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


                                   FORM 10-KSB

Mark One)

( X ) ANNUAL REPORT  PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES  EXCHANGE
ACT OF 1934.

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2004

( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.

For the transition period from                   to
                               ------------------   ---------------------------

                         Commission File Number 0-31193

                                 USIP.COM, INC.
                    -----------------------------------------
           (Name of small business issuer as specified in its charter)

                           UTAH                         16-1583162
              ------------------------------        --------------------
             (State or other jurisdiction of         (I.R.S. Employer
             incorporation or organization)          Identification No.)

                                7325 OSWEGO ROAD
                            LIVERPOOL, NEW YORK 13090
                    (Address of principal executive offices)

                                 (315) 451-7515
                           (Issuer's telephone number)
                     ---------------------------------------
Securities Registered Pursuant to Section 12(b) of The Exchange Act: NONE

Securities Registered Pursuant to Section 12(g) of The Exchange Act:

                          COMMON STOCK, $.01 PAR VALUE

                                (Title of Class)

Check whether the issuer (1) filed all reports  required to be filed by Sections
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 y No o

Check if disclosure  of delinquent  filers in response to Item 405 of Regulation
S-B is not 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

STATE ISSUER'S REVENUES FOR ITS MOST RECENT FISCAL YEAR: $451,539

As of December 31, 2004 the  aggregate  market value of the common stock held by
non-affiliates  was  approximately  $2,840,575  based upon the closing  price on
December  31, 2004 of $0.65.  As of December  31,  2004,  there were  17,804,388
shares of common stock outstanding.

Documents incorporated by reference: NONE

Transitional Small Business Disclosure Format: Yes o No y


<PAGE>




                                TABLE OF CONTENTS


                                     PART I
                                                                            PAGE
Item 1.      Description of Business
Item 2.      Description of Property
Item 3.      Legal Proceedings
Item 4.      Submission of Matters to a Vote of Security Holders
                                     PART II
Item 5.      Market for Common Equity and Related Stockholder Matters
Item 6.      Managements Discussion and Analysis or Plan of Operation
Item 7.      Financial Statements
Item 8.      Changes in and Disagreements With Accountants on
             Accounting and Financial Disclosure
Item 8A      Controls and Procedures
                                    PART III
Item 9.      Directors, Executive Officers, Promoters and Control persons;
             Compliance with Section 16(a) of the Exchange Act.
Item 10.     Executive Compensation
Item 11.     Security ownership of Certain Beneficial Owners and Management
Item 12.     Certain Relationships and Related Transactions
                                     PART IV
Item 13.     Exhibits and Reports on Form 8-K
Item 14.     Principal Accountant Fees and Services
             Signatures






















<PAGE>

PART I

ITEM 1. DESCRIPTION OF BUSINESS

GENERAL OVERVIEW

USIP.Com,  Inc.  ("USIP," the "Company,"  "we," "our" or "us") was  incorporated
under  the laws of the State of Utah on April 6, 1978 as Derby  Farms,  Inc.  On
January 19, 1982 our Articles of Incorporation  were amended and the name of our
company was changed to Commerce Oil of Kentucky, Inc.

On  January  31,  2000  Datone  Communications,  Inc.,  ("Datone"),  a New  York
corporation  and an  independent  payphone  provider  ("IPP")  merged  into  our
company.  All the Datone  shares  were  retired.  Datone  shareholders  received
7,268,388 restricted shares of common stock for their stock. On February 4, 2000
we amended our Articles of Incorporation and changed our name to USIP.Com, Inc.

On April 29, 2000 we purchased all the shares of NB Payphones, Ltd., ("NB"), the
owner of 466 payphones in Pennsylvania and Cointel Leasing,  Inc.,  ("Cointel"),
the owner of 45 payphones in Syracuse, New York, from Riviera Bay Holding Trust,
a Gibraltar Trust, for 8,750,000  restricted shares of our common stock. NB is a
USIP wholly owned subsidiary.

On August 30, 2000 we incorporated  Datone, Inc. as a Delaware company.  Datone,
Inc. is a USIP wholly owned  subsidiary.  All the revenue  generating assets and
related  expenses  that we received from the Datone  Communications  Merger were
subsequently  moved via an  intercompany  transfer  from USIP into Datone,  Inc.
Datone,  Inc., was capitalized with $1,017. All of the Datone, Inc., shares were
given to USIP. On October 1, 2000 we merged Cointel into Datone,  Inc. by way of
an intercompany  transaction.  Management  decided that it would not benefit our
company to have two companies  that are in the same  business and  location;  we
therefore combined the two in an effort to save money.

On  December  14,  2001  we  incorporated  The  Platinum   Funding   Corporation
("Platinum"),  as a  New  York  wholly  owned  subsidiary  for  the  purpose  of
developing a real estate based mortgage brokerage business.  Platinum has had no
activity since December 14, 2001.

SMART PAYPHONE TECHNOLOGY.

Our payphones  utilize  "smart"  technology  which  provides  voice  synthesized
calling  instructions,  detects  and counts  coins  deposited  during each call,
informs  the caller at certain  intervals  of the time  remaining  on each call,
identifies  the need for and the  amount of an  additional  deposit  in order to
continue the call, and provides other  functions  associated with the completion
of  calls.  Through  the  use  of  a  non-volatile,   electronically   erasable,
programmable  memory chip, the payphones can also be programmed and reprogrammed
from our central  computer  facilities to update rate  information  or to direct
different  types  of  calls  to  particular  carriers.  Our  payphones  can also
distinguish  coins by size and weight,  report to our central host  computer the
total amount of coin in the coin box, perform  self-diagnosis  and automatically
report problems to a pre-programmed service number.

CUSTOMER SERVICE.

The  technology  we  use  enables  us  to  (i)  respond   quickly  to  equipment
malfunctions and (ii) maintain accurate records of payphone activity,  which can
be verified by customers.  We strive to minimize  "downtime" on our payphones by
identifying  service  problems as quickly as possible.  We employ both  advanced
telecommunications  technology  and  trained  field  technicians  as part of our
commitment to provide superior customer  service.  The records generated through
our  technology  also  allow  for  the  more  timely  and  accurate  payment  of
commissions to Location Owners.

OPERATIONS

As of December 31, 2004 we owned and operated approximately 511 payphones in two
states,  and as of December  31, 2003 we owned and  operated  approximately  567
payphones in three states.

COIN CALLS

Our payphones generate coin revenues  primarily from local calls.  Historically,
the maximum rate that LECs and IPPs could  charge for local calls was  generally
set by state regulatory  authorities and in most cases was $0.25 through October
6, 1997. We charge $0.25,  $0.35, and $0.50 in New York, and $0.35, and $0.50 in
Pennsylvania.  In ensuring "fair compensation" for all calls, the FCC determined
that local coin rates from payphones should be generally  deregulated by October
7, 1997, but provided for possible modifications or exemptions from deregulation
upon a  detailed  demonstration  by an  individual  state  that there are market
failures within the state that would not allow market-based rates to develop. On
July 1, 1997, a federal court issued an order that upheld the FCC's authority to
deregulate  local coin call rates.  In accordance  with the FCC's ruling and the
court order,  certain  RBOCs,  LECs and IPPs,  including  our Company,  began to
increase rates for local coin calls from $0.25 to $0.35 after October 7, 1997.

Long distance carriers that have contracted to provide transmission  services to
our payphones  typically  carry long distance coin calls. We pay a charge to the
long-distance  carrier each time the carrier transports a long-distance call for
which we receive coin revenue from an end user.



                                       1
<PAGE>

NON-COIN CALLS

We also receive revenue from non-coin calls made from our payphones. Traditional
non-coin calls include credit card,  calling card, prepaid calling card, collect
and third  party  billed  calls  where the  caller  dials "0" plus the number or
simply dials "0" for an operator.

The services  needed to complete a non-coin call include  providing an automated
or live operator to answer the call, verifying billing  information,  validating
calling  cards  and  credit  cards,  routing  and  transmitting  the call to its
destination,  monitoring the call's  duration and determining the charge for the
call, and billing and collecting the applicable  charge. We have contracted with
operator  service  providers  to handle  these calls and perform all  associated
functions, while paying us a commission on the revenues generated.

REGULATIONS AND DIAL-AROUND COMPENSATION

On September  20, 1996 the Federal  Communications  Commission  ("FCC")  adopted
rules,  which became  effective  November 7, 1996 (the "1996  Payphone  Order"),
initially mandating dial-around  compensation for both access code calls and 800
subscriber  calls at a flat rate of $45.85  per  payphone  per month  (131 calls
multiplied by $0.35 per call).  Commencing October 7, 1997 and ending October 6,
1998 the $45.85 per  payphone  per month  rate was to  transition  to a per-call
system at the rate of $0.35 per call.  Several parties challenged certain of the
FCC regulations  including the dial-around  compensation rate. On July 1, 1997 a
federal  court  vacated  certain  portions  of the FCC's  1996  Payphone  Order,
including the dial-around compensation rate.

In  accordance  with the court's  mandate,  on October 9, 1997 the FCC adopted a
second order (the "1997 Payphone Order"), establishing a rate of $0.284 per call
for the  first two  years of  per-call  compensation  (October  7, 1997  through
October 6, 1999). The IXCs were required to pay this per-call amount to payphone
service  providers,  beginning  October 7, 1997. On May 15, 1998 the court again
remanded  the  per-call  compensation  rate to the FCC for  further  explanation
without vacating the $0.284 default rate.

On February 4, 1999 the FCC released a third order (the "1999 Payphone  Order"),
in which the FCC  abandoned  its  efforts  to derive a  "market  based"  default
dial-around  compensation  rate and instead adopted a "cost based" rate of $0.24
per dial-around call. This rate became effective on April 21, 1999 and served as
a default rate through January 31, 2002.

