UNITED
STATESSECURITIES AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 FORM
10-K
 
 
 x ANNUAL REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
 
 For
the fiscal year ended December 31,
2008
 
 OR
 
 r 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
  Indicate
by check mark if the registrant is a well-known seasoned issuer (as defined in
Rule 405 of the Securities Act). Yes r No x
  Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act. Yes r No x
  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 r
 
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-B is not contained herein, and will not 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-K or any amendment to this
Form 10-K. r
  Large Accelerated
      filer   r
                      Accelerated
      filer   rNon-accelerated
      filer  (Do not check if a smaller reporting company)  r
                      Smaller reporting
      Company    x
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   YES  x  NO  r
 
 State
issuer's revenues for its most recent fiscal
year:  $46,651
 
 As of
April 3, 2009, the Registrant had 541,810,067 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 June 30, 2008 based upon the average bid and ask
prices on that date was $90,590
 
 Transitional
Small Business Disclosure Format (check one).  YES r  NO x
 
  Table of Contents
  Tableof
Contents
  PagePART
      IItem
      1.
                                  Description of business
                                  3Item
      2.
                                  Description of property
                                  10Item
      3.
                                  Legal proceedings
                                  10PART
      IIItem
      5.
                                  Market for Registrant’s Common Equity and Related Stockholder
      Matters and Issuer Purchases of Equity Securities.
                                  11Item
      7.
                                  Management's discussion and analysis of financial condition and
      results of operations.
                                  14Item
      8.
                                  Financial statements and Supplementary Data
                                  16Item
      9.
                                  Changes in and disagreements with Accountants on accounting and
      financial disclosure.
                                  16Item
      9A(T).
                                  Controls & Procedures
                                  16PART
      IIIItem
      10.
                                  Directors, Executive Officers and Corporate
      Governance
                                  17Item
      11.
                                  Executive compensation.
                                  18Item
      12.
                                  Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters.
                                  20Item
      13.
                                  Certain Relationships and Related Transactions, and Director
      Independence
                                  21Item
      14.
                                  Principal Accountant Fees and Services
                                  22Item
      15.
                                  Exhibits and Financial Statement Schedules
                                  23
 
 Table of Contents
  PART
I
 
 ITEM1.
Description
of Business
  Background
  Prior to
November 21, 2007, 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. On
November 21, 2007, the Company was spun-off from iVoice and the Company is now
an independent public reporting company. Currently the Company no longer
produces any products.
 
 In June
2008, the Company formed a new, wholly owned subsidiary, Small Cap Advisors,
Inc., to provide investor relation (“IR”) services to small and medium sized
public companies. Micro-cap public companies typically take a stock promotion
approach to IR. However, the Company abandoned this business model in the fall
of 2008 after the economic crisis in the U.S. began and the stock markets began
to rapidly deteriorate in value.  The Company does not anticipate
re-starting the operations of Small Cap Advisors, Inc.
 
 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.  After a successful
launch in the beginning of 2006, product sales have decreased substantially in
the succeeding years and late in 2007, retailers 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.
 
 In June
2008, the Company formed Small Cap Advisors, Inc., to provide investor relation
(“IR”) services to small and medium sized public companies. Micro-cap public
companies typically take a stock promotion approach to IR. This involves sending
out un-targeted mass emails to potential investors, or getting profiled on
investor relations websites.  The Company believed this was no longer
a viable approach to gaining new investors, and in fact, current IR strategies
may have actually undermined marketing efforts and diminishing shareholder
goodwill.  The Company developed a process which it called “SEO-IR”,
which involved a search engine optimization approach to IR.  SEO-IR
was designed to build awareness, credibility, relevance, and a community of
dedicated shareholders for the Company’s clients. Furthermore, SEO-IR would have
facilitated the convergence of the client’s corporate marketing strategy and IR
strategy by aligning multiple distribution channels to reach a targeted, engaged
audience. However, the Company abandoned this business model in the fall of 2008
after the economic crisis in the U.S. began and the stock markets began to
rapidly deteriorate in value.  The Company does not anticipate
re-starting the operations of SEO-IR.
 
 Based on
these 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.
  
 3
 Table of Contents
  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.
 
 Without
any product sales, Thomas Pharmaceuticals will need 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 $125,000 per
quarter.
 
 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 one part time employee.  We are dependent on our
key officer Mark Meller, our President and Chief Executive
Officer.  The loss of Mr. Meller 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. Meller.
 
 Forward
Looking Statements - Cautionary Factors
 
 This
Annual Report on Form 10-K 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 identify forward-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:
 
 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. After a successful launch in
the beginning of 2006, product sales have decreased substantially in the
succeeding years and late in 2007, retailers decided to no longer carry the
Acid+All® product. We are not currently shipping Acid+All® to any
retailers. 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 $1,281,514 for the year ended December 31,
2007 and $814,391 during the year ended December 31, 2008. 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.
 
 
 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
$125,000 per quarter.  These quarterly expenses are anticipated to
consist of the following: payroll and benefits of $25,000, occupancy costs of
$13,000, professional fees of $29,500, advertising of $10,000, net interest
expenses of $30,000, liability insurance of $7,000 and miscellaneous
administrative expenses of $10,500.  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.
  4
 Table of Contents
  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.
 
 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.
  Thomas
Pharmaceuticals has a working capital loss, which means that the current assets
on December 31, 2008 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, 2008 our working capital
deficit was $2,969,424. 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.
 
 Thomas
Pharmaceuticals was spun-off from iVoice, Inc. in November 2007 and does not
have an operating history as a separate public company. Prior to November 2007,
Thomas Pharmaceuticals was a subsidiary of iVoice, Inc and the Company had been
able to rely, to some degree, on iVoice for capital requirements. After the
spin-off, Thomas Pharmaceuticals had 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, prior to November 2007, Thomas Pharmaceuticals’ business
had relied on iVoice for financial, administrative and managerial expertise in
conducting its operations. Following the spin-off, Thomas Pharmaceuticals
maintained its own credit and banking relationships and performed 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.
 
 5
 Table of Contents
  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. For more
information about the preparation of our financial statements, 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, 2008 and 2007 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.
 
 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 $500,000 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.
 
 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.
 
