SECURITIES
AND EXCHANGE COMMISSION




Washington,
D.C. 20549




FORM
10-KSB





[
X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934





For
the fiscal year ended December 31, 2007





OR





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





For the
transition period from __________________ to ______________________





Commission
file
number:                          000-52876











THOMAS
PHARMACEUTICALS, LTD.


(Exact
name of registrant as specified in its charter)






New Jersey
            20-3954826(State or
      other jurisdiction of
              incorporation
      or organization)
            (I.R.S.
      Employer
              Identification
No.)




750 Highway
      34
                Matawan, NJ
              07747(Address
      of Principal Executive Offices)
              (Zip
      Code)
   Registrant’s
Telephone Number, Including Area
Code:                                                                                                                     (732) 441-7700








Securities
      registered under Section 12(b) of the Exchange Act:
            None.


Securities
      registered under Section 12(g) of the Exchange Act:
            Class A common stock , no par
      value





Check
whether the issuer is not required to file reports pursuant to Section 13 or
15(d) of the Exchange Act. [  ]





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.  YES x   NO o








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





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





State
issuer’s revenues for its most recent fiscal
year:  $22,857





As of
April 11, 2008, the Registrant had 273,276,105 shares of Class A Common Stock,
no par value per share, outstanding. The aggregate market value of the voting
stock held by non-affiliates as of that date based upon the average bid and ask
prices on that date was $109,310.





Transitional
Small Business Disclosure Format (check one).   YES oNO x






























































2


PART
      IItem
      1.   Description of business
            4Item
      2.   Description of property
            24Item
      3.   Legal proceedings
            24PART
      IIItem
      5.   Market for common equity and related stockholder
      matters.
            25Item
      6.   Management’s discussion and analysis or results of
      operations.
            27Item
      7.   Financial statements
            33Item
      8A(T).  Controls & Procedures
            34PART
      IIIItem
      9.    Directors, executive officers, promoters and control
      persons,compliance with Section 16(a) of the Exchange Act
            36Item
      10.  Executive compensation.
            39Item
      11.  Security ownership of certain beneficial owners and
      management
            43Item
      12.  Certain relationships and related transactions, director
      independence
            44Item
      13.  Exhibits
            46Item
      14.  Principal Accountant Fees and Services
            48

















3


PART
I





ITEM 1.  Description
of Business




Background




Thomas
Pharmaceuticals, Ltd. (the “Company” or “Thomas Pharmaceuticals”) was a wholly
owned subsidiary of iVoice, Inc. (“iVoice”) by virtue of iVoice’s ownership of
all of the shares of Class A Common Stock prior to the spin-off. The Company was
incorporated as iVoice Acquisitions Corp. in New Jersey on May 19,
2005.  On January 6, 2006, iVoice Acquisitions Corp. completed the
merger with Thomas Pharmaceuticals, Ltd., a New York Corporation (“Thomas NY”).
Pursuant to the terms of the Agreement and Plan of Merger with Thomas NY, iVoice
Acquisition Corp’s name was changed to Thomas Pharmaceuticals, Ltd.





In March
2007 iVoice announced its intention to distribute Thomas Pharmaceuticals Class A
Common Stock to its stockholders upon the effectiveness of required Securities
Exchange Commission filings and final approval by the board of directors of the
terms and conditions of the Distribution. The board of directors and management
of iVoice believe that the Distribution is in the best interests of iVoice and
its stockholders. iVoice believes that the Distribution will enhance value for
iVoice stockholders and that the spin-off of Thomas Pharmaceuticals will provide
greater access to capital by allowing the financial community to focus solely on
Thomas Pharmaceuticals and its business as a stand alone company. In determining
the terms of the spin-off and the Distribution, the board considered the ability
of iVoice to satisfy its working capital needs as a whole as against the ability
of Thomas Pharmaceuticals to satisfy its capital needs as a stand alone company.
iVoice’s present plan, which is subject to change, is to become a technology
licensing company. In addition, the iVoice board believed that, as a result of
each company’s business plan, the Thomas Pharmaceuticals business as a
stand-alone company would more easily be able to obtain financing from third
parties than iVoice would. The Distribution will also enable Thomas
Pharmaceuticals to provide its management and employees incentive compensation
in the form of equity ownership in Thomas Pharmaceuticals, enhancing Thomas
Pharmaceuticals’ ability to attract, retain and motivate key
employees.





The Company is publicly traded and is
currently traded on the NASD Over The Counter Bulletin Board (“OTCBB”) under the
symbol “TPHM”.





Business





Thomas
Pharmaceuticals was founded on the premise that money can be made by making the
“humdrum hip” or by retooling a mundane product to make it new and
exciting.  The strategy of Thomas Pharmaceuticals is to capitalize on
“old school” or “retro” products, such as antacids, with proven effectiveness
and usefulness, but with improved formulation, packaging, marketing and
advertising to articulate the brand attributes to a new generation of consumer
who demand substance with style.





Thomas
Pharmaceuticals began selling its first product, Acid+All®, a calcium-enriched,
sugar free, anti-gas antacid tablet, in January 2006.  During the year
ended December 31, 2006 Thomas Pharmaceuticals generated approximately $179,938
in revenues from product sales.  Revenues from product sales have
decreased substantially during the year ended December 31, 2007 to
$22,857.  During 2006 and 2007 the product was available through retailers
who decided to no longer carry the Acid+All®




4


product
since Thomas Pharmaceuticals did not have the financial resources for necessary
sales and marketing activities at that time. Thomas Pharmaceuticals needs to
raise significant financing in order to fund its ongoing
operations.  There can be no assurance as to the receipt or timing of
financing.  We anticipate that our operations will require at least
$190,000 per quarter.





Thomas
Pharmaceuticals is currently not shipping Acid+All® to any
retailers.  The only sales of Acid+All®  at this time are
sales of remaining products on the shelves of retailers who previously ordered
Acid+All®.  Currently, Thomas Pharmaceuticals has no new orders for
its product and if it were to receive any order for the Acid+All® product it
would be unable to fill such order since its contract packager has ceased
packaging the Acid+All® product based on the financial condition of the Company
and the Company has no packaged products in inventory.  If Thomas
Pharmaceuticals is able to obtain necessary financing it may be able to enter
into a new arrangement with a contractor to package Acid+All® and may be able to
develop new contracts with retailers.  However, no such assurance can
be given that Thomas Pharmaceuticals will be able to obtain financing or enter
into any new contracts with retailers or a packager.





Based on
the operational developments described above and the lack of financing,
management is currently evaluating the business of the
Company.  Thomas Pharmaceuticals will not be able to continue in the
business of selling Acid+All®  or engage in any other related or
unrelated business unless it obtains financing or enters into a merger,
consolidation, reorganization, joint venture, license, purchase or sale of
assets, purchase or sale of stock, or other similar transaction.  Any
such merger, acquisition or other transaction may be with a company which has a
business outside the current field of operations of Thomas
Pharmaceuticals.  Management of Thomas Pharmaceuticals is actively
seeking a potential merger or acquisition candidate.  There can be no
assurance that any acquisition plan will be successfully implemented. Thomas
Pharmaceuticals may not be able to identify, successfully integrate or
profitably manage any such businesses or operations.  Currently,
Thomas Pharmaceuticals has no plans, proposals or arrangements, either orally or
in writing, regarding any specific proposed acquisition or merger.





Thomas
Pharmaceuticals does not intend to restrict its search to any particular
business, industry, or geographical location. In evaluating a transaction,
Thomas Pharmaceuticals will analyze all available factors and make a
determination based on a composite of available facts, without reliance on any
single factor.  It is impossible to predict the nature of a
transaction in which Thomas Pharmaceuticals may participate. Specific business
opportunities would be reviewed as well as the respective needs and desires of
Thomas Pharmaceuticals and the legal structure or method deemed by management to
be suitable would be selected.





As
described above, implementing a structure for a particular transaction, Thomas
Pharmaceuticals may become a party to a merger, consolidation, reorganization,
joint venture, license, purchase and sale of assets, or purchase and sale of
stock, or other arrangement the exact nature of which cannot now be
predicted.  The operations of Thomas Pharmaceuticals following its
consummation of a transaction will be dependent on the nature of the
transaction. There may also be various risks inherent in the transaction, the
nature and magnitude of which cannot be predicted. In addition, although there
are no current plans to do so, Thomas Pharmaceuticals may in the future change
its strategy for the development and marketing of its products and the business
plan of Thomas Pharmaceuticals might not be implemented as set forth
herein.









5


The
Company does not have any new products in development and does not expect to
launch any new products in the near future due to its lack of financial
resources.  If Thomas Pharmaceuticals obtains financing or enters into
a merger, acquisition or other transaction it may seek to expand the operations
of Thomas Pharmaceuticals through sales and marketing activity or it may engage
in another line of business.  If Thomas Pharmaceuticals is
unsuccessful in obtaining financing or entering into a merger, acquisition or
other transaction the business of Thomas Pharmaceuticals is unlikely to
continue.




As
described herein, Thomas Pharmaceuticals currently faces a multitude of problems
which have a significant impact on the Company.  These problems each
stem from a lack of financing and are interrelated.  As a result of
not having adequate financing for sales and marketing activities retailers that
previously carried the Acid+All® product stopped ordering such
product.   This in turn resulted in the Company’s packager to
stop packaging the Acid+All® product.  Without a packager for the
product the Company is not able to deliver any products to any retailers that
would be willing at this time or in the future to place the Acid+All® product on
their shelves.  In addition, if the Company is not able to obtain
adequate financing it will not be able to engage in any future sales or
marketing activities and it is unlikely that retailers will carry the Acid+All®
product in the future, once a packager is in place, unless financial resources
are available for such sales and marketing activities. Accordingly, if the
Company is unsuccessful in obtaining financing or entering into a merger,
acquisition or other transaction Thomas Pharmaceuticals will be unable to solve
the multitude of problems that it current faces as a result of not having
adequate financing and it will be unlikely that the business of Thomas
Pharmaceuticals will be able to continue.





The
Company has a limited operating history on which to base an evaluation of its
business and prospects. Its prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stage of development, particularly companies in new and rapidly evolving
markets. The Company will encounter various risks in implementing and executing
its business strategy. The Company can provide no assurance that it will be
successful in addressing such risks, and the failure to do so could have a
material adverse effect on its business.





The
Company does not presently intend to make any loans to any merger or acquisition
candidate, or to any unaffiliated third parties.





We do not
expect to purchase any significant equipment for the foreseeable future, unless
we are successful in growing the business and expanding our product
lines.





We do not
expect any significant changes in the numbers of employees in the next twelve
months, unless we are successful in growing the business and expanding our
product lines.





Employees





We
currently only have two employees, one full-time and one
part-time.  We are dependent on our key officer John E. Lucas, our
Chief Executive Officer.  The loss of Mr. Lucas could materially harm
our business because of the cost and time necessary to retain and train a
replacement. Such a loss would also divert management attention away from
operational issues.  To minimize the effects of such loss, we have
entered into an employment contract with Mr. Lucas.







6


Forward
Looking Statements - Cautionary Factors





This
Annual Report on Form 10-KSB contains forward-looking statements
within the meaning of that term in Section 27A of the Securities Act of
1933, as amended, and in Section 21F of the Securities Exchange Act of 1934 as
amended. The statements relate to future events or our future financial
performance. In some cases, you can identifyforward-looking
statements by terminology such as “may,” “will,” “should,” “expect,” “plan,”
“intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or
“continue,” the negative of these terms or other similar terminology. These
forward-looking statements involve risks and uncertainties and other factors
that may cause the actual results, performance or achievements to differ from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Except for the historical information and statements
contained in this Report, the matters and items set forth in this Report are
forward looking statements that involve uncertainties and risks some of which
are discussed at appropriate points in the Report and are also summarized as
follows:





Risks
Related to Our Business





Thomas
Pharmaceuticals has had limited product sales and is unable to fill any orders
for Acid+All® at this time.





Our one
product, Acid+All®, has had limited sales to date. During the year ended
December 31, 2006 we generated approximately $179,938 in revenues from product
sales.  Product sales have decreased substantially during the year
ended December 31, 2007 to $22,857.  As of March 1, 2007 we were
shipping Acid+All® to 40 major national and regional
retailers.  During 2006 and 2007 the product was available through
additional retailers who decided to no longer carry the Acid+All® product since
we did not have the financial resources for necessary sales and marketing
activities at that time.  We are currently not shipping Acid+All® to
any retailers.  The only sales of Acid+All®  at this time
are sales of remaining products on the shelves of retailers who previously
ordered Acid+All®.  Currently, we have no new orders for our product
and if we were to receive any order for the Acid+All® product we would be unable
to fill such order since our contract packager has ceased packaging the
Acid+All® product based on our financial condition and we have no packaged
products in inventory.  If we are able to obtain necessary financing
we may be able to enter into a new arrangement with a contractor to package
Acid+All® and may be able to develop new contracts with
retailers.  However, no such assurance can be given that we will be
able to obtain financing or enter into any new contracts with retailers or a
packager.





Thomas
Pharmaceuticals has a history of operating losses and has been unprofitable
since inception.





We
incurred net losses of approximately $1,489,594 during the year ended December
31, 2006 and $1,281,514 for the year ended December 31, 2007. We expect to incur
substantial additional operating losses in the future. We cannot assure you that
we will continue to generate revenues from operations or achieve profitability
in the near future or at all.  We may continue to operate at a loss
for the foreseeable future and we cannot estimate when or if we will achieve
profitability. If we continue to have operating losses, there is no certainty
that we will have the financial resources to continue in business.







7


Thomas
Pharmaceuticals will not be able to continue in business unless it obtains
financing or enters into a merger, acquisition or similar
transaction.




Our
primary source of financing has been through the issuance of convertible
debentures and Series B Preferred Stock to iVoice. We need to raise significant
financing in order to fund our ongoing operations until such time that the sale
of products generates enough revenue to fund operations.  There can be
no assurance as to the receipt or timing of financing or revenues from
operations.  We anticipate that our operations will require at least
$190,000 per quarter.  These quarterly expenses are anticipated to
consist of the following: payroll and benefits of $60,500, occupancy costs of
$7,000, professional fees of $29,500, advertising of $30,000, net interest
expenses of $24,000, contract sales management of $20,000, liability insurance
of $7,000 and miscellaneous administrative expenses of $12,000.  We
anticipate that we will require financing on an ongoing basis for the
foreseeable future to fund our working capital needs.





Based on
the operational developments described above and the lack of financing,
management is currently evaluating the business of the
Company.  Thomas Pharmaceuticals will not be able to continue in the
business of selling Acid+All®  or engage in any other related or
unrelated business unless it obtains financing or enters into a merger,
consolidation, reorganization, joint venture, license, purchase or sale of
assets, purchase or sale of stock, or other similar transaction.  Any
such merger, acquisition or other transaction may be with a company which has a
business outside the current field of operations of Thomas
Pharmaceuticals.  Management of Thomas Pharmaceuticals is actively
seeking a potential merger or acquisition candidate.  There can be no
assurance that any acquisition plan will be successfully implemented. Thomas
Pharmaceuticals may not be able to identify, successfully integrate or
profitably manage any such businesses or operations.  Currently,
Thomas Pharmaceuticals has no plans, proposals or arrangements, either orally or
in writing, regarding any specific proposed acquisition or merger.




Thomas
Pharmaceuticals currently faces a multitude of interrelated problems that stem
from a lack of financing.





We
currently face a multitude of problems which have a significant impact on
us.  These problems each stem from a lack of financing and are
interrelated.  As a result of not having adequate financing for sales
and marketing activities retailers that previously carried the Acid+All® product
stopped ordering such product.   This in turn resulted in our
packager to stop packaging the Acid+All® product.  Without a packager
for the product we are not able to deliver any products to any retailers that
would be willing at this time or in the future to place the Acid+All® product on
their shelves.  In addition, if we are not able to obtain adequate
financing we will not be able to engage in any future sales or marketing
activities and it is unlikely that retailers will carry the Acid+All® product in
the future, once a packager is in place, unless financial resources are
available for such sales and marketing activities. Accordingly, if we are
unsuccessful in obtaining financing or entering into a merger, acquisition or
other transaction we will be unable to solve the multitude of problems that we
currently face as a result of not having adequate financing and it will be
unlikely that our business will be able to continue.

















8


The
sales cycle for products of Thomas Pharmaceuticals is lengthy and there is no
guaranty of resulting sales.





The
average marketing and sales cycle for new products such as ours is lengthy and
can be as long as 18 months. Accordingly, the time lag from initiation of
marketing efforts to final sales can be lengthy and there is no guaranty that
the expenditure of significant time and resources will result in
sales.





The
long payment cycle and exposure to losses on sales of products may have a
negative effect on our business, results of operations and financial
condition.





As is the
case with many suppliers of over-the-counter healthcare products to retailers
such as drug store chains, we ship our products to vendors in advance of sale to
the consumer and in certain cases will not receive payment from the vendors
until after the product is scanned at the cash register and the sale to the
consumer is made (known as pay-on-scan). We generally offer a return policy for
unsold products. We often have inventory that is outstanding with our vendors
that is available for sale but is not yet sold or paid for. In addition, we
extend credit and have sales guarantees pursuant to arrangements with certain
vendors. Several of our large customers have provisions in their agreements that
delay payments to us until there is a steady flow of products being sold. In
some cases, we also offer an unlimited return policy for slow moving products.
Exposure to losses on receivables and pursuant to sales guarantees is expected
to vary by customer due to how the products are being purchased by the customers
(end-users). Our cash flow will therefore generally lag behind our inventory
shipment and sales and unless we are able to put our products in the hands of a
significant number of consumers, our business, results of operations and
financial condition may suffer significantly. In addition, we may not have
sufficient cash flow to purchase additional inventory when needed for delivery
to vendors or for operations. We believe that we may continue to operate at a
negative cash flow for certain periods in the future due to these factors. If we
are unable to consistently generate sustained positive cash flow from
operations, we must rely on debt or equity financing.





Thomas
Pharmaceuticals may have difficulty in expanding its retail distribution
network, which will limit its ability to sell sufficient quantities of products
or grow its market share to create profits.





Our
business model depends greatly on our ability to place our products on retail
shelves for availability to consumers. In order to compete effectively, gain
market share and generate sufficient net sales, we must expand our distribution
network. Our targeted retailers are very protective of their limited shelf
space. Our business model depends on us being able to convince retailers that
they will benefit from adding our products to their inventory. If stores and
distributors are unwilling or unable to do so, we may not be able to sell
sufficient quantities of products in order to create profits. Our failure to
develop, maintain and continually improve our distribution network could give
rise to a loss of market share or an inability to attain sufficient market share
in order to create profits.




As
described above, as of March 1, 2007 Thomas Pharmaceuticals was shipping
Acid+All® to 40 major national and regional retailers.  During 2006
and 2007 the product was available through additional retailers who decided to
no longer carry the Acid+All® product since Thomas Pharmaceuticals did not have
the financial resources for necessary sales and marketing activities at that
time. Thomas Pharmaceuticals is currently not shipping Acid+All® to any
retailers.  The only sales of Acid+All®  at






9


this time
are sales of remaining products on the shelves of retailers who previously
ordered Acid+All®.  Currently, Thomas Pharmaceuticals has no new
orders for its product and if it were to receive any order for the Acid+All®
product it would be unable to fill such order since its contract packager has
ceased packaging the Acid+All® product based on the financial condition of the
Company and the Company has no packaged products in
inventory.   In addition, we currently do not have long-term sale
or supply agreements with any retail distributors and we do not have any
agreements with any retail distributors to carry our products exclusively or for
any period of time. Therefore, any retail distributors who sell our products may
purchase products that compete with our products or cease purchasing our
products at any time.





Thomas
Pharmaceuticals has a working capital loss, which means that the current assets
on December 31, 2007 were not sufficient to satisfy the current
liabilities.





We
currently have a working capital deficit, which means that our current
liabilities exceed our current assets. At December 31, 2007 our working capital
deficit was $2,179,221. Current assets are assets that are expected to be
converted to cash or otherwise utilized within one year and, therefore, may be
used to pay current liabilities as they become due. Our working capital deficit
means that our current assets are not sufficient to satisfy all of our current
liabilities.





Thomas
Pharmaceuticals will face many of the difficulties that companies in the early
stage may face.





As a
result of our limited operating history, it may be difficult for you to assess
our growth and earnings potential. We may face many of the difficulties that
companies in the early stages of their development in new and evolving markets
often face as they are described below. We may continue to face these
difficulties in the future, some of which may be beyond our control. If we are
unable to successfully address these problems, our future growth and earnings
will be negatively affected.





Thomas
Pharmaceuticals has no operating history as a separate public company and may be
unable to operate profitably as a stand-alone company.





Although
iVoice has operated as a reporting public company since 2000 and has sold
computerized telephony software since 1997, Thomas Pharmaceuticals does not have
an operating history as a separate public company. Since Thomas Pharmaceuticals
has only been a subsidiary of iVoice as of January 6, 2006 it has been able to
rely, to some degree, on iVoice for capital requirements. After the
Distribution, Thomas Pharmaceuticals will be able to rely only on its own
business for such requirements. The business of Thomas Pharmaceuticals has
operated at a loss in the past for iVoice, and as an independent company such
losses may continue or increase. Additionally, since January 2006 Thomas
Pharmaceuticals’ business has relied on iVoice for financial, administrative and
managerial expertise in conducting its operations. Following the Distribution,
Thomas Pharmaceuticals will maintain its own credit and banking relationships
and perform its own financial and investor relations functions. Thomas
Pharmaceuticals may not be able to successfully put in place the financial,
administrative and managerial structure necessary to operate as a separate
public company, and the development of such structure will require a significant
amount of management’s time and other resources.








10


The
historical information of Thomas Pharmaceuticals has limited relevance to its
results of operations as a separate company.





The
historical financial information of Thomas Pharmaceuticals included in the
prospectus and in this filing does not reflect what our results of operations,
financial position and cash flows would have been had we been a separate,
stand-alone entity during the periods presented or what our results of
operations, financial position and cash flows will be in the future. This is
because iVoice did not account for us as, and we were not operated as, a single
stand-alone business for the periods presented. For more information about the
preparation of our financial statements from the financial statements of iVoice,
see “Management’s Discussion and Analysis or Results of
Operations.”





Thomas
Pharmaceuticals has received a going concern opinion from its independent
auditors that describes the uncertainty regarding its ability to continue as a
going concern.





Thomas
Pharmaceuticals has received a report from its independent auditors for the
fiscal year ended December 31, 2007 and 2006 containing an explanatory paragraph
that describes the uncertainty regarding Thomas Pharmaceuticals’ ability to
continue as a going concern due to its operating losses and capital
deficit.





We
anticipate that our operations will require at least $190,000 per
quarter.  These quarterly expenses are anticipated to consist of the
following: payroll and benefits of $60,500, occupancy costs of $7,000,
professional fees of $29,500, advertising of $30,000, net interest expenses of
$24,000, contract sales management of $20,000, liability insurance of $7,000 and
miscellaneous administrative expenses of $12,000.