In a decision  released  January  31, 2002 (the "2002  Payphone  Order") the FCC
partially  addressed the remaining issues concerning the "true-up"  required for
interim and intermediate period compensation. The FCC adjusted the per-call rate
to  $0.229,  for the  interim  period  only,  to reflect a  different  method of
calculating  the  delay in IXC  payments  to PSPs for the  interim  period,  and
determined  that the total  interim  period  compensation  should be $33.89  per
payphone  per month  ($0.229  times an  average  of 148 calls per  payphone  per
month).  The 2002 Payphone Order deferred to a later order its  determination of
the  allocation  of this  total  compensation  rate among the  various  carriers
required to pay compensation for the interim period.

On October 23, 2002 the FCC  released  its Fifth  Order on  Reconsideration  and
Order on Remand (The  "Interim  Order"),  which  resolved the  remaining  issues
surrounding the interim/intermediate period true-up and specifically how monthly
per-phone  compensation  owed to  PSPs is to be  allocated  among  the  relevant
dial-around  carriers.  The Interim Order also  resolves how certain  offsets to
such  payments  will be handled and a host of other issues  raised by parties in
their  remaining FCC challenges to the 1999 Payphone Order and the 2002 Payphone
Order. In the Interim Order the FCC ordered a true-up for the interim period and
increased  the  adjusted  monthly  rate to $35.22 per  payphone  per  month,  to
compensate for the three-month payment delay inherent in the dial-around payment
system.  The new rate of $35.22  per  payphone  per month is a  composite  rate,
allocated  among  approximately  five hundred  carriers based on their estimated
dial-around  traffic during the interim  period.  The FCC also ordered a true-up
requiring PSPs, to refund an amount equal to $0.046 (the difference  between the
old $0.284 rate and the current  $0.238 rate) to each  carrier that  compensated
the  PSP on a  per-call  basis  during  the  intermediate  period.  Interest  on
additional  payments  and refunds is to be computed  from the  original  payment
date, at the IRS prescribed rate applicable to late tax payments.

On August 2, 2002 and  September  2, 2002  respectively,  the APCC and the RBOCs
filed   petitions  with  the  FCC  to  revisit  and  increase  the   dial-around
compensation  level. Using the FCC's existing formula,  as approved by the Court
in its June 26, 2000 order,  and adjusted only to reflect current costs and call
volumes,  the APCC and RBOCs  petitions  support  approximately  doubling of the
current $0.24 rate. In response to the  petitions,  on September 2, 2002 the FCC
put them out for comment and reply comment by interested parties,  seeking input
on how the  Commission  should  proceed  to  address  the  issues  raised by the
filings.

We believe  that the "fair  compensation"  requirements  of  Section  276 of the
Telecom  Act mandate  that the FCC  promptly  review and adjust the  dial-around
compensation  rate level.  While no assurances  can be given as to the timing or
amount of any increase in the dial-around  rate level, we believe an increase in
the rate is reasonably  likely given the significant  reduction in payphone call
volumes, and other relevant changes since the FCC set the $0.24 rate level.

Our  objectives  are to continue to review our overall cost  structure,  improve
route  density  and  service  quality,  monitor  and take  action  on our  under
performing  telephones.  We have implemented the following  strategy to meet our
objectives.

                                       2
<PAGE>

SERVICE AND MAINTENANCE

We employ  field  service  technicians,  who collect  coin boxes,  and clean and
maintain a route of  payphones.  Our  technicians  also respond to trouble calls
made by Location  Owners,  by users of payphones or by the  telephone  itself as
part of its internal  diagnostic  procedures.  Some of our  technicians are also
responsible for the installation of new payphones.

CUSTOMERS, SALES AND MARKETING

The  Location  Owners  with whom we  contract  are a diverse  group of small and
medium sized  businesses,  which are frequented by individuals  needing payphone
access. The majority of our payphones are located at convenience  stores,  truck
stops, service stations,  grocery stores, colleges and hospitals. As of December
31, 2004 our payphone accounts of 20 or more payphones represented approximately
5% of our  installed  payphone  base.  Approximately  70% of our customers are a
result of acquisitions from (ITOC's), Independent Telephone Operating Companies.

We install our payphones in convenience stores,  truck stops,  service stations,
grocery  stores,  colleges and hospitals.  Before we install a phone,  we search
for, and utilize historical revenue information about each payphone location. In
locations where historical revenue information is not available,  we rely on our
site survey to examine geographic factors,  population density, traffic patterns
and other factors in  determining  whether to install a payphone.  We recognize,
however,  that recent  changes in payphone  traffic  volumes and usage  patterns
being  experienced on an industry-wide  basis warrant a continued  assessment of
the location deployment of our payphones.

Our location  agreements  may provide for revenue  sharing  with the  applicable
location  owners based on fixed  percentages of revenues.  Our  agreements  also
provide for monthly  billing for payphone  service.  We can terminate a location
agreement  on 30 days' notice to the  Location  Owner if the  payphone  does not
generate sufficient revenue.

SERVICE AND EQUIPMENT SUPPLIERS

Our  primary   suppliers  provide  payphone   components,   local  line  access,
long-distance  transmission and operator services.  To promote acceptance by end
users  accustomed  to using RBOC or  LEC-owned  payphone  equipment,  we utilize
payphones  designed to be similar in appearance and operation to payphones owned
by LECs.

We  purchase   circuit  boards  from  various   manufacturers   for  repair  and
installation  of our  payphones.  We  primarily  obtain  local line  access from
various LECs,  including  Verizon,  North  Pittsburgh  Telephone Co. and various
other incumbent and competitive  suppliers of local line access.  New sources of
local line access are expected to emerge as competition  continues to develop in
local  service  markets.  Long-distance  services are provided to our company by
various long-distance and operator service providers, including AT&T, Qwest, ILD
Telecommunications, Inc., and others.

We expect the basic  availability  of such  products and services to continue in
the future;  however, the continuing  availability of alternative sources cannot
be assured.  Although we are not aware of any current  circumstances  that would
require  us to seek  alternative  suppliers  for  any  material  portion  of the
products or services used in the operation of our business,  transition from our
existing  suppliers,  if  necessary,  could  have  a  disruptive  effect  on our
operations and could give rise to unforeseen delays and/or expenses.

ASSEMBLY AND REPAIR OF PAYPHONES

We assemble and repair payphone  equipment for our use. The assembly of payphone
equipment provides us with technical  expertise used in the operation,  service,
maintenance  and repair of our  payphones.  We  assemble,  refurbish  or replace
payphones from standard  payphone  components  either  obtained from our sizable
inventory or purchased from component manufacturers.  These components include a
metal case,  an integrated  circuit  board  incorporating  a  microprocessor,  a
handset and cord,  and a coin box and lock. On the occasion when  components are
not  available  from  inventory,  we can  purchase the  components  from several
suppliers.  We do not believe that the loss of any single  supplier would have a
material adverse effect on our assembly operations.

Our payphones  comply with all material  regulatory  requirements  regarding the
performance  and quality of  payphone  equipment  and have all of the  operating
characteristics  required by the applicable  regulatory  authorities,  including
free access to local emergency (911) telephone  numbers,  dial-around  access to
all available  carriers,  and automatic  coin return  capability  for incomplete
calls.

TECHNOLOGY

The payphone  equipment we install makes use of microprocessors to provide voice
synthesized  calling  instructions,  detect and count coin deposits  during each
call, inform the caller at certain intervals of the time remaining on each call,
identify  the  need  for and the  amount  of an  additional  deposit  and  other
functions  associated with completion of calls. Through the use of non-volatile,
electronically erasable,  programmable read-only memory chips, our payphones can
also be programmed  and  reprogrammed  from our central  computer  facilities to
update rate  information  or to direct  different  kinds of calls to  particular
carriers.

Our  payphones  can  distinguish  coins by size and  weight,  report to a remote
location  the  total  coins  in  the  coin  box,  perform   self-diagnosis   and
automatically   report  problems  to  a  pre-programmed   service  number,   and
immediately report attempts at vandalism or theft. Many of our payphones operate
on power available from the telephone  lines,  thereby avoiding the need for and
reliance upon an additional power source at the installation location.



                                       3
<PAGE>

We provide all  technical  support  required to operate the  payphones,  such as
computers  and  software  and  hardware  specialists,  at  our  headquarters  in
Liverpool  New  York.  Our  assembly  and  repair  support   operations  provide
materials,  equipment,  spare parts and  accessories  to the field.  Each of our
division offices and each of our technician's  vehicles maintain inventories for
immediate deployment in the field.

MAJOR CUSTOMERS

No individual  customer accounted for more than 5% of our consolidated  revenues
in 2003 and 2004.

COMPETITION

We compete for payphone  locations  directly with RBOCs, LECs and other IPPs. We
also compete, indirectly, with long-distance companies, which can offer Location
Owners  commissions on  long-distance  calls made from LEC-owned  payphones.  We
compete with LECs and long-distance companies who may have substantially greater
financial, marketing and other resources.

We  believe  that  our  principal  competition  is from  providers  of  wireless
communications  services  for both  local  and long  distance  traffic.  Certain
providers of wireless communication services have introduced rate plans that are
competitively  priced  with  certain  of the  products  offered  by us, and have
negatively impacted the usage of payphones throughout the nation.

We believe that the  competitive  factors among  payphone  providers are (1) the
commission  payments to a Location Owner, (2) the ability to serve accounts with
locations  in several  LATAs or  states,  (3) the  quality  of  service  and the
availability of specialized  services  provided to a Location Owner and payphone
users, and (4)  responsiveness to customer service needs. We believe that we are
currently competitive in each of these areas.

 Additionally,  a number of  domestic  IPPs  continue  to  experience  financial
difficulties from various  competitive and regulatory  factors impacting the pay
telephone  industry  generally,  which  may  impair  their  ability  to  compete
prospectively.  While  no  assurances  can  be  given,  we  believe  that  these
circumstances create an opportunity for us to obtain new location agreements and
reduced site commissions going forward.  There are no guarantees that we will be
able to obtain new location agreements that are advantageous to our company.

We compete with long-distance  carriers that provide  dial-around  services that
can be accessed through our payphones.  Certain national  long-distance operator
service providers and prepaid calling card providers have implemented  extensive
advertising promotions and distribution schemes which have increased dial-around
activity on payphones  owned by LECs and IPPs,  including  our company,  thereby
reducing traffic to our primary providers of long-distance  service. While we do
receive compensation for dial-around calls placed from our payphones, regulatory
efforts are  underway to improve the  collection  system and provide us with the
ability to collect that portion of dial-around calls that are owed.