 6
 Table of Contents
  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, 2008, there are outstanding $1,038,584 in principal of convertible
debentures and promissory notes ($838,584 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 shares issued by us to
iVoice. $941,784 of the convertible debentures and promissory notes 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 $0.0001 and a constant
conversion price of $0.00008, we will issue in the aggregate of approximately
19,855,000,000 shares of Class A Common Stock (issuance of up to approximately
6,875,000,000 shares for conversion of the iVoice Series B Convertible Preferred
Stock, up to 10,480,000,000 shares for conversion of the iVoice Convertible
Debentures and Promissory Notes and up to 2,500,000,000 shares for conversion of
Thomas Pharmaceutical Acquisition Corp. 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. $941,784 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.
 
 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, 2007 and 2008, we reported net cash used in operating activities of
$177,795 and $53,398, respectively, and will require financing for working
capital to meet our operating obligations.  Cash reserves at December
31, 2008 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 $500,000 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.
  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.
 
 7
 Table of Contents
  Thomas
Pharmaceuticals’ obligations under the secured convertible debentures and
promissory notes are secured by substantially all of its assets.
 
 Our
obligations under $838,584 in principal of secured convertible debentures and
promissory notes 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 Pharmaceutical Acquisition Corp. (“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.
 
 If
Thomas Pharmaceuticals loses the services of its key personnel, its business may
suffer.
 
 We
currently only have one part-time employee.  We are dependent on our
key officer Mark Meller, our President and Chief Executive
Officer.  The loss of Mr. Meller 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. Meller.
  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 Mark Meller, our President and Chief
Executive Officer, pursuant to which we agreed to pay Mr. Meller the sum of
$80,000 the first year with an annual increase of 10% every year
thereafter.  Mr. Meller will also participate in the Company’s
Corporate Compensation Program as approved and authorized by the Board of
Directors. The compensation payable to Mr. Meller under this agreement may be
paid in the form of cash or shares of Class B Common Stock at the option of the
Company.
 
 Our
employment agreement with Mr. Meller provides for significant severance payments
in certain events.  In the event Mr. Meller’s employment agreement is
terminated by us for cause or due to Mr. Meller’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. Meller’s employment agreement is terminated by us within three years
following a change in control, as defined in the employment agreement, or by Mr.
Meller for good reason (as defined in the employment agreement) within three
years following a change in control, Mr. Meller 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. Meller has been employed by us).
 
 The
salary obligations of Mr. Meller, 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 this salary.  In
addition, the severance provisions with Mr. Meller may be additional significant
expenses for us in the event those agreements are triggered.   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.
 
 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 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.
 
 8
 Table of Contents
  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. During 2006 and 2007 the product was available through
major national and regional 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.   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.
  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.
 
 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®. 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.
 
 9
 Table of Contents
  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 currently do not have any product
liability insurance because of our financial situation. Product liabilities
relating to our products could adversely affect us.
 
 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:
 
 ·
                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, 2008, approximately
92,000,000 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.
 
 ITEM2. 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 direct rent for these offices which are located within the
corporate offices of iVoice, Inc.
  ITEM3. Legal
Proceedings.
 
 We are
subject to litigation from time to time arising from our normal course of
operations.
 
 On
December 13, 2007, Independent Can filed suit against the Company seeking
payment of monies owed equal to $19,100.80. Independent Can had provided the
Company the tins that held the Acid+All® tablets.  In June 2008, the
Company defaulted on a settlement agreement and Independent Can was awarded a
judgment for $14,785.32 for amounts due on the original stipulation of
settlement. As of the date of this filing, the judgment is still
outstanding.
  On May
27, 2008, Lebhar Friedman, Inc. filed suit against the Company in the Superior
Court of New Jersey, Monmouth County, for the sum of $16,230.80 for failure to
pay for goods and/or services received by the Company.  On December 1,
2008 a Default Judgment was entered against the Company.  On February
11, 2009, the Company executed a settlement with Lebhar Friedman by the issuance
of 10,000,000 shares of Class A Common Stock and a cash payment of
$1,500.
  On August
7, 2008, the intellectual property attorney Ursula Day asserted a claim against
the Company for unpaid bills equal to $9,547.  The Company has been in
discussions attempting to resolve this dispute. Ms. Day has been gathering
documentation to support her claim. As soon as this is completed, the Company
will attempt to settle this dispute.
  On
January 22, 2009, the accounting firm of Rosen, Seymour, Shapss, Martin &
Company LLP filed suit against the Company for the sum of $25,000 claiming that
the Company did not pay the accounting firm fees previously agreed
upon.  The Company has retained local counsel and intends to
vigorously defend this suit.
  10
 Table of Contents
  PART
II
  
 ITEM5.Market
for Common Equity and Related Stockholder Matters and 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.
 
 High
                          
                          
                          LowFISCAL
      YEAR 2007Fourth
      Quarter (from 12/26/07)
                          
                          $
                          0.01
                          
                          
                          $
                          0.001FISCAL
      YEAR 2008First
      Quarter
                          
                          $
                          0.0050
                          
                          
                          $
                          0.0001Second
      Quarter
                          
                          $
                          0.0008
                          
                          
                          $
                          0.0002Third
      Quarter
                          
                          $
                          0.0007
                          
                          
                          $
                          0.0001Fourth
      Quarter
                          
                          $
                          0.0010
                          
                          
                          $
                          0.0001
 
 Holders
of Common Equity.
  As of
April 3, 2009, the number of record holders of our common shares was
approximately 755.
  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.
  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.
  Recent
Sales of Unregistered Securities
  On June
10, 2008, the Company received $77,250 from iVoice, Inc. for an initial
investment in Small Cap Advisors. The Company secured the receipt with a
convertible promissory note, at an interest of prime plus 1 (4.25% at December
31, 2008) percent per annum. Additional amounts may be added to this note based
on any unpaid administrative service fees and will accrue interest at the above
specified rate from date of advance until paid. The principal and interest shall
be due and payable as follows: (a) interest shall accrue monthly on the unpaid
balance and shall be paid annually, and (b) principal shall be payable on
demand.
  On June
11, 2008, the Company converted its outstanding accounts due to iVoice, Inc. for
unpaid administrative services in the amount of $47,302 into a convertible
promissory note at the rate of prime plus 1 (4.25% at December 31, 2008) percent
per annum. Additional amounts may be added to this note based on any unpaid
administrative service fees and will accrue interest at the above specified rate
from date of advance until paid. The principal and interest shall be due and
payable as follows: (a) interest shall accrue monthly on the unpaid balance and
shall be paid annually, and (b) principal shall be payable on
demand.
  During
the year ended December 31, 2008, the Company issued 142,600,000 shares of Class
A common stock to iVoice, Inc. as repayment of principal on an outstanding
convertible debenture, valued at $66,100.
  On
February 11, 2009, the Company issued 10,000,000 shares of Class A Common Stock
to Lebhar Friedman as part of a settlement of all outstanding debts due to
Lebhar Friedman pursuant to the agreement executed on the same day.
 