The
financial statements of Thomas Pharmaceuticals have been prepared on the basis
of a going concern, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. Our ability to
continue as a going concern is dependent on additional sources of
capital.  We have not made any adjustments to our financial statements
as a result of the going concern modification to the report of our independent
registered public accounting firm. If we become unable to continue as a going
concern, we could have to liquidate our assets, which means that we are likely
to receive significantly less for those assets than the values at which such
assets are carried on our financial statements. Any shortfall in the proceeds
from the liquidation of our assets would directly reduce the amounts, if any,
that holders of our common stock could receive in liquidation.





Our
future success is dependent upon our ability to achieve profitable operations
and generate cash from operating activities, and upon additional financing. We
will need to raise approximately $760,000 to sustain our operations over the
next twelve months.  There is no guarantee that we will be able to
raise enough capital or generate revenues to sustain our operations. In
addition, our going concern opinion may negatively impact our ability to raise
necessary funds.





There can
be no assurance that management’s plans to raise additional capital will be
successful, and other unforeseeable actions may become necessary. Any inability
to raise capital may require us to reduce the level of our operations. Such
actions would have a material adverse effect on us, our business and operations
and result in charges that would be material to our business and results of
operations.





11


Thomas
Pharmaceuticals’ future revenue and operating results are unpredictable and may
fluctuate, which could cause Thomas Pharmaceuticals’ stock price to
decline.





Our short
operating history and the competitive market in which we operate make it
difficult to accurately forecast our revenues and operating
results.  Our operating results are unpredictable and we expect them
to fluctuate in the future due to a number of factors. These factors may
include, among others:




●
            the
      timing of sales of our products, particularly in light of our minimal
      sales history;




●
            lengthy
      sales and payment cycles;




●
            market
      acceptance of products;




●
            reliance
      on a limited number of key
customers;




●
            need
      for additional funding;




●
            the
      introduction of competitive products by existing or new
      competitors;




●
            reduced
      demand for any given product;




●
            unexpected
      delays in introducing new products;




●
            increased
      expenses, whether related to sales and marketing, product development or
      administration; and




●
            costs
      related to possible acquisitions of products or
  businesses.




Due to
these factors, forecasts may not be achieved, either because expected revenues
do not occur or because they occur at lower prices or on terms that are less
favorable to us. In addition, these factors increase the chances that our
results could diverge from the expectations of investors and analysts. If so,
the market price of our stock would likely decline.





Thomas
Pharmaceuticals has in the past and may in the future sell convertible
securities, possibly without limitations on the number of shares of common stock
the securities are convertible into, which could dilute the value of the
holdings of current stockholders and have other detrimental effects on your
holdings.





We have
relied on the issuance of convertible debentures and convertible preferred stock
to obtain working capital and may continue to do so in the future. As of
December 31, 2007, there are outstanding $910,000 in principal of convertible
debentures ($710,000 in principal issued by us to iVoice and $200,000 in
principal issued by Thomas Pharmaceutical Acquisition Corp. to BioBridge LLC)
and 550 shares of Series B Convertible Preferred Stock with a stated value of
$1,000 per share convertible into our




12


shares
issued by us to iVoice. $813,200 of the convertible debentures provide that, at
the holder’s option, principal and interest due on the debentures can be
converted into the number of shares of Class A Common Stock determined by
dividing the amount of the debenture being converted by a 20% discount to the
lowest closing bid price of the Class A Common Stock for the five trading days
before the conversion date. $96,800 of the convertible debentures provide that,
at the holder’s option, principal and interest due on the debentures can be
converted into the Series B Convertible Preferred Stock having a stated value of
$1,000 per share. The Series B Convertible Preferred Stock is convertible at the
holder’s option into the number of shares of Thomas Pharmaceuticals’ Class A
Common Stock determined by dividing the stated value of the shares of Series B
Convertible Preferred Stock being converted by a 20% discount to the lowest
closing bid price of the Class A Common Stock for the five trading days before
the conversion date. Provisions of the amended Certificate of Incorporation
limit the holders of the Series B Preferred Stock from converting these shares
into more than 9.99% of the total Class A Common Stock at that time of
conversion. If we assume a constant market price of $0.001 and a constant
conversion price of $0.0008, we will issue in the aggregate of approximately
1,825,000,000 shares of Class A Common Stock (issuance of up to 687,500,000
shares for conversion of the iVoice Series B Convertible Preferred Stock, up to
887,500,000 shares for conversion of the iVoice Convertible Debentures and up to
250,000,000 shares for conversion of Thomas Acquisition Convertible Debentures).
There is no limit upon the number of shares that we may be required to issue
upon conversion of any of these obligations.





The
following is an example of the amount of shares of Thomas
Pharmaceuticals Class A Common Stock that are issuable upon conversion of
$1,460,000 of principal of our convertible debentures and Series B Preferred
Stock, based on various market prices:





Assumed
      Market
              Price
            Assumed
      Conversion
              Price
            No.
      of Shares
              to
      be issued
            Percentage
      of
              Stock
      Issuable$0.0010
            $0.00080
            1,825,000,000
            88.0%$0.0008
            $0.00064
            2,281,250,000
            90.2%$0.0006
            $0.00048
            3,041,666,667
            92.5%$0.0004
            $0.00032
            4,562,500,000
            94.8%





$813,200
in principal of convertible debentures is secured by substantially all of our
assets.





In order
to obtain working capital in the future, we may issue additional equity
securities and convertible obligations.










13


In the
event that the price of Thomas Pharmaceuticals Class A Common Stock
decreases, and our convertible obligations (or any other convertible obligations
we may issue) are converted into shares of Thomas Pharmaceuticals Class A
Common Stock:




●
            the
      percentage of shares outstanding that will be held by these holders upon
      conversion will increase
accordingly,




●
            increased
      share issuance, in addition to a stock overhang of an indeterminable
      amount, may depress the price of Thomas Pharmaceuticals Class A
      Common Stock,




●
            the
      sale of a substantial amount of convertible securities to relatively few
      holders could effectuate a possible change in control of Thomas
      Pharmaceuticals, and




●
            in
      the event of our voluntary or involuntary liquidation while the secured
      convertible debentures are outstanding, the holders of those securities
      will be entitled to a preference in distribution of our
      property.




In
addition, if the market price declines significantly, we could be required to
issue a number of shares of Class A Common Stock sufficient to result in our
current stockholders not having an effective vote in the election of directors
and other corporate matters. In the event of a change in control of Thomas
Pharmaceuticals, it is possible that the new majority stockholders may take
actions that may not be consistent with the objectives or desires of our current
stockholders.





We are
required to convert our existing convertible obligations based upon a 20%
discount to the market price of our common stock. As a result, the lower the
market price of Thomas Pharmaceuticals Class A Common Stock, the larger the
number of shares we will have to issue to the holders of our convertible
obligations. Any sale of convertible obligations may result in a very large
conversion at one time.





Thomas
Pharmaceuticals may not be able to access sufficient funds when
needed.





We are
dependent on external financing to fund our operations. For the years ended
December 31, 2006 and 2007, we reported net cash used in operating activities of
$1,204,961 and $177,795, respectively, and will require financing for working
capital to meet our operating obligations.  Cash reserves at December
31, 2007 are not sufficient to sustain our operations at these levels and we
anticipate that we will require financing on an ongoing basis for the
foreseeable future to fund our working capital needs.  We will need to
raise approximately $760,000 to sustain our operations over the next twelve
months.  There is no guarantee that we will be able to raise enough
capital or generate revenues to sustain our operations. In addition, our going
concern opinion may negatively impact our ability to raise necessary
funds.   See “Management’s Discussion and Analysis or Results of
Operations - Liquidity and Capital Resources.” We cannot assure you that we will
be able to access such financing in sufficient amounts or at all when needed.
Our inability to obtain sufficient financing would have an immediate material
adverse effect on us, our financial condition and our business.







14


Thomas
Pharmaceuticals’ stockholders may experience significant dilution if future
equity offerings are used to fund operations or acquire businesses.





If
working capital or future acquisitions are financed through the issuance of
equity securities, Thomas Pharmaceuticals stockholders would experience
significant dilution. In addition, securities issued in connection with future
financing activities or potential acquisitions may have rights and preferences
senior to the rights and preferences of the Thomas Pharmaceuticals Class A
Common Stock.





The
conversion of outstanding debt obligations into equity securities would have a
dilutive effect on Thomas Pharmaceuticals shareholders. Further, securities
issued in connection with future financing activities or potential acquisitions
may have rights and preferences senior to the rights and preferences of the
Thomas Pharmaceuticals Class A Common Stock.





Thomas
Pharmaceuticals’ obligations under the secured convertible debentures are
secured by substantially all of its assets.





Our
obligations under $610,000 in principal of secured convertible debentures issued
by Thomas Pharmaceuticals to iVoice are secured by substantially all of our
assets. In addition, $103,800 in principal of secured convertible debentures
issued by Thomas Pharmaceutical Acquisition Corp., an entity unaffiliated with
iVoice or Thomas Pharmaceuticals are secured, subject to the prior security
interest of iVoice, by substantially all of our assets.  The net
proceeds of $160,000 from the convertible debentures were loaned by Thomas
Acquisition to Thomas Pharmaceuticals and Thomas Pharmaceuticals executed a
Promissory Note for such funds.  In exchange for and in consideration
of BioBridge LLC purchasing the Thomas Acquisition secured convertible debenture
and thereby permitting Thomas Acquisition to loan the net proceeds to Thomas
Pharmaceuticals for operations, Thomas Pharmaceuticals agreed to have the Thomas
Acquisition convertible debenture secured with assets of Thomas Pharmaceuticals
and convertible into shares of Thomas Pharmaceuticals.  As a result,
if we default under the terms of the secured convertible debentures issued by us
or Thomas Acquisition, the secured lenders could foreclose on their security
interests and liquidate all of our assets. This would cause operations to
cease.





Members
of Thomas Pharmaceuticals’ Board of Directors and management may have conflicts
of interest after the Distribution; Thomas Pharmaceuticals does not have any
formal procedure for resolving conflicts in the future.





As of the
date of the filing, Mr. Mahoney, the Non-Executive Chairman of the Board of
Thomas Pharmaceuticals, also serves as the Chairman, President and Chief
Executive Officer of iVoice. Mr. Mahoney is a controlling stockholder of iVoice,
beneficially owning approximately 88% of the outstanding shares of iVoice Class
A Common Stock (assuming the conversion of outstanding shares of Class B Common
Stock and debt into shares of Class A Common Stock) as of December 31,
2007.  As of the date of the filing, Mr. Mahoney will own iVoice
shares and iVoice will beneficially own approximately 9.99% of the outstanding
shares of Thomas Pharmaceuticals Class A Common Stock (assuming the 9.99%
limitation on the conversion of outstanding shares of Class B Convertible
Preferred Stock and debt into Class A Common Stock).  iVoice will have
the right to convert $710,000 in principal






15


(plus
accrued and unpaid interest) of indebtedness into an indeterminate number of
shares of Thomas Pharmaceuticals Class A Common Stock. The debentures are
convertible at the option of iVoice any time up to maturity at a conversion
price equal to 80% of the lowest closing bid price of the common stock for the 5
trading days immediately preceding the conversion date, subject to the
provisions that limit the holders of the debentures from converting these into
more than 9.99% of the total Class A Common Stock at that time of conversion.
For example, if the assumed constant conversion price for this indebtedness was
$.0008 per share, iVoice would receive an aggregate of 887,500,000 shares of
Class A Common Stock.  The convertible debentures are secured by the
assets of Thomas Pharmaceuticals. In the event the debentures are redeemed, then
Thomas Pharmaceuticals will pay $125,000 plus interest for each $100,000
redeemed. There is no limitation on the number of shares of Class A Common Stock
that we may be required to issue to iVoice upon the conversion of this
indebtedness.




iVoice
also owns 550 shares of Series B Convertible Preferred Stock with a stated value
of $1,000 per share.  Each share of Series B Convertible Preferred
Stock is convertible at the option of iVoice into the number of shares of Thomas
Pharmaceuticals’ Class A Common Stock determined by dividing the stated value of
Series B Convertible Preferred Stock being converted by a 20% discount to the
lowest closing bid price of the Class A Common Stock for the five trading days
before the conversion date, subject to provisions that limit the holders from
converting these shares into more than 9.99% of the total Class A Common Stock
at that time of conversion.  For example, if the assumed constant
conversion price for these shares was $.0008 per share, iVoice would receive an
aggregate of 687,500,000 shares of Class A Common Stock.  There is no
limit upon the number of shares of Class A Common Stock that we may be required
to issue upon conversion of these shares, but iVoice is prohibited from having a
total aggregate beneficial holdings of Class A Common Stock in excess
of  9.99% of the total outstanding Class A Common Stock at the time of
conversion.





iVoice,
as a holder of shares of the Series B Convertible Preferred Stock, shall at no
time be able to vote more than 9.99% of the total shares voting at any
Corporation shareholder meeting or written consent of shareholder action in lieu
of meeting. For example, as of December 31, 2007, iVoice would have voting
rights equal to 27,555,586 shares of Class A Common Stock, or 9.99% of the
eligible voting rights.  Jerome R. Mahoney, as the sole officer of
iVoice, has the authority to vote portfolio securities owned by iVoice such as
shares of Thomas Pharmaceuticals owned by iVoice.   Mr. Mahoney
votes these portfolio securities as directed by the Board of Directors of
iVoice.   Jerome R. Mahoney and Frank V. Esser are directors of
iVoice and the approval of both Mr. Mahoney and Mr. Esser is required for any
voting decision.   Mr. Esser is also a stockholder of iVoice and
a director and stockholder of Thomas Pharmaceuticals.





Mr.
Mahoney also serves as the Chairman of the Board of Trey Resources and the
President, Chief Executive Officer and Secretary of iVoice
Technology.  Mr. Mahoney’s roles with Thomas Pharmaceuticals, iVoice,
Trey Resources and iVoice Technology could create, or appear to create,
potential conflicts of interest when Mr. Mahoney is faced with decisions that
could have different implications for Thomas Pharmaceuticals, iVoice, Trey
Resources and iVoice Technology.  These relationships could create, or
appear to create, potential conflicts of interest when Thomas Pharmaceuticals’
directors and management are faced with decisions that could have different
implications for Thomas Pharmaceuticals, iVoice, Trey Resources and iVoice
Technology.  For example, Mr. Mahoney may experience conflicts of
interest with respect to the allocation of his time, services and






16


functions
among Thomas Pharmaceuticals, iVoice, Trey Resources and iVoice Technology.
Other examples include allocating corporate opportunities to any of these four
companies including potential business acquisitions.  Additional
conflicts may relate to disputes arising out of any agreements between Thomas
Pharmaceuticals and iVoice.  Other examples could include activities
undertaken by iVoice in the future that could be in direct competition with
Thomas Pharmaceuticals. Also, the appearance of conflicts, even if such
conflicts do not materialize, might adversely affect the public’s perception of
Thomas Pharmaceuticals. Furthermore, Thomas Pharmaceuticals does not have any
formal procedure for resolving such conflicts of interest should they arise
following the Distribution.





If
Thomas Pharmaceuticals loses the services of its key personnel, its business may
suffer.





We
currently only have two employees, one full-time and one
part-time.  We are dependent on our key officer John E. Lucas, our
Chief Executive Officer.  The loss of Mr. Lucas could materially harm
our business because of the cost and time necessary to retain and train a
replacement. Such a loss would also divert management attention away from
operational issues.  To minimize the effects of such loss, we have
entered into an employment contract with Mr. Lucas.




We have
no key man insurance on any of our employees and do not expect to obtain such
insurance in the future. If we lose the services of any key personnel and such
personnel can not be replaced on a timely basis our business may
suffer.





Thomas
Pharmaceuticals employment agreements are a significant expense for our
Company.





We have
entered into an employment agreement with John E. Lucas, our Chief Executive
Officer, pursuant to which we agreed to pay Mr. Lucas the sum of $60,000 the
first year with an annual increase based on the Consumer Price Index every year
thereafter.  We also agreed to pay Mr. Lucas an annual cash bonus
based upon the net sales of the Company. The compensation payable to Mr. Lucas
under the agreement may be paid in the form of cash, debt or shares of Class A
Common Stock at the option of the Company.





In the
event Mr. Lucas’s employment agreement is terminated by us for cause or due to
Mr. Lucas’s disability or retirement, we will pay him any unpaid compensation
through the date of termination.  In the event Mr. Lucas’s employment
agreement is terminated due to Mr. Lucas’s death, we will pay to his estate all
earned but unpaid compensation through the date of termination. In the event Mr.
Lucas’s employment agreement is terminated by us without cause or by Mr. Lucas
for good reason, Mr. Lucas will be entitled to receive any unpaid compensation
through the date of termination, any unpaid bonus earned with respect to the
fiscal year ending on or preceding the date of termination, and a one-time lump
sum payment equal to four week’s base salary.





In
addition, we have entered into an employment agreement with Mr. Mahoney which
was effective at the time of the Distribution pursuant to which Mr. Mahoney will
serve as our Non-Executive Chairman of the Board for a term of five years. As
consideration, we agreed to pay Mr. Mahoney the sum of $85,000 the first year
with an annual increase based on the Consumer Price Index every year thereafter.
The compensation payable to Mr. Mahoney under the agreement may be paid in the
form of cash, debt or shares of Class B Common Stock at the option of Mr.
Mahoney.





17


Our
employment agreement with Mr. Mahoney provides for significant severance
payments in certain events.  In the event Mr. Mahoney’s employment
agreement is terminated by us for cause or due to Mr. Mahoney’s disability or
retirement, we will pay him his full base salary for five years from the date of
termination at the highest salary level under the agreement.  In
addition, in the event Mr. Mahoney’s employment agreement is terminated by us
within three years following a change in control, as defined in the employment
agreement, or by Mr. Mahoney for good reason (as defined in the employment
agreement) within three years following a change in control, Mr. Mahoney will be
entitled to receive a severance payment up to three hundred percent, less $100,
of his gross income for services rendered to us in each of the five prior
calendar years (or shorter period during which Mr. Mahoney has been employed by
us).





The
combined salary obligations of Mr. Lucas and Mr. Mahoney total $145,000 per
year, which is a significant expense and use of funds for the Company which has
limited operations and resources.  We currently do not have funds
available to pay these salaries.  In addition, the severance
provisions with Mr. Lucas and Mr. Mahoney may be additional significant expenses
for us in the event those agreements are triggered.  In particular,
the agreement with Mr. Mahoney would make it very costly for us to terminate Mr.
Mahoney.  Such costs may also discourage potential acquisition
proposals, which may negatively affect our stock price.




Potential
future business acquisitions by Thomas Pharmaceuticals may be unpredictable and
may cause its business to suffer.





We may
seek to expand our operations through the acquisition of additional businesses.
These potential acquired additional businesses may be outside our current field
of operations. We may not be able to identify, successfully integrate or
profitably manage any such businesses or operations. The proposed expansion may
involve a number of special risks, including possible adverse effects on our
operating results, diversion of management attention, inability to retain key
personnel, risks associated with unanticipated events and the financial
statement effect of potential impairment of acquired intangible assets, any of
which could have a materially adverse effect on our business, financial
condition and results of operations. In addition, if competition for acquisition
candidates or assumed operations were to increase, the cost of acquiring
businesses or assuming customers’ operations could increase
materially.





Our
inability to implement and manage our expansion strategy successfully may have a
material adverse effect on our business and future prospects. Furthermore,
through the acquisition of additional businesses, we may effect a business
acquisition with a target business which may be financially unstable,
under-managed, or in its early stages of development or growth. While we may,
under certain circumstances, seek to effect business acquisitions with more than
one target business, as a result of limited resources, in all likelihood, will
have the ability to effect only a single business acquisition at one time.
Currently, we have no plans, proposals or arrangements, either orally or in
writing, regarding any proposed acquisitions.  In addition, although
there are no current plans to do so, we may change our strategy for the
development and marketing of our products in the future and our business plan
might not be implemented as set forth herein.











18


If
Thomas Pharmaceuticals is unable to successfully compete in the over-the-counter
non-prescription healthcare product industry its business and financial
condition will be significantly negatively impacted.





The
over-the-counter non-prescription healthcare product industry is extremely
competitive and consists of major domestic and international pharmaceutical,
cosmetic, consumer products and other companies, most of which have financial,
technical, manufacturing, distribution, marketing, sales and other resources
substantially greater than ours and who hold significant market share. Our
Acid+All® tablets primarily compete with over-the-counter antacid products, such
as Rolaids® and Tums®.  We compete by bringing style and substance to
traditional categories of consumer health care products to create new upscale
products. Our competitors may introduce more effective or less expensive
products or products with greater market recognition or acceptance, including
prescription antacids, which could compete with our products and have a
significant negative impact on our business and financial
condition.





Thomas
Pharmaceuticals may not achieve the market acceptance of its products necessary
to generate revenues.





To date
we have had limited sales of our one product - Acid+All®. Our products may not
achieve market acceptance. Market acceptance will depend on a number of factors,
including:




●
            the
      effectiveness of our products;




●
            our
      ability to keep production costs
low;




●
            our
      ability to successfully market our products;
and




●
            timely
      introductions of new products.




We lack
the capital needed to bring any future products to market at this
time.





If our
Acid+All® product fails to achieve market acceptance and significant sales, we
will not be able to generate revenue from the sale of this product and may not
continue in business.





Thomas
Pharmaceuticals may fail to develop new products, or may incur unexpected
expenses or delays.





We
currently rely on a single product, Acid+All®, which has had limited sales to
date.  We lack the capital needed to bring any future products to
market at this time.  Future products may include product extensions
of Acid+All®, flavored and effervescent versions of Acid+All® and an Acid+All®
acid reducer, depending upon financing.  We do not currently have any
of these products in development and do not expect to launch any new products in
the near future due to our lack of financial resources.





Due to
the risks inherent in developing new products—limited financing, competition,
obsolescence, loss of key personnel, and other factors—we may fail to develop
these new products, or may experience lengthy and costly delays in doing so. It
will be important for us to be able to develop and




19


market
new products. We cannot assure that we will be able to develop new products in
order to remain competitive. Our introduction of new products will be subject to
the inherent risks of unforeseen problems and delays. We cannot assure you that
our efforts to develop, market and sell our products will be
successful.





Thomas
Pharmaceuticals may grow in excess of its ability to manage growth, which could
result in inefficiencies.





We
believe that growth of our business may strain our management and operations. As
our business grows we intend to increase our workforce.Our
ability to manage growth depends in part upon our ability to expand our
operating, management, information and financial systems, which may
significantly increase our future operating expenses. We cannot assure you that
our business will grow in the future or that we will be able to effectively
manage our growth.





Thomas
Pharmaceuticals relies on strategic relationships to distribute and sell its
products, the loss of which would cause its revenues to decrease.