OUR EMPLOYEES

We  currently  have  five  full  time  employees.  We may,  from  time to  time,
supplement  our regular  work force as  necessary  with  temporary  and contract
personnel. None of our employees are represented by a labor union. We believe we
have a good relationship with our employees.

A NOTE ABOUT FORWARD-LOOKING STATEMENTS

This report  (including the foregoing  "Description of Business" and the section
below entitled "Management's  Discussion and Analysis of Financial Condition and
Results of Operations") contains  forward-looking  statements that involve risks
and  uncertainties.  You should  exercise  extreme  caution  with respect to all
forward-looking statements contained in this report. Specifically, the following
statements are forward-looking:

o  statements  regarding  our overall  strategy  for  expansion  of our company,
including without limitation our intended markets and future products;

o statements regarding our research and development efforts;

o statements  regarding the plans and  objectives of our  management  for future
operations,   including,   without  limitation,   plans  to  explore  other  non
telecommunication business along with the size and nature of the costs we expect
to incur and the people and services we may employ;

o statements regarding the future of our company, our competition or regulations
that may affect us;

o statements regarding our ability to compete with third parties;

o any statements using the words "anticipate,"  "believe," "estimate," "expect,"
"intend," and similar words; and

o any statements other than historical fact.



                                       4
<PAGE>

We believe that it is important to communicate  our future  expectations  to our
shareholders.  Forward-looking statements reflect the current view of management
with respect to future events and are subject to numerous  risks,  uncertainties
and assumptions,  including,  without  limitation,  the factors listed in "Risks
Associated  with Our  Business."  Although  we  believe  that  the  expectations
reflected in such  forward-looking  statements  are  reasonable,  we can give no
assurance  that such  expectations  will prove to be correct.  Should any one or
more of  these or  other  risks  or  uncertainties  materialize  or  should  any
underlying  assumptions  prove  incorrect,  actual  results  are  likely to vary
materially from those  described in this report.  There can be no assurance that
the projected results will occur, that these judgments or assumptions will prove
correct or that unforeseen developments will not occur.

Any person or entity may read and copy our reports filed with the Securities and
Exchange  Commission at the SEC's Public Reference Room at 450 Fifth Street, NW,
Washington,  D.C. 20549.  The public may obtain  information on the operation of
the Public  Reference Room by calling the SEC toll free at  1-800-SEC-0330.  The
SEC also maintains an Internet site at HTTP://WWW.SEC.GOV where reports, proxies
and informational statements on public companies may be viewed by the public.

ITEM 2.   DESCRIPTION OF PROPERTY

We lease  approximately  3000 square feet of space in Liverpool,  New York. This
location provides office space and space for assembly and repair of payphones.

ITEM 3.   LEGAL PROCEEDINGS

Not Applicable

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not Applicable


PART II

ITEM 5.   MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

In the third  calendar  quarter of 2001 our  common  stock was  included  in the
NASD's  Bulletin Board system under the symbol "USPO".  The following table sets
forth for the respective periods indicated the prices of the common stock in the
over-the-counter  market,  as reported and summarized by the OTC Bulletin Board.
Such prices are based on  inter-dealer  bid and asked  prices,  without  markup,
markdown, commissions, or adjustments and may not represent actual transactions.


CALENDAR QUARTER ENDED                    HIGH BID(S)                LOW BID(S)
March 31, 2003                              $0.38                      $0.25
June 30, 2003                               $0.65                      $0.40
September 30, 2003                          $0.65                      $0.40
December 31, 2003                           $0.65                      $0.38
March 31, 2004                              $0.45                      $0.25
June 30, 2004                               $0.41                      $0.23
September 30, 2004                          $0.41                      $0.30
December 31, 2004                           $1.05                      $0.60

Since  inception,  no dividends have been paid on our common stock. We intend to
retain any earnings for use in our  business  activities,  so it is not expected
that  any  dividends  on our  common  stock  will be  declared  and  paid in the
foreseeable future. At December 31, 2004 there were approximately 262 holders of
record of our common stock.

Any future dividends will be at the discretion of the board of directors,  after
taking into account various factors, including among others, operations, current
and  anticipated  cash needs and  expansion  plans,  the income tax laws then in
effect,  the requirements of Utah law, and any restrictions  that may be imposed
by our future credit arrangements.

On December  23,  2003 we issued  twenty five  thousand  unregistered  shares of
common stock to Carl E. Worboys, a resident of the State of New York, and eighty
thousand  unregistered  shares  to Jass  Equities,  Inc.,  a State  of New  York
corporation in lieu of services rendered to our company.  The shares were issued
under Section 4(2) of the Securities Act of 1933, as amended.


                                       5
<PAGE>

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND RESULTS
OF OPERATIONS

         The following  discussion  and analysis  should be read in  conjunction
with the Company's consolidated financial statements and notes.

         Certain  statements  contained  below  are  forward-looking  statements
(rather than historical facts) that are subject to risks and uncertainties  that
could cause  actual  results to differ  materially  from those  described in the
forward-looking statements.

GENERAL

         As of December  31, 2004 the  Company  owned and  operated a network of
approximately 511 payphones.  Our installed  payphone base generated revenue for
the fiscal year 2003 and 2004 from the following three sources.

         1.  Commission  Income.  Commission  income includes  commissions  from
operator  service  telecommunications  companies and  commissions  for toll free
calls from all payphones. The commissions for operator services are paid 45 days
in arrears.  Dial Around compensation is billed quarterly and received three and
one half months behind the billed quarter.

         2. Coin calls.  Coin calls  represent  calls paid for by customers  who
deposit  coins into the  payphones.  Coin call revenue is recorded as the actual
amount of coins collected from the payphones.  Some coin collections are made on
a daily basis and others more often if the particular  payphone has  significant
usage.  The coins are counted in house and  deposited  weekly in New York and in
Pennsylvania counted by Citizens National Bank and deposited every other week.

         3. Payphone  sales,  repairs and pre-paid phone cards. We derive income
from the sale and repair of a payphone. We can negotiate the sale, of a payphone
to a site owner when it becomes  cost  prohibitive  to maintain or if a customer
offers to buy the phone at a price that is  favorable  to our  company.  The new
owner or lessee becomes responsible for the maintenance and operational costs of
the payphone. We sell pre-paid phone cards at some of our payphone locations. We
also derive a profit from any  commission  split that is negotiated  between the
parties  as a result  of a sale or lease of a  payphone.  Sales and  repairs  of
payphones  and the sale of  pre-paid  phone  cards are not  subject  to the same
collection delays as the other types of operating income.

         The principal  costs related to the ongoing  operation of the Company's
payphones include telephone charges,  commissions,  and service, maintenance and
network  costs.  Telephone  charges  consist of payments  made by the Company to
local exchange  carriers and long distance  carriers for the line charge and use
of their networks. Commission expense represents payments to owners of locations
where the Company's  payphones are installed.  Service,  maintenance and network
costs  represent  the cost of  servicing  and  maintaining  the  payphones on an
ongoing basis.

         Weather  conditions affect our revenue stream because we operate in the
Northeastern  part of the country.  Revenues drop off  significantly  during the
winter  because most of our phones are outdoors.  The spring and summer  periods
show a significant increase in payphone usage.  Revenues are generally lowest in
the first quarter and highest in the third quarter.

         The increase use of wireless  communication  services has substantially
impacted  the  public's  use of  payphones,  and we believe that this trend will
continue to increase as the cost for wireless usage declines.  However,  we have
attempted  to  minimize  some  of the  impact  from  wireless  use  by  avoiding
traditional travel locations where wireless  communication is high. There are no
guarantees  that we will be  successful  in  minimizing  the effects of wireless
usage.


YEAR ENDED DECEMBER 31, 2004 COMPARED TO YEAR ENDED DECEMBER 31, 2003

REVENUES

         Total  revenue  decreased  by $218,842 or  approximately  32.65%,  from
$670,381in  the year  ended  December  31,  2003 to  $451,539  in the year ended
December  31,  2004.  This  decrease was  primarily  attributable  to removal of
unprofitable  phone locations and lower call volumes on our payphones  resulting
from the  growth  in  wireless  communications.  We  reduced  our  network  from
approximately 567 payphones in 2003 to approximately 511 in 2004.

         Commissions  decreased by $3,014 or approximately 8.9%, from $33,867 in
the year ended December 31, 2003 to $30,853 in the year ended December 31, 2004.
This  decrease  was a result  of our  reduction  in  payphones,  fewer  operator
assisted calls,  and the increase  competition  from the wireless  communication
industry.

         Coin call revenues  decreased by $53,061 or approximately  28.7%,  from
$184,956 in year ended  December 31, 2003 to $131,895 in the year ended December
31, 2004.  The decrease in coin call revenue was primarily  attributable  to the
reduced number of payphones we operated  coupled with the increased  competition
from wireless communication services.

         Non-coin  call  revenue,  which is comprised  primarily of  dial-around
revenue and operator service revenue  decreased  $143,949  approximately  46.51%
from $309,498 in the year ended  December 31, 2003 to $165,549 in the year ended
December 31, 2004.  Approximately  $92,200 of this decrease is attributable to a
one-time  settlement  received in 2003  brought  forth by the FCC's Order on the
Compensation   True-up.   This  order  resolved  a  hosts  of  open  dial-around
compensation  "issues"  and most  importantly,  setting  forth the terms for the
"true-up"  of  past  dial-around   payments  for  the  so-called  "interim"  and
"intermediate" time periods.

         Service & Repair Sales decreased by $14,883,  when compared to the same
period in 2003.  Equipment sales  increased by $2,167,  from $6,620 for the year
ending  December 31, 2003 to $8,787 in the year ending  December  31, 2004.  Our
phone card  decreased by $6,102 when  compared to 2003.  This decrease is due to
increased  competition  from other phone card vendors along with loss of various
site locations.