 On March
23, 2009, The Company issued 54,000,000 shares of Class A common stock to
iVoice, Inc. as repayment of principal on an outstanding convertible debenture,
valued at $5,400.
  11
 Table of Contents
 
 Description
of Securities
  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”.
  Preferred
Stock
  Preferred
Stock consists of 1,000,000 shares of authorized preferred stock with no par
value, of which 501,000 shares are in the designations listed below. The balance
of the shares, 499,000, remain available for designation by the
Company.
 
 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.
 
 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, 2008 there are no shares of the Series A Convertible Preferred
Stock issued and outstanding.
 
 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. On June 12, 2008, the Certificate of Incorporation was
amended such that 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 thirty (30) trading
days immediately preceding the conversion date and to limit the Series B
Preferred stockholders to hold no more than 9.99% of the total Class A Common
Stock at that time of conversion.   The holders of these shares
shall have one vote for each share of Class A Common Stock into which each share
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 thirty (30) trading days immediately preceding the record date and to
limit the voting rights of the Series B Preferred stockholders 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. 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, 2008 there are 550 shares issued and outstanding.
 
 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, 2008, there are 477,810,067
shares issued and outstanding.
 
 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.
 
 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, 2008 there are no shares of Class B
Common Stock 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.
 
 12
 Table of Contents
  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.
  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
                          
                          
                          
                          0Equity
      compensation plans not approved by security holders
                          
                          
                          N/A
                          
                          
                          
                          N/A
                          
                          
                          
                          52,216,038
                          (1)Total
                          
                          
                          N/A
                          
                          
                          
                          N/A
                          
                          
                          
                          52,216,038
                          (1)
  (1) As of
December 31, 2008, 52,216,038 shares of Class A Common Stock remained available
for future issuance under the Thomas Pharmaceuticals, Ltd. 2008 Stock Incentive
Plan.
 
 Thomas
Pharmaceuticals, Ltd. 2008 Stock Incentive
Plan
  The
Thomas Pharmaceuticals 2008 Stock Incentive Plan (the "Plan") was approved by
the Board of Directors, and became effective, on October 3, 2008.  The
shares that may be delivered or purchased or used for reference purposes under
the Plan shall not exceed an aggregate of twenty percent (20%) of the issued and
outstanding shares of the Company's Class A Common Stock, no par value per
share, as determined by the Board from time to time. The purpose of the Plan is
to (i) provide long-term incentives and rewards to employees, directors,
independent contractors or agents of Thomas Pharmaceuticals and its
subsidiaries; (ii) assist Thomas Pharmaceuticals in attracting and retaining
employees, directors, independent contractors or agents with experience and/or
ability on a basis competitive with industry practices; and (iii) associate the
interests of such employees, directors, independent contractors or agents with
those of Thomas Pharmaceuticals' stockholders. Awards under the Plan may
include, but need not be limited to, stock options (including non-statutory
stock options and incentive stock options, stock appreciation rights, warrants,
dividend equivalents, stock awards, restricted stock, phantom stock, performance
shares or other securities or rights that the Board of Directors determines to
be consistent with the objectives and limitations of the Plan. Under the Plan,
the Board may provide for the issuance of shares of the Company's Class A Common
Stock as a stock award for no consideration other than services rendered or, to
the extent permitted by applicable state law, to be rendered. The Board shall
have all the powers vested in it by the terms of the Plan, such powers to
include exclusive authority (within the limitations of the Plan) to select the
Eligible Participants to be granted awards under the Plan, to determine the
type, size and terms of the awards to be made to each Eligible Participant
selected, to determine the time when the awards will be granted, when they will
vest, when they may be exercised, and when they will be paid, to amend awards
previously granted, and the establish objectives and conditions, if any, for
earning awards and whether awards will be paid after the end of the award
period.
 
 Thomas
Pharmaceuticals, Ltd. 2008 Directors’ and
Officers’ Stock Incentive Plan
  The
Thomas Pharmaceuticals, Inc. 2008 Directors' and Officers' Stock Incentive Plan
(the "D&O Plan") was approved by the Board of Directors, and become
effective, on October 3, 2008. The shares that may be delivered or purchased or
used for reference purposes under the D&O Plan shall not exceed an aggregate
of twenty percent (20%) of the issued and outstanding shares of the Company's
Class A Common Stock, no par value per share, as determined by the Board from
time to time.  The purpose of the D&O Plan is to (i) provide
long-term incentives and rewards to officers and directors of the Company and
its subsidiaries;  (ii) assist the Company in attracting and retaining
officers and directors, with experience and/or ability on a basis competitive
with industry practices; and (iii) associate the interests of such officers and
directors with those of the Company's stockholders.  Awards under the
D&O Plan may include, but need not be limited to, stock options (including
non-statutory stock options and incentive stock options), stock appreciation
rights, warrants, dividend equivalents, stock awards, restricted stock, phantom
stock, performance shares or other securities or rights that the Board of
Directors determines to be consistent with the objectives and limitations of the
D&O Plan.  Under the D&O Plan, the Board may provide for the
issuance of shares of the Company's Class A Common Stock as a stock award for no
consideration other than services rendered or, to the extent permitted by
applicable state law, to be rendered. The Board shall have all the powers vested
in it by the terms of the Plan, such powers to include exclusive authority
(within the limitations of the Plan) to select the Eligible Participants to be
granted awards under the Plan, to determine the type, size and terms of the
awards to be made to each Eligible Participant selected, to determine the time
when the awards will be granted, when they will vest, when they may be
exercised, and when they will be paid, to amend awards previously granted, and
the establish objectives and conditions, if any, for earning awards and whether
awards will be paid after the end of the award period.
 
 13
 Table of Contents
  ITEM7 – Management’s Discussion and
Analysis of Financial Condition and Results of Operations
 
 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, 2007
filed with Form 10-KSB 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, 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. On November
21, 2007, the Company was spun-off from iVoice and is now an independent public
reporting company. 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.
 
 Currently
the Company no longer produces any products. Earned sales are derived from
finished goods inventory on hand and cash receipts from previously written off
bad debts.
 