Our
success relies in great part on establishing and maintaining strategic
relationships with retailers, such as major drug store chains, to distribute and
sell our products.   As of March 1, 2007 we were shipping
Acid+All® to 40 major national and regional retailers.  During 2006
and 2007 the product was available through additional retailers who decided to
no longer carry the Acid+All® product since we did not have the financial
resources for necessary sales and marketing activities at that time. We are
currently not shipping Acid+All® to any retailers.  The only sales of
Acid+All® at this time are sales of remaining products on the shelves of
retailers who previously ordered Acid+All®.  Currently, we have no new
orders for its product and if we were to receive any order for the Acid+All®
product it would be unable to fill such order since our contract packager has
ceased packaging the Acid+All® product based on our financial condition and we
have no packaged products in inventory.  If Thomas Pharmaceuticals is able
to obtain necessary financing it may be able to enter into a new arrangement
with a contractor to package Acid+All® and may be able to develop new contracts
with retailers.  However, no such assurance can be given that Thomas
Pharmaceuticals will be able to obtain financing or enter into any new contracts
with retailers or a packager.   Our inability to establish or
maintain strategic relationships with retailers may reduce our revenues and
increase our losses from operations.




Thomas
Pharmaceuticals’ business depends upon third party manufacturers, the loss or
unavailability of which would require it to find substitute manufacturers,
resulting in delays in production and additional expenses.





Our
Acid+All® product is produced for us by a third party manufacturer. The
Acid+All® tablets are being manufactured for us by Contract Pharmacal
Corporation, an established contract manufacturer headquartered in Hauppauge,
New York, which has been approved by the U.S. Food and Drug Administration, or
FDA. This manufacturer is responsible for supplying the formula ingredients for
Acid+All®. We do not have a contract with this manufacturer.This manufacturer may
not continue to maintain its FDA certification or continue to be willing or able
to produce our products for us at reasonable prices or at all. If for any reason
this company discontinues production of our products at a time when we have a
low volume of inventory on hand or are experiencing a high demand for our






20


products,
significant delays in production of our products and interruption of our product
sales may result as we seek to establish a relationship and commence production
with a new manufacturer.





The
Acid+All® tablets were packaged by Denison Pharmaceuticals, Inc. a Pawtucket,
Rhode Island-based, FDA-registered pharmaceutical contract packer. Denison is no
longer packaging our Acid+All® tablets based on the financial condition of the
Company.  We are seeking another packager for our Acid+All® tablets.
Until such time as we arrange for another packer for our Acid+All® tablets, we
will not be able to fill any orders if we receive them.  We have no
packaged products in inventory.  If Thomas Pharmaceuticals is able to
obtain necessary financing it may be able to enter into a new arrangement with a
contractor to package Acid+All® and may be able to develop new contracts with
retailers.  However, no such assurance can be given that Thomas
Pharmaceuticals will be able to obtain financing or enter into any new contracts
with retailers or a packager.




We cannot
assure that any manufacturers will provide the products we need, in the
quantities we request, or at a price we are willing to pay. In general, we do
not maintain written agreements with these manufacturers. Because of the lack of
such agreements, there can be no assurance that products we need will be
available. Our inability to obtain adequate supplies of product from third party
manufacturers at favorable prices, or at all, may increase our expenses and
reduce our operating margins, resulting in increased losses.





If
Thomas Pharmaceuticals must restructure its operations, valuable resources will
be diverted from other business objectives.





We intend
to continually evaluate our products and corporate strategy. We have in the past
undertaken organizational changes such as the change in responsibilities after
the resignation of our former President.  We have also ceased the
development of any future products due to our lack of available
finances.  We may in the future undertake additional organizational
changes and/or product and marketing strategy modifications.  If we
undertake such changes in the future these changes may increase the risk that
objectives will not be met due to the allocation of valuable limited resources
to implement changes. Further, due to the uncertain nature of any of these
undertakings, these efforts may not be successful and we may not realize any
benefit from these efforts.





Thomas
Pharmaceuticals may incur increased expenses after the administrative services
agreement with iVoice is terminated.





Thomas
Pharmaceuticals has entered into an administrative services agreement with
iVoice. Under this agreement, iVoice is providing Thomas Pharmaceuticals with
physical premises, contract review, sales issuance, invoicing and collection
services, material and inventory control, employee benefits administration,
payroll, financial accounting and reporting, and other areas where Thomas
Pharmaceuticals needs assistance and support. The agreement will continue
following the Distribution on a month-to-month basis. Upon termination of the
agreement, Thomas Pharmaceuticals will be required to obtain such services from
a third party or increase its headcount to provide such services. This could be
more expensive than the fees which Thomas Pharmaceuticals has been required to
pay under the administrative services agreement.





21


The
business of Thomas Pharmaceuticals is subject to government regulation, the
failure to comply with which could result in significant penalties.





Over-the-counter
drugs are subject to FDA regulations. Our management has determined that our
Acid+All® product is an over-the-counter drug that may be marketed without
specific FDA approval as it is covered by over-the-counter monographs. The FDA,
however, may disagree with our management’s classification of this
product.  The FDA has broad regulatory and enforcement powers. If the
FDA determines that we have failed to comply with applicable regulatory
requirements, it can impose a variety of enforcement actions from public warning
letters, fines, injunctions, consent decrees and civil penalties to suspension
or delayed issuance of approvals, seizure or recall of our products, total or
partial shutdown of production, withdrawal of approvals or clearances already
granted, and criminal prosecution. The FDA can also require us to replace or
refund the cost of products that we distributed. If any of these events were to
occur, it could materially adversely affect our ability to market our products
and our business and financial condition.





Advertising
of our products is subject to regulation by the U.S. Federal Trade Commission,
or FTC, under the Federal Trade Commission Act, or FTCA. If the FTC were to
impose limitations on our advertising of products, any such limitations could
materially adversely affect our ability to successfully market our
products.




Advertising,
labeling, sales and manufacturing of our products are also regulated by state
and local authorities and governmental regulations in foreign countries where we
may commence or expand sales.  There can be no assurance that such
authorities will not commence regulatory action, which could restrict the
permissible scope of our product claims or our ability to sell in that
state.





We are
also subject to licensing and regulation by a number of authorities in the
states and municipalities in which we conduct operations. These may include
health, safety, and fire regulations. Our operations are also subject to federal
and state minimum wage laws governing such matters as working conditions and
overtime.





We cannot
predict the nature of any future laws, regulations, interpretations or
applications, nor can we determine what effect additional governmental
regulations or administrative orders, when and if promulgated, would have on our
business in the future. They could, however, require the reformulation of
certain products to meet new standards, the recall or discontinuance of certain
products not capable of reformulation, additional record keeping, expanded
documentation of the properties of certain products, expanded or different
labeling, and/or scientific substantiation. Any or all of such requirements
could have a material adverse effect on our business, financial condition,
results of operations and cash flows. If we were to experience product recalls
or discontinuances, we could incur substantial expenses and wastage of time, as
well as damage to our reputation.





The
products of Thomas Pharmaceuticals have limited trademark protection, which
could permit others to market similar products, resulting in decreased sales by
Thomas Pharmaceuticals.




We
utilize the following registered and unregistered trademarks which are material
to our business:  Acid+All®, Heartburn Happens, Acid+All HelpsTM,
Acid+All Does it AllTM and Ask for Acid+All®.






22


Only
Acid+All® and Ask for Acid+All® are registered trademarks. We believe that
protecting our registered and unregistered trademarks is crucial to our business
strategy of building strong brand name recognition and that such trademarks will
have significant value.




Our
policy is to pursue registration of all the trademarks associated with our key
products. We rely on common law trademark rights to protect our unregistered
trademarks. Common law trademark rights generally are limited to the geographic
area in which the trademark is actually used, while a United States federal
registration of a trademark enables the registrant to stop the unauthorized use
of the trademark by any third party anywhere in the United States. Furthermore,
the protection available, if any, in foreign jurisdictions may not be as
extensive as the protection available to us in the United States.





Thomas
Pharmaceuticals may be unable to protect its proprietary products or prevent the
development of similar products by its competitors, which could materially and
adversely affect its ability to successfully compete.





We do not
own any patent or licenses. We claim proprietary rights in various unpatented
technologies, know-how, trade secrets and trademarks relating to our products
and manufacturing processes. We protect our proprietary rights in our product
formulas and operations through contractual obligations with our manufacturers,
employees, consultants and vendors. These protections may prove inadequate.
Further, our competitors may independently develop or patent products that are
substantially equivalent or superior to our products.




The
products of Thomas Pharmaceuticals could infringe on intellectual property
rights of others.





Although
we seek to ensure that we do not infringe on the intellectual property rights of
others, we cannot assure you that third parties will not assert intellectual
property claims against us. Infringement claims by third parties against us may
have a material adverse affect on our business.





Thomas
Pharmaceuticals is exposed to product liability claims, which could create a
substantial liability.





We face
an inherent risk of exposure to product liability claims in the event that the
use of our products results in injury. We have $3,000,000 of product liability
insurance which our management believes is adequate insurance, but if it is not,
product liabilities relating to our products could adversely affect
us.  We maintain a product liability policy with Chubb Custom
Insurance Co. with an annual premium of approximately $13,000.




Our Class A common stock is deemed to be “penny stock,” which may make it
more difficult for investors to sell their shares due to suitability
requirements.





Our Class
A common stock is deemed to be “penny stock” as that term is defined in Rule
3a51-1 promulgated under the Securities Exchange Act of 1934. These requirements
may reduce the potential market for our Class A common stock by reducing the
number of potential investors.  This may make it more difficult for
investors in our Class A common stock to sell shares to third parties or to
otherwise dispose of them.  This could cause our stock price to
decline.  Penny stocks are stock:





23


·
            With
      a price of less than $5.00 per
share


·
            That
      are not traded on a “recognized” national
  exchange;


·
            Whose
      prices are not quoted on the NASDAQ automated quotation
      system  (NASDAQ listed stock must still have a price of not less
      than $5.00 per share); or


·
            In
      issuers with net tangible assets less than $2.0 million (if the issuer has
      been in continuous operation for at least three years) or $5.0 million (if
      in continuous operation for less than three years), or with average
      revenues of less than $6.0 million for the last three
    years.





Broker/dealers
dealing in penny stocks are required to provide potential investors with a
document disclosing the risks of penny stocks.  Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor.





Future
sales of our Class A common stock could cause our stock price to
decline.





The sale
of a large number of our shares, or the perception that such a sale may occur,
could lower our stock price.  Such sales could make it more difficult
for us to sell equity securities in the future at a time and price that we
consider appropriate.  As of December 31, 2007, approximately
5,155,000 shares of our Class A Common Stock could be considered “restricted
securities” and saleable only upon registration under the Securities Act of
1933, as amended (the “Securities Act”), upon compliance with Rule 144 of the
Securities Act, or pursuant to another exemption from registration.








Item
2.   Description of Property.





We do not
own any real property for use in our operations or otherwise.





Our
executive offices are located at 750 Highway 34, Matawan, NJ 07747 and our
telephone number is (732) 441-7700.  However, the Company does not
have a lease or pay rent for these offices which are located within the
corporate offices of iVoice, Inc.








Item
3.   Legal Proceedings.





We are
subject to litigation from time to time arising from our normal course of
operations.  Currently, there are no open litigation matters relating
to our products, except for a suit file on December 13, 2007 by Independent Can
seeking payment of monies owed equal to $19,100.80.  Independent Can
had provide the Company the tins that held the Acid+All® tablets.  The
Company and Independent have settled this suit for the sum of $8,050 payable
over seven months.









24


PART
II







Item 5.
              Market for Common Equity,
      Related Stockholder Matters and Small Business Issuer Purchases of Equity
      Securities.





Market
Information





Our Class A common stock, no par value,
is quoted on the NASD OTC Bulletin Board under the symbol “TPHM.”  The
following table shows the high and low closing prices for the periods
indicated.  The quotations listed below reflect inter-dealer prices,
without retail mark-up, mark-down or commission and may not represent actual
transactions.





High
            
            LowFISCAL
      YEAR 2007Fourth
      Quarter (from 12/26/07)
            $0.01
            
            $0.001





Holders
of Common Equity.




In
connection with the spin-off from iVoice, Inc., the Company issued 243,184,868
shares of Class A common stock on November 21, 2007. This amount represents one
share of Thomas Pharmaceuticals, Ltd. Class A common stock for every share of
iVoice, Inc. Class A common stock held as of the record date of November 14,
2007.




As of
December 31, 2007, the number of record holders of our common shares was
approximately 756.




Dividend
Information.




To date,
the Company has never paid a cash dividend. We have no plans to pay any cash
dividends in the near future.  We intend to retain all earnings, if
any, for the foreseeable future, for use in our business
operations.




EQUITY
COMPENSATION PLAN INFORMATION





Number
      of securities to be issued upon exercise of outstanding options, warrants
      and rights (a)
            
            Weighted-average
      exercise price of outstanding options, warrants and rights
    (b)
            
            Number
      of securities remaining available for future issuance under equity
      compensation plans (excluding securities reflected in column
      (a))
              (c)Equity
      compensation plans approved by security holders
            N/A
            
            N/A
            
            N/AEquity
      compensation plans not approved by security holders
            N/A
            
            N/A
            
            N/ATotal
            N/A
            
            N/A
            
            N/A





25


As of
December 31, 2007, the Company did not have any Equity Compensation
Plans.







Recent
Sales of Unregistered Securities




On
January 6, 2006, the Company issued 550 shares of Series B Convertible Preferred
Stock valued at $550,000 to iVoice, Inc. pursuant to the terms of the Agreement
and Plan of Merger, with Thomas NY.   The holders of these shares
may convert their shares into Class A Common Stock at the price per share equal
to eighty percent (80%) of the lowest closing bid price of the Common Stock
for the five (5) trading days immediately preceding the conversion date, subject
to provisions that limit the holders from converting these shares into more than
9.99% of the total Class A Common Stock at that time of conversion.




On
January 6, 2006 the Company issued to iVoice a $360,000 secured convertible
debenture due on January 1, 2013 bearing interest of 10%, compounded quarterly.
The convertible debenture is secured by the assets of the Company.




On
January 6, 2006 the Company issued to iVoice a $100,000 administrative service
convertible debenture due on January 1, 2013 bearing interest of 10%, compounded
quarterly. This debenture is issued in lieu of payments on the Administrative
Services Agreement of the same date. The convertible debenture is secured by the
assets of the Company.




On April
27, 2006 the Company issued to iVoice a $225,000 secured convertible debenture
due on January 1, 2013 bearing interest of 10%, compounded quarterly. The
convertible debenture is secured by the assets of the Company.




On February 7, 2007, the Company issued
to iVoice a $25,000 secured convertible debenture due on February 6, 2014
bearing interest of 10%, compounded quarterly. The convertible debenture is
secured by the assets of the Company.




The
Company can redeem a portion or all amounts outstanding under the iVoice
Convertible Debentures at any time upon thirty (30) business days advanced
written notice.  The redemption price shall be equal to one hundred
twenty-five percent (125%) multiplied by the portion of the principal sum being
redeemed, plus any accrued and unpaid interest.




iVoice
may, at its discretion, convert the outstanding principal and accrued interest,
in whole or in part, into a number of shares of Thomas Pharmaceuticals Class A
Common Stock  at the price per share equal to eighty
percent (80%) of the lowest closing bid price of the Common Stock for the
five (5) trading




26


days
immediately preceding the conversion date, subject to the provisions that limit
the holders of the debentures from converting these into more than 9.99% of the
total Class A Common Stock at that time of conversion.




On
January 26, 2007, Thomas Acquisition issued to an investor a debenture in the
principal amount of $103,200 convertible into Class A Common Stock of Thomas
Pharmaceuticals and a debenture in the principal amount of $96,800 convertible
into Series B Convertible Preferred Stock of the Company. The $103,200 of the
convertible debentures provide that, at the holder’s option, principal and
interest due on the debentures can be converted into the number of shares of the
Company’s Class A Common Stock determined by dividing the amount of the
debenture being converted by a 20% discount to the lowest closing bid price of
the Company’s Class A Common Stock for the five trading days before the
conversion date.  The $96,800 of the convertible debentures provide
that, at the holder’s option, principal and interest due on the debentures can
be converted into the Company’s Series B Convertible Preferred Stock having a
stated value of $1,000 per share. The $103,200 convertible debenture was secured
with the assets of the Company, subordinate to the security interest previously
granted to iVoice. The net proceeds of $160,000 from the convertible debentures
were loaned to the Company in the form of a Promissory Note. The Promissory Note
bears interest at the rate of ten percent per annum and has a term of seven
years.




On
December 14, 2007, the Company issued 5,091,237 shares of Class A common stock
in exchange for 500,000 shares of Series A Convertible Preferred Stock pursuant
to the provisions of the spin-off agreement.




Item
6 – Management’s Discussion and Analysis or Plan of Operation





This
discussion and analysis of our financial condition and results of operations
includes “forward-looking” statements that reflect our current views with
respect to future events and financial performance.  We use words such
as “we” “expect,” “anticipate,” “believe,” and “intend” and similar expressions
to identify forward-looking statements.  You should be aware that
actual results may differ materially from our expressed expectations because of
risks and uncertainties inherent in future events and you should not rely unduly
on these forward looking statements.  We will not necessarily update
the information in this discussion if any forward-looking statement later turns
out to be inaccurate.





You
should read the following discussion in conjunction with our financial
statements and related notes included elsewhere in this filing as well as our
audited statements and related notes for the fiscal year ended December 31, 2006
filed with Form SB-2 previously filed with the SEC.  The following
discussion contains forward-looking statements.  Please see “Forward
Looking Statements - Cautionary Factors” for a discussion of uncertainties,
risks and assumptions associated with these statements.





Overview





Thomas
Pharmaceuticals, Ltd. (the “Company” or “Thomas Pharmaceuticals”) was a
wholly-owned subsidiary of iVoice.  Thomas Pharmaceuticals was founded
on the premise that money can be made by making the “humdrum hip” or by
retooling a mundane product to make it new and exciting.  The strategy
of Thomas Pharmaceuticals is to capitalize on “old school” or “retro” products,
such as antacids, with proven effectiveness and usefulness, but with improved
formulation, packaging, marketing and




27


advertising
to articulate the brand attributes to a new generation of consumer who demand
substance with style. Thomas Pharmaceuticals operates its business from its
executive office in Matawan, New Jersey.





Thomas
Pharmaceuticals began selling its first product, Acid+All®, a calcium-enriched,
sugar free, anti-gas antacid tablet, in January 2006.  During the year
ended December 31, 2006 Thomas Pharmaceuticals generated approximately $179,938
in revenues from product sales.  Revenues from product sales have
decreased substantially during the year ended December 31, 2007 to
$22,857.  During 2006 and 2007 the product was available through retailers
who decided to no longer carry the Acid+All® product since Thomas
Pharmaceuticals did not have the financial resources for necessary sales and
marketing activities at that time. Thomas Pharmaceuticals needs to raise
significant financing in order to fund its ongoing operations.  There
can be no assurance as to the receipt or timing of financing.  We
anticipate that our operations will require at least $190,000 per
quarter.





Thomas
Pharmaceuticals is currently not shipping Acid+All® to any
retailers.  The only sales of Acid+All®  at this time are
sales of remaining products on the shelves of retailers who previously ordered
Acid+All®.  Currently, Thomas Pharmaceuticals has no new orders for
its product and if it were to receive any order for the Acid+All® product it
would be unable to fill such order since its contract packager has ceased
packaging the Acid+All® product based on the financial condition of the Company
and the Company has no packaged products in inventory.  If Thomas
Pharmaceuticals is able to obtain necessary financing it may be able to enter
into a new arrangement with a contractor to package Acid+All® and may be able to
develop new contracts with retailers.  However, no such assurance can
be given that Thomas Pharmaceuticals will be able to obtain financing or enter
into any new contracts with retailers or a packager.





Plan
of Operation





As
described above, based on the operational developments described above and the
lack of financing, management is currently evaluating the business of the
Company.  Thomas Pharmaceuticals will not be able to continue in the
business of selling Acid+All®  or engage in any other related or
unrelated business unless it obtains financing or enters into a merger,
consolidation, reorganization, joint venture, license, purchase or sale of
assets, purchase or sale of stock, or other similar transaction.  Any
such merger, acquisition or other transaction may be with a company which has a
business outside the current field of operations of Thomas
Pharmaceuticals.  Management of Thomas Pharmaceuticals is actively
seeking a potential merger or acquisition candidate.  There can be no
assurance that any acquisition plan will be successfully implemented. Thomas
Pharmaceuticals may not be able to identify, successfully integrate or
profitably manage any such businesses or operations.  Currently,
Thomas Pharmaceuticals has no plans, proposals or arrangements, either orally or
in writing, regarding any specific proposed acquisition or merger.





Thomas
Pharmaceuticals does not intend to restrict its search to any particular
business, industry, or geographical location. In evaluating a transaction,
Thomas Pharmaceuticals will analyze all available factors and make a
determination based on a composite of available facts, without reliance on any
single factor.  It is impossible to predict the nature of a
transaction in which Thomas Pharmaceuticals may participate. Specific business
opportunities would be reviewed as well as the respective needs and
desires




28


of Thomas
Pharmaceuticals and the legal structure or method deemed by management to be
suitable would be selected.





As
described above, implementing a structure for a particular transaction, Thomas
Pharmaceuticals may become a party to a merger, consolidation, reorganization,
joint venture, license, purchase and sale of assets, or purchase and sale of
stock, or other arrangement the exact nature of which cannot now be
predicted.  The operations of Thomas Pharmaceuticals following its
consummation of a transaction will be dependent on the nature of the
transaction. There may also be various risks inherent in the transaction, the
nature and magnitude of which cannot be predicted. In addition, although there
are no current plans to do so, Thomas Pharmaceuticals may in the future change
its strategy for the development and marketing of its products and the business
plan of Thomas Pharmaceuticals might not be implemented as set forth
herein.





The
Company does not have any new products in development and does not expect to
launch any new products in the near future due to its lack of financial
resources.  If Thomas Pharmaceuticals obtains financing or enters into
a merger, acquisition or other transaction it may seek to expand the operations
of Thomas Pharmaceuticals through sales and marketing activity or it may engage
in another line of business.  If Thomas Pharmaceuticals is
unsuccessful in obtaining financing or entering into a merger, acquisition or
other transaction the business of Thomas Pharmaceuticals is unlikely to
continue.




As
described herein, Thomas Pharmaceuticals currently faces a multitude of problems
which have a significant impact on the Company.  These problems each
stem from a lack of financing and are interrelated.  As a result of
not having adequate financing for sales and marketing activities retailers that
previously carried the Acid+All® product stopped ordering such
product.   This in turn resulted in the Company’s packager to
stop packaging the Acid+All® product.  Without a packager for the
product the Company is not able to deliver any products to any retailers that
would be willing at this time or in the future to place the Acid+All® product on
their shelves.  In addition, if the Company is not able to obtain
adequate financing it will not be able to engage in any future sales or
marketing activities and it is unlikely that retailers will carry the Acid+All®
product in the future, once a packager is in place, unless financial resources
are available for such sales and marketing activities. Accordingly, if the
Company is unsuccessful in obtaining financing or entering into a merger,
acquisition or other transaction Thomas Pharmaceuticals will be unable to solve
the multitude of problems that it current faces as a result of not having
adequate financing and it will be unlikely that the business of Thomas
Pharmaceuticals will be able to continue.