                                       6
<PAGE>

COSTS OF SALES

         Our overall cost of sales  decreased  for the year ending  December 31,
2004 by  $77,848  or  approximately  15.29%  when  compared  to the year  ending
December 31, 2003. Our telecommunication  costs decreased by $25,754, due to the
fact we provided  service to 511  payphones in 2004 as compared to 567 payphones
in 2003.  This number  reflects an overall  reduction of 56 payphones due to our
ongoing strategy of identifying and removing unprofitable payphones.  Once a low
revenue  payphone  is  identified,  we offer the site  owner an  opportunity  to
purchase the  equipment.  If the site owner does not purchase the  payphone,  we
remove it from the site.

         Our  commissions  expense  decreased  by $2,490  due to a  decrease  in
payphone usage, a direct response to increase use of cellular phones and reduced
number of  payphones.  In 2004 our  contractor's  fees  decreased by $4,030 this
decrease is due to the  elimination of contractors  and the  re-organization  of
routes to manage  them  more  efficiently.  Depreciation  expense  decreased  by
$10,005  when  compared  to the same  period in 2003.  This  decrease  is due to
certain assets being fully  depreciated and our on going strategy of identifying
unprofitable payphones,  and selling them to the site owners. Once a payphone is
sold to the site owner it is removed from our assets and depreciation schedules.
We own  telephone  equipment and motor  vehicles,  which provide a service for a
number of years.  The term of service is  commonly  referred  to as the  "useful
life" of the  asset.  Because  an asset  such as  telephone  equipment  or motor
vehicle is  expected to provide  service  for many  years,  it is recorded as an
asset,  rather than an expense,  in the year acquired.  A portion of the cost of
the  long-lived  asset is reported as an expense  each year over its useful life
and the amount of the  expense  in each year is  determined  in a  rational  and
systematic manner.

         Our cost of sales for repairs,  service,  travel and supplies decreased
by $30,813 a direct result of the management  team's  ongoing  efforts to reduce
cost.  Our phone card expenses  decreased by $4,756 when  comparing year 2004 to
2003.  This decrease is due to the reduced number of phone card machine sites in
2004.


OPERATION AND ADMINISTRATIVE EXPENSES

         Operating  expenses  decreased by $44,061 or approximately  10.53% over
the same period in 2003.  This decrease in operating  expense is a direct result
of our management  team's ongoing efforts to cut expenses and run the company as
efficiently  as  possible.  Salaries and related  payroll  taxes were reduced by
$15,037 when  compared to the same  expenses for 2003.  This decrease is due the
elimination  of one  clerical  assistant.  Our  insurance  expense  decreased by
$12,118  when  compared to the fiscal  year 2003.  This  decrease  is  primarily
attributable to the decrease in payroll.  Rent increased by $1,539 when compared
to 2003.  Professional fees decreased by $5,966 over 2003. These are fees we pay
to accountants and attorneys  throughout the year for performing  various tasks.
Expenses for outside  services  decreased by $11,752 over 2003.  Our  telephone,
utilities, office, vehicle and travel & entertainment expenses, together account
for a decrease  of $727 when  compared to the same period  ending  December  31,
2003.

         Interest  expense in the year ended  December  31,  2004  increased  by
$5,000 from  $49,288 in the year ended  December 31, 2003 to $54,288 in the year
ended December 31, 2004. This increase is  attributable  to increased  borrowing
levels related to our lines of credit. We drew $90,000 on our lines of credit in
2004.

PROPOSED MERGER

         On May 24, 2004,  USIP.Com,  Inc. announced that its Board of Directors
unanimously  approved an Agreement and Plan of Merger with Cornerstone  Services
Group,  Inc.  ("Cornerstone"),  a privately  held Houston,  Texas based company.
Cornerstone acquires and provides  infrastructure and pharmaceutical services to
companies relating to the care of the Senior or Aged population.

         Under the terms of the agreement, Cornerstone and USIP will merge, with
USIP as the surviving  corporation.  Immediately  upon the  consummation  of the
merger,  the name of the surviving  corporation  will be changed to  Cornerstone
Services Group, Inc. In the merger, the shareholders of Cornerstone will receive
a number of shares of USIP common stock  representing  approximately  75% of the
shares of USIP common stock that will be outstanding,  on a fully diluted basis,
following the merger.

         This  transaction  is subject to USIP  shareholders  approval and other
customary  closing  conditions.  The shareholders will be voting on the proposed
acquisition and other related  matters  pertaining to the merger at the upcoming
shareholders  meeting.  Further  information  on the  merger may be found in the
preliminary  proxy  statement  that was filed with SEC on November 5, 2004.  The
Securities   and   Exchange    Commission   maintain   an   internet   site   at
HTTP://WWW.SEC.GOV where the public can review a copy of our reports.

GOING CONCERN QUALIFICATION

         In their Independent  Auditor's Report, our auditors state that we have
incurred  annual  losses since  inception  raising  substantial  doubt about our
ability to continue as a going concern.




                                       7
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOW

         Our primary  sources of liquidity  have been cash from  operations  and
borrowing  from various  credit  facilities.  As of December 31, 2004, we have a
note  payable  to Key  Bank in the  amount  of  $70,069.  We have an  additional
unsecured lines of credit with the Lilly Beter Capital Group, Ltd. in the amount
of  $500,000,  and Riviera Bay Holding  Trust in the amount of  $100,000,  as of
December  31, 2004 we have drawn on these  lines in the amount of  $548,027  and
$95,046 respectively.

RISKS ASSOCIATED WITH OUR BUSINESS

In addition to the other information in this report,  the following risks should
be considered carefully in evaluating our business and prospects:

UNLESS  WE CAN  REVERSE  OUR  HISTORY  OF  LOSSES,  WE MAY  HAVE TO  DISCONTINUE
OPERATIONS.

If we are unable to achieve or sustain  profitability,  or if  operating  losses
increase  in the future,  we may not be able to remain a viable  company and may
have to  discontinue  operations.  Our expenses have  historically  exceeded our
revenues  and we have had losses in all  fiscal  years of  operation,  including
those in fiscal  years  2003  through  2004,  and the losses  are  projected  to
continue in 2005.  Our net losses were  $308,260  and  $403,170 for fiscal years
ended 2003, 2004 respectively.  We have been concentrating on the development of
our products, services and business plan. Our management believes that we can be
profitable and that our business plan will be successful;  however,  there is no
assurance that we will be successful in  implementing  our business plan or that
we will be profitable now or in the future.

WE MAY NOT SUCCEED OR BECOME PROFITABLE.

We will need to generate  significant  revenues to achieve  profitability and we
may be unable to do so. Even if we do achieve profitability,  we may not be able
to sustain or increase  profitability in the future. We expect that our expenses
will continue to increase and there is no guarantee  that we will not experience
operating  losses and negative cash flow from operations for this fiscal year or
for the foreseeable future. If we do not achieve or sustain profitability,  then
we may be unable to continue our operations.

WE WILL NEED ADDITIONAL CAPITAL FINANCING IN THE FUTURE.

We may be  required  to seek  additional  financing  in the future to respond to
increased  expenses or shortfalls in anticipated  revenues,  accelerate  product
development and  deployment,  respond to competitive  pressures,  develop new or
enhanced products, or take advantage of unanticipated acquisition opportunities.
We  cannot  be  certain  we will be able to find such  additional  financing  on
reasonable  terms,  or at all. If we are unable to obtain  additional  financing
when needed, we could be required to modify our business plan in accordance with
the extent of available financing.

IF WE ENGAGE IN ACQUISITIONS, WE MAY EXPERIENCE SIGNIFICANT COSTS AND DIFFICULTY
ASSIMILATING THE OPERATIONS OR PERSONNEL OF THE ACQUIRED COMPANIES,  WHICH COULD
THREATEN OUR FUTURE GROWTH.

If  we  make  any  acquisitions,  we  could  have  difficulty  assimilating  the
operations,  technologies  and  products  acquired or  integrating  or retaining
personnel of acquired companies. In addition,  acquisitions may involve entering
markets in which we have no or limited direct prior  experience.  The occurrence
of any one or more of these factors could disrupt our ongoing business, distract
our  management and employees and increase our expenses.  In addition,  pursuing
acquisition  opportunities  could  divert our  management's  attention  from our
ongoing  business  operations  and result in  decreased  operating  performance.
Moreover, our profitability may suffer because of  acquisition-related  costs or
amortization of acquired goodwill and other intangible assets.  Furthermore,  we
may have to incur debt or issue equity  securities in future  acquisitions.  The
issuance of equity securities would dilute our existing stockholders.

IF  WE  CANNOT  ATTRACT,  RETAIN,  MOTIVATE  AND  INTEGRATE  ADDITIONAL  SKILLED
PERSONNEL, OUR ABILITY TO COMPETE WILL BE IMPAIRED.

Many of our current and potential  competitors  have more  employees than we do.
Our success depends in large part on our ability to attract, retain and motivate
highly qualified management and technical personnel. We face intense competition
for  qualified  personnel.  The industry in which we compete has a high level of
employee  mobility and  aggressive  recruiting of skilled  personnel.  If we are
unable  to  continue  to employ  our key  personnel  or to  attract  and  retain
qualified  personnel  in the  future,  our ability to  successfully  execute our
business plan will be jeopardized and our growth will be inhibited.

WE MAY BE UNABLE TO ADEQUATELY  PROTECT OUR PROPRIETARY RIGHTS OR MAY BE SUED BY
THIRD PARTIES FOR INFRINGEMENT OF THEIR PROPRIETARY RIGHTS.

The  telecommunications  industry is  characterized  by the existence of a large
number of patents and frequent  litigation based on allegations of trade secret,
copyright  or patent  infringement.  We may  inadvertently  infringe a patent of
which we are unaware.  In addition,  because patent  applications  can take many
years to issue,  there may be a patent  application  now pending of which we are
unaware that will cause us to be infringing when it is issued in the future.  If
we make any  acquisitions,  we could have similar problems in those  industries.
Although we are not currently involved in any intellectual  property litigation,
we may be a party to  litigation  in the  future  to  protect  our  intellectual
property or as a result of our alleged  infringement  of another's  intellectual
property, forcing us to do one or more of the following:



                                       8
<PAGE>

o Cease selling,  incorporating  or using products or services that  incorporate
the challenged intellectual property;

o Obtain from the holder of the infringed  intellectual property right a license
to sell or use the relevant  technology,  which  license may not be available on
reasonable terms; or

o Redesign those products or services that incorporate such technology.