 In June
2008, the Company formed a new, wholly owned subsidiary, Small Cap Advisors,
Inc., to provide investor relation (“IR”) services to small and medium sized
public companies. Micro-cap public companies typically take a stock promotion
approach to IR. This involves sending out un-targeted mass emails to potential
investors, or getting profiled on investor relations websites.  The
Company believed this was no longer a viable approach to gaining new investors,
and in fact, current IR strategies may have actually undermined marketing
efforts and diminishing shareholder goodwill.  The Company developed a
process which it called “SEO-IR”, which involved a search engine optimization
approach to IR.  SEO-IR was designed to build awareness, credibility,
relevance, and a community of dedicated shareholders for the Company’s clients.
Furthermore, SEO-IR would have facilitated the convergence of the client’s
corporate marketing strategy and IR strategy by aligning multiple distribution
channels to reach a targeted, engaged audience. However, the Company abandoned
this business model in the fall of 2008 after the economic crisis in the U.S.
began and the stock markets began to rapidly deteriorate in
value.  The Company does not anticipate re-starting the operations of
SEO-IR.
  Results
of Operations
 
 Year
ended December 31, 2008 compared to year ended December 31, 2007
 
 Total
revenues for the years ended December 31, 2008 and 2007 were $46,651 and
$22,857, respectively. Revenues in the year ended December 31, 2008 were from
finished goods inventory on-hand and the reversal of reserves recorded in 2007
for chargebacks, rebates and product returns as the criteria for meeting the
recognition of this revenue has occurred in 2008. Sales for the year ended
December 31, 2007 were $75,842, net of a provision for product returns and
allowance of $52,985.
 
 Gross
profit (loss) for the years ended December 31, 2008 and 2007 was $46,651 and
$(38,198), respectively. The gross profit in the year ended December 31, 2008
was the result of the sales of finished goods that had previously been written
down to $0 and there were no costs on collections.  For the year ended
December 31, 2007, our standard product gross profit of 50% was substantially
eroded by the effect of the provision for product returns and a provision for
obsolete inventory of $26,117.
 
 Operating
expenses for the years ended December 31, 2008 and 2007 were $509,324 and
$843,422, respectively. The costs in 2008 primarily represent the costs of
running a public company, executive compensation of $133,500, administrative
service fees of $48,000 and professional fees for accounting, legal and business
consulting services of $219,940. In addition, the Company incurred $77,038 of
expenses related to Small Cap Advisors during its first couple of months of
operation. The costs in 2007 primarily consist of $93,315 for a sampling event
in San Francisco on Valentine’s Day, $42,031 provision for bad debts,
depreciation, amortization and impairment of intangible assets of $186,237,
executive compensation of $71,514, professional fees for accounting and legal of
$237,080, administrative service fees of $55,333, contract selling of $72,607,
product sample costs of $28,583 and costs of staffing and running our field
sales office in New York City of $55,422, which was closed on March 31,
2007.
  Total
other expense for the year ended December 31, 2008 was $296,567. This total was
primarily comprised of $141,643 amortization of the discount on debt, $40,563
loss on revaluation of the derivatives and $114,361 of interest expense on the
debentures and promissory notes. Total other expense for the year ended December
31, 2007 was $344,895.  This total was primarily comprised of $122,905
amortization of the discount on debt, $126,459 loss on revaluation of the
derivatives and $95,531 of 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.
  Loss
before preferred dividends for the years ended December 31, 2008 and 2007 were
$759,240 and $1,226,515, respectively. The decrease in loss before preferred
dividends of $467,275 was primarily the results of the Company curtailing any
spending for selling, marketing and advertising until further funding becomes
available.
  Preferred
dividends for the years ended December 31, 2008 and 2007 were $55,151 and
$54,999, respectively. These dividends are accrued pursuant to the provisions of
the Series B Convertible Preferred Stock and remain unpaid.
 
 14
 Table of Contents
 
 Liquidity
and Capital Resources
 
 Between
January 6, 2006 and February 7, 2007, iVoice purchased from Thomas
Pharmaceuticals an aggregate of $550,000 of Thomas Pharmaceuticals Series B
Convertible Preferred Stock (550 shares), an aggregate of $610,000 10% secured
convertible debenture and a $100,000 10% administrative service convertible
debenture. The administrative service debenture was issued by Thomas
Pharmaceuticals to compensate iVoice for the administrative services that iVoice
provided to Thomas Pharmaceuticals under the administrative services agreement.
The purchase of the Series B Convertible Preferred Stock and the convertible
debentures provided working capital to Thomas Pharmaceuticals.  The
debentures are due between January 1, 2013 and February 6, 2015 and bear
interest of 10%, compounded quarterly.
 
 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, 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.
  On April
16, 2008 and May 7, 2008, the Company executed a consulting agreement with
Jerome Mahoney and an employment agreement with Mark Meller, respectively. As
part of their individual compensation agreements, the Company issued two five
(5) year promissory notes in the amount of $35,000, each, for signing bonuses.
The notes carry an interest charge of 3% per annum and are convertible into
Class B common stock on a dollar for dollar basis plus accrued
interest.
 
 On June
10, 2008, the Company received $77,250 from iVoice, Inc. for an initial
investment in Small Cap Advisors. The Company secured the receipt with a
convertible promissory note, at an interest of prime plus 1 (4.25% at December
31, 2008) percent per annum. Additional amounts may be added to this note based
on any unpaid administrative service fees and will accrue interest at the above
specified rate from date of advance until paid. The principal and interest shall
be due and payable as follows: (a) interest shall accrue monthly on the unpaid
balance and shall be paid annually, and (b) principal shall be payable on
demand.
 
 On June
11, 2008, the Company converted its outstanding accounts due to iVoice, Inc. for
unpaid administrative services in the amount of $47,302 into a convertible
promissory note at the rate of prime plus 1 (4.25% at December 31, 2008) percent
per annum. Additional amounts may be added to this note based on any unpaid
administrative service fees and will accrue interest at the above specified rate
from date of advance until paid. The principal and interest shall be due and
payable as follows: (a) interest shall accrue monthly on the unpaid balance and
shall be paid annually, and (b) principal shall be payable on
demand.
 
 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 years ended December 31, 2008 and 2007 the Company had net decreases in cash
of $3,148 and $2,042, respectively. The Company’s principal sources and uses of
funds during these periods was as follows:
  Cash flows from operating
activities.  The Company used $53,398 in cash for operations in
the year ended December 31, 2008, a decrease of $124,397 compared to $177,795 in
cash used for operations in the year ending December 31, 2007.  The
cash used in operations in 2008 was primarily the result of a net cash loss (net
loss after adding back non-cash items but before considering changes in certain
assets and liabilities) of $504,169 offset by increases in accounts payable and
accrued liabilities of $450,771. The 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 offset by decreases in accounts receivable of $1,277, inventory of
$8,640 and prepaid expenses of $56,177 and increases in accounts payable and
accrued liabilities of $466,510. The lower net cash loss was primarily from the
curtailment of cash type expenses
  Cash flows from investing
activities.  The Company did not use any cash for investing
activities in the year ended December 31, 2008. The Company used cash of $3,247
for investing activities in the year ended December 31, 2007 for additional
spending on patents.
 