The
Company has a limited operating history on which to base an evaluation of its
business and prospects. Its prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stage of development, particularly companies in new and rapidly evolving
markets. The Company will encounter various risks in implementing and executing
its business strategy. The Company can provide no assurance that it will be
successful in addressing such risks, and the failure to do so could have a
material adverse effect on its business.





The
Company does not presently intend to make any loans to any merger or acquisition
candidate, or to any unaffiliated third parties.





We do not
expect to purchase any significant equipment for the foreseeable future, unless
we are successful in growing the business and expanding our product
lines.





29


We do not
expect any significant changes in the numbers of employees in the next twelve
months, unless we are successful in growing the business and expanding our
product lines.







Results
of Operations





Year
ended December 31, 2007 compared to year ended December 31, 2006





In
January 2006, the Company merged with Thomas Pharmaceuticals NY, which was a
start-up company with limited operations and its management had focused its
energies on identifying acquisition and/or merger candidates and with closing
this merger.





Total
revenues for the years ended December 31, 2007 and 2006 were $22,857 and
$179,938, respectively. Revenues from the sales of the Company’s Acid-All
product account for all the revenues of the Company. New product sales of
$75,842 in 2007 were reduced by a charge of $52,985 for a reserve for product
returns and payment discounts. The sales in 2006 represent initial product sales
of the Acid-All product of $331,994, net of a provision for product returns and
allowance of $152,056. New product sales eroded year-to-year as the Company
struggled with its liquidity and the loss of its contract packager.





Gross
loss for the years ended December 31, 2007 and 2006 was a loss
of  $38,198 and $18,652, respectively. Our standard gross profit of
approximately 49% on new product sales was substantially eroded by the effect of
the discounts and the provision for product returns of $52,985 and $152,056,
respectively. Our gross loss for the years ended December 31, 2007 and 2006 was
also effected by a charge for a reserve for excess and obsolete inventory of
$26,117 and $30,000, respectively.





Operating
expenses for the years ended December 31, 2007 and 2006 were $843,422 and
$1,130,053, respectively. The costs in 2007 include $176,371 for selling and
marketing expenses compared to $601,929 for 2006. The decrease of $425,558 is
primarily attributed to decrease in advertising expenses when compared to the
expenses for new product launches in 2006 for the Acid-All products. Additional
decreases in selling expenses represent reduction in salaries and curtailment of
sampling expenses upon the resignation of the Thomas’s president in March
’07.  General and administrative expenses in 2007 decreased by $4,666
when compared to 2006. Of these decreases, consulting on product packaging
decreased by $58,680, conference, seminars, promotion and travel expenses
decreased by $41,523, rent, utilities and office expenses decreased by $39,369
when compared to 2006. These decreases were offset by increases in accounting,
legal and professional fees of $145,736 related to the preparation and filing of
the Company’s SB2 registration statement. The operating expenses in 2007 also
include a $79,137 charge for impairment of intangible assets, $104,784 for
depreciation expense and a $2,316 amortization of intangibles. The overall
decrease in operating expenses of $286,631 in 2007 when compared to 2006 was
primarily the result of curtailment of spending due to the decreased liquidity
of the Company.




Total
other expense for the year ended December 31, 2007 was an expense of $344,895.
This total was primarily comprised of $122,905 amortization of the discount on
debt, $126,459 loss on revaluation






30


of the
derivatives and $95,531 of accrued interest expense on the debentures and
promissory notes. Total other expense for the year ended December 31, 2006 was
an expense of $293,724.  This total was primarily comprised of $88,214
amortization of the discount on debt, $141,920 loss on revaluation of the
derivatives and $63,590 of accrued interest expense on the on the debentures and
promissory notes. The increase in amortization of the discount on debt and the
increase in interest expense were related to the increases in convertible debt
as compared to the prior year.




Net loss
before preferred dividends for the years ended December 31, 2007 and 2006 were
$1,226,515 and $1,442,429, respectively. The decrease in net loss before
preferred dividends of $215,914 was the result of the factors discussed
above.




Preferred
dividends for the years ended December 31, 2007 and 2006 were $54,999 and
$47,165, respectively. These dividends are accrued pursuant to the provisions of
the Series B Convertible Preferred Stock.





Liquidity
and Capital Resources





On
January 6, 2006, the Company issued 550 shares of Series B Convertible Preferred
Stock valued at $550,000 to iVoice, Inc. pursuant to the terms of the Agreement
and Plan of Merger, with Thomas NY.   The holders of these shares
may convert their shares into Class A Common Stock at the price per share equal
to eighty percent (80%) of the lowest closing bid price of the Common Stock
for the five (5) trading days immediately preceding the conversion date, subject
to provisions that limit the holders from converting these shares into more than
9.99% of the total Class A Common Stock at that time of conversion.




On
January 6, 2006 the Company issued to iVoice a $360,000 secured convertible
debenture due on January 1, 2013 bearing interest of 10%, compounded quarterly.
The convertible debenture is secured by the assets of the Company.




On
January 6, 2006 the Company issued to iVoice a $100,000 administrative service
convertible debenture due on January 1, 2013 bearing interest of 10%, compounded
quarterly. This debenture is issued in lieu of payments on the Administrative
Services Agreement of the same date. The convertible debenture is secured by the
assets of the Company.




On April
27, 2006 the Company issued to iVoice a $225,000 secured convertible debenture
due on January 1, 2013 bearing interest of 10%, compounded quarterly. The
convertible debenture is secured by the assets of the Company.




On February 7, 2007, the Company issued
to iVoice a $25,000 secured convertible debenture due on February 6, 2014
bearing interest of 10%, compounded quarterly. The convertible debenture is
secured by the assets of the Company.




The
Company can redeem a portion or all amounts outstanding under the iVoice
Convertible Debentures at any time upon thirty (30) business days advanced
written notice.  The redemption price shall be equal to one hundred
twenty-five percent (125%) multiplied by the portion of the principal sum being
redeemed, plus any accrued and unpaid interest.






31


iVoice
may, at its discretion, convert the outstanding principal and accrued interest,
in whole or in part, into a number of shares of Thomas Pharmaceuticals Class A
Common Stock  at the price per share equal to eighty
percent (80%) of the lowest closing bid price of the Common Stock for the
five (5) trading days immediately preceding the conversion date, subject to
provisions that limit the holders from converting these debentures into more
than 9.99% of the total Class A Common Stock at that time of
conversion.




On
January 26, 2007, Thomas Acquisition issued to an investor a debenture in the
principal amount of $103,200 convertible into Class A Common Stock of Thomas
Pharmaceuticals and a debenture in the principal amount of $96,800 convertible
into Series B Convertible Preferred Stock of the Company. The $103,200 of the
convertible debentures provide that, at the holder’s option, principal and
interest due on the debentures can be converted into the number of shares of the
Company’s Class A Common Stock determined by dividing the amount of the
debenture being converted by a 20% discount to the lowest closing bid price of
the Company’s Class A Common Stock for the five trading days before the
conversion date.  The $96,800 of the convertible debentures provide
that, at the holder’s option, principal and interest due on the debentures can
be converted into the Company’s Series B Convertible Preferred Stock having a
stated value of $1,000 per share. The $103,200 convertible debenture was secured
with the assets of the Company, subordinate to the security interest previously
granted to iVoice. The net proceeds of $160,000 from the convertible debentures
were loaned to the Company in the form of a Promissory Note. The Promissory Note
bears interest at the rate of ten percent per annum and has a term of seven
years.




Based on
the operational developments described elsewhere and the lack of financing,
management is currently evaluating the business of the
Company.  Thomas Pharmaceuticals will not be able to continue in the
business of selling Acid+All®  or engage in any other related or
unrelated business unless it obtains financing or enters into a merger,
consolidation, reorganization, joint venture, license, purchase or sale of
assets, purchase or sale of stock, or other similar transaction.  Any
such merger, acquisition or other transaction may be with a company which has a
business outside the current field of operations of Thomas
Pharmaceuticals.  Management of Thomas Pharmaceuticals is actively
seeking a potential merger or acquisition candidate.  There can be no
assurance that any acquisition plan will be successfully implemented. Thomas
Pharmaceuticals may not be able to identify, successfully integrate or
profitably manage any such businesses or operations.  Currently,
Thomas Pharmaceuticals has no plans, proposals or arrangements, either orally or
in writing, regarding any specific proposed acquisition or merger.





Thomas
Pharmaceuticals does not intend to restrict its search to any particular
business, industry, or geographical location. In evaluating a transaction,
Thomas Pharmaceuticals will analyze all available factors and make a
determination based on a composite of available facts, without reliance on any
single factor.  It is impossible to predict the nature of a
transaction in which Thomas Pharmaceuticals may participate. Specific business
opportunities would be reviewed as well as the respective needs and desires of
Thomas Pharmaceuticals and the legal structure or method deemed by management to
be suitable would be selected.





As
described above, implementing a structure for a particular transaction, Thomas
Pharmaceuticals may become a party to a merger, consolidation, reorganization,
joint venture, license, purchase and sale of assets, or purchase and sale of
stock, or other arrangement the exact nature of which cannot now be
predicted.  The operations of Thomas Pharmaceuticals following its
consummation of a transaction will be






32


dependent
on the nature of the transaction. There may also be various risks inherent in
the transaction, the nature and magnitude of which cannot be predicted. In
addition, although there are no current plans to do so, Thomas Pharmaceuticals
may in the future change its strategy for the development and marketing of its
products and the business plan of Thomas Pharmaceuticals might not be
implemented as set forth herein.





To date,
the Company has incurred substantial losses, and will require financing for
working capital to meet its operating obligations.  We anticipate that
we will require financing on an ongoing basis for the foreseeable future to fund
our working capital needs.





During
the year ended December 31, 2007 the Company had a net decrease in cash of
$2,042. During the year ended December 31, 2006, the Company had a net increase
in cash of $11,647. The Company’s principal source and use of funds during these
periods was as follows:




Cash flows from operating
activities.  The Company used $177,795 in cash for operations
in the year ended December 31, 2007, a decrease of $1,027,166 compared to
$1,204,961 in cash used for operations in the year ending December 31,
2006.  The decrease in cash used in operations in 2007 was primarily
the result of lower net cash loss (net loss after adding back non-cash items but
before considering changes in certain assets and liabilities) of $710,399 and
decreases in accounts receivable of $1,277, inventory of $8,640 and prepaid
expenses of $56,177. These were in addition to increases in accounts payable and
accrued liabilities of $466,510. The cash used in operations in 2006 of
$1,204,961 was primarily the result of net cash loss of $1,002,793 and increases
in accounts receivable of $192,533, inventory of $64,757 and prepaid expenses of
$58,976. These were offset by increases in accounts payable and accrued
liabilities of $114,098.




Cash flows from investing
activities.  The Company used cash of $3,247 for investing
activities in the year ended December 31, 2007 for additional spending on
patents. The Company used cash of $18,392 for investing activities in the year
ended December 31, 2006 to upgrade the computers for the sales office and for
additional spending on patents.





Cash flows from financing
activities.The
Companyprovided
$179,000 cash from financing in the year ended December 31, 2007. This
represented the proceeds from the sale of $185,000 of debt financing to iVoice
and Thomas Acquisition, less a $6,000 repayment of debt during the year. The
Company provided $1,235,000 cash from financing is the year ended December 31,
2006 from the sales of Convertible Debenture and Series B Preferred Stock to
iVoice. These amounts represented the initial financing pursuant to the terms of
the Agreement and Plan of Merger, dated January 6, 2006, with Thomas
Pharmaceuticals, Thomas Pharmaceuticals NY, and the shareholders of Thomas
Pharmaceuticals NY.





Off-Balance
Sheet Arrangements





During
fiscal year ended December 31, 2007, the Company did not engage in any material
off-balance sheet activities nor have any relationships or arrangements with
unconsolidated entities established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes. Further, we have not guaranteed any obligations of
unconsolidated entities nor do we have any commitment or intent to provide
additional funding to any such entities.







33


Item
7.   Financial Statements.




The financial statements and notes of
this Form 10-KSB appear after the signature page to this Form
10-KSB.







Item
8A(T). Controls and Procedures.





Evaluation
of disclosure controls and procedures.





Management
of the Company has evaluated, with the participation of the Chief Executive
Officer and Chief Financial Officer of the Company, the effectiveness of the
Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) as of the end of the fiscal year covered by this Annual Report on Form
10-KSB. Based on that evaluation, the Chief Executive Officer and Chief
Financial Officer of the Company have concluded that the Company’s disclosure
controls and procedures as of the end of the fiscal year covered by this Annual
Report on Form 10-KSB are effective to provide reasonable assurance that
information required to be disclosed by the Company in the reports that it files
or submits under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission and that the information required to be
disclosed in the reports is accumulated and communicated to management,
including our Chief Executive Officer and Chief Financial Officer, to allow
timely decisions regarding required disclosure except for the following
deficiencies:





a)
            A
      deficiency in the Company’s disclosure controls and procedures existed as
      of December 31, 2007. The deficiency was identified as the Company’s
      limited segregation of duties amongst the Company’s employees with respect
      to the Company’s control activities. This deficiency is the result of the
      Company’s limited number of employees. This deficiency may affect
      management’s ability to determine if errors or inappropriate actions have
      taken place. Management is required to apply its judgment in evaluating
      the cost-benefit relationship of possible changes in our disclosure
      controls and procedures.





b)
            A
      deficiency in the Company’s disclosure controls and procedures existed as
      of December 31, 2007. The deficiency was identified in respect to the
      Company’s Board of Directors. This deficiency is the result of the
      Company’s limited number of external board members. This deficiency may
      give the impression to the investors that the board is not independent
      from management. Management and the Board of Directors are required to
      apply their judgment in evaluating the cost-benefit relationship of
      possible changes in the organization of the Board of
      Directors.





Management’s
Report on Internal Control Over Financial Reporting





Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Exchange Act Rule
13a-15(f). Under the supervision and with the participation of our management,
including our Chief Executive Officer and Chief Financial Officer, we conducted
an evaluation of the effectiveness of our internal control over financial
reporting as






34


of
December 31, 2007 based on the criteria set forth in Internal Control --
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission. Based on our evaluation under the criteria set forth in
Internal Control Over Financial Reporting - Guidance for Small Public Companies,
our management concluded that our internal control over financial reporting was
effective as of December 31, 2007, except as disclosed above.





This
Annual Report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this Annual
Report. Our registered public accounting firm will be required to attest to our
management’s assessment of internal control over financial reporting beginning
with our Annual Report for the year ended December 31, 2008.





Changes
in internal controls.





Management
of the Company has also evaluated, with the participation of the Chief Executive
Officer of the Company, any change in the Company’s internal control over
financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) that occurred during the fiscal year covered by this Annual Report
on Form 10-KSB. There was no change in the Company’s internal control over
financial reporting identified in that evaluation that occurred during the
fiscal year covered by this Annual Report on Form 10-KSB that has materially
affected, or is reasonably likely to materially affect, the Company’s internal
control over financial reporting.



























35


Part
III





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







The
Company has three directors and one principal officer. Listed below is certain
information concerning individuals who currently serve as directors and
executive officers of the Company.





Name
              
              Age
              
              Position
              
              Period
      Served as
                Officer\DirectorJerome
      R. Mahoney
              
              48
              
              Non-Executive
      Chairman
      of the Board of Directors
              
              5-19-05
      to presentJohn
      E. Lucas
              
              75
              
              President,
      Chief
      Executive Officer, Chief
      Financial Officer
      and Director
              
              1-06-06
      to presentFrank
      V. Esser
              
              68
              
              Director
              
              1-06-06
      to present


Jerome R.
Mahoney.  Mr. Mahoney is the
Non-Executive Chairman of the Board of Thomas Pharmaceuticals. He has been a
director of Thomas Pharmaceuticals since May 2005. Mr. Mahoney has been the
President and Chief Executive Officer and a director of iVoice, Inc. since May
21, 1999. Mr. Mahoney started at Executone Information Systems, a telephone
systems manufacturer, and was Director of National Accounts from 1988 to 1989.
In 1989, Mr. Mahoney founded Voice Express, Inc. a New York company that sold
voicemail systems and telephone system service contracts and installed these
systems. Mr. Mahoney sold Voice Express Systems in 1993. From 1993 to 1997, Mr.
Mahoney was President of IVS Corp., and on December 17, 1997, he established
International Voice Technologies, with which iVoice merged on May 21, 1999. Mr.
Mahoney is also the Non-Executive Chairman of the Board of Trey Resources, Inc.
Livingston, New Jersey, and has been a director of Trey Resources since January
1, 2003. He was also the Non-Executive Chairman of the Board of SpeechSwitch,
Inc. Matawan, New Jersey from November 10, 2004 through February 7,
2008.  He also held the Non-Executive Chairman of the Board of Deep
Field Technologies, Inc. Matawan, New Jersey from November 10, 2004 through
February 13, 2007. Mr. Mahoney has served as Non-Executive Chairman of the Board
of MM2 Group,
Inc. Livingston, New Jersey since October 19, 2005. Mr. Mahoney has served as
iVoice Technology’s Non-Executive Chairman of the Board  from November
10, 2004 until August 30, 2006 and President, Chief Executive Officer and
Secretary since August 30, 2006. Mr. Mahoney received a B.A. in finance and
marketing from Fairleigh Dickinson University, Rutherford, N.J. in
1983.





John E.
Lucas.  Mr. Lucas has been
Thomas Pharmaceuticals’ Chief Executive Officer and a director since February
2005 and President since March 15, 2007. Mr. Lucas served as Chairman and Chief
Executive Officer of EpiCept Corporation, New Jersey and Munich, Germany from
January 1999 to




36


July
2004. Mr. Lucas was also a director and on the audit, compensation and corporate
governance committees of Sequenom, Inc. a producer of sophisticated DNA analysis
and molecular diagnostics systems from 1998 to 2006. Mr. Lucas began his
management career a few years after graduation from Harvard Business School (in
1958) when he was recruited to serve as Chief Executive Officer of Oxford
Laboratories, San Mateo, California, a small company producing clinical
laboratory devices and related supplies. Under his leadership, that company grew
rapidly, completed an initial public offering and subsequently was acquired by
G.D. Searle & Co. (now Monsanto). From 1974 to 2004 Mr. Lucas went on to
serve as Chief Executive Officer of six additional biomedical startup or early
stage turnaround companies, all of which achieved profitable liquidity. Mr.
Lucas is a graduate of Western Military Academy and Northwestern University. He
served three years sea duty as a line officer in the U.S. Navy.





Frank V. Esser.  Mr. Esser has
been a director of Thomas Pharmaceuticals since January 2006. He has been a
director of iVoice, Inc. since February 24, 2004 and the iVoice Head of The
Audit Committee. Mr. Esser, who is a Certified Public Accountant, from 1959 to
1968, functioned as Transfer Agent and Head Bookkeeper in the Treasury
Department of Texaco Inc. As a certified public accountant with Ernst &
Young from 1968 to 1981, he participated in the audits of major publicly traded
companies such as J.P. Stevens & Co., Dynamics Corporation of America, and
Phillips - Van Heusen Corporation, along with law firms, banks, manufacturing
companies and other organizations. He also participated in the public offerings
of equity and debt and the preparation of SEC filings. In 1981, Mr. Esser
accepted the position of Corporate Controller with a client, Grow Group, Inc. a
Fortune 500 manufacturer of paints, solvents, and household products, ascending
to the position of Chief Financial Officer in 1987. In 1998, Mr. Esser accepted
the position of Senior Associate at Beacon Consulting Associates, adding the
title of Vice President in 1999. Mr. Esser is also a Board member of iVoice
Technology, Inc. Matawan, New Jersey, since June 2005. Mr. Esser holds a BBA
degree from Baruch College of the City University of New York and is a Certified
Public Accountant in New York State.





There are
no agreements or understandings for the officer or directors to resign at the
request of another person and the above-named officers and director is not
acting on behalf of nor will act at the direction of any other person. As of
December 31, 2007, we did not have a separate audit committee. Rather, our
entire Board of Directors performed all the functions that may be delegated to
an audit committee. Based on our small size and limited financial and human
resources, we did not believe that creating an audit committee separate and
distinct from our full Board of Directors would have been
cost-effective.





There are
no family relationships among the directors or executive officers.




For the
year ended December 31, 2007, the Board held no meetings.  In
addition, the Board acted through written unanimous consent in lieu of a meeting
on four (4) occasions.





Section
16(a) Beneficial Ownership Reporting Compliance.





No person who was a director, officer,
beneficial owner of more than ten percent of any class of equity securities of
the registrant registered pursuant to section 12 (“Reporting Person”) failed to
file on a timely basis the necessary reports, on Forms 3, 4, or 5, as required
by section 16(a) of the Exchange Act during the most recent fiscal
year.







37


Code
of Ethics.





On April
14, 2008, the Board of Directors of the Company adopted a Code of Ethics for
adherence by its senior corporate officers to ensure honest and ethical conduct;
full, fair and proper disclosure of  financial information in the
Company’s periodic reports filed pursuant to the Securities Exchange Act of
1934; and compliance with applicable laws, rules, and regulations. Any person
may obtain a copy of our Code of Ethics by mailing a request to the Company at
the address appearing on the front page of this Annual Report on Form
10-KSB.





AUDIT
COMMITTEE





During
2007, Messrs. Mahoney and Esser served on the Audit Committee with Mr. Esser
serving as the Chairman of the committee. The Audit Committee has one
independent member who may also be deemed to be a financial expert as defined in
§228.401(e) of the regulations promulgated by the SEC pursuant to the Securities
Exchange Act of 1934, as amended.  Management is responsible for the
Company’s internal controls and the financial reporting process. The independent
auditors are responsible for performing an independent audit of the Company’s
consolidated financial statements in accordance with generally accepted
accounting principles and to issue a report thereon and as to management’s
assessment of the effectiveness of internal controls over financial reporting.
The Audit Committee’s responsibility is to monitor and oversee these processes,
although the members of the Audit Committee are not engaged in the practice of
auditing.  The Audit Committee did not meet in 2007 and did not act
through written unanimous consent in lieu of a meeting. The Board of Directors
approved an Audit Committee Charter on April 14, 2008. As of this date, the
Audit Committee operates pursuant to this Audit Committee Charter.





AUDIT
COMMITTEE REPORT





The
following is the Audit Committee’s report submitted to the Board of Directors
for the fiscal year ended December 31, 2007.  The Audit Committee
has:





·
            reviewed
      and discussed the Company’s audited financial statements with management
      and Bagell, Josephs, Levine & Company, L.L.C., the Company’s
      independent accountants;


·
            discussed
      with Bagell, Josephs, Levine & Company, L.L.C. the matters required to
      be discussed by Statement on Auditing Standards No.61, as
      may be modified or supplemented;
and


·
            received
      from Bagell, Josephs, Levine & Company, L.L.C. the written disclosures
      and the letter regarding their independence as required by Independence
      Standards Board Standard No. 1, as may be modified or supplemented, and
      discussed the auditors’ independence with them;
  and





Based on
the review and discussions referred to above, the Audit Committee recommended to
the Board of Directors that the audited financial statements be included in the
Company’s Annual Report on Form 10-KSB for the fiscal year ended December 31,
2007, for filing with the Securities and Exchange Commission.