A successful  claim of  infringement  against us, and our failure to license the
same or similar technology,  could adversely affect our business, asset value or
stock value.  Infringement  claims, with or without merit, would be expensive to
litigate or settle, and would divert management resources.

Our employees may be bound by confidentiality and other nondisclosure agreements
regarding  the  trade  secrets  of their  former  employers.  As a  result,  our
employees or we could be subject to allegations  of trade secret  violations and
other similar violations if claims are made that they breached these agreements.

BECAUSE OUR OFFICERS AND DIRECTORS ARE INDEMNIFIED  AGAINST  CERTAIN LOSSES,  WE
MAY BE EXPOSED TO COSTS ASSOCIATED WITH LITIGATION.

If our  directors  or  officers  become  exposed  to  liabilities  invoking  the
indemnification  provisions,  we could be exposed to  additional  unreimbursable
costs,  including legal fees. Our articles of  incorporation  and bylaws provide
that our directors  and officers will not be liable to us or to any  shareholder
and will be  indemnified  and held harmless for any  consequences  of any act or
omission by the  directors and officers  unless the act or omission  constitutes
gross negligence or willful misconduct.  Extended or protracted litigation could
have a material adverse effect on our cash flow.


WE WILL DEPEND ON OUTSIDE MANUFACTURING SOURCES AND SUPPLIERS.

We may contract  with third party  manufacturers  to produce our products and we
will depend on third party  suppliers to obtain the raw materials  necessary for
the  production of our  products.  We do not know what type of contracts we will
have  with  such  third  party  manufacturers  and  suppliers.  In the  event we
outsource the manufacture of our products, we will have limited control over the
actual production process. Moreover,  difficulties encountered by any one of our
third party manufacturers,  which result in product defects,  delayed or reduced
product  shipments,  cost  overruns or our  inability to fill orders on a timely
basis,  could  have  an  adverse  impact  on our  business.  Even  a  short-term
disruption in our relationship with third party manufacturers or suppliers could
have a material  adverse effect on our operations.  We do not intend to maintain
an inventory of sufficient size to protect ourselves for any significant  period
of time against supply interruptions,  particularly if we are required to obtain
alternative sources of supply.

OUR STOCK PRICE MAY BE VOLATILE.

The market  price of our common  stock will likely  fluctuate  significantly  in
response to the following factors, some of which are beyond our control:

o Variations in our quarterly operating results;

o Changes in  financial  estimates  of our  revenues  and  operating  results by
securities analysts;

o Changes in market valuations of telecommunications equipment companies;

o  Announcements  by  us  of  significant  contracts,  acquisitions,   strategic
partnerships, joint ventures or capital commitments;

o Additions or departures of key personnel;

o Future sales of our common stock;

o Stock  market  price and  volume  fluctuations  attributable  to  inconsistent
trading volume levels of our stock;

o Commencement of or involvement in litigation.

In  addition,   the  equity  markets  have   experienced   volatility  that  has
particularly   affected  the  market  prices  of  equity  securities  issued  by
technology  companies and that often has been unrelated or  disproportionate  to
the operating  results of those companies.  These broad market  fluctuations may
adversely affect the market price of our common stock.



                                       9
<PAGE>

WE DO NOT ANTICIPATE PAYING ANY DIVIDENDS ON OUR COMMON STOCK.

We have not paid any  dividends on our Common Stock since  inception  and do not
anticipate  paying any dividends on our Common Stock in the foreseeable  future.
Instead,  we intend to retain any future  earnings for use in the  operation and
expansion of our business.

IF WE ARE SUBJECT TO SEC REGULATIONS  RELATING TO LOW-PRICED  STOCKS, THE MARKET
FOR OUR COMMON STOCK COULD BE ADVERSELY AFFECTED.

The  Securities  and  Exchange  Commission  has adopted  regulations  concerning
low-priced (or "penny") stocks.  The regulations  generally define "penny stock"
to be any  equity  security  that has a market  price less than $5.00 per share,
subject to certain  exceptions.  Our stock is  currently  classified  as a penny
stock.

The penny stock  regulations  require that  broker-dealers,  who recommend penny
stocks to persons other than institutional  accredited  investors make a special
suitability  determination  for the purchaser,  receive the purchaser's  written
agreement to the  transaction  prior to the sale and provide the purchaser  with
risk disclosure documents that identify risks associated with investing in penny
stocks.   Furthermore,   the  broker-dealer  must  obtain  a  signed  and  dated
acknowledgment from the purchaser  demonstrating that the purchaser has actually
received the required risk disclosure document before effecting a transaction in
penny stock. These requirements have historically resulted in reducing the level
of trading activity in securities that become subject to the penny stock rules.

The  additional  burdens  imposed  upon  broker-dealers  by  these  penny  stock
requirements may discourage  broker-dealers  from effecting  transactions in the
common  stock,  which could  severely  limit the market  liquidity of our common
stock and our  shareholders'  ability to sell our common stock in the  secondary
market.


ITEM 7.    FINANCIAL STATEMENTS

                                 USIP.COM, INC.

                        CONSOLIDATED FINANCIAL STATEMENTS

TABLE OF CONTENTS

INDEPENDENT AUDITORS' REPORT


FINANCIAL STATEMENTS


                           Consolidated Balance Sheets
                           At December 31, 2004 and 2003

                           Consolidated Statements of Operations
                           For the Years Ended December 31, 2004 and 2003

                           Statement of Stockholder's Equity
                           For the Years Ended December 31, 2004 and 2003

                           Consolidated Statements of Cash Flows
                           For the Years Ended December 31, 2004, and 2003

                           Notes to Financial Statements

















                                       10
<PAGE>



INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Shareholders

USIP.COM, Inc.

We have audited the accompanying consolidated balance sheet of USIP.COM, Inc. as
of December  31, 2004 and 2003 and the related  statement  of  operations,  cash
flows,  and the statement of  stockholders  equity and for the years then ended.
These financial  statements are the responsibility of the Company's  management.
Our responsibility is to express an opinion on these financial  statements based
on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit 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 USIP.COM,  Inc as of December
31, 2004 and 2003, and the results of its operations, and its cash flows for the
years then ended are in conformity with accounting principles generally accepted
in the United States of America.

The accompanying  consolidated  financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 9 to the
financial  statements,  the Company has incurred annual  operating  losses since
inception. As of December 31, 2004, the Company has increased its line of credit
borrowings to meet operating costs, and has seen stockholders' equity declining.
The financial  statements do not include any adjustments to reflect the possible
future effects on the recoverability and classification of assets or the amounts
and  classification  of  liabilities  that might  result from the outcome of the
foregoing uncertainties.

Respectfully submitted,

/s/Robison, Hill & Co.
----------------------
Certified Public Accountants

Salt Lake City, Utah

March 22, 2005








                                       11
<PAGE>


                                 USIP.COM, INC.
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2004 AND 2003
<TABLE>
<CAPTION>

                                                                                           December 31,
                                                                                     2004                2003
                                                                              ------------------  ------------------
CURRENT ASSETS
<S>                                                                           <C>                 <C>
  Cash                                                                        $            5,412  $            6,121
  Commissions and Sales Receivable, Net                                                   57,148             109,639
  Inventory                                                                               17,145              20,289
  Prepaid Expenses                                                                         1,630               4,989
                                                                              ------------------  ------------------

TOTAL CURRENT ASSETS                                                                      81,335             141,038
                                                                              ------------------  ------------------

FIXED ASSETS
  Telephone and Office Equipment                                                       1,870,410           1,882,353
  Vehicle                                                                                 76,367              76,367
                                                                              ------------------  ------------------
                                                                                       1,946,777           1,958,720
  Less: Accumulated Depreciation                                                      (1,556,998)         (1,358,594)
                                                                              ------------------  ------------------

               Net Fixed Assets                                                          389,779             600,126
                                                                              ------------------  ------------------

TOTAL ASSETS                                                                  $          471,114  $          741,164
                                                                              ==================  ==================

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
  Accounts Payable                                                            $          205,871  $          175,060
  Line of Credit                                                                         643,076             508,356
  Accrued Payroll and Payroll Taxes                                                        6,802               5,706
  Accrued State Gross Receipts Taxes                                                       2,438               7,049
  Other Accrued Expenses                                                                   1,028               2,960
  Related Party Note                                                                       2,500                   -
  Current Portion of Long-Term Debt                                                       33,193                   -
                                                                              ------------------  ------------------

TOTAL CURRENT LIABILITIES                                                                894,908             699,131
                                                                              ------------------  ------------------

Long-Term Liabilities
  Notes Payable                                                                           75,522             138,179
                                                                              ------------------  ------------------

TOTAL LONG-TERM LIABILITIES                                                               75,522             138,179

TOTAL LIABILITIES                                                                        970,430             837,310
                                                                              ------------------  ------------------

STOCKHOLDERS' EQUITY
    Common Stock, $.01 par value  25,000,000 shares                                      178,044             178,044
      authorized, 17,804,388 shares issued and outstanding
      at December 31, 2004 and 2003
  Additional Paid In Capital                                                           1,462,558           1,462,558
  Retained Earnings                                                                   (2,139,918)         (1,736,748)
                                                                              ------------------  ------------------

TOTAL STOCKHOLDERS' EQUITY                                                              (499,316)            (96,146)
                                                                              ------------------  ------------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                    $          471,114  $          741,164
                                                                              ==================  ==================
</TABLE>

   The accompanying notes are an integral part of these financial statements.