 Cash flows from financing
activities. The Company provided $50,250 in cash from financing
activities in the year ended December 31, 2008. The Company received gross
proceeds of $77,250 from iVoice, Inc to fund the initial investment in Small Cap
Advisor and repaid $27,000 during the year. 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.
  Off-Balance
Sheet Arrangements
 
 During
fiscal year ended December 31, 2008, 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.
 
 15
 Table of Contents
  ITEM8. Financial Statements and
Supplementary Data.
  The financial statements and notes of
this Form 10-K appear after the signature page to this Form
10-K.
  ITEM9. Changes in and Disagreements
With Accountants on Accounting and Financial Disclosure.
 
 On March
10, 2009, Bagell, Josephs, Levine & Company, L.L.C. was dismissed by the
Company as its independent accountant.  On March 11, 2009, the
Registrant engaged Rosenberg Rich Baker Berman & Company as its independent
accountant to conduct the audit for the fiscal year ended December 31,
2008.
 
 In
connection with this change in accountants subject to paragraph (a) of Item 304
of Regulation S-K:  (i) there was no disagreement of the type described in
paragraph (a)(1)(iv) or any reportable event as described in paragraph (a)(1)(v)
of Item 304 and (ii) during the fiscal year in which the change in accountants
took place or during the subsequent fiscal year, there have been no transactions
or events similar to those which involved such disagreement or reportable
event.
 
 Item9A(T). Controls and
Procedures.
 
 Evaluation
of disclosure controls and procedures.
 
 An
evaluation was performed under the supervision and with the participation of
management, including the Chief Executive Officer and the Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures as defined in Rules 13a-15(e) or 15d-15(e) of
the Securities Exchange Act of 1934, as amended, as of December 31,
2008.  Based on that evaluation, management, including the Chief
Executive Officer and Chief Financial Officer had concluded that the Company's
disclosure controls and procedures were not effective.
 
 The
Company maintains a set of disclosure controls and procedures designed to ensure
that information required to be disclosed by us in our reports filed under the
securities Exchange Act, is recorded, processed, summarized, and reported within
the time periods specified by the SEC's rules and forms. Disclosure controls are
also designed with the objective of ensuring that this information is
accumulated and communicated to our management, including our Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure.
 
 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 of December 31, 2008 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 — Integrated Framework,
our management concluded that our internal control over financial reporting was
not effective for the following reasons:
 
 a)
                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)
                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.
 
 This
Annual Report does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting. We were not required to have, nor have we engaged our independent
registered public accounting firm to perform, an audit on our internal control
over financial reporting pursuant to the 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 tentatively
beginning with our annual report for the year ended December 31,
2009.
  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-K.  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-K that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
 
 Risk
factors related to controls and procedures
 
 The
Company has limited segregation of duties amongst its employees with respect to
the Company's preparation and review of the Company's financial statements due
to the limited number of employees, which is a deficiency in internal controls,
and if the Company fails to maintain an effective system of internal controls,
it may not be able to accurately report its financial results or prevent fraud.
As a result, current and potential stockholders could lose confidence in the
Company's financial reporting which could harm the trading price of the
Company's stock.
  Management
has found it necessary to limit the Company's administrative staffing in order
to conserve cash, until the Company's level of business activity increases. As a
result, there is very limited segregation of duties amongst the administrative
employees, and the Company and its independent public accounting firm have
identified this as a deficiency in the Company's internal controls. The Company
intends to remedy this deficiency by hiring additional employees and
reallocating duties, including responsibilities for financial reporting, among
the employees as soon as there are sufficient resources available. However,
until such time, this deficiency will continue to exist. Despite the limited
number of administrative employees and limited segregation of duties, management
believes that the Company's administrative employees are capable of following
its disclosure controls and procedures effectively.
 
 16
 Table of Contents
  Part
III
 
 Item10. Directors, Executive
Officers and Corporate Governance.
  The Company has two 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 asOfficer\DirectorMark
      Meller
                                          
                                          
                                          49
                                          
                                          President,
      Chief Executive Officer and Director
                                          
                                          5-22-08
      to presentFrank
      V. Esser
                                          
                                          
                                          69
                                          
                                          Director
                                          
                                          1-06-06
      to presentJerome
      R. Mahoney
                                          
                                          
                                          49
                                          
                                          Non-Executive
      Chairman of the Board of Directors
                                          
                                          5-19-05
      to 4-16-08John
      E. Lucas
                                          
                                          
                                          76
                                          
                                          President,
      Chief Executive Officer Chief Financial Officer and
      Director
                                          
                                          1-06-06
      to
4-28-08
  Mark Meller.Mr. Meller has
been the President, Chief Executive Office and Director since May 22,
2008.  Since September 15, 2003, Mr. Meller has been the President,
Chief Financial Office and Director of Trey Resources, Inc. From October 2004
until February 2007, Mr. Meller was the President, Chief Executive Officer,
Chief Financial Officer and Director of Deep Field Technologies, Inc. Since
December 15, 2004, Mr. Meller has been the President, Chief Executive Officer,
Chief Financial Officer and Director of MM2 Group, Inc. From August 29, 2005
until August 2006, Mr. Meller was the President, Chief Executive Officer and
Chief Financial Officer of iVoice Technology, Inc. Since 1988, Mr. Meller has
been Chief Executive Officer of Bristol Townsend & Co., Inc., a New Jersey
based consulting firm providing merger and acquisition advisory services to
middle market companies. From 1986 to 1988, Mr. Meller was Vice President of
Corporate Finance and General Counsel of Crown Capital Group, Inc, a New Jersey
based consulting firm providing advisory services for middle market leveraged
buy-outs (LBO’s). Prior to 1986, Mr. Meller was a financial consultant and
practiced law in New York City. He is a member of the New York State
Bar.
  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.
 
