses
              $ 
                  472,000
              $
                    424,000Less: valuation allowance
              (472,000)
              (424,000)--------------
              --------------Net deferred tax asset
              $            
                  -
              $             
                  -========
              ========
 
 
 **NOTE
        9 - COMMITMENTS**
 
 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.  eTelcharge will be required to issue up to 302,085 and
        156,665 shares of common stock in 2005 and 2006, respectively, 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.
 
 At
        December 31, 2004, future minimum commitments under non-cancelable operating leases
        are as follows:
  2005
              
              $
                  44,1002006
              
              44,1002007
              
              3,675$91,875
 
 Rent
        expense totaled approximately $36,675 and $12,000 for the years ended December
        31, 2004 and 2003, respectively.
   F-11
 
  **NOTE
        10- COMMON STOCK**
  
 Effective
        April 5, 2005, eTelcharge effected a 4:1 forward split of eTelcharge’s common
        stock.  All share and per share amounts reflect the effect of the split as
        if it had occurred on the first day of the first period
        presented.
  Since
        inception, the following share activity occurred:
  
 **Shares**
              **Amount**--------------
              --------------Shares for cash
              9,688,628
              $1,113,247Shares for services
              56,938,260
              5,996,331Shares for assets
              12,800
              4,800Share cancellation
              (120,000)
              ---------------
              --------------Totals
              66,519,688
              $7,114,378========
              ========
 
 
  **NOTE
        11 - STOCK OPTIONS**
  
 Under
        the
        terms of a stock option agreement effective August 1, 2001, eTelcharge granted
        options to a consulting firm to purchase 9,200,000 shares of common stock.
        6,000,000 options have an exercise price of $0.50 per share and 3,200,000
        options have an exercise price of $0.63 per share. The options vested
        immediately upon approval by the Securities and Exchange Commission (SEC)
        of
        eTelcharge's Form SB-2, which occurred in April of 2002.  The options
        expired in April 2003. eTelcharge estimated the fair value of this option
        grant
        using the Black-Scholes option-pricing model with the following
        assumptions.
 
 Summary
        information regarding options is as follows:
 
 **Wtd.
                  Avg.******
              ****
              **Exercise******
              **Options**
              **Price**--------------
              --------------Outstanding at December 31, 2002
              9,200,000
              $0.54Expired
              (9,200,000)
              0.54--------------
              --------------Outstanding
                  at December 31, 2003
              -
              -========
              ========
 
  **NOTE
        12 - 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, for $116,500 payable under a repayment agreement which required
        monthly payments ranging from $7,500 to $8,500 through January 2001.  The
        repayment agreement was unsecured and does not bear interest. In addition,
        the
        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, 2004 and 2003.
   F-12
  
  
 **NOTE
        13 - RESTATEMENT OF PREVIOUSLY ISSUED FINANCIAL STATEMENTS**
  
 During
        2005, management of eTelcharge discovered errors related to 2001 and 2002. 
9,200,000 shares of common stock valued at $3,450,000 issued in 2001 for
        services were not recorded.  Accordingly, net loss, common stock and
        additional paid in capital were understated by $3,450,000, $27,600 and
        $3,422,400, respectively.  Accrued compensation and pending stock
        subscriptions of $104,651 and $9,279 related to 2002 were not recorded. 
Accordingly, net loss, accrued compensation and pending stock subscriptions
        were
        understated by $113,930, $104,651 and $9,279, respectively.
  **NOTE
          14 - SUBSEQUENT EVENTS**
 
 eTelcharge
          has issued 61,682,020 shares of common stock during 2005. Of this amount
          48,343,596 shares were issued for prior year services for a previously
          accrued
          total of $2,574,374. Shares totaling 4,130,424 were issued for $138,157
          in cash,
          of which $132,007 was received in prior years and $6,150 was received in
          2005.
          The president of eTelcharge received 9,200,000 common shares, valued at
          $1,840,000 for services in 2005, while an employee received 8,000 common
          shares,
          valued at $1,600 for services in 2005.
      F-13