                                       12
<PAGE>

                                 USIP.COM, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>

                                                                                  2004                  2003
                                                                           -------------------   -------------------
SALES
<S>                                                                        <C>                   <C>
  Commissions                                                              $            30,853   $            33,867
  Coin Collections                                                                     131,895               184,956
  Dial Around                                                                          165,549               309,498
  Equipment Sales                                                                        8,787                 6,620
  Phone Card Sales                                                                       2,495                 8,597
  Service and Repair Sales                                                             111,960               126,843
      Total Sales                                                                      451,539               670,381
                                                                           -------------------   -------------------

COST OF SALES
  Telecommunications Costs                                                             192,008               217,762
  Commissions                                                                              251                 2,741
  Contractor Fees                                                                        5,538                 9,568
  Repairs and Service Supplies                                                          12,156                45,001
  Depreciation                                                                         204,669               214,674
  Phone Cards and Phone Costs                                                            3,588                 8,344
  Travel                                                                                13,253                11,221
      Total Cost of Sales                                                              431,463               509,311
                                                                           -------------------   -------------------

                                                                                        20,076               161,070
                                                                           -------------------   -------------------
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                       13
<PAGE>


                                 USIP.COM, INC.
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003
                                   (CONTINUED)
<TABLE>
<CAPTION>

                                                                                   2004                 2003
                                                                            ------------------   -------------------
OPERATING EXPENSES
<S>                                                                         <C>                  <C>
  Salaries and Wages                                                        $          170,883   $           184,088
  Payroll Taxes                                                                         14,280                16,112
  Insurance                                                                             32,546                44,664
  Telephone                                                                             15,219                13,564
  Outside Services                                                                       8,479                20,231
  Utilities                                                                              5,461                 8,277
  Vehicle Expenses                                                                       3,387                 2,767
  Rent                                                                                  62,857                61,318
  Professional Fees                                                                     49,500                55,466
  Travel and Entertainment                                                                 798                 2,718
  Office Expense                                                                        11,255                 9,521
      Total Operating Expenses                                                         374,665               418,726
                                                                            ------------------   -------------------

                                                                                      (354,589)             (257,656)
                                                                            ------------------   -------------------

OTHER INCOME (EXPENSE)
  Gain on Sale of Equipment                                                              1,256                 6,871
  Prov For State Tax                                                                     4,451                (8,187)
  Interest Expense                                                                     (54,288)              (49,288)
      Total Other Income                                                               (48,581)              (50,604)
                                                                            ------------------   -------------------

NET INCOME                                                                  $         (403,170)  $          (308,260)
                                                                            ==================   ===================

Weighted Common Shares Outstanding                                                  17,804,388            17,804,388

Net Loss per Common Share                                                   $         (0.02)     $          (0.02)
                                                                            ==================   ===================
</TABLE>



   The accompanying notes are an integral part of these financial statements.


                                       14
<PAGE>


                                  USIP.COM, INC
                        STATEMENT OF STOCKHOLDERS' EQUITY
                 FOR THE YEARS ENDING DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                                   Additional
                                      Common Stock                                  Paid-in             Retained
                                      --------------------------------------
                                            Shares              Amount              Capital             Earnings
                                      ------------------   -----------------   ------------------   -----------------

<S>                                   <C>                  <C>                 <C>                  <C>
Balance  as of January 1, 2003                17,699,388   $         176,994   $        1,442,608   $      (1,428,488)


Issuance of Common Stock                          80,000                 800               15,200                   -


Issuance of Common Stock                          25,000                 250                4,750                   -

Net Loss                                               -                   -                    -            (308,260)
                                      ------------------   -----------------   ------------------   -----------------

Balance  as of December 31, 2003              17,804,388             178,044            1,462,558          (1,736,748)

Net Loss                                               -                   -                    -            (403,170)
                                      ------------------   -----------------   ------------------   -----------------

Balance as of December 31, 2004               17,804,388   $         178,044   $        1,462,558   $      (2,139,918)
                                      ==================   =================   ==================   =================
</TABLE>
















   The accompanying notes are an integral part of these financial statements.


                                       15
<PAGE>




                                  USIP.COM, INC
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

<TABLE>
<CAPTION>
                                                                                     2004                2003
                                                                              ------------------   -----------------
Cash Flows From Operating Activities:
<S>                                                                           <C>                  <C>
    Net (Loss)                                                                $         (403,170)  $        (308,260)
    Adjustments to reconcile net  (loss) to net
        cash provided (used) by operating activities:
  Depreciation Expense                                                                   204,669             214,674
  Gain on Sale of Equipment                                                               (1,256)             (6,871)
  (Increase) Decrease in Commission Receivables                                           52,491              15,637
  (Increase) Decrease in Inventory                                                         3,144              30,493
  (Increase) Decrease in Prepaid Insurance                                                 3,359               1,057
  Increase (Decrease) in Accounts Payable                                                 30,811             (26,752)
  Increase (Decrease) in Accrued Expenses                                                   (836)             12,993
  Increase (Decrease) in Gross Receipts Tax                                               (4,611)             (2,572)
                                                                              ------------------   -----------------

            Net cash (used) by operating activities                                     (115,399)            (69,601)
                                                                              ------------------   -----------------

Cash Flows From Investing Activities:
  Proceeds from Sale of Equipment                                                          6,933              16,769
                                                                              ------------------   -----------------

            Net cash (used) by investing activities                                        6,933              16,769
                                                                              ------------------   -----------------

Cash Flows From Financing Activities:
  Proceeds received from Line of Credit                                                  134,720              82,614
  Proceeds from issuance of Notes Payable                                                  2,500                  -
  Payments on Notes Payable                                                              (29,463)            (18,682)
  Payments on Lines of Credit                                                                -               (33,000)
   Proceeds from issuance of stock                                                           -                21,000
                                                                              ------------------   -----------------

            Net cash provided by financing activities                                    107,757              51,932
                                                                              ------------------   -----------------

Net Increase (Decrease)  in cash                                                            (709)               (900)

Cash - Beginning of Period                                                                 6,121               7,021
                                                                              ------------------   -----------------

Cash - End of Period                                                          $            5,412   $           6,121
                                                                              ==================   =================

Supplemental Disclosures of Cash Flow Information:
  Cash Paid During Period The Period For:
    Interest                                                                  $            9,568   $          10,402
    Income Taxes                                                              $              -     $           8,937
</TABLE>






   The accompanying notes are an integral part of these financial statements.


                                       16
<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

NOTE 1. NATURE OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF BUSINESS

USIP.COM, Inc. is currently a provider of both privately owned and company owned
payphones (COCOT's) and stations in New York State and Pennsylvania. The Company
receives  revenues  from the  collection of the payphone  coinage,  a portion of
usage of service  from each  payphone and a percentage  of long  distance  calls
placed from each  payphone from the  telecommunications  service  providers.  In
addition,  the Company  also  receives  revenues  from the service and repair of
privately  owned  payphones,  sales of  payphone  units and the sales of prepaid
phone cards.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

MANAGEMENT ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principals requires management to make estimates and assumptions that
effect the reported  amounts of assets and  liabilities  and the  disclosure  of
contingent  assets and  liabilities at the date of the financial  statements and
the  reported  amounts of revenues  and expenses  during the  reporting  period.
Actual results could differ from those estimates.

PRINCIPLES OF CONSOLIDATION

The  accompanying  consolidated  Financial  Statements  include the  accounts of
USIP.COM, Inc. and its wholly owned subsidiaries,  Datone, Inc. and NB Payphone,
Inc.   Intercompany   transactions   and  balances   have  been   eliminated  in
consolidation and combination.

CONCENTRATIONS OF CREDIT RISK

The  Company's  payphones  are located  primarily in New York State and parts of
Pennsylvania and usage of those phones may be affected by economic conditions in
those areas. The company has experienced  about a 30% drop in revenue's,  due to
increased  competition  from other  payphone  providers  and  increase  usage of
wireless communications.

The Company maintains cash balances with a financial  institution insured by the
Federal  Deposit  Insurance  Corporation up to $100,000.  There are no uninsured
balances at December 31, 2004 and 2003.





                                       17
<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


CASH AND CASH EQUIVALENTS

The Company  considers  all highly liquid  instruments  with a maturity of three
months  or  less  when  purchased  to  be  cash   equivalents  for  purposes  of
classification  in the balance sheets and statement of cash flows. Cash and Cash
equivalents consists of cash in bank (checking) accounts.

FIXED ASSETS AND DEPRECIATION

Fixed assets are stated at cost.  Depreciation  is calculated on a straight-line
basis over the useful  lives of the  related  assets,  which  range from five to
seven years.

INCOME TAXES

Income  taxes are  accounted  for in  accordance  with  Statement  of  Financial
Accounting Standards No. 109, "Accounting for Income Taxes". Under SFAS No. 109,
deferred  income taxes are  recognized  using the asset and liability  method by
applying tax rates to  cumulative  temporary  differences  based on when and how
they are expected to affect the tax return.  Deferred tax assets and liabilities
are adjusted for income tax rate changes.

NET (LOSS) PER COMMON SHARE

Net loss per  common  share has been  calculated  by taking the net loss for the
current period and dividing by the weighted  average  shares  outstanding at the
end of the period.

REVENUE RECOGNITION

The Company derives its primary revenue from the sources described below,  which
includes dial around revenues, coin collections, and telephone equipment repairs
and sales.  Other revenues  generated by the company include,  phone card sales,
and commissions.

Dial around revenues are generated from calls to gain access to a different long
distance carrier than is already  programmed into the phone.  Revenues from dial
around  calls are  recorded  based  upon  estimates  until  the coin  collection
revenues are generated when callers deposit coins into the phones to make calls.
Coin revenues are recorded in an amount equal to the coins  collected.  Revenues
on commissions,  phone card sales, and telephone equipment repairs and sales are
realized when the services are provided.