AUDIT
      COMMITTEEFrank
      V. Esser,ChairmanJerome
      Mahoney, Member





The
Audit Committee report shall not be deemed incorporated by reference by any
general statement incorporating by reference this Annual Report on Form 10-KSB
into any filing under the Securities Act of 1933, as amended or the Securities
Exchange Act of 1934, as amended, and shall not otherwise be deemed filed under
these acts.


38


Item
10. Executive Compensation.




The
following table sets forth compensation information for services rendered by
certain of our executive officers in all capacities during the last three
completed fiscal years.  The following information includes the dollar
value of base salaries, bonus awards, the number of stock options granted, and
certain other compensation, if any, whether paid or deferred.




Summary
Compensation Table




Name and Position(s)
            
            Year
            
            Salary($)
            
            
            Total
              CompensationJohn
      E. Lucas
            
            2007
            
            $
            62,070
            
            
            $
            62,070Chief
      Executive Officer and
            
            2006
            
            $
            60,000
            
            
            $
            60,000President
      (1)Farris
      M. Thomas, Jr.
            
            2007
            
            $
            15,000
            
            
            $
            15,000President
      (2)
            
            2006
            
            $
            72,000
            
            
            $
            72,000




(1)
            Mr.
      Lucas has been serving as the Chief Executive Officer since February 2005
      and the President since March 16, 2007. $49,570 of this compensation
      remains unpaid at December 31,
2007.




(2)
            Mr.
      Thomas served as the President from July 2004 to March 15,
      2007.






Director
Compensation




The
following table sets forth compensation information for services rendered by our
directors during the last completed fiscal year.  The following
information includes the dollar value of base salaries, bonus awards, the number
of stock options granted, and certain other compensation, if any, whether paid
or deferred. Our directors did not receive any bonus, stock awards, option
awards, non-equity incentive plan compensation, or nonqualified deferred
compensation earnings during the last completed fiscal year.




39


Director
Compensation




Name and Position(s)
            
            Year
            
            Salary($)
            
            
            Total
              CompensationJerome
      R. Mahoney (1)
            
            2007
            
            $
            9,444
            
            
            $
            9,444John
      E. Lucas (2)
            
            2007
            
            $
            —
            
            
            $
            —Frank
      V. Esser (3)
            
            2007
            
            $
            12,000
            
            
            $
            12,000




(1)
            Mr.
      Mahoney has been serving as the Non-Executive Chairman of the Board since
      May 2005 and received no compensation for this service through the
      effective date of the Distribution. Effective at the date of the
      Distribution, Mr. Mahoney received a salary for his services as
      Non-Executive Chairman of the Board of $85,000 for the first year with an
      annual increases based on the Consumer Price Index every year thereafter.
      Amounts shown are unpaid.




(2)
            Mr.
      Lucas received no compensation for his service as a director. Mr. Lucas’s
      compensation received in his capacity as Chief Executive Officer is
      disclosed in the Summary Compensation Table
  above.




(3)
            Mr.
      Esser has been serving as our outside director since January 2006 at a fee
      of $12,000 per year. Amounts shown are
unpaid.




Employment
Contracts





Jerome
R. Mahoney





Thomas
Pharmaceuticals entered into a five-year employment agreement with Mr. Mahoney
on March 1, 2007, which became effective at the time of the Distribution.
Pursuant to the agreement, Mr. Mahoney will serve as Thomas Pharmaceuticals’
Non-Executive Chairman of the Board for a term of five years. As consideration,
Thomas Pharmaceuticals will pay Mr. Mahoney the sum of $85,000 the first year
with an annual increase based on the Consumer Price Index every year thereafter.
Thomas Pharmaceuticals also will pay Mr. Mahoney a bonus for each merger or
acquisition completed by the Company equal to six percent (6%) of the gross
consideration paid or received by Thomas Pharmaceuticals in a merger or
acquisition completed by the Company during the term of the agreement. The
compensation payable to Mr. Mahoney under the agreement may be paid in the form
of cash, debt or shares of Class B Common Stock at the option of Mr.
Mahoney.





In the
event Mr. Mahoney’s employment agreement is terminated by Thomas Pharmaceuticals
due to Mr. Mahoney’s disability or retirement, Thomas Pharmaceuticals will pay
him his full base salary for five years from the date of termination at the
highest salary level under the agreement. In the event Mr. Mahoney’s employment
agreement is terminated due to Mr. Mahoney’s death, Thomas Pharmaceuticals will
pay to his estate his full base salary for eight years from the date of
termination at the highest salary level under the agreement.







40


In the
event Mr. Mahoney’s employment is terminated by Thomas Pharmaceuticals for
cause, Thomas Pharmaceuticals will pay him through the date of termination and
all other obligations for payments and benefits to Mr. Mahoney will terminate on
such termination date.  Under his agreement, “cause” means (1) the
willful and continued failure of Mr. Mahoney to substantially perform his duties
to the Company after written demand for such performance is delivered to Mr.
Mahoney by the Company’s board of directors, (2) the willful engaging by Mr.
Mahoney in conduct that is demonstrably and materially injurious to the Company,
monetarily or otherwise, (3) the conviction of Mr. Mahoney of a felony, or (4)
the commission of any act by Mr. Mahoney against the Company that may be
construed as embezzlement, larceny, and/or grand larceny.  However,
Mr. Mahoney will not be deemed to have been terminated for cause unless the
board of directors determines, by a vote of at least 75% of the members of the
board of directors, that Mr. Mahoney was guilty of conduct described in items
(1), (2) or (4) above. Mr. Mahoney would be required to recuse himself from any
discussions or vote regarding any potential termination, and the remaining
directors would be required to determine, in accordance with their fiduciary
duties as a board member, if Mr. Mahoney should be terminated for
cause.





In the
event Mr. Mahoney’s employment agreement is terminated by Thomas Pharmaceuticals
following a change in control, as defined in the employment agreement for any
reason other than cause, death, disability, retirement or good reason Mr.
Mahoney will be entitled to receive his base salary through the term of the
agreement plus an additional five years following the date of termination at the
highest rate in effect on that date.  In the event Mr. Mahoney’s
employment agreement is terminated within three years following a change in
control, other than for cause, retirement, death or disability, or by Mr.
Mahoney for good reason within three years following a change in control, in
lieu of the foregoing payment Mr. Mahoney will be entitled to receive a
severance payment equal to three hundred percent (300%), less $100, of his gross
income for services rendered to Thomas Pharmaceuticals in each of the five prior
calendar years (or shorter period during which Mr. Mahoney shall have been
employed by Thomas Pharmaceuticals). Under his employment agreement, “good
reason” means, among other things, (1) any limitation on Mr. Mahoney’s powers as
Non-Executive Chairman of the Board, (2) a reduction in compensation, (3) a
relocation of the Company outside New Jersey or (4) the failure of the Company
to make any required payments under the agreement. The employment agreement
restricts Mr. Mahoney from competing with Thomas Pharmaceuticals during the term
of the agreement and for one year after he is no longer employed by the Company;
provided that Mr. Mahoney is receiving severance or other compensation from the
Company pursuant to the employment agreement for at least one year.





John
E. Lucas





Thomas
Pharmaceuticals entered into an employment agreement with Mr. Lucas as of
January 6, 2006 pursuant to which Mr. Lucas serves as Thomas Pharmaceutical’s
Chief Executive Officer. The agreement term continues until December 31, 2008.
As consideration, Thomas Pharmaceuticals agreed to pay Mr. Lucas the sum of
$60,000 the first year with an annual increase based on the Consumer Price Index
every year thereafter. Thomas Pharmaceuticals also agreed to pay Mr. Lucas an
annual cash bonus based upon the net sales of the Company, equal to 2.5% of net
sales in excess of $1,000,000 in 2006 and 2007, and 4% of net sales over $6
million in 2008. The compensation payable to Mr. Lucas under the agreement may
be paid in the form of cash, debt or shares of Class B Common Stock at the
option of the Company.






41


In the
event Mr. Lucas’s employment agreement is terminated by Thomas Pharmaceuticals
for cause or due to Mr. Lucas’s disability or retirement, Thomas Pharmaceuticals
will pay him any unpaid compensation through the date of termination. Under his
agreement, “cause” means (1) the willful and continued failure of Mr. Lucas to
substantially perform his duties to the Company after written demand for such
performance is delivered to Mr. Lucas by the Company’s board of directors, (2)
the willful engaging by Mr. Lucas in conduct that is demonstrably and materially
injurious to the Company, monetarily or otherwise, (3) the conviction of Mr.
Lucas of a felony, which is limited solely to a crime that relates to the
business operations of the Company or that results in his being unable to
substantially carry out his duties as set forth in the agreement, or (4) the
commission of any act by Mr. Lucas against the Company that may be construed as
embezzlement, larceny, and/or grand larceny. However, Mr. Lucas will not be
deemed to have been terminated for cause unless the board of directors
determines, by a vote of at least two-thirds of the members of the board of
directors, that Mr. Lucas was guilty of conduct described in items (1), (2) or
(4) above. Mr. Lucas would be required to recuse himself from any discussions or
vote regarding any potential termination and the remaining directors would be
required to determine, in accordance with their fiduciary duties as a board
member, if Mr. Lucas should be terminated for cause.





In the
event Mr. Lucas’s employment agreement is terminated due to Mr. Lucas’s death,
Thomas Pharmaceuticals will pay to his estate all earned but unpaid compensation
through the date of termination. In the event Mr. Lucas’s employment agreement
is terminated by Thomas Pharmaceuticals without cause or by Mr. Lucas for good
reason, Mr. Lucas will be entitled to receive (1) any unpaid compensation
through the date of termination, (2) any unpaid bonus earned with respect to the
fiscal year ending on or preceding the date of termination, and (3) a one-time
lump sum payment equal to four week’s base salary. Under his employment
agreement, “good reason” means, among other things, (1) a material breach of the
employment agreement by the Company, (2) the failure by the Company to make any
required payments under the agreement, (3) any material reduction or diminution
in Mr. Lucas’s titles or primary job responsibilities with the Company, or (4) a
change in control of the Company, as defined in the employment agreement. The
employment agreement restricts Mr. Lucas from competing with Thomas
Pharmaceuticals during the term of the agreement and for two years after he is
no longer employed by Thomas Pharmaceuticals.





Farris
M. (Tom) Thomas, Jr.





Thomas
Pharmaceuticals entered into an employment agreement with Mr. Thomas as of
January 6, 2006 pursuant to which Mr. Thomas served as Thomas Pharmaceutical’s
President through his resignation on March 15, 2007. The agreement had a term
until December 31, 2008. As consideration, Thomas Pharmaceuticals agreed to pay
Mr. Thomas the sum of $72,000 the first year with an annual increase based on
the Consumer Price Index every year thereafter. Thomas Pharmaceuticals also
agreed to pay Mr. Thomas an annual cash bonus based upon the net sales of the
Company, equal to 2.5% of net sales in excess of $1,000,000 in 2006 and 2007,
and 4% of net sales over $6 million in 2008. Mr. Thomas resigned as President of
Thomas Pharmaceuticals on March 15, 2007 and his employment agreement terminated
as of such date.








42


Item
11. Security Ownership of Certain Beneficial Owners and Management.





The
following tables set forth certain information regarding the beneficial
ownership of our voting securities as of December 31, 2007 of (i) each
person known to us to beneficially own more than 5% of the applicable class of
voting securities, (ii) our directors, (iii) and each named executive
officer and (iv) all directors and executive officers as a
group.  As of December 31, 2007, there were 550 shares of Series B
Convertible preferred stock outstanding and a total of 248,276,105 shares of
Class A common stock outstanding. Each share of Series B Convertible preferred
stock shall have one vote for each shares of Class A Common Stock into which
each shares of Series B Convertible preferred shares could be converted,
assuming a conversion price of eighty percent (80%) of the lowest closing
bid price of the Common Stock for the five (5) trading days immediately
preceding the record date and shall be limited to no more than 9.99% of the
total voting rights of the aggregate of the Series B Preferred Stock, Class A
Common Stock and Class B Common Stock shareholders and of equal voting rights
and powers of the holders of the Class A Common Stock and is entitled to vote
together with respect to any question upon which the holders of Class A Common
Stock have the right to vote. Each share of Class A common stock is entitled to
one vote.





The number of shares beneficially owned
is determined under rules promulgated by the Securities and Exchange Commission,
and the information is not necessarily indicative of beneficial ownership for
any other purpose.  Under those rules, beneficial ownership includes
any shares as to which the individual has sole or shared voting power or
investment power and also any shares which the individual has the right to
acquire within 60 days of March 31, 2008, through the exercise or conversion of
any stock option, convertible security, warrant or other
right.  Unless otherwise indicated, each person or entity named in the
table has sole voting power and investment power (or shares that power with that
person’s spouse) with respect to all shares of capital stock listed as owned by
that person or entity.





Security
ownership of certain beneficial owners




%
      of Class
                Beneficially
      OwnedName/Address
            
            Title
      of Class
            
            
            Number
            
            
            
            PercentiVoice,
      Inc.
            
            Series
      B Convertible Preferred
            
            
            550
            
            
            
            100.00
            %750
      Highway 34
            
            Class
      A Common Stock
            
            
            27,555,586
            (1)
            
            
            9.99
            %Matawan,
      NJ 07747




BioBridge
      LLC
            
            Series
      B Convertible Preferred
            
            
            96.8
            (2)
            
            
            15.00
            %One
      Kendall Square, #700
            
            Class
      A Common Stock
            
            
            129,000,000
            (3)
            
            
            34.19
            %Cambridge,
      MA 02139


______________________________




(1)
            Represents
      the maximum number of shares that can be held on any conversion date of
      9.99% of the Class A Common Shares outstanding for any conversion of both
      the Series B Preferred Stock and the Convertible Debentures assuming at
      conversion price of $.0008. The Series B Preferred Stock and the
      Convertible Debentures are convertible into an aggregate of 1,575,000,000
      Class A Common Shares, assuming at conversion price of
    $.0008.





43


(2)
            Includes
      96.8 shares of Thomas Pharmaceuticals Series B Convertible Preferred Stock
      issuable upon the conversion of $96,800 in principal of debentures issued
      by Thomas Pharmaceutical Acquisition Corp. ($96,800 in stated
      value).





(3)
            Represents
      the maximum of the following: (i) 129,000,000 shares of Thomas
      Pharmaceuticals Class A Common Stock issuable upon the conversion of
      $103,200 in principal of debentures issued by Thomas Pharmaceutical
      Acquisition Corp., an entity not affiliated with Thomas Pharmaceuticals or
      iVoice, convertible into shares of Thomas Pharmaceuticals Class A Common
      Stock at a conversion price equal to 80% of the lowest closing bid price
      of the common stock for the 5 trading days immediately preceding the
      conversion date; or (ii) 27,555,586 shares of Thomas Pharmaceuticals Class
      A Common Stock issuable, up to the limit of 9.99% of the total Class A
      Common Stock at that time, upon the conversion of a portion of the $96,800
      in principal of debentures issued by Thomas Pharmaceutical Acquisition
      Corp. convertible into shares of Thomas Pharmaceuticals Series B
      Convertible Preferred Stock ($96,800 in stated value) which are in turn
      convertible into the number of shares of Thomas Pharmaceuticals’ Class A
      Common Stock determined by dividing the stated value of the number of
      shares of Series B Convertible Preferred Stock being converted by 80% of
      the lowest closing bid price of the common stock for the 5 trading days
      immediately preceding the conversion date. The Series B Preferred Stock
      and the Convertible Debentures are convertible into an aggregate of
      250,000,000 Class A Common Shares, assuming at conversion price of
      $.0008.







Security
ownership of management




Common
      Stock
                Beneficially
      OwnedName/Address
            
            Title
      of Class
            
            Number
            
            
            PercentJohn
      E. Lucas (a)
            
            Class
      A Common Stock
            
            
            1,067,632
            
            
            
            0.43
            %Jerome
      R. Mahoney (a)
            
            Class
      A Common Stock
            
            
            —
            
            
            
            0.00
            %Frank
      V. Esser (a)
            
            Class
      A Common Stock
            
            
            70,892
            
            
            
            0.03
            %Director
      and executive officer as a group
            
            Class
      A Common Stock
            
            
            1,138,524
            
            
            
            0.46
            %


______________________________




(a)
            The
      address for these officers and directors is c/o Thomas Pharmaceuticals,
      Ltd. 750 Highway 34, Matawan, New Jersey
07747.




Item
12.  Certain Relationships and Related Transactions, and Director
Independence.




Related
Party Accounts Due




Reference
is made to the employment and other arrangements with Mr. Mahoney and Mr. Lucas
set forth under Item 10 Executive Compensation above.  As of December
31, 2007, the Company has accrued $9,444 of deferred compensation for the
Non-executive Chairman of the Board and $49,570 for the CEO and President of the
Company. These deferrals will remain unpaid until the Board of Directors






44


determines
that the Company has sufficient liquidity to make such payments. The
Non-executive Chairman of the Board and the CEO and President of the Company
have further agreed, however, to accept payment or partial payment, from time to
time, in the form of the Company’s Class A Common Stock and/or the Company’s
Class B Company Stock, at such time as the Board of Directors determines to
issue such shares in satisfaction of these accrued
liabilities.





Director
Independence





Thomas
Pharmaceutical’s board of directors consists of Jerome R. Mahoney, John E. Lucas
and Frank V. Esser. Mr. Esser is an “independent director” as such term is
defined in Section 4200(a)(15) of the NASDAQ Marketplace Rules.



















































45


ITEM
13.                                           EXHIBITS





Exhibit
            
            Description3.1
            
            Certificate
      of Incorporation of Thomas Pharmaceuticals, Ltd. (f/k/a iVoice Acquisition
      Corp.), a New Jersey corporation, filed May 19, 2005.
  (1)3.2
            
            Amendment
      to Certificate of Incorporation of Thomas Pharmaceuticals, Ltd. (f/k/a
      iVoice Acquisition Corp.), a New Jersey corporation, filed January 4,
      2006. (1)3.3
            
            Amendment
      to Certificate of Incorporation of Thomas Pharmaceuticals, Ltd., a New
      Jersey corporation, filed January 27, 2006. (1)3.4
            
            Amendment
      to Certificate of Incorporation of Thomas Pharmaceuticals, Ltd., a New
      Jersey corporation, filed April, 2007. (1)3.5
            
            Amendment
      to Certificate of Incorporation of Thomas Pharmaceuticals, Ltd., a New
      Jersey corporation, filed January 23, 2008.4.1
            
            By-laws
      of Thomas Pharmaceuticals, Ltd., a New Jersey corporation.
    (1)


10.1
            
            Agreement
      and Plan of Merger dated January 6, 2006 by and among iVoice, Inc. Thomas
      Pharmaceuticals, Ltd. (f/k/a iVoice Acquisition Corp.), a New Jersey
      corporation, Thomas Pharmaceuticals Ltd., a New York corporation, Farris
      M. Thomas, Jr., an individual, John E. Lucas, an individual, Richard C.
      Brogle, Nina Schwalbe, an individual, John H. Kirkwood, an individual, and
      Maureen Gillespie, an individual. (1)10.2
            
            Secured
      Convertible Debenture dated January 6, 2006 issued by Thomas
      Pharmaceuticals, Ltd. a New Jersey corporation. for the sum of $360,000.
      (1)10.3
            
            Administrative
      Services Agreement dated January 6, 2006 between Thomas Pharmaceuticals,
      Ltd., a New Jersey corporation and iVoice, Inc.
  (1)


10.4
            
            Amended
      and Restated Security Agreement dated June 14, 2007 by and between iVoice,
      Inc. and Thomas Pharmaceuticals, Ltd., a New Jersey corporation, as
      amended. (2)10.5
            
            Shareholders
      Agreement dated January 6, 2006 by and among iVoice, Inc. Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation, Thomas Pharmaceuticals
      Ltd., a New York corporation, Farris M. Thomas, Jr., an individual, John
      E. Lucas, an individual, Richard C. Brogle, Nina Schwalbe, an individual,
      John H. Kirkwood, an individual, and Maureen Gillespie, an individual.
      (1)10.6
            
            Investor
      Registration Rights Agreement dated January 6, 2006 by and between iVoice,
      Inc. and Thomas Pharmaceuticals, Ltd., a New Jersey corporation.
      (1)10.7
            
            Escrow
      Agreement dated January 6, 2006 by and among iVoice, Inc. Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation, and Meritz & Muenz
      LLP. (1)10.8
            
            Administrative
      Services Convertible Debenture dated January 6, 2006 issued by Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation, for the sum of $100,000.
      (1)10.9
            
            Employment
      Agreement dated January 6, 2006 by and between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and John E.
      Lucas.  (1)10.10
            
            Employment
      Agreement dated January 6, 2006 by and between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and Farris M. Thomas, Jr.
    (1)10.11
            
            Amendment
      No. 1 to Agreement and Plan of Merger dated April 13, 2006 by and among
      iVoice, Inc. Thomas Pharmaceuticals, Ltd. (f/k/a iVoice Acquisition
      Corp.), a New Jersey corporation, Thomas Pharmaceuticals Ltd., a New York
      corporation, Farris M. Thomas, Jr., an individual, John E. Lucas, an
      individual, Richard C. Brogle, Nina Schwalbe, an individual, John H.
      Kirkwood, an individual, and Maureen Gillespie, an individual.
      (1)






46




10.12
            
            Secured
      Convertible Debenture dated April 27, 2006, issued by Thomas
      Pharmaceuticals, Ltd. a New Jersey corporation, for the sum of $225,000.
      (1)10.13
            
            Stock
      Purchase Agreement dated August 7, 2006 by and among Thomas
      Pharmaceuticals Ltd., Thomas Pharmaceutical Acquisition Corp. and iVoice,
      Inc. (1)10.14
            
            Extension
      Agreement by and among Thomas Pharmaceuticals Ltd., Thomas Pharmaceutical
      Acquisition Corp. and iVoice, Inc. dated January 26, 2007.
    (1)10.15
            
            Secured
      Convertible Debenture dated January 26, 2007, for the sum of $103,200
      issued by Thomas Pharmaceutical Acquisition Corp., a Delaware corporation.
      (1)10.16
            
            Convertible
      Debenture dated January 26, 2007, for the sum of $96,800 issued by Thomas
      Pharmaceutical Acquisition Corp., a Delaware corporation.
    (1)10.17
            
            Promissory
      Note dated January 26, 2007, for the sum of $160,000 issued by Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation. (1)10.18
            
            Amended
      and Restated Security Agreement dated June 14, 2007, issued by Thomas
      Pharmaceutical Acquisition Corp., a Delaware corporation, as amended.
      (3)


10.19
            
            Secured
      Convertible Debenture dated February 7, 2007, issued by Thomas
      Pharmaceuticals, Ltd. a New Jersey corporation, for the sum of $25,000.
      (1)10.20
            
            Employment
      Agreement dated March 1, 2007 by and between Thomas Pharmaceuticals, Ltd.
      a New Jersey corporation, and Jerome R. Mahoney. (2)10.21
            
            Administrative
      Services Agreement dated March 1, 2007 between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and iVoice, Inc. (2)10.22
            
            Professional
      Services Agreement dated January 3, 2006 by and between P2B, Inc. and
      Thomas Pharmaceuticals, Ltd. (2)10.23
            
            Amendment
      to Employment Agreement dated June 11, 2007 by and between Thomas
      Pharmaceuticals, Ltd. a New Jersey corporation, and John E. Lucas
      (2)10.24
            
            Amendment
      to the Secured Convertible Debentures dated March 23, 2008, between Thomas
      Pharmaceuticals, Ltd. and iVoice, Inc.14.1
            
            Code
      of Ethics +21
            
            List
      of Subsidiaries: None31.1
            
            Certifications
      of the Chief Executive Officer and Principal Accounting Officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002+32.1
            
            Certification
      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
      the Sarbanes-Oxley Act Of 2002 +99.1
            
            Audit
      Committee Charter +


_________





(1)
            Filed
      as an exhibit to the Registration Statement on Form SB-2, filed with the
      Commission on April 13, 2007 and incorporated herein by
      reference.(2)
            Filed
      as an exhibit to Amendment No. 1 to the Registration Statement on Form
      SB-2, filed with the Commission on June 18, 2007 and incorporated herein
      by reference.(3)
            Filed
      as an exhibit to Amendment No. 2 to the Registration Statement on Form
      SB-2, filed with the Commission on July 27, 2007 and incorporated herein
      by reference.+
            Filed
      herewith.