 Jerome R.
Mahoney.  Mr. Mahoney has served
as Director of the Company since its inception through April 16,
2008.  He was elected Vice President and Secretary of the Company on
February 23, 2006 and served in this position through November 21,
2007.  He served as the Non-Executive Chairman of the Board of Thomas
Pharmaceuticals from November 21, 2007 through April 16, 2008.  On
April 16, 2008, Mr. Mahoney resigned his positions as Non-Executive Chairman of
the Board and Director of Thomas Pharmaceuticals and became a consultant to the
Company.  Mr. Mahoney has been the President and Chief Executive
Officer and a director of iVoice, Inc. since 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.
 
 John E. Lucas.  Mr.
Lucas had served as Thomas Pharmaceuticals’ Chief Executive Officer and a
director since February 2005 and President since March 15, 2007.  Mr.
Lucas resigned as President, Chief Executive Officer and Director on April 28,
2008.  Mr. Lucas served as Chairman and Chief Executive Officer of
EpiCept Corporation, New Jersey and Munich, Germany from January 1999 to 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.
 
 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, 2008, the Board held no meetings.  In
addition, the Board acted through written unanimous consent in lieu of a meeting
on fourteen (14) occasions.
 
 17
 Table of Contents
 
 AUDIT
COMMITTEE
 
 During
2008, Messrs. Esser and Meller 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 2008 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.
 
 NOMINATING
COMMITTEE
 
 The
Company does not have a standing nominating committee or a committee performing
similar functions, as the Board of Directors consists of only two
members.  Due to the Company’s size, it finds it difficult to attract
individuals who would be willing to accept membership on the Company’s Board of
Directors.  Therefore, with only two members of the Board of
Directors, the full Board of Directors would participate in nominating
candidates to the Board of Directors.  The Company did not have an
annual meeting of shareholders in the past fiscal year.
  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.
 
 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-K.
  Item11. Executive
Compensation.
  The
following table sets forth compensation information for services rendered by
certain of our executive officers in all capacities during the last two
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($)
                                      
                                      
                                      All Other Compensation
                                      
                                      
                                      Total
                                        CompensationMark
      Meller
                                      
                                      2008
                                      
                                      $
                                      52,222
                                      
                                      
                                      $
                                      35,000
                                      
                                      
                                      $
                                      87,222President
      and Chief Executive Officer (1)John
      E. Lucas
                                      
                                      2008
                                      
                                      $
                                      21,488
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      21,488Chief
      Executive Officer and
                                      
                                      2007
                                      
                                      $
                                      62,070
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      62,070President
      (2)Farris
      M. Thomas, Jr.
                                      
                                      2007
                                      
                                      $
                                      15,000
                                      
                                      
                                      $
                                      0
                                      
                                      
                                      $
                                      15,000President
      (3)
 (1)
                Mr.
      Meller has been serving as the President andChief
      Executive Officer since May 2008. $49,439 of this compensation remains
      unpaid at December 31, 2008. Mr. Meller also received a signing bonus of
      $35,000 in the form of a five year promissory
  note.
  (2)
                Mr.
      Lucas had served as the Chief Executive Officer from February 2005 and the
      President since March 16, 2007, and both until April 29, 2008. $73,558 of
      this compensation remains unpaid at December 31,
  2008.
  (3)
                Mr.
      Thomas had served as the President from July 2004 to March 15,
      2007.
  18
 Table of Contents
  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.
  Director
Compensation
  Name and
      Position(s)
                          
                          Year
                          
                          Salary($)
                          
                          
                          Total
                            CompensationJerome
      R. Mahoney (1)
                          
                          2008
                          
                          $
                          24,792
                          
                          
                          $
                          24,792John
      E. Lucas (2)
                          
                          2008
                          
                          $
                          --
                          
                          
                          $
                          --Frank
      V. Esser (3)
                          
                          2008
                          
                          $
                          12,000
                          
                          
                          $
                          12,000
 
  (1)
                Mr.
      Mahoney had served as the Non-Executive Chairman of the Board from May
      2005 through November 2007 and received no compensation for his services.
      From November 2007, the date of the Distribution, until April 16, 2008,
      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. On April 16, 2008, Mr.
      Mahoney resigned his position on the Board. 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
 
 Mark
Meller
 
 On May
22, 2008, the Company entered into an Employment Agreement with Mark Meller to
serve as its President, Chief Executive Officer and Director through May 7, 2013
at an annual salary of $80,000 with an annual increase of 10% every year
thereafter. This compensation may be paid in Class B Common Stock, in lieu of
cash, at the option of Board of Directors. In addition, the Company issued a
five (5) year promissory note in the amount of $35,000 for a signing bonus. The
promissory note carries an interest charge of 3% per annum and is convertible
into Class B common stock on a dollar for dollar basis plus accrued
interest.
 
 Mr.
Meller shall be granted a stock option under the Company’s stock option plan as
adopted by the Board of Directors and the shareholders of the Company. The
Company will provide Mr. Meller a Stock Option Contract for his signature which
will set out the terms of the option.
 
 The
Company also will pay Mr. Meller a $250,000 bonus for each merger or acquisition
completed by the Company during the term of the agreement. The compensation
payable to Mr. Meller under the agreement may be paid in the form of cash or
shares of Class B Common Stock at the discretion of the Company and with the
agreement of Mr. Meller.
 
 In the
event Mr. Meller’s employment agreement is terminated by the Company for cause,
or by the Company due to Mr. Meller’s disability or retirement, The Company 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. Meller’s employment
agreement is terminated due to Mr. Meller’s death, The Company 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.
 
 In the
event Mr. Meller’s employment agreement is terminated by the Company following a
change in control, as defined in the employment agreement for any reason other
than cause, death, disability, retirement or good reason, Mr. Meller 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. Meller’s employment agreement
is terminated within three years following a change in control, other than for
cause, retirement, death or disability, or by Mr. Meller for good reason within
three years following a change in control, in lieu of the foregoing payment Mr.
Meller will be entitled to receive a severance payment equal to three hundred
percent (300%), less $100, at the rate equal to the greater of the rate in
effect on the date prior to the change in control and the rate in effect at the
time notice of termination is given. Under his employment agreement, “good
reason” means, among other things, (1) any limitation on Mr. Meller’s powers as
President and/or Chief Executive Officer, (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.
 
 19
 Table of Contents
  Jerome
R. Mahoney
 
 The
Company 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 the Company’ 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. Mr. Mahoney resigned his position as Non-Executive Chairman of the
Board on April 16, 2008 and his employment agreement terminated as of such
date.
 