                                       18
<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


NOTE 2. INVENTORY

Inventory is valued at the lower of cost, determined on the first-in,  first-out
basis  (FIFO),  or market  value.  At  December  31,  inventory  consists of the
following:

                                           2004                    2003
                                     -----------------      ------------------
Calling Cards                        $             583      $            4,058
Parts and Accessories                           16,562                  16,231
                                     -----------------      ------------------
                                     $          17,145      $           20,289
                                     =================      ==================

NOTE 3. COMMISSIONS AND SALES RECEIVABLE

Commissions and Sales Receivable consists of the following at December 31:


                                           2004                    2003
                                     -----------------      ------------------
Commissions Receivable               $          54,200      $          108,806
Sales Receivable                                 2,948                     833
                                     -----------------      ------------------
                                     $          57,148      $          109,639
                                     =================      ==================


NOTE 4. LONG-TERM DEBT

Long-term debt as of December 31 is as follows:
<TABLE>
<CAPTION>

                                                                                            2004               2003
                                                                                     ------------------  -----------------
<S>                                                                                  <C>                 <C>
Vehicle Note, Monthly payments of $462 with interest at 9.25%                        $            4,845  $           6,401
Vehicle Note, Monthly payments of $261 with interest at 12.4%                                         -              2,327
Bank Note, Monthly payments of $1,825 with interest at 7.5%                                      70,069             84,559
Vehicle Note, Monthly payment of $535 w/interest at 8.2%                                         18,580             23,613
Vehicle Note, Monthly payment of $589 w/interest at  8.2%                                        15,221             21,114
Lease on ATM Machine                                                                                  -                165
                                                                                     ------------------  -----------------
                                                                                                108,715            138,179

Less current portion of long-term debt                                                           33,193                  -
                                                                                     ------------------  -----------------

                                                                                     $           75,522  $         138,179
                                                                                     ==================  =================
</TABLE>

Aggregate annual maturities  required on long-term debt at December 31, 2004 are
as follows:



                                       19
<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003



2005                                     $           33,193
2006                                                 30,471
2007                                                 28,630
2008                                                 16,421
2009                                                      -
Thereafter                                                -
                                         ------------------
                                         $          108,715
                                         ==================

NOTE 5. RELATED PARTY NOTE

During 2004, a relative of Joseph Passalaqua,  Secretary of the Company,  loaned
the Company $2,500. This note is due on December 27, 2005 and carries with it an
interest rate of 10%. As of December 31, 2004 the  outstanding  principal on the
note was $2,500, and accrued interest was $3.

The Company has a revolving  line of credit from the Lilly Beter Capital  Group,
Ltd witch is affiliated with Lilly O. Beter,  director of the Company,  of which
$548,027  and  $508,356  was  outstanding  as of  December  31,  2004  and  2003
respectively.  Advances  on the credit  line are  payable on demand and carry an
interest rate of 8%-10%.

The Company has  revolving  lines of credit from  Riviera Bay Holding  Trust,  a
beneficial  owner of  common  stock,  of which  $95,046  was  outstanding  as of
December 31,  2004.  Advances on the credit line are payable on demand and carry
an interest rate of 8%.

NOTE 6. OPERATING LEASES

On July 1, 2004 the Company entered into a new leases for its corporate offices.
The lease had a term of 6 months expiring on December 31, 2004. Monthly payments
under this lease was $5,053.

NOTE 7. MAJOR DIAL AROUND COMPENSATION PROVIDERS (COMMISSIONS)

The  Company  received  approximately  95% of total dial  around  and  zero-plus
compensation (commissions) from two providers.

NOTE 8. INCOME TAXES

As of December 31, 2004, the Company had a net operating loss  carryforward  for
income tax reporting  purposes of  approximately  $2,179,585  that may be offset
against future taxable income through 2021. Current tax laws limit the amount of
loss  available to be offset  against  future  taxable income when a substantial
change in ownership  occurs.  Therefore,  the amount  available to offset future
taxable income may be limited. No tax benefit has been reported in the financial
statements,


                                       20
<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003


because the Company believes there is a 50% or greater chance the carry-forwards
will  expire  unused.  Accordingly,  the  potential  tax  benefits  of the  loss
carry-forwards are offset by a valuation allowance of the same amount.


                                            2004                2003
                                     ------------------  ------------------
Net Operating Losses                            741,059             603,981
Equipment Obsolescence                          (99,506)            (99,506)
Valuation Allowance                            (641,553)           (504,475)
                                     ------------------  ------------------
                                                      -                   -
                                     ==================  ==================

The  provision  for income  taxes  differs  from the amount  computed  using the
federal US statutory income tax rate as follows:


                                                  2004            2003
                                             --------------  --------------
Provision (Benefit) at US Statutory Rate           (137,078)       (104,808)
Equipment Obsolescence                                    -               -
Increase (Decrease) in Valuation Allowance          137,078         104,808
                                             --------------  --------------
                                                          -               -
                                             ==============  ==============

The Company evaluates its valuation  allowance  requirements  based on projected
future operations. When circumstances change and causes a change in management's
judgement  about the  recoverability  of deferred tax assets,  the impact of the
change on the valuation is reflected in current income.

NOTE 9. GOING CONCERN CONSIDERATIONS

The  accompanying  financial  statements  have been prepared in conformity  with
accounting   principles   generally   accepted  in  the  United  States,   which
contemplates the Company as a going concern.  However, the Company has sustained
substantial  operating  losses in recent  years,  it has  increased  its line of
credit  borrowings to meet operating  costs,  while revenue's have declined over
13% for the year  ended  December  31,  2003  and  over  32% for the year  ended
December  31, 2004.  The Company  also had one of its credit lines  converted to
fixed note during 2003. The company has a current ratio of .091 and .200 for the
years  ended  December  31,  2004 and 2003,  and has a deficit in  stockholders'
equity.  The Companies  ability to continue as a going concern is dependent upon
obtaining the additional capital as well as additional revue to be successful in
its planned activity.  Management believes that actions presently being taken to
revise the Company's operating and financial  requirements provide them with the
opportunity to continue as a going concern.

These financial statements do not reflect adjustments that would be necessary if
the  Company  were unable to continue  as a "going  concern".  While  management
believes that the actions already taken


                                       21
<PAGE>


                                 USIP.COM, INC.
                 CONSOLIDATED NOTES TO THE FINANCIAL STATEMENTS
                 FOR THE YEARS ENDED DECEMBER 31, 2004 AND 2003

or planned,  will mitigate the adverse  conditions  and events which raise doubt
about the validity of the "going  concern"  assumption  used in preparing  these
financial  statements,  there can be no  assurance  that these  actions  will be
successful.

If the Company were unable to continue as a "going  concern",  then  substantial
adjustments  would be necessary to the carrying  values of assets,  the reported
amounts of its liabilities,  the reported revenues and expenses, and the balance
sheet classifications used.

NOTE 10. MERGER AGREEMENT

On May 24, 2004, the Company  announced that its Board of Directors  unanimously
approved an Agreement and Plan of Merger with Cornerstone  Services Group,  Inc.
("Cornerstone"),  a privately  held Houston,  Texas based  company.  Cornerstone
acquires and provides  infrastructure and  pharmaceutical  services to companies
relating to the care of the Senior or Aged population.

Under the terms of the agreement,  Cornerstone and the Company will merge,  with
the Company as the surviving  corporation.  Immediately upon the consummation of
the merger, the name of the surviving corporation will be changed to Cornerstone
Services Group, Inc. In the merger, the shareholders of Cornerstone will receive
a number of shares of the Company's common stock representing  approximately 75%
of the shares of the Company's common stock that will be outstanding, on a fully
diluted basis, following the merger.

This  transaction  is subject to the Company's  shareholders  approval and other
customary  closing  conditions.  The shareholders will be voting on the proposed
acquisition and other related  matters  pertaining to the merger at the upcoming
shareholders  meeting.  As of the date of this report this agreement and plan of
merger has not been completed.


                                       22
<PAGE>


ITEM 8. CHANGES IN AND DISAGREEMENT  WITH ACCOUNTANT ON ACCOUNTING AND FINANCIAL
DISCLOSURE

On December 22, 2004, the Company's management  determined that in order to meet
its compliance obligations under the Federal Securities Laws it was necessary to
dismiss Anderson, Forse & Co., Ltd. as its principal independent accountant, due
to the fact that  Anderson  Forse & Co.,  Ltd.  was not a member  of the  PCAOB.
Accordingly,  on that date Anderson, Forse & Co., Ltd. was dismissed. The report
of Anderson,  Forse & Co., Ltd. on the  financial  statements of the Company for
the past two years did not contain an adverse  opinion or disclaimer of opinion,
nor was it modified as to uncertainty,  audit scope,  or accounting  principles.
There were no  disagreements  with Anderson,  Forse & Co., Ltd. on any matter of
accounting principle or practice,  financial statement  disclosure,  or auditing
scope or  procedure,  which,  if not resolved to the  satisfaction  of Anderson,
Forse & Co., Ltd.  would have caused it to make  reference to the subject matter
of such disagreement in connection with its report.

On December 22, 2004, the Board of Directors engaged Robison,  Hill & Co. as the
company's principle  independent  accountant,  and Robison, Hill & Co., accepted
such engagement on that date. Robison,  Hill & Co. has been appointed to perform
auditing service  beginning with the year ended December 31, 2003. The action to
dismiss Anderson,  Forse & Co., Ltd. and to engage Robison, Hill & Co. was taken
upon majority approval of the Board of Directors of the Registrant.

ITEM 8A. CONTROLS AND PROCEDURES

The Company carried out an evaluation,  with the  participation of our principal
executive and principal financial officers, of the effectiveness, as of December
31,  2004,  of our  disclosure  controls  and  procedures  (as  defined in Rules
13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934). Based upon that
evaluation, made at the end of the period, our chief executive officer and chief
financial  officer  concluded  that our  disclosure  controls and procedures are
effective in alerting them on a timely basis of material information required to
be disclosed in our periodic reports to the Securities and Exchange  Commission,
and that there has been no  significant  change in such  internal  controls,  or
other factors which could significantly affect such controls.

ITEM 8B. OTHER INFORMATION

NONE.