47


Item
14.  Principal Accountant Fees and Services




The
following table sets forth fees billed to the Company by the Company’s
independent auditors for the year ended December 31, 2007 and December 31, 2006
for (i) services rendered for the audit of the Company’s annual financial
statements and the review of the Company’s quarterly financial statements, (ii)
services rendered that are reasonably related to the performance of the audit or
review of the Company’s financial statements that are not reported as Audit
Fees, and (iii) services rendered in connection with tax preparation,
compliance, advice and assistance.




Services
            
            2007
            
            2006Audit
      Fees
            
            $19,000
            
            $15,000Audit
      - Related Fees
            
            (1)
            
            (1)Tax
      fees
            
            (1)
            
            (1)All
      Other Fees
            
            —
            
            —Total
            
            $19,000
            
            $15,000(1)
      Included in base audit fee, not
itemized




Pursuant
to pre-approval policies and procedures established by the Company’s Audit
Committee with the Audit Committee being informed of each service and such
policies and procedures do not include delegation of the Audit Committees
responsibilities under the Securities Exchange Act of 1934, as amended, to
management, prior to the Company engaging our independent registered public
accounting firm to perform a particular service, our President and Chief
Executive Officer obtains an estimate for the service to be
performed.  All of the services described above were approved by the
President and Chief Executive Officer in accordance with Audit Committee
policies and procedures.














48




Signatures




In
accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
this report on Form 10-KSB to be signed on its behalf by the undersigned,
thereunto duly authorized.




Thomas
      Pharmaceuticals, Ltd.By:
              /s/ John
      E. Lucas
              April
      14, 2008John
      E. LucasPresident,
      Chief Executive Officer,
                Chief
      Financial Officer and Director











In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




By:
                /s/ John
      E. Lucas
                April
      14, 2008John
      E. LucasPresident,
      Chief Executive Officer,
                  Chief
      Financial Officer and Director


By:
                  /s/ Jerome
      R. Mahoney
                  April
      14, 2008Jerome
      R. MahoneyNon-executive
      Chairman of the Board
  By:
                      /s/ Frank
      V. Esser
                      April
      14, 2008Frank
      V. EsserDirector




49


INDEX
OF EXHIBITS





3.1
            
            Certificate
      of Incorporation of Thomas Pharmaceuticals, Ltd. (f/k/a iVoice Acquisition
      Corp.), a New Jersey corporation, filed May 19, 2005.
  (1)3.2
            
            Amendment
      to Certificate of Incorporation of Thomas Pharmaceuticals, Ltd. (f/k/a
      iVoice Acquisition Corp.), a New Jersey corporation, filed January 4,
      2006. (1)3.3
            
            Amendment
      to Certificate of Incorporation of Thomas Pharmaceuticals, Ltd., a New
      Jersey corporation, filed January 27, 2006. (1)3.4
            
            Amendment
      to Certificate of Incorporation of Thomas Pharmaceuticals, Ltd., a New
      Jersey corporation, filed April, 2007. (1)3.5
            
            Amendment
      to Certificate of Incorporation of Thomas Pharmaceuticals, Ltd., a New
      Jersey corporation, filed January 23, 2008.4.1
            
            By-laws
      of Thomas Pharmaceuticals, Ltd., a New Jersey corporation.
    (1)


10.1
            
            Agreement
      and Plan of Merger dated January 6, 2006 by and among iVoice, Inc. Thomas
      Pharmaceuticals, Ltd. (f/k/a iVoice Acquisition Corp.), a New Jersey
      corporation, Thomas Pharmaceuticals Ltd., a New York corporation, Farris
      M. Thomas, Jr., an individual, John E. Lucas, an individual, Richard C.
      Brogle, Nina Schwalbe, an individual, John H. Kirkwood, an individual, and
      Maureen Gillespie, an individual. (1)10.2
            
            Secured
      Convertible Debenture dated January 6, 2006 issued by Thomas
      Pharmaceuticals, Ltd. a New Jersey corporation. for the sum of $360,000.
      (1)10.3
            
            Administrative
      Services Agreement dated January 6, 2006 between Thomas Pharmaceuticals,
      Ltd., a New Jersey corporation and iVoice, Inc.
  (1)


10.4
            
            Amended
      and Restated Security Agreement dated June 14, 2007 by and between iVoice,
      Inc. and Thomas Pharmaceuticals, Ltd., a New Jersey corporation, as
      amended. (2)10.5
            
            Shareholders
      Agreement dated January 6, 2006 by and among iVoice, Inc. Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation, Thomas Pharmaceuticals
      Ltd., a New York corporation, Farris M. Thomas, Jr., an individual, John
      E. Lucas, an individual, Richard C. Brogle, Nina Schwalbe, an individual,
      John H. Kirkwood, an individual, and Maureen Gillespie, an individual.
      (1)10.6
            
            Investor
      Registration Rights Agreement dated January 6, 2006 by and between iVoice,
      Inc. and Thomas Pharmaceuticals, Ltd., a New Jersey corporation.
      (1)10.7
            
            Escrow
      Agreement dated January 6, 2006 by and among iVoice, Inc. Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation, and Meritz & Muenz
      LLP. (1)10.8
            
            Administrative
      Services Convertible Debenture dated January 6, 2006 issued by Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation, for the sum of $100,000.
      (1)10.9
            
            Employment
      Agreement dated January 6, 2006 by and between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and John E.
      Lucas.  (1)10.10
            
            Employment
      Agreement dated January 6, 2006 by and between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and Farris M. Thomas, Jr.
    (1)10.11
            
            Amendment
      No. 1 to Agreement and Plan of Merger dated April 13, 2006 by and among
      iVoice, Inc. Thomas Pharmaceuticals, Ltd. (f/k/a iVoice Acquisition
      Corp.), a New Jersey corporation, Thomas Pharmaceuticals Ltd., a New York
      corporation, Farris M. Thomas, Jr., an individual, John E. Lucas, an
      individual, Richard C. Brogle, Nina Schwalbe, an individual, John H.
      Kirkwood, an individual, and Maureen Gillespie, an individual.
      (1)








50


10.12
            
            Secured
      Convertible Debenture dated April 27, 2006, issued by Thomas
      Pharmaceuticals, Ltd. a New Jersey corporation, for the sum of $225,000.
      (1)10.13
            
            Stock
      Purchase Agreement dated August 7, 2006 by and among Thomas
      Pharmaceuticals Ltd., Thomas Pharmaceutical Acquisition Corp. and iVoice,
      Inc. (1)10.14
            
            Extension
      Agreement by and among Thomas Pharmaceuticals Ltd., Thomas Pharmaceutical
      Acquisition Corp. and iVoice, Inc. dated January 26, 2007.
    (1)10.15
            
            Secured
      Convertible Debenture dated January 26, 2007, for the sum of $103,200
      issued by Thomas Pharmaceutical Acquisition Corp., a Delaware corporation.
      (1)10.16
            
            Convertible
      Debenture dated January 26, 2007, for the sum of $96,800 issued by Thomas
      Pharmaceutical Acquisition Corp., a Delaware corporation.
    (1)10.17
            
            Promissory
      Note dated January 26, 2007, for the sum of $160,000 issued by Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation. (1)10.18
            
            Amended
      and Restated Security Agreement dated June 14, 2007, issued by Thomas
      Pharmaceutical Acquisition Corp., a Delaware corporation, as amended.
      (3)


10.19
            
            Secured
      Convertible Debenture dated February 7, 2007, issued by Thomas
      Pharmaceuticals, Ltd. a New Jersey corporation, for the sum of $25,000.
      (1)10.20
            
            Employment
      Agreement dated March 1, 2007 by and between Thomas Pharmaceuticals, Ltd.
      a New Jersey corporation, and Jerome R. Mahoney. (2)10.21
            
            Administrative
      Services Agreement dated March 1, 2007 between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and iVoice, Inc. (2)10.22
            
            Professional
      Services Agreement dated January 3, 2006 by and between P2B, Inc. and
      Thomas Pharmaceuticals, Ltd. (2)10.23
            
            Amendment
      to Employment Agreement dated June 11, 2007 by and between Thomas
      Pharmaceuticals, Ltd. a New Jersey corporation, and John E. Lucas
      (2)10.24
            
            Amendment
      to the Secured Convertible Debentures dated March 23, 2008, between Thomas
      Pharmaceuticals, Ltd. and iVoice, Inc.14.1
            
            Code
      of Ethics +21
            
            List
      of Subsidiaries: None31.1
            
            Certifications
      of the Chief Executive Officer and Principal Accounting Officer pursuant
      to Section 302 of the Sarbanes-Oxley Act of 2002+32.1
            
            Certification
      Pursuant To 18 U.S.C. Section 1350, As Adopted Pursuant To Section 906 of
      the Sarbanes-Oxley Act Of 2002 +99.1
            
            Audit
      Committee Charter +


_________





(1)
            Filed
      as an exhibit to the Registration Statement on Form SB-2, filed with the
      Commission on April 13, 2007 and incorporated herein by
      reference.(2)
            Filed
      as an exhibit to Amendment No. 1 to the Registration Statement on Form
      SB-2, filed with the Commission on June 18, 2007 and incorporated herein
      by reference.(3)
            Filed
      as an exhibit to Amendment No. 2 to the Registration Statement on Form
      SB-2, filed with the Commission on July 27, 2007 and incorporated herein
      by reference.+
            Filed
      herewith.











51
 
 THOMAS
PHARMACEUTICALS, LTD.
 FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 
 
 
 
 
                 
 
  THOMAS
PHARMACEUTICALS, LTD.
 FINANCIAL
STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 
 INDEX
TO FINANCIAL STATEMENTS
 
 
 
 
  Page(s)Report
      of Independent Registered Public Accounting Firm
                2Balance
      Sheets at December 31, 2007 and 2006
                3Statements
      of Operations for the Years Ended December 31, 2007 and
    2006
                4Statement
      of Changes in Stockholders’ Deficit for the Years Ended December 31, 2007
      and 2006
                5Statements
      of Cash Flows for the Years Ended December 31, 2007 and
    2006
                6-7Notes
      to Financial Statements
                8-26
 
              
 F -
1
  BAGELL,
JOSEPHS, LEVINE & COMPANY, L.L.C.
 Certified
Public Accountants
 406
Lippincott Drive – Suite J
 Marlton,
New Jersey 08053
 (856)
346-2828  Fax (856) 396-0022
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
  To the
Board of Directors and Stockholders’ of Thomas Pharmaceuticals,
Ltd.
 Matawan,
NJ
  
 We have
audited the accompanying balance sheets of Thomas Pharmaceuticals, Ltd. (the
“Company”) as of December 31, 2007 and 2006 and the related statements of
operations, changes in stockholders’ deficit, and cash flows 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 standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, 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 Thomas Pharmaceuticals, Ltd. as of
December 31, 2007 and 2006, and the results of its operations, changes in
stockholders’ deficit, and cash flows for the years the ended, and are in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements for the years ended December 31, 2007 and 2006
have been prepared assuming that the Company will continue as a going
concern.   As discussed in Note 13 to the financial statements,
the Company has sustained operating losses and capital deficits that raise
substantial doubt about its ability to continue as a going concern. Management’s
plans in regard to these matters are also described in Note 13.  The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
  As stated
in Note 14, the Company had amended its previously issued financial statements
for the year ended December 31, 2006. The Company had amended these statements
to reflect the retroactive restatement for the 2,431,849-for-one stock split
which was accomplished by means of a stock dividend effectuated immediately
prior to the effective date of the registration statement. The amended
statements show a decrease in weighted average number of common shares
outstanding to 243,184,868 for year ended December 31, 2006. This change has no
effect on the previously reported loss of $1,489,594 for the year ended December
31, 2006 or in the net loss per basic and diluted shares of $(0.01) for year
ended December 31, 2006.
 
 
 BAGELL,
JOSEPHS, LEVINE & COMPANY, L.L.C.
 BAGELL,
JOSEPHS, LEVINE & COMPANY, L.L.C.
 Certified
Public Accountants
 Marlton,
New Jersey
 
 April 2,
2008
  F -
2
 THOMAS
PHARMACEUTICALS, LTD.
 BALANCE
SHEETS
 December
31,
  2007
                
                
                2006ASSETSCurrent
      Assets:Cash
      and cash equivalents
                
                $
                9,705
                
                
                $
                11,747Accounts
      receivable, net of provision for product returns of $149,225 and $136,858,
      andbad
      debt allowance of $42,031 and $0, respectively
                
                
                —
                
                
                
                55,675Inventory,
      net of reserves for excess inventory of $56,117 and $30,000,
      respectively
                
                
                —
                
                
                
                34,757Prepaid
      and other current assets
                
                
                4,699
                
                
                
                58,901Total
      Current Assets
                
                
                14,404
                
                
                
                161,080Property
      and equipment, net of accumulated depreciation of $117,428 and $12,644,
      respectively
                
                
                3,380
                
                
                
                108,164Other
      Asset:Intangibles
      assets, net of impairment and amortization of $111,453 and $30,000,
      respectively
                
                
                —
                
                
                
                78,206Security
      deposits
                
                
                —
                
                
                
                1,975Total
      Other Assets
                
                
                —
                
                
                
                80,181TOTAL
      ASSETS
                
                $
                17,784
                
                
                $
                349,425LIABILITIES AND
      STOCKHOLDERS’ DEFICITLIABILITIESCurrent
      Liabilities:Accounts
      payable and accrued expenses
                
                $
                768,130
                
                
                $
                301,620Dividends
      payable
                
                
                102,164
                
                
                
                47,165Derivative
      liability
                
                
                1,132,379
                
                
                
                826,920Convertible
      debentures payable, net of discount of $519,048 and $596,786,
      respectively
                
                
                190,952
                
                
                
                88,214Total
      Current Liabilities
                
                
                2,193,625
                
                
                
                1,263,919Long
      Term Liabilities:Notes
      payable, net of discount of $133,833 and $0, respectively
                
                
                40,167
                
                
                
                20,000Total
      Long Term Liabilities
                
                
                40,167
                
                
                
                20,000Total
      Liabilities
                
                
                2,233,792
                
                
                
                1,283,919COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS’
      DEFICITSeries
      A Convertible Preferred stock, no par value, 500,000
      shares authorized; 0 and 500,000 shares issued and
      outstanding, respectively
                
                
                —
                
                
                
                5,000Series
      B Convertible Preferred stock, no par value, 1,000
      shares authorized; 550 shares issued and
      outstanding
                
                
                550,000
                
                
                
                550,000Common
      stock:Class
      A, no par value, 10,000,000,000 shares authorized; 248,276,105
      and 243,184,868 shares issued and outstanding, respectively
                
                
                5,100
                
                
                
                100Class
      B, no par value, 50,000,000 shares authorized; no shares
      issued and outstanding
                
                
                —
                
                
                
                —Accumulated
      deficit
                
                
                (2,771,108
                )
                
                
                (1,489,594
                )Total
      Stockholders’ Deficit
                
                
                (2,216,008
                )
                
                
                (934,494
                )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                
                $
                17,784
                
                
                $
                349,425
  
 The
accompanying notes are an integral part of these financial
statements.
 F -
3
 THOMAS PHARMACEUTICALS, LTD.
 STATEMENTS
OF OPERATIONS
 FOR
THE YEARS ENDED DECEMBER 31,
  
 (restated)2007
                
                
                2006NET
      REVENUES
                
                $
                22,857
                
                
                $
                179,938COST
      OF GOODS SOLD
                
                
                61,055
                
                
                
                198,590GROSS
      LOSS
                
                
                (38,198
                )
                
                
                (18,652
                )OPERATING
      EXPENSESSelling
      and marketing expenses
                
                
                176,371
                
                
                
                601,929General
      and administrative expenses
                
                
                480,814
                
                
                
                485,480Depreciation
      and amortization expenses
                
                
                186,237
                
                
                
                42,644Total
      selling, general and administrative expenses
                
                
                843,422
                
                
                
                1,130,053LOSS
      BEFORE OTHER EXPENSE
                
                
                (881,620
                )
                
                
                (1,148,705
                )OTHER
      EXPENSEAmortization
      of debt discount
                
                
                122,905
                
                
                
                88,214Loss
      on revaluation of derivatives
                
                
                126,459
                
                
                
                141,920Interest
      expense
                
                
                95,531
                
                
                
                63,590Total
      Other Expense
                
                
                344,895
                
                
                
                293,724LOSS
      BEFORE PROVISION FOR INCOME TAXES
                
                
                (1,226,515
                )
                
                
                (1,442,429
                )Provision
      for income taxes
                
                
                —
                
                
                
                —LOSS
      BEFORE PREFERRED DIVIDENDS
                
                
                (1,226,515
                )
                
                
                (1,442,429
                )Preferred
      dividends
                
                
                54,999
                
                
                
                47,165NET
      LOSS APPLICABLE TO COMMON SHARES
                
                $
                (1,281,514
                )
                
                $
                (1,489,594
                )NET
      LOSS PER BASIC AND DILUTED SHARES
                
                $
                (0.01
                )
                
                $
                (0.01
                )WEIGHTED
      AVERAGE NUMBER OF COMMONSHARES OUTSTANDING
                
                
                243,435,943
                
                
                
                243,184,868
   The
accompanying notes are an integral part of these financial
statements.
  
 F -
4
 THOMAS
PHARMACEUTICALS, LTD
 STATEMENT
OF CHANGES IN STOCKHOLDERS’ DEFICIT
 FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
    Series
      A Convertible
                  Preferred
                
                
                Series
      B Convertible
                  Preferred
                
                
                Class
      A
                  Common
      Stock
                
                
                Class
      B
                  Common
      Stock
                
                
                Accumulated
                
                
                Total
      Stockholders’Shares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                Deficit
                
                
                Deficit(restated)Balance,
      December 31, 2005
                
                
                —
                
                
                $
                —
                
                
                
                —
                
                
                $
                —
                
                
                
                100
                
                
                $
                100
                
                
                
                —
                
                
                $
                —
                
                
                $
                —
                
                
                $
                100Retroactive
      restatement of stock split (2,431,849:1)
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                243,184,768
                
                
                
                —
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                —Merger
      with Thomas Pharmaceuticals, Ltd (NY)
                
                
                500,000
                
                
                
                5,000
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                5,000Investment
      by iVoice, Inc.
                
                
                
                
                
                
                
                
                
                
                550
                
                
                
                550,000
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                550,000Preferred
      stock dividends declared, but unpaid
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (47,165
                )
                
                
                (47,165
                )Net
      loss for the year ended December 31, 2006
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (1,442,429
                )
                
                
                (1,442,429
                )Balance,
      December 31, 2006
                
                
                500,000
                
                
                
                5,000
                
                
                
                550
                
                
                
                550,000
                
                
                
                243,184,868
                
                
                
                100
                
                
                
                —
                
                
                
                —
                
                
                
                (1,489,594
                )
                
                
                (934,494
                )Conversion
      of Series A Preferred
                
                
                (500,000
                )
                
                
                (5,000
                )
                
                
                
                
                
                
                
                
                
                
                5,091,237
                
                
                
                5,000
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                —Preferred
      stock dividends declared, but unpaid
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (54,999
                )
                
                
                (54,999
                )Net
      loss for the year ended December 31, 2006
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                (1,226,515
                )
                
                
                (1,
      226,515
                )Balance,
      December 31, 2006
                
                
                —
                
                
                $
                —
                
                
                
                550
                
                
                $
                550,000
                
                
                
                248,276,105
                
                
                $
                5,100
                
                
                
                —
                
                
                $
                —
                
                
                $
                (2,771,108
                )
                
                $
                (2,216,008
                )
 
 
 
 
 
 
 
 
 
 The
accompanying notes are an integral part of these financial
statements.
 