 John
E. Lucas
 
 The
Company entered into an employment agreement with Mr. Lucas as of January 6,
2006 pursuant to which Mr. Lucas served as the Company’s Chief Executive
Officer. The agreement term expired on December 31, 2008. As consideration, the
Company 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. The Company
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. Mr. Lucas resigned his
position as President and Chief Executive Office on April 29, 2008 and his
employment agreement terminated as of such date with the provision that all
earned and unpaid compensation owed to Mr. Lucas shall be paid to Mr. Lucas as
set forth in the Employment Agreement, as amended.
 
 Farris
M. (Tom) Thomas, Jr.
 
 The
Company entered into an employment agreement with Mr. Thomas as of January 6,
2006 pursuant to which Mr. Thomas served as the Company’s President through his
resignation on March 15, 2007. The agreement had a term until December 31, 2008.
As consideration, the Company 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. The Company 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 the Company on March 15, 2007 and his employment
agreement terminated as of such date.
  ITEM12. Security Ownership of
Certain Beneficial Owners and Management and Related Stockholder
Matters.
 
 The
following tables set forth certain information regarding the beneficial
ownership of our voting securities as of April 3, 2009 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
April 3, 2009, there were 550 shares of Series B Convertible preferred stock
outstanding and a total of 541,810,067 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 April 3, 2009, 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
                                                
                                                
                                                60,134,236
                                                (1)
                                                
                                                
                                                9.99
                                                %Matawan,
      NJ 07747BioBridge
      LLC
                                                
                                                Series
      B Convertible Preferred
                                                
                                                
                                                96.8
                                                (2)
                                                
                                                
                                                15.00
                                                %One
      Kendall Square, #700
                                                
                                                Class
      A Common Stock
                                                
                                                
                                                1,290,000,000
                                                (3)
                                                
                                                
                                                70.42
                                                %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 $.00008. The Series B Preferred Stock and the
      Convertible Debentures are convertible into an aggregate of 17,357,300,000
      Class A Common Shares, assuming at conversion price of
      $.00008.
 
 (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) 1,290,000,000 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) 60,134,236 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
      2,500,000,000 Class A Common Shares, assuming at conversion price of
      $.00008.
 
 20
 Table of Contents
  Security
ownership of management
  Common
      Stock
                      Beneficially
      OwnedName/Address
                  
                  Title
      of Class
                  
                  Number
                  
                  
                  PercentMark
      Meller (a)
                  
                  Class
      A Common Stock
                  
                  
                  34,787,500
                  
                  
                  
                  6.42
                  %Frank
      V. Esser (a)
                  
                  Class
      A Common Stock
                  
                  
                  70,892
                  
                  
                  
                  0.01
                  %Director
      and executive officer as a group
                  
                  Class
      A Common Stock
                  
                  
                  34,858,392
                  
                  
                  
                  6.43
                  %
 ______________________________
  (a)  The
      address for these officers and directors is c/o Thomas Pharmaceuticals,
      Ltd. 750 Highway 34, Matawan, New Jersey
07747.
  ITEM13. Certain Relationships and
Related Transactions, and Director Independence.
  Related
Party Accounts Due
  Reference
is made to the employment agreement with Mr. Meller set forth under Item 11
Executive Compensation above.  As of December 31, 2008, the Company
has accrued $49,439 of deferred compensation for the President and CEO of the
Company. These deferrals will remain unpaid until the Board of Directors
determines that the Company has sufficient liquidity to make such payments. The
President and CEO 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.
 
 On May 7,
2008, the Company executed an employment agreement with Mark Meller. As part of
this agreement, the Company issued a five year promissory note in the amount of
$35,000 for a signing bonus. The note carry interest charges of 3% per annum and
is convertible into Class B common stock on a dollar for dollar basis plus
accrued interest. As of December 31, 2008, the balance due on the note is
$35,000 each, plus accrued interest of $685.
 
 On June
10, 2008, the Company received $77,250 from iVoice, Inc. for an initial
investment in Small Cap Advisors. The Company secured the receipt with a
convertible promissory note, at an interest of prime plus 1 (4.25% at December
31, 2008) percent per annum. Additional amounts may be added to this note based
on any unpaid administrative service fees and will accrue interest at the above
specified rate from date of advance until paid. The principal and interest shall
be due and payable as follows: (a) interest shall accrue monthly on the unpaid
balance and shall be paid annually, and (b) principal shall be payable on
demand. As of December 31, 2008, the balance due on the note is $69,250, plus
accrued interest of $2,390.
 
 On June
11, 2008, the Company converted its outstanding accounts due to iVoice, Inc. for
unpaid administrative services in the amount of $47,302 into a convertible
promissory note at the rate of prime plus 1 (4.25% at December 31, 2008) percent
per annum. Additional amounts may be added to this note based on any unpaid
administrative service fees and will accrue interest at the above specified rate
from date of advance until paid. The principal and interest shall be due and
payable as follows: (a) interest shall accrue monthly on the unpaid balance and
shall be paid annually, and (b) principal shall be payable on demand. At
December 31, 2008, the principal balance of the note is $71,302, plus accrued
interest of $1,530.
 
 Director
Independence
 
 Thomas
Pharmaceutical’s board of directors consists of Mark Meller 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.
  
 21
 Table of Contents
  ITEM14.  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, 2008 and December 31, 2007
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
                    
                    2008
                    
                    
                    2007Audit
      Fees
                    
                    $
                    19,000
                    
                    
                    $
                    19,000Audit
      - Related Fees
                    
                    
                    (1
                    )
                    
                    
                    (1
                    )Tax
      fees
                    
                    
                    (1
                    )
                    
                    
                    (1
                    )All
      Other Fees
                    
                    $
                    8,500
                    
                    
                    $
                    1,500Total
                    
                    $
                    27,500
                    
                    
                    $
                    20,500(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 Audit
Committee Chairman obtains an estimate for the service to be
performed.  All of the services described above were approved by the
Audit Committee Chairman in accordance with Audit Committee policies and
procedures.
  