                                       23
<PAGE>

PART III

ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS


NAME                      AGE       POSITION WITH COMPANY            DIRECTOR
                                                                   CONTINUOUSLY
                                                                      SINCE
Craig H. Burton           43              President            January 2000
Joseph J. Passalaqua      31         Secretary/Treasurer       January 2000
Lilly O. Beter            70              Director             January 2000


Craig H. Burton attended the University of South Carolina-Coastal and was a duly
licensed  real  estate  agent in the  State of New  York.  He began  working  in
marketing  for a long  distance  carrier  in 1996 and then  moved to  Datone  as
Director of Marketing for payphones and prepaid cards.

Joseph J.  Passalaqua  has served as a  technical  support  employee  for Datone
Communications, Inc., a payphone company. He was elected an officer and director
of Datone in 1999. Several other payphone companies in the Central New York area
have employed him.

Lilly O. Beter is the former  President of Lilly Beter Capital  Group,  Ltd. The
firm was  founded  over 30 years  ago  when  she had  been  associated  with her
husband, Dr. Peter David Beter, in his law practice until his death in 1987. Dr.
Beter  had  been  General  Counsel  for the  Export-Import  Bank of  Washington,
co-founder  of  a  mining   exploration   company  in  Zaire,   and  represented
international financial interests in Europe, South America, and the Middle East.
Ms. Beter provided government representation to their clients. Ms. Beter, having
lived extensively abroad, is now active in overseas investment  management.  Ms.
Beter is also a Director of Peninsula Holdings Group Ltd.


BOARD OF DIRECTORS; ELECTION OF OFFICERS

All directors  hold offices until the next annual  meeting of  shareholders  and
until their successors are duly elected and qualified.  Any vacancy occurring in
the  Board  of  Directors  may be  filled  by the  shareholders,  the  Board  of
Directors, or if the Directors remaining in office constitute less than a quorum
of the Board of Directors,  they may fill the vacancy by the affirmative vote of
a majority of the Directors  remaining in office.  A director  elected to fill a
vacancy is elected for the  unexpired  term of his  predecessor  in office.  Any
directorship  filled by reason of an increase in the number of  directors  shall
expire at the next shareholders' meeting in which directors are elected,  unless
the vacancy is filled by the  shareholders,  in which case the term shall expire
on the  later  of (i) the  next  meeting  of the  shareholders  or (ii) the term
designated  for the  director  at the time of  creation  of the  position  being
filled.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities  Exchange Act of 1934, as amended,  requires our
officers and directors  and persons who own more than 10% of a registered  class
of our equity  securities  to file initial  reports of ownership  and reports of
changes in ownership with the Securities  and Exchange  Commission  (the "SEC").
Such  persons are  required by SEC  regulation  to furnish us with copies of all
Section 16(a) forms they file.

Based  solely on review of the copies of such forms  received by us with respect
to fiscal year 2004, or written  representations from certain reporting persons,
we believe that all filing  requirements  applicable to its directors,  officers
and persons who own more than ten percent of a registered class of the Company's
equity securities have been complied with.



                                       24
<PAGE>

AUDIT COMMITTEE

The  Company  does not  currently  have an  audit  committee,  and the  Board of
Directors serves this function. In addition, the Board does not have a financial
expert as defined by  Regulation  S-B Item 401. The Company has not been able to
attract a  financial  expert to serve on its Board of  Directors;  however,  the
Company will be seeking a candidate to serve in this role in the future.

CODE OF ETHICS

The  Company has not adopted a Code of Ethics for its  principal  executive  and
financial officers.  Due to the Company's limited operations the Company's Board
of Directors  does not believe a code of ethics is  necessary at this time.  The
Company's  Board of Directors will revisit this issue in the future to determine
if adoption of a code of ethics is appropriate.  In the meantime,  the Company's
management  intends  to  promote  honest  and  ethical  conduct,  full  and fair
disclosures  in its  reports  with  the  SEC,  and  compliance  with  applicable
governmental laws and regulations.

ITEM 10.    EXECUTIVE COMPENSATION


NAME AND PRINCIPAL POSITION        ANNUAL COMPENSATION    LONG-TERM COMPENSATION

Craig H. Burton , President                 $40,040                -0-

Joseph J. Passalaqua, Secretary             $27,040                -0-

We have health insurance for our employees. We do not have retirement,  pension,
profit sharing,  stock options, or other similar programs for the benefit of our
employees.

OPTIONS AND SARS

The company has no option or SAR  programs  and no options or SAR's were granted
to any of its employees.

LONG-TERM INCENTIVE PLANS

The Company has no  long-term  incentive  plans for its  officers,  directors or
employees.




                                       25
<PAGE>

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain  information  regarding  ownership of the
Company's  Common  Stock as of  December  31,  2004,  with  respect  to: (i) the
beneficial ownership of those persons known by the Company to own more than five
(5%) percent of outstanding  Common Stock of the Company;  (ii) each Director of
the  Company;  and (iii)  the  beneficial  ownership  of all  Directors  and all
Directors and officers as a group.

                                                     AMOUNT AND
                                                     NATURE OF
                                        TITLE OF     BENEFICIAL       PERCENT OF
NAME AND ADDRESS OF BENEFICIAL OWNER      CLASS      OWNERSHIP (1)    CLASS  (3)
------------------------------------      ------     -------------    ----------


Craig  H. Burton (2)                      Common      150,000

Joseph J. Passalaqua  (2)                 Common      200,000

Lilly O. Beter  (2)                       Common          -0-

Epic Events  Trust                        Common     6,086,111          34.4
2207 Concord Pike, Ste 551
Wilmington, DE  19803

Rivieria Bay Holding Company              Common     6,798,161          38.4
2207 Concord Pike, Ste 551
Wilmington, DE  19803

Gibraltar International                   Common     1,061,839           9.1
Caribbean Trust
2207 Concord Pike, Ste 551
Wilmington,  DE  19803



         (1)      Except  as  otherwise  noted,  the  nature  of the  beneficial
                  ownership for all shares is sole voting and investment power.

         (2)      The address for each of our  executive  officers and directors
                  is 7325 Oswego Road, Liverpool, New York 13090

         (3)      Percentage  of  beneficial  ownership as to any person as of a
                  particular date is calculated by dividing the number of shares
                  beneficially  owned by such person by the sum of the number of
                  shares  outstanding as of such date and the number of unissued
                  shares as to which such person has the right to acquire voting
                  and/or  investment  power within 60 days. The number of shares
                  shown includes  outstanding shares of Common Stock owned as of
                  December  31, 2004 by the person  indicated.  Our total issued
                  and  outstanding  stock as of December 31, 2004 was 17,804,388
                  shares.

ITEM  12.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Not Applicable.



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<PAGE>

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

EXHIBIT                           DESCRIPTION
NO.

3        Articles of Incorporation  (incorporated by reference to Exhibit 3.1 of
         the Company's Form 10-SB) filed on July 28, 2000(the "2000 10SB").
3.1      Amended Articles of Incorporation (incorporated by reference to Exhibit
         3.1 of the  Company's  Form  10-SB)  filed on July 28,  2000(the  "2000
         10-SB").
3.2      Amended Articles of Incorporation (incorporated by reference to Exhibit
         3.2 of the  Company's  Form  10-SB)  filed on July 28,  2000(the  "2000
         10SB").
3.3      Bylaws (incorporated by reference to Exhibit 4 of the 2000 10-SB).
4.1      Specimen Stock  Certificate  (incorporated by reference to Exhibit 5 of
         the 2000 10SB).
21.1     Subsidiaries of the Registrant. (1)
31.1     Sarbanes-Oxley Act of 2002 Section 302 Certification by Craig Burton
31.2     Sarbanes-Oxley   Act  of  2002  Section  302   Certification  by  Kathy
         Christopher
32.1     Sarbanes-Oxley Act of 2002 Section 906 Certification by Craig Burton
32.2     Sarbanes-Oxley   Act  of  2002  Section  906   Certification  by  Kathy
         Christopher

(1)

Filed herewith.

(b) A report on Form 8-K was filed on  December  22,  2004  indicating  that the
Company had changed its principal accountants

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aggregate fees billed by the Company's principal accountants,  Robinson,  Hill &
Company, for audit services related to the most recent two fiscal years, and for
other professional  services billed in the most recent two fiscal years, were as
follows:


                                  FISCAL 2004       FISCAL 2003
                                  -----------       -----------
Audit Fees      (1)               $    11,779       $    20,800
Audit-Related Fees                          0                 0
Tax Fees          (2)                     864             4,000
All Other Fees                              0                 0
Total                             $    12,643       $    24,800


(1)  Comprised of the audit of the Company's  annual  financial  statements  and
reviews of the Company's  quarterly  financial  statements,  as well as consents
related to and reviews of other documents filed with the Securities and Exchange
Commission.

(2)  Comprised  of  preparation  of all federal and state  corporate  income tax
returns for the Company and its subsidiaries.

Under the Sarbanes-Oxley Act of 2002, all audit and non-audit services performed
by the Company's independent  accountants must now be approved in advance by the
Audit  Committee  to assure that such  services  do not impair the  accountants'
independence  from the Company.  The Company  does not have an Audit  Committee,
therefore,  the Board of Directors  reviews and approves  audit and  permissible
non-audit  services performed by Robinson,  Hill & Company,  as well as the fees
charged by Robinson, Hill & Company for such services.



                                       27
<PAGE>

                                   SIGNATURES

In accordance  with Section 13 or 15(d) of the Securities  Exchange Act of 1934,
the  registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


     USIP.COM, INC.
     Date:  March 24, 2005

     By:/s/ CRAIG H. BURTON
     ----------------------
     CRAIG H. BURTON
     President


Pursuant to the  requirements of Section 13 or 15(d) of the Securities  Exchange
Act of 1934,  this  report has been  signed  below by the  following  persons on
behalf of the Company and in the capacities and on the dates indicated.


SIGNATURE                                      TITLE                      DATE

/s/  CRAIG H. BURTON               President                     March 24, 2005
-------------------------
Craig H. Burton

/s/  JOSEPH J. PASSALAQUA          Secretary/Treasurer           March 24, 2005
-------------------------
Joseph J. Passalaqua

/s/  LILLY O. BETER                Director                      March 24, 2005
-------------------------
Lilly O. Beter




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