 F -
5
 THOMAS
PHARMACEUTICALS, LTD
 STATEMENTS
OF CASH FLOWS
 FOR
THE YEARS ENDED DECEMBER 31,
 
  2007
                
                
                2006CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      (loss) before preferred dividends
                
                $
                (1,226,515
                )
                
                $
                (1,442,429
                )Adjustments
      to reconcile net (loss) to net cash (used in)
      operating  activities:Depreciation
      expense
                
                
                104,784
                
                
                
                12,644Amortization
      of intangible assets
                
                
                81,453
                
                
                
                30,000Amortization
      of debt discount on beneficial conversion
                
                
                122,905
                
                
                
                88,214Loss
      on revaluation of derivatives
                
                
                126,459
                
                
                
                141,920Provision
      for product returns
                
                
                54,398
                
                
                
                136,858Provision
      for excess and obsolete inventory
                
                
                26,117
                
                
                
                30,000Changes
      in assets and liabilities(Increase)
      decrease in accounts receivable
                
                
                1,277
                
                
                
                (192,533
                )(Increase)
      decrease in inventory
                
                
                8,640
                
                
                
                (64,757
                )(Increase)
      decrease in prepaid and other assets
                
                
                56,177
                
                
                
                (58,976
                )Increase
      in accounts payable and accrued expenses
                
                
                466,510
                
                
                
                114,098Net
      cash (used in) operating activities
                
                
                (177,795
                )
                
                
                (1,204,961
                )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
                
                
                —
                
                
                
                (5,633
                )Purchase
      of intangibles
                
                
                (3,247
                )
                
                
                (12,795
                )Cash
      acquired in merger with Thomas Pharmaceuticals (NY)
                
                
                —
                
                
                
                36Net
      cash (used in) investing activities
                
                
                (3,247
                )
                
                
                (18,392
                )CASH
      FLOWS FROM FINANCING ACTIVITIESGross
      proceeds from debt financing
                
                
                185,000
                
                
                
                685,000Repayment
      of debt financing
                
                
                (6,000
                )
                
                
                —Gross
      proceeds from sales of equity securities
                
                
                —
                
                
                
                550,000Net
      cash provided by financing activities
                
                
                179,000
                
                
                
                1,235,000NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                
                
                (2,042
                )
                
                
                11,647CASH
      AND CASH EQUIVALENTS - BEGINNING OF YEAR
                
                
                11,747
                
                
                
                100CASH
      AND CASH EQUIVALENTS - END OF YEAR
                
                $
                9,705
                
                
                $
                11,747CASH
      PAID DURING THE YEAR FOR:Interest
      expense
                
                $
                —
                
                
                $
                —Income
      taxes
                
                $
                —
                
                
                $
                —
 
 
 The
accompanying notes are an integral part of these financial
statements.
  F -
6
 THOMAS
PHARMACEUTICALS, LTD
 STATEMENTS
OF CASH FLOWS (Continued)
 FOR
THE YEARS ENDED DECEMBER 31, 2007 AND 2006
 
  
 SUPPLEMENTAL CASH FLOW
      INFORMATIONFor
      the year ended December 31, 2007:a)
                The
      Company issued a 10% Promissory Note valued at $160,000 to Thomas
      Pharmaceutical Acquisition Corp. pursuant to the terms of the Extension
      Agreement with iVoice, Inc., Thomas Pharmaceutical Acquisition Corp. and
      Thomas Pharmaceuticals.b)
                The
      Company issued a 10% Secured Convertible Debenture valued at $25,000 to
      iVoice, Inc., a related partc)
                The
      Company declared $54,999 of preferred stock dividends. This amount remains
      unpaid.For
      the year ended December 31, 2006:a)
                On
      January 6, 2006, the Company concluded the merger of Thomas
      Pharmaceuticals, Ltd, a New York corporation (“Thomas NY”). Pursuant to
      terms of the Agreement and Plan of Merger, the Company issued 500,000
      shares of Series A Convertible Preferred Stock valued at $5,000 to the
      previous shareholders of Thomas NY. The net cash effect on cash flows is
      as follows:Cash
                
                $
                36Property
      and equipment
                
                
                115,175Intangible
      assets
                
                
                1,878Security
      deposits
                
                
                1,900Accounts
      payable and accrued expenses
                
                
                (187,522
                )Notes
      payable
                
                
                (20,000
                )Series
      A Convertible Preferred Stock
                
                
                (5,000
                )Total
      intangible value of customer lists
                
                $
                (93,533
                )b)
                The
      Company issued 550 shares of Series B Convertible Preferred Stock valued
      at $550,000 to iVoice, Inc., a related party, pursuant to the terms of the
      Agreement and Plan of Merger, with Thomas
  NY.c)
                The
      Company issued two (2) 10% Secured Convertible Debenture valued at
      $585,000 to iVoice, Inc., a related party, pursuant to the terms of the
      Agreement and Plan of Merger, with Thomas
  NY.d)
                The
      Company issued an Administrative Service Convertible Debenture valued at
      $100,000 to iVoice, Inc., a related party, pursuant to the terms of the
      Agreement and Plan of Merger, with Thomas
  NY.e)
                The
      Company declared $47,165 of preferred stock dividends. This amount
      remained unpaid as of December 31, 2006.
 
 
  The
accompanying notes are an integral part of these financial
statements.
 
 
 F -
7
 
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
1 - ORGANIZATION AND
BASIS OF PRESENTATION
 
 
 Thomas
Pharmaceuticals, Ltd. (the “Company” or “Thomas Pharmaceuticals”) was a wholly
owned subsidiary of iVoice, Inc. (“iVoice”) by virtue of iVoice’s ownership of
all of the shares of Class A Common Stock prior to the spin-off. The Company was
incorporated as iVoice Acquisitions Corp. in New Jersey on May 19,
2005.  On January 6, 2006, iVoice Acquisitions Corp. completed the
merger with Thomas Pharmaceuticals, Ltd., a New York Corporation (“Thomas NY”).
Pursuant to the terms of the Agreement and Plan of Merger with Thomas NY, iVoice
Acquisition Corp’s name was changed to Thomas Pharmaceuticals, Ltd. The Company
develops and markets over the counter non-prescription healthcare products. The
Company focuses on high-end, branded consumables. Its first product, Acid +
AllTM, is a calcium-enriched, sugar free, anti-gas antacid.  The Company
operates its business from the home office of iVoice in Matawan, NJ and
distributed the products from its vendors packaging operation in Pawtucket,
R.I.
 
 Basis of
Presentation
 
 The
accompanying financial statements of the Company have been derived from the
consolidated financial statements and accounting records of iVoice using the
historical results of operations and historical basis of assets and liabilities
of iVoice’s over the counter non-prescription healthcare products business and
are prepared on the accrual basis of accounting in accordance with the
accounting principles generally accepted in the United States of America.
Management believes the assumptions underlying the financial statements are
reasonable and include all costs directly applicable to the Company. These
financial statements do not include any allocation of expenses and assets from
the parent, iVoice.  However, the financial statements included herein
may not necessarily reflect the Company’s results of operations, financial
position and cash flows had the Company been a stand-alone company during the
years presented.
 
  NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Start-up
Costs
 
 In
accordance with the American Institute of Certified Public Accountants Statement
of Position 98-5, “Reporting on the Costs of Start-up Activities,” the Company
expenses all costs incurred in connection with the start-up and organization of
the Company.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and 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.
 
 F -
8
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Cash and Cash
Equivalents
 
 The
Company considers all highly liquid debt instruments and other short-term
investments with an initial maturity of three months or less to be cash or cash
equivalents. As of December 31, 2007 and 2006, the Company has no cash
equivalents.
 
 The
Company maintains cash and cash equivalents with a financial institution, which
is insured by the Federal Deposit Insurance Corporation up to $100,000. At
various times throughout the year, the company had balances on deposits at the
financial institutions in excess of federally insured limits. The Company had no
uninsured cash balances at December 31, 2007 and 2006.
 
 Revenue and Cost
Recognition
 
 Product
sales revenue, net of estimated provisions, is recognized when persuasive
evidence that an arrangement exists, delivery has occurred, the selling price is
fixed or determinable, and collectability is reasonably assured. Provisions for
sales discounts, and estimates for chargebacks, rebates, and product returns are
established as a reduction of product sales revenue at the time revenues are
recognized, based on historical experience adjusted to reflect known changes in
the factors that impact these reserves.  Cost of revenue includes
direct costs to produce and distribute the products.
 
 Product
Returns
 
 The
Company offers an open return policy for unsold product and the Company had a
limited number of product returns.  Management determined that in
order to provide adequate provision, that the provision for product returns is
based on the balance of uncollected receivables from customers who have not made
any payments at the end of the period.  Management has provided a
provision for product returns on 100% of the uncollected receivables. The
provision for product returns at December 31, 2007 and 2006  is
$149,225 and 136,858, respectively.
 
 Accounts
Receivable
 
 The
Company conducts business and extends credit pursuant to the individual
agreements. Standard terms are 2%-30/net 31 and most of the small customers
conform to these terms. Several large customers have provisions in their
agreements that delay payments to the Company until there is a steady flow of
products being resold. In some cases, the Company also offers an unlimited
return policy for slow moving products. Provisions created for product returns
also reduce the outstanding balance of accounts receivable. Exposure to losses
on receivables is expected to vary by customer due to how the products are being
purchased by the end-users.
 
 F -
9
 
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
  NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 As of
December 31, 2007 and 2006, the accounts receivable, net of allowance for
product returns and bad debt, is as follows:
  2007
                  
                  
                  2006Accounts
      receivable
                  
                  $
                  191,256
                  
                  
                  $
                  192,533Less:
      allowance for product returns
                  
                  
                  (149,225
                  )
                  
                  
                  (136,858
                  )Less:
      provision for bad debt
                  
                  
                  (42,031
                  )
                  
                  
                  —Net
      accounts receivable
                  
                  $
                  —
                  
                  
                  $
                  55,675
 Provision for Bad
Debt
 
 The
Company evaluates the credit worthiness of each of its customers and has
determined that some accounts will be uncollectible and will have to be written
off in the future. Management has determined that a provision for bad debt of
$42,031 and $0, in addition to the provision for product returns, is sufficient
at December 31, 2007 and 2006, respectively.
 
 Inventory
 
 Inventory,
consisting primarily of raw materials and finished goods such as antacid
tablets, tins, display boxes and completed shipping boxes, and is valued at the
lower of cost or market.  Cost is determined on a first-in, first-out
basis for the materials and includes an allocation of the production labor for
the packaging and shipping provided by an unrelated contractor.
 
 Inventory
reserves are estimated for excess and slow-moving inventory. These estimates are
based on current assessments about future demands, market conditions and related
management initiatives.  If market conditions and actual demands are
less favorable than those projected by management, additional inventory
write-downs may be required.
 
 During
the year ended December 31, 2007, the Company was notified by its contract
packager that the Company had shipped all available finished goods and that no
further packaging would take place. Based on this event, management determined
that the remaining inventory of raw materials was of no value and that a 100%
reserve was required for all remaining inventory.
 
 As of
December 31, 2007 and 2006, the inventory at cost and reserves for excess and
slow-moving inventory is as follows:
  2007
                  
                  
                  
                  2006Inventory
      at cost
                  
                  $
                  56,116
                  
                  
                  $
                  64,757Less:
      Reserve for excess and slow-moving inventory
                  
                  
                  (56,116
                  )
                  
                  
                  (30,000
                  )Net
      inventory
                  
                  $
                  0
                  
                  
                  $
                  34,757
  F -
10
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Intangible
Assets
 
 Intangible
assets represent the intangible value placed on the customer list acquired from
Thomas NY and on costs incurred for trademarks and trademark applications. The
intangible value of the customer list is being amortized over three years on a
straight-line basis and the trademark costs are amortized over ten years on a
straight-line basis. Identified intangible assets are regularly reviewed to
determine whether facts and circumstances exist which indicate that the useful
life is shorter than originally estimated or the carrying amount of assets may
not be recoverable. The Company assesses the recoverability of its identifiable
intangible assets by comparing the projected discounted net cash flows
associated with the related asset or group of assets over their remaining lives
against their respective carrying amounts. Impairment is based on the excess of
the carrying amount over the fair value of those assets. Also see Note
3.
 
 Advertising
Costs
 
 Advertising
costs are expensed as incurred and are included in selling and marketing
expenses.  For the years ended December 31, 2007 and 2006, the Company
incurred $29,259 and $366,282, respectively, in advertising costs.
 
 Derivative
Liabilities
 
 During
April 2003, the Financial Accounting Standards Board issued SFAS 149, “Amendment
of Statement 133 on Derivative Instruments and Hedging
Activities.”  SFAS 149 amends and clarifies accounting for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities under SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities.” The statement requires that contracts with
comparable characteristics be accounted for similarly and clarifies when a
derivative contains a financing component that warrants special reporting in the
statement of cash flows.  SFAS 149 is effective for contracts entered
into or modified after June 30, 2003, except in certain circumstances, and for
hedging relationships designated after June 30, 2003. The financial statements
for the years ended December 31, 2007 and 2006 include the recognition of the
derivative liability on the underlying securities issuable upon conversion of
the iVoice Secured Convertible Debentures and Thomas Pharmaceuticals Acquisition
Corp. (“Thomas Acquisition”) Promissory Notes.
 
 
 F -
11
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Income
Taxes
 
 The
Company was a subsidiary of iVoice and as such, its results of operations were
reported as part of the consolidated federal income tax returns of iVoice. Upon
the spin-off from iVoice, Inc, the Company will no longer be included in the
consolidated returns of iVoice, Inc and will be required to account for income
taxes in accordance with Statements of Financial Accounting Standards No. 109,
“Accounting for Income Taxes,” which requires an asset and liability approach to
financial accounting and reporting for income taxes. Deferred income taxes and
liabilities are computed annually for differences between the financial
statement and the tax basis of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.
 
 Fair Value of Financial
Instruments
 
 The
carrying amount reported in the balance sheet for cash and cash equivalents,
accounts receivable, accounts payable and accrued expenses approximate fair
value because of the immediate or short-term maturity of these financial
instruments. The carrying amount reported for notes payable and convertible
debentures approximates fair value because the interest on the underlying
instruments is comparable with current market rates.
 
 Fixed
Assets
 
 Fixed
      assets are stated at cost. Depreciation is computed using the
      straight-line method over the estimated useful lives of the
      assets.
 
 When
      assets are retired or otherwise disposed of, the costs and related
      accumulated depreciation are removed from the accounts, and any resulting
      gain or loss is recognized in income for the period. The cost of
      maintenance and repairs is charged to income as incurred; significant
      renewals and betterments are capitalized. Deduction is made for
      retirements resulting from renewals or betterments. During 2007,
      management had determined that the packaging equipment, which had been
      capitalized, had no future value and the remaining book value was written
      down to zero as an additional charge to accumulated depreciation of
      $92,140.
 
 As of
December 31, 2007 and 2006, the costs and accumulated depreciation for the
property and equipment is as follows:
  2007
                  
                  
                  2006Property
      and equipment at cost
                  
                  $
                  120,808
                  
                  
                  $
                  120,808Less:
      Accumulated depreciation
                  
                  
                  (117,428
                  )
                  
                  
                  (12,644
                  )Net
      property and equipment
                  
                  $
                  3,380
                  
                  
                  $
                  108,164
  Depreciation
expense for the years ended December 31, 2007 and 2006 was $104,784 and $12,644,
respectively.
 
 F -
12
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
  NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Loss Per Share of Common
Stock
 
 Historical
net loss per common share is computed using the weighted average number of
common shares outstanding. Common stock equivalents were not included in the
computation of diluted earnings per share when the Company reported a loss
because to do so would be antidilutive for periods presented.
 
 On
November 21, 2007, the Company’s transfer agent distributed 243,184,868 shares
of Class A common stock to the iVoice shareholders as a stock dividend pursuant
to the spin-off agreement. For purposes of calculating the weighted average
common shares outstanding used in the loss per share calculation, the stock
dividend has been retroactively applied for the years ended December 31, 2007
and 2006.
 
 The
following is a reconciliation of the computation for basic and diluted
EPS:
  2007
                  
                  
                  2006Net
      loss applicable to common shares
                  
                  $
                  (1,281,514
                  )
                  
                  $
                  (1,489,594
                  )Weighted-average
      common sharesOutstanding
                  
                  
                  243,435,943
                  
                  
                  
                  243,184,868Net
      loss per share
                  
                  $
                  (0.01
                  )
                  
                  $
                  (0.01
                  )
 The
Company has shares issuable upon conversion of the iVoice Convertible
Debentures, the Thomas Acquisition Convertible Debenture and the Series B
Convertible Preferred Stock. At December 31, 2007, the Company had common stock
equivalents of 1,825,000,000. At December 31, 2006, the common stock equivalents
are indeterminable because there was no public market for the shares at that
time.
 
 Recent Accounting
Pronouncements
 
 In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Liabilities, including an amendment of FASB Statement No.
115” (“SFAS No. 159”). SFAS No. 159 permits entities to choose, at specified
election dates, to measure many financial instruments and certain other items at
fair value that are not currently required to be measured at fair value.
Unrealized gains and losses shall be reported on items for which the fair value
option has been elected in earnings at each subsequent reporting date. SFAS No.
159 is effective for fiscal years beginning after November 15, 2007. Early
adoption is permitted as of the beginning of a fiscal year that begins on or
before November 15, 2007, provided the entity also elects to apply the
provisions of SFAS No. 157 “Fair Value Measurements” (“SFAS No. 157). The
adoption of SFAS 159 is not expected to have a material impact on the Company’s
financial position or results of operations.
 
  F -
13
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
  NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 In June
2007, the FASB ratified the consensus in EITF Issue No. 07-3 “Accounting for
Nonrefundable Payments for Goods or Services to Be Used in Future Research and
Development Activities” (EITF 07-3), requiring that nonrefundable advance
payments for future research and development activities be deferred and
capitalized. Such amounts should be expensed as the related goods are delivered
or the related services are performed. The statement is effective for fiscal
years beginning after December 15, 2007. Management is currently assessing the
potential impact of the standard on the Company’s financial
statements.
 
 In June
2007, the FASB ratified EITF Issue No. 06-11 “Accounting for Income Tax Benefits
of Dividends on Share-Based Payment Awards” (EITF 06-11), which requires
entities to record tax benefits on dividends or dividend equivalents that are
charged to retained earnings for certain share-based awards to additional
paid-in capital. In a share-based payment arrangement, employees may receive
dividends or dividend equivalents on awards of non-vested equity shares,
non-vested equity share units during the vesting period, and share options until
the exercise date. Generally, the payment of such dividends can be treated as
deductible compensation for tax purposes. The amount of tax benefits recognized
in additional paid-in capital should be included in the pool of excess tax
benefits available to absorb tax deficiencies on share-based payment awards.
EITF 06-11 is effective for fiscal years beginning after December 15, 2007, and
interim periods within those years. Management is currently assessing the
potential impact of this guidance on the Company’s financial
statements.
 
 In
December 2007, the FASB issued SFAS No. 160 “NoncontrollingInterests in
Consolidated Financial Statements — an amendmentof ARB No. 51”
(“SFAS 160”).  SFAS 160 requires that ownership interests in
subsidiaries held by parties other than the parent, and the amount of
consolidated net income, be clearly identified, labeled, and presented in the
consolidated financial statements within equity, but separate from the parent’s
equity. It also requires once a subsidiary is deconsolidated, any retained
noncontrolling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
noncontrolling owners. SFAS 160 will be effective for the Trust beginning
January 1, 2009. Management anticipates that the adoption of SFAS 160 will
not have a material impact on the Company’s financial statements.
 
 
  F -
14
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
3 – INTANGIBLE
ASSETS
 
 On
January 6, 2006, the Company completed the merger with Thomas NY. As a result of
the merger, the shareholders of Thomas NY exchanged all of their common stock
shares of Thomas NY for 500,000 shares of the Company’s Series A Convertible
Preferred Stock.  In addition, the Company assumed the assets and
liabilities of Thomas NY with an aggregate value of ($93,533), which was
recorded as the intangible value of the customer list.
  During
the years ended December 31, 2007 and 2006, the Company recorded an additional
$3,247 and $12,795, respectively, of costs related to registering of trademarks
of the Company.
  Under FAS
No. 142, “Goodwill and Other Intangible Assets”, goodwill and other intangible
assets are tested for impairment under certain circumstances, and written off
when impaired, rather than being amortized as previous standards require. During
the year ended December 31, 2007, the Company was notified that the two largest
retailers have decided to no longer carry the Acid+All® product since the
Company did not have the financial resources for necessary sales and marketing
activities at that time. The Company was also notified that the contract
packager had ceased packaging the Acid+All® product and that the Company had no
packaged products in inventory.
  All
capitalized intangibles have been reviewed for impairment at December 31, 2007.
Based upon managements’ evaluation of this business, it was determined that the
current book value of the intangible assets for the customer list and trademarks
of the Company should be fully impaired for the amount of $109,137. At December
31, 2007 and 2006, intangible assets are as follows:
  2007
                  
                  
                  2006Intangible
      assets at cost
                  
                  $
                  111,453
                  
                  
                  $
                  108,206Less:
      Accumulated amortization
                  
                  
                  (2,316
                  )
                  
                  
                  —Less:
      Accumulated impairment
                  
                  
                  (109,137
                  )
                  
                  
                  (30,000
                  )Net
      intangible assets
                  
                  $
                  0
                  
                  
                  $
                  78,206
   NOTE
4 – CONVERTIBLE
DEBENTURES
 
 On
January 6, 2006 the Company issued to iVoice a $360,000 secured convertible
debenture due on January 1, 2013 bearing interest of 10%, compounded quarterly.
As of December 31, 2007 and 2006, the remaining principal balance of the
convertible debenture was $360,000 plus accrued interest of $77,901 and $36,728,
respectively.
 
 On
January 6, 2006 the Company issued to iVoice a $100,000 administrative service
convertible debenture due on January 1, 2013 bearing interest of 10%, compounded
quarterly. This debenture is issued in lieu of payments on the Administrative
Services Agreement of the same date. As of December 31, 2007 and 2006, the
remaining principal balance of the convertible debenture was $100,000 plus
accrued interest of $21,639 and  $10,202, respectively.
  F -
15
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
4 – CONVERTIBLE
DEBENTURES (Continued)
 
 On April
27, 2006 the Company issued to iVoice a $225,000 secured convertible debenture
due on January 1, 2013 bearing interest of 10%, compounded quarterly. As of
December 31, 2007 and 2006, the remaining principal balance of the convertible
debenture was $225,000 plus accrued interest of $40,603 and 15,629,
respectively.
 
 On
February 7, 2007, the Company issued to iVoice a $25,000 secured convertible
debenture due on February 6, 2014 bearing interest of 10%, compounded quarterly.
As of December 31, 2007 the remaining principal balance of the convertible
debenture was $25,000 plus accrued interest of $2,303.
 
 The
Company can redeem a portion or all amounts outstanding under the iVoice
Convertible Debentures at any time upon thirty (30) business days advanced
written notice.  The redemption price shall be equal to one hundred
twenty-five percent (125%) multiplied by the portion of the principal sum being
redeemed, plus any accrued and unpaid interest.
 
 iVoice
may, at its discretion, convert the outstanding principal and accrued interest,
in whole or in part, into a number of shares of Thomas Pharmaceuticals Class A
Common Stock  at the price per share equal to eighty
percent (80%) of the lowest closing bid price of the Common Stock for the
five (5) trading days immediately preceding the conversion date. The Company
determined that the beneficial conversion feature of the iVoice Debentures met
the criteria of EITF No. 98-5 “Accounting for Convertible Securities with
Beneficial Conversion Features or Contingently Adjustable Conversion Ratios”,
and therefore the conversion feature needed to be accounted for as a derivative.
The fair value of the derivative was estimated at the date of issuance using the
Black-Scholes model with the following assumptions: risk free interest rate
(5.47%); expected dividend yield (0%); expected life (7 years); and volatility
(169.22%, 194.86% and 154.79%). The aggregate fair value of the beneficial
conversion feature was greater that the proceeds of the debentures and as such,
an aggregate cumulative amount of $163,437 has been charged to loss on
revaluation of derivatives, and the balance has been recorded as a discount on
debt conversion.
 
 The
aggregate principal value of the iVoice debentures at December 31, 2007 and 2006
is $710,000 and $685,000, respectively. These amounts are shown net of the
unamortized portion of the discount on conversion of $519,048 and $596,786,
respectively. This discount is being amortized over the life of the debenture
and is being recorded as a charge to amortization of discount on beneficial
conversion on the statement of operations.
   F -
16
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
5 – NOTES
PAYABLE
 
 As part
of the merger with Thomas NY, the Company assumed a $20,000 promissory note due
to Jana M. Wesley which bears interest at the rate of 5% per annum, compounded
annually.  The promissory note matures on January 19, 2009 with a lump
sum payment due of any remaining principal and interest. As of December 31, 2007
and 2006, the unpaid balance on the promissory note is $20,000 plus accrued
interest of $3,095 and $1,995, respectively.
 
 On
January 26, 2007, Thomas Acquisition issued to an investor a debenture in the
principal amount of $103,200 convertible into Class A Common Stock of Thomas
Pharmaceuticals and a debenture in the principal amount of $96,800 convertible
into Series B Convertible Preferred Stock of the Company. The $103,200 of the
convertible debentures provide that, at the holder’s option, principal and
interest due on the debentures can be converted into the number of shares of the
Company’s Class A Common Stock determined by dividing the amount of the
debenture being converted by a 20% discount to the lowest closing bid price of
the Company’s Class A Common Stock for the five trading days before the
conversion date.  The $96,800 of the convertible debentures provide
that, at the holder’s option, principal and interest due on the debentures can
be converted into the Company’s Series B Convertible Preferred Stock having a
stated value of $1,000 per share. The $103,200 convertible debenture was secured
with the assets of the Company, subordinate to the security interest previously
granted to iVoice. The net proceeds of $160,000 from the convertible debentures
were loaned to the Company in the form of a Promissory Note. The Promissory Note
bears interest at the rate of ten percent per annum and has a term of seven
years. On February 12, 2007, the Company repaid $6,000 that was applied to the
principal balance of the promissory note. As of December 31, 2007, the unpaid
balance on the promissory note is $154,000 plus accrued interest of
$14,530.
 
 The
Company determined that the beneficial conversion feature of the Thomas
Acquisition Debentures met the criteria of an EITF No. 98-5 and therefore the
conversion feature needed to be accounted for as a derivative. The fair value of
the derivative was estimated at the date of issuance using the Black-Scholes
model with the following assumptions: risk free interest rate: 5.47%; expected
dividend yield: 0%: expected life: 7 years; and volatility: 154.79%. The
aggregate fair value of the beneficial conversion feature was greater that the
proceeds of the promissory note and as such, an aggregate of $88,546 was charged
to loss on revaluation of derivatives and the balance was recorded as a discount
on debt conversion at the time of issuance.
 
 The
aggregate principal of the two promissory notes at December 31, 2007 is
$174,000. The aggregate accumulated interest of the two promissory notes at
December 31, 2007 is $17,625. The aggregate principal amounts are shown net of
the unamortized portion of the discount on conversion of the Thomas Acquisition
debentures of $133,833. This discount is being amortized over the life of the
Thomas Acquisition debenture and is being recorded as a charge to amortization
of discount on beneficial conversion on the statement of
operations.
 
  F -
17
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
6 - DERIVATIVE
LIABILITY
 
 In
accordance with SFAS 133, “ Accounting for Derivative Instruments and Hedging
Activities” and EITF 00-19, “ Accounting for Derivative Financial Instruments
Indexed to, and Potentially Settled in, a Company’s Own Stock”, the beneficial
conversion feature associated with the iVoice and Thomas Acquisition Convertible
Debentures represents embedded derivatives in that the conversion price is
variable, the numbers of shares to be issued are indeterminable and the control
of whether shares are issued does not reside with the Company. As such, the
Company had recognized embedded derivatives on the iVoice debentures in the
amount of $873,437 as a derivative liability in the accompanying balance sheet
and as of December 31, 2007 and 2006, they had an estimated fair value of
$882,912 and $826,920, respectively. The Company has also recognized embedded
derivatives during 2007 on the Thomas Acquisition debentures in the amount of
$242,546 as a derivative liability in the accompanying balance sheet and as of
December 31, 2007, it was measured at its estimated fair value of
$249,467.
 
 The
estimated fair value of the embedded derivatives have been calculated based on a
Black-Scholes pricing model using the following assumptions:
  12/31/07
                  
                  
                  12/31/06Fair
      market value of stock
                  
                  $
                  0.001
                  
                  
                  $
                  0.001Exercise
      price
                  
                  $
                  0.0008
                  
                  
                  $
                  0.0008Dividend
      yield
                  
                  
                  0.00
                  %
                  
                  
                  0.00
                  %Risk
      free interest rate
                  
                  
                  5.47
                  %
                  
                  
                  5.47
                  %Expected
      volatility *
                  
                  
                  242.17
                  %
                  
                  
                  242.17
                  %Expected
      life (years)
                  
                  5.00
      to 6.08
                  
                  
                  6.00
 
 * It was
determined that the historical stock prices of iVoice provided the closest
comparable for determining the expected volatility of the Thomas common
stock.
 
 Changes
in the fair value of the embedded derivatives are calculated at each reporting
period and recorded in (gain) loss on revaluation of derivatives in the
condensed statements of operations. For the year ended December 31, 2007, there
was a change in the fair value of the embedded derivatives, which resulted in a
loss of $32,595.  This loss was in addition to the losses recognized
on the issuance of additional derivatives during the year in the amount of
$93,864, resulting in a net loss of $126,459.  For the year ended
December 31, 2006, there was a change in the fair value of the embedded
derivatives, which resulted in a gain of $16,199.  This gain was
offset by the immediate recognition of loss on revaluation of derivatives issued
during the same period in the amount of $158,119, resulting in a net loss of
$141,920.
 
 In
accordance with SFAS 133, SFAS 150, “Accounting for Certain Financials
Instruments With Characteristics of Both Liabilities and Equity” and EITF 00-19,
the fair market value of the derivatives are recorded as a debt
discount.  The debt discount on the iVoice and Thomas Acquisition
debentures of $710,000 and $154,000, respectively, is being amortized over the
life of the convertible debentures. Amortization expense on the debt discount
for the years ended December 31, 2007 and 2006 was $122,905 and $88,214,
respectively.
 
  F -
18
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
7  - INCOME
TAXES
  Deferred
income taxes will be determined using the liability method for the temporary
differences between the financial reporting basis and income tax basis of the
Company’s assets and liabilities.  Deferred income taxes will be
measured based on the tax rates expected to be in effect when the temporary
differences are included in the Company’s tax return.  Deferred tax
assets and liabilities are recognized based on anticipated future tax
consequences attributable to differences between financial statement carrying
amounts of assets and liabilities and their respective tax bases. At December
31, 2007 deferred tax assets consist of the following:
  Deferred
      tax assets
                  
                  $
                  110,000Less:
      Valuation allowance
                  
                  
                  (110,000
                  )Net
      deferred tax assets
                  
                  $
                  0
 
 At
December 31, 2007 the Company had a federal net operating loss carry forward in
the approximate amount of $275,000 available to offset future taxable
income.  The Company established a valuation allowance equal to the
full amount of the deferred tax asset due to the uncertainty of the utilization
of the operating loss in future periods. Prior to the spin-off from iVoice, Inc,
the Company was a subsidiary of iVoice and as such, did not have its’ own
federal tax liability or federal net operating loss carry forward.
   NOTE
8 - OPERATING
LEASE
 
 The
Company leased a 300 square foot office space in New York City under a lease
that expired on March 31, 2007. The term of the lease was one year commencing
April 1, 2006. Monthly lease payments under the extended lease are $2,075 per
month. The Company paid utilities, insurance and other costs relating to the
leased space. The New York City office was closed on March 28, 2007 following
the resignation of the President of the Company.
 
  NOTE
9 - RELATED PARTY
TRANSACTIONS
 
 In
addition to the financing provided by iVoice, Inc, iVoice provides
administrative services and other miscellaneous support to the Company from time
to time. As of December 31, 2007, the Company has recorded $24,702 of these
charges along with other vendor charges in the financial accounts of the
Company. These amounts will remain unpaid until the Board of Directors
determines that the Company has sufficient liquidity to make such
payments.
 
 F -
19
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
10 – COMMITMENTS AND
CONTINGENCIES
 
 On
January 6, 2006 the Company entered into an Administrative Services Agreement
with iVoice The term of this agreement commenced on January 6, 2006 and was
terminated in November 2007, according to the provisions of Section 2, upon
effectiveness of the registration statements. In consideration for the services,
the Company issued to iVoice an Administrative Service Convertible Debenture in
the amount of $100,000. For the years ended December 31, 2007 and 2006 the
Company recorded $50,000 of service fees.
 
 On
January 2, 2006 the Company entered into an Employment Agreement with John E.
Lucas to serve as its Chief Executive Officer through December 31, 2008 at an
annual salary of $60,000 with annual cost of living
increases.  Additionally, Mr. Lucas will receive incentive
compensation equal to 2.5% of net sales in excess of $1 million in fiscal 2006
and 2007 and 4% of net sales over $6 million in fiscal 2008. On June 11, 2007,
this agreement was amended to add the additional title of President and allow
the Company to issue Class A Common Stock in lieu of cash payments for any
compensation due and owing to Mr. Lucas.
 
 On
January 2, 2006 the Company entered into an Employment Agreement with Farris M.
Thomas, Jr. to serve as its President through December 31, 2008 at an annual
salary of $72,000 with annual cost of living increases.  On March 15,
2007, Mr. Thomas resigned his position with the Company and his employment
contract has been terminated.
 
 On March
1, 2007 the Company entered into a five-year employment agreement with Jerome
Mahoney, which will become effective at the time of the distribution, to serve
as its Non-Executive Chairman of the Board for a term of five years. As
consideration, the Company will pay Mr. Mahoney the sum of $85,000 the first
year with an annual increase based on the Consumer Price Index every year
thereafter. The Company also will pay Mr. Mahoney a bonus for each merger or
acquisition completed by the Company equal to six percent (6%) of the gross
consideration paid or received by the Company in a merger or acquisition
completed by the Company during the term of the agreement. The compensation
payable to Mr. Mahoney under the agreement may be paid in the form of cash, debt
or shares of Class B Common Stock at the option of Mr. Mahoney.
 
 On March 1, 2007,the Company entered into an
administrative services agreement with iVoice which became effective at the time
of the distribution and replaced the administrative services agreement entered
into on January 6, 2006. Under this agreement, iVoice provides the Company with
physical premises, contract review, sales issuance, invoicing and collection
services, financial accounting and reporting, claims administration and
reporting, and other areas where the Company needs transitional assistance and
support. Under the administrative services agreement, iVoice provides the
Company substantially the same level of service and use substantially the same
degree of care as iVoice’s personnel provided and used in providing such
services prior to the execution of the agreement. For these services, the
Company will pay iVoice a fee of $4,000 per month.
 
 F -
20
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
11 - STOCKHOLDERS’
DEFICIT
 
 Pursuant
to the Company’s amended certificate of incorporation, the Company is authorized
to issue 1,000,000 shares of preferred stock, no par value, 10,000,000,000
shares of Class A common stock, no par value, and 50,000,000 shares of Class B
common stock, no par value. Of the 1,000,000 authorized shares of Preferred
Stock, 500,000 shares are designated as “Series A Convertible Preferred Stock,
no par value” and 1,000 shares are designated as “Series B Convertible Preferred
Stock, no par value”.
  a)    
Preferred
Stock
  Preferred
Stock consists of 1,000,000 shares of authorized preferred stock with no par
value, in the following designations:
 
 Series A Convertible
Preferred Stock
 
 Series A
Convertible Preferred Stock consisted of 500,000 shares with no par value. The
initial value of each share is $.01 and is subject to adjustment for stock
dividends, combinations, splits, recapitalizations and the like. The holders of
these shares are not entitled to receive dividends at any time. Upon
liquidation, the holders of these shares will receive up to 100% of the initial
value of the shares, but following the distribution to any senior debt or senior
equities. The holders of these shares may request that iVoice, Inc. to spin-off
the Company from iVoice, Inc. and for iVoice, Inc. to use its commercially
reasonable efforts to file and cause to become effective a registration
statement under the Securities Act of 1933, as amended. The holders of these
shares will receive a prorated portion of the Net Enterprise Value as provided
for in the amended certificate of incorporation. The holders of these shares
shall have no voting rights, except as required by law or as explicitly set
forth in the amended certificate of incorporation. The holders of these shares
shall have the right to elect one director of the Corporation.
 
 On
January 6, 2006, the Company completed the merger with Thomas NY. As a result of
the merger, the Shareholders of Thomas NY exchanged all of their common stock
shares of Thomas NY for 500,000 shares of Series A Convertible Preferred
Stock.
 
 As of
December 31, 2006, there are 500,000 shares issued and outstanding.
 
 On
December 14, 2007, the 500,000 shares of Series A Convertible Preferred Stock
shares were exchanged for 5,091,237 shares of Class A Common Stock pursuant to
the provisions of the spin-off agreement.
 
 As of
December 31, 2007, there are no shares issued and outstanding.
 
 F -
21
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
11 - STOCKHOLDERS’
DEFICIT (Continued)
 
 Series B Convertible
Preferred Stock
 
 Series B
Convertible Preferred Stock consists of 1,000 shares with no par value. The
initial value of each share is $1,000 and is subject to adjustment for stock
dividends, combinations, splits, recapitalizations and the like. The holders of
these shares are entitled to receive dividends at a rate of 10% per annum based
on the initial value of the shares outstanding. Upon liquidation, the holders of
these shares will receive up to 125% of the initial value of the shares plus
accumulated and unpaid dividends, but following the distribution to any senior
debt or senior equities. Upon the SEC declaring the effectiveness of a
registration statement of the Company, the holders of these shares may convert
their shares into Class A Common Stock at the price per share equal to eighty
percent (80%) of the lowest closing bid price of the Common Stock for the
five (5) trading days immediately preceding the conversion
date.   The holders of these shares shall have one vote for each
shares of Class A Common Stock into which each shares of Series B Preferred
Shares could be converted, assuming a conversion price of eighty
percent (80%) of the lowest closing bid price of the Common Stock for the
five (5) trading days immediately preceding the record date, and of equal voting
rights and powers of the holders of the Class A Common Stock and is entitled to
vote together with respect to any question upon which the holders of Class A
Common Stock have the right to vote. The Corporation must also get a majority
approval from the holders of the Series B Preferred Stock to make any changes to
the structure of the Company or to authorize or issue any equity or debt
security that has a preference or priority over the Series B Preferred Stock as
to liquidation preferences, dividend rights, voting rights, or
otherwise.
 
 On
January 6, 2006, the Company issued 550 shares of Series B Convertible Preferred
Stock valued at $550,000 to iVoice, Inc., a related party, pursuant to the terms
of the Agreement and Plan of Merger, with Thomas NY.
 
 As of
December 31, 2007 and 2006, there are 550 shares issued and
outstanding.
 
 b)
                Class A Common
      Stock
 
 Class A
Common Stock consists of 10,000,000,000 shares of authorized preferred stock
with no par value.  As of December 31, 2007, there are 248,276,105
shares issued and outstanding. As of December 31, 2006 there were 100 shares
issued and outstanding prior to the spin-off and 243,184,868 shares issued and
outstanding following the restatement for the 2,431,849 for 1 retroactive stock
split.
 
 Each
holder of Class A common stock is entitled to one vote for each share held of
record.  Holders of our Class A common stock have no preemptive,
subscription, conversion, or redemption rights.  Upon liquidation,
dissolution or winding-up, the holders of Class A common stock are entitled to
receive net assets pro rata.  Each holder of Class A common stock is
entitled to receive ratably any dividends declared by our board of directors out
of funds legally available for the payment of dividends.
  F -
22
 
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
11 - STOCKHOLDERS’
DEFICIT (Continued)
 
 For the
year ended December 31, 2007, the Company had the following transactions in its
Class A common stock:
 
 On
November 21, 2007, the Company issued 243,184,868 shares of Class A common stock
to the iVoice shareholders as a stock dividend pursuant to the provisions of the
spin-off agreement.
 
 On
December 14, 2007, the Company issued 5,091,237 shares of Class A common stock
in exchange for 500,000 shares of Series A Convertible Preferred Stock pursuant
to the provisions of the spin-off agreement.
 
 c)
                Class B Common
      Stock
 
 Class B
Common Stock consists of 50,000,000 shares of authorized preferred stock with no
par value.  As of December 31, 2007 and 2006, there are no shares
issued and outstanding.
 
 Upon the
consummation of a Spin-off Transaction and the commencement of public trading of
the Class A Common Stock of the Corporation, each holder of Class B Common Stock
shall have the right to convert each share of Class B Common Stock into the
number of Class A Common Stock Shares calculated by dividing the number of Class
B Common Stock Shares being converted by eighty percent (80%) of the lowest
price that the Company had previously issued its Class A Common Stock since the
Class B Common Stock Shares were issued.
 
 Each
holder of Class B common stock is entitled to one vote for each share of Class B
common stock held.  Each holder has full voting rights and powers
equal to the voting rights and powers of the holders of Class A Common Stock and
is entitled to vote, together with holders of Class A Common Stock and not as a
separate class (except as required by law), with respect to any question upon
which holders of Class A Common Stock have the right to vote. Upon the
consummation of a Spin-off Transaction and the commencement of public trading of
the Class A common stock, then every holder of the outstanding shares of the
Class B Common Stock shall be entitled on each matter to cast the number of
votes equal to the number of Class A Common Stock Shares that would be issued
upon the conversion of the Class B Common Stock Shares held by that holder, had
all of the outstanding Class B Common Stock Shares held by that holder been
converted on the record date used for purposes of determining which shareholders
would vote in such an election.  With respect to all matters upon
which shareholders are entitled to vote or to which shareholders are entitled to
give consent, the holders of the outstanding shares of Class B Common Stock
Shares shall vote together with Class A Common Stock Shares without regard to
class, except as to those matters on which separate class voting is required by
applicable law.
 
 Each
share of Class B Common Stock shall receive dividends or other distributions, as
declared, equal to the number of Class A Common Stock Shares that would be
issued upon the conversion of the Class B Common Stock Shares, had all of the
outstanding Class B Common Stock Shares been converted on the record date
established for the purposes distributing any dividend or other shareholder
distribution.
 
 F -
23
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
11 - STOCKHOLDERS’
DEFICIT (Continued)
 
 d)
                Dividends
 
 Pursuant
to the Company’s amended certificate of incorporation, the Company is required
to accrue dividends at the rate of 10% per annum of the Series B Initial Value
of each share of Series B Convertible Preferred Stock outstanding on each
Dividend Payment Date, being March 31, June 30, September 30 and December 31.
Dividends on the Series B Preferred Stock shall be cumulative from the date of
issue. Accrued and unpaid dividends for any past Dividend Period, being the
quarterly period commencing on and including the day after the preceding
Dividend Payment Date, may be declared and paid at any time as may be fixed by
the Board of Directors. The Company has not paid any dividends on its Series B
Convertible Preferred Stock or its common stock and management does not
contemplate doing so in the foreseeable future. The Company anticipates that any
earnings generated from operations will be used to finance growth.
 
  NOTE
12 – ACQUISTIONS &
MERGERS
 
 On
January 6, 2006, the Company completed the merger with Thomas NY. As a result of
the merger, the Shareholders of Thomas NY exchanged all of their common stock
shares of Thomas NY for 500,000 shares of Series A Convertible Preferred Stock.
In addition, the Company assumed the assets and liabilities of Thomas
NY.  The merger has been accounted for under the purchase method of
accounting and the Company is considered the acquiring entity by virtue that
they are the issuer of the stock and that they have continuing control of the
Company’s voting stock. The aggregate book value of Thomas NY was determined to
be ($93,533), which was recorded as intangible assets.
 
 The book
value ($93,533) of Thomas NY at the time of the merger consisted
of:
  Cash
                  
                  $
                  36Property
      and equipment
                  
                  
                  115,175Intangible
      assets
                  
                  
                  1,878Security
      deposits
                  
                  
                  1,900Accounts
      payable & accrued expenses
                  
                  
                  (187,522
                  )Notes
      payable
                  
                  
                  (20,000
                  )Series
      A Convertible Preferred Stock
                  
                  
                  (5,000
                  )Total
      intangible value of customer list
                  
                  $
                  (93,533
                  )
  
 F -
24
 
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 NOTE
12 – ACQUISTIONS &
MERGERS (Continued)
 
 On August
9, 2006, iVoice entered into a Stock Purchase Agreement by and among iVoice,
Thomas Pharmaceutical Acquisition Corp (“Thomas Acquisition”), a Delaware
corporation and the Company, whereby Thomas Acquisition agreed to purchase all
the Company’s securities held by iVoice These securities include the Class A
common stock, Series B Convertible Preferred Stock, Secured Convertible
Debentures and Administrative Service Convertible Debenture for $1,235,100, plus
a 25% premium and accrued interest and interest and dividends accrued under the
terms of such securities through the Closing Date.  The closing will
occur when Thomas Acquisition secures financing to consummate the
transaction.  In addition, iVoice may terminate this Stock Purchase
Agreement since this transaction was not completed by October 31,
2006.
 
 On
January 25, 2007, iVoice entered into an Extension Agreement by and among
iVoice, Inc, Thomas Acquisition and the Company (the “Parties”), whereby the
Parties have agreed to extend the termination date provided in the Stock
Purchase Agreement until such time as SEC declares effective a registration
statement for the distribution of the Company’s Class A Common
Stock.  It was also agreed by the parties that Thomas Acquisition
would provide $160,000 to the Company as bridge financing until Thomas
Acquisition can arrange their own financing to consummate the original Stock
Purchase Agreement.
 
 
 NOTE
13 - GOING
CONCERN
 
 As shown
in the accompanying financial statements, the Company has sustained net
operating losses for the years ended December 31, 2007 and 2006. There is no
guarantee that the Company will be able to raise enough capital or generate
revenues to sustain its operations. This raises substantial doubt about the
Company’s ability to continue as a going concern.
 
 The
Company’s future success is dependent upon its ability to achieve profitable
operations and generate cash from operating activities, and upon additional
financing. There is no guarantee that the Company will be able to raise enough
capital or generate revenues to sustain its operations. Management believes they
can raise the appropriate funds needed to support their business plan and to
grow the Company so that it can maintain a positive cash flow.
 
 The
financial statements do not include any adjustments relating to the
recoverability or classification of recorded assets and liabilities that might
result should the Company be unable to continue as a going concern.
 
 
 
 F -
25
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES
TO FINANCIAL STATEMENTS
 DECEMBER
31, 2007 AND 2006
 
 NOTE
14 - RESTATEMENT
 
 The
Company had amended its previously issued financial statements for the year
ended December 31, 2006. The Company had amended these statements to reflect the
retroactive restatement for the 2,431,849-for-one stock split which was
accomplished by means of a stock dividend effectuated immediately prior to the
effective date of the registration statement. The amended statements show a
decrease in weighted average number of common shares outstanding to 243,184,868
for year ended December 31, 2006. This change has no effect on the previously
reported loss of $1,489,594 for the year ended December 31, 2006 or in the net
loss per basic and diluted shares of $(0.01) for year ended December 31,
2006.
 
  NOTE
15 – SUBSEQUENT
EVENTS
 
 On
January 15, 2008, the Company issued 25,000,000 shares of Class A common stock
to iVoice, Inc. with a total value of $12,500 for partial repayment of the
convertible debentures.
 
 On
January 23, 2008, the Board of Directors amended the Company’s Certificate of
Incorporation to limit the holders of the Series B Preferred Stock from
converting these shares into more than 9.99% of the total Class A Common Stock
at that time of conversion and to limit the voting rights of the Series B
Preferred Stock shareholders to no more than 9.99% of the total voting rights of
the aggregate of the Series B Preferred Stock, Class A Common Stock and Class B
Common Stock shareholders.
 
 On March
23, 2008, the Company amended the iVoice Convertible debentures to limit the
holders of the debentures from converting these into more than 9.99% of the
total Class A Common Stock at that time of conversion.
 
       F -
26