 22
 Table of Contents
  ITEM15.    Exhibits and Financial
Statement Schedules
 
 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 June 16, 2008. (5)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)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
                  Administrative
      Services Agreement dated June 20, 2008 between Small Cap Advisors, Inc., a
      wholly owned subsidiary and a New Jersey corporation and iVoice, Inc.
      (5)10.25
                  Secured
      Convertible Promissory Note dated June 10, 2008, issued by Small Cap
      Advisors, Inc., a wholly owned subsidiary and a New Jersey corporation,
      for the sum of $77,250. (5)10.26
                  Security
      Agreement dated June 20, 2008 by and between iVoice, Inc. and Small Cap
      Advisors, Inc, a New Jersey corporation. (5)10.27
                  Consulting
      Agreement dated August 13, 2008 by and between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and Jerome R. Mahoney.
  (6)10.28
                  Employment
      Agreement dated August 13, 2008 by and between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and Mark Meller. (6)10.29
                  Administrative
      Services Agreement, Amendment No. 1, dated June 12, 2008 between Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation and iVoice, Inc.
      (6)10.30
                  Secured
      Convertible Promissory Note dated June 12, 2008, issued by Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation, for accrued and unpaid
      administrative service fees. (6)10.31
                  Security
      Agreement dated June 12, 2008 by and between iVoice, Inc. and Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation. (6)10.32
                  Promissory Note dated May 15, 2008 payable to Mark
      Meller. +10.33
                  Promissory Note dated May 15, 2008 payable to Jerome
      Mahoney. +14.1
                  Code
      of Ethics (4)21
                  List of
      Subsidiaries +31.1
                  Rule
      13a-14(a)/15d-14(a) Certifications+32.1
                  Certification Pursuant To 18 U.S.C. Section 1350, As
      Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act Of 2002
      +
  _________
 
 (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.(4)
                Filed
      as an exhibit to with the Registrant’s Form 10-KSB for the fiscal year
      ended December 31, 2007 and incorporated herein by
    reference.(5)
                Filed
      as an exhibit to with the Registrant’s Form 8-K, filed with the Commission
      on June 23, 2008 and incorporated herein by reference.(6)
                Filed
      as an exhibit to with the Registrant’s Form 10-Q, filed with the
      Commission on August 14, 2008 and incorporated herein by
      reference.+
                Filed
      herewith.
  23
 Table of Contents
  Signatures
  In
accordance with Section 13 or 15(d) of the Exchange Act, the Registrant caused
this report on Form 10-K to be signed on its behalf by the undersigned,
thereunto duly authorized.
  Thomas
Pharmaceuticals, Ltd
  By:              /s/ Mark
Meller                                                                                               April
14, 2009
 Mark Meller
 President, 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/ Mark
Meller                                                                                              April
14, 2009
 Mark Meller
 President, Chief Executive
Officer,
 Chief Financial Officer
and Director
 
 
 By:              /s/ Frank V.
Esser                                                                                              April
14, 2009
 Frank V. Esser
 Director
   24
 Table of Contents
  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 June 16, 2008. (5)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)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
                  Administrative
      Services Agreement dated June 20, 2008 between Small Cap Advisors, Inc., a
      wholly owned subsidiary and a New Jersey corporation and iVoice, Inc.
      (5)10.25
                  Secured
      Convertible Promissory Note dated June 10, 2008, issued by Small Cap
      Advisors, Inc., a wholly owned subsidiary and a New Jersey corporation,
      for the sum of $77,250. (5)10.26
                  Security
      Agreement dated June 20, 2008 by and between iVoice, Inc. and Small Cap
      Advisors, Inc, a New Jersey corporation. (5)10.27
                  Consulting
      Agreement dated August 13, 2008 by and between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and Jerome R. Mahoney.
  (6)10.28
                  Employment
      Agreement dated August 13, 2008 by and between Thomas Pharmaceuticals,
      Ltd. a New Jersey corporation, and Mark Meller. (6)10.29
                  Administrative
      Services Agreement, Amendment No. 1, dated June 12, 2008 between Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation and iVoice, Inc.
      (6)10.30
                  Secured
      Convertible Promissory Note dated June 12, 2008, issued by Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation, for accrued and unpaid
      administrative service fees. (6)10.31
                  Security
      Agreement dated June 12, 2008 by and between iVoice, Inc. and Thomas
      Pharmaceuticals, Ltd., a New Jersey corporation. (6)10.32
                  Promissory Note dated May 15, 2008 payable to Mark
      Meller. +10.33
                  Promissory Note dated May 15, 2008 payable to Jerome
      Mahoney. +14.1
                  Code
      of Ethics (4)21
                  List of
      Subsidiaries +31.1
                  Rule
      13a-14(a)/15d-14(a) Certifications+32.1
                  Certification Pursuant To 18 U.S.C. Section 1350, As
      Adopted Pursuant To Section 906 of the Sarbanes-Oxley Act Of 2002
      +
  _________
 
 (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.(4)
                Filed
      as an exhibit to with the Registrant’s Form 10-KSB for the fiscal year
      ended December 31, 2007 and incorporated herein by
    reference.(5)
                Filed
      as an exhibit to with the Registrant’s Form 8-K, filed with the Commission
      on June 23, 2008 and incorporated herein by reference.(6)
                Filed
      as an exhibit to with the Registrant’s Form 10-Q, filed with the
      Commission on August 14, 2008 and incorporated herein by
      reference.+
                Filed
      herewith.
 
 
 25
 Table of Contents




THOMAS
PHARMACEUTICALS, LTD.
 FINANCIAL
STATEMENTS
 DECEMBER
31, 2008 and 2007
 
 
 
 
 Table of Contents
 
 
 
 THOMAS
PHARMACEUTICALS, LTD.
 FINANCIAL
STATEMENTS
 DECEMBER
31, 2008 and 2007
 
 
 INDEX
TO FINANCIAL STATEMENTS
 
 
 Page(s)Reports of Independent Registered Public Accounting
      Firms
                    F-1Balance Sheets at December 31, 2008 and 2007
                    F-3Statements of Operations for the Years Ended December 31, 2008
      and 2007
                    F-4Statement of Changes in Stockholders’ Deficit for the
      Years Ended December 31, 2008 and 2007
                    F-5Statements of Cash Flows for the Years Ended December 31, 2008
      and 2007
                    F-6Notes to Financial Statements
                    F-8
  
 
 
 
 
 Table of Contents
 
 
 
 RosenbergRich Baker Berman & Co
 Certified
Public Accountants
 380
Foothill Road
 Bridgewater,
NJ 08807-0483
 Phone
(908)
231-1000                    Fax
(908) 231-6894
  
 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 sheet of Thomas Pharmaceuticals, Ltd. (the
“Company”) as of December 31, 2008 and the related statements of operations,
changes in stockholders’ deficit, and cash flows for the year 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 audit.
 
 We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit 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 audit
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, 2008, and the results of its operations, changes in stockholders’
deficit, and cash flows for the year then 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, 2008 have
been prepared assuming that the Company will continue as a going
concern.   As discussed in Note 14 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 14.  The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
  Rosenberg
Rich Baker Berman & Co
 Certified
Public Accountants
 Bridgewater,
New Jersey
 
 April 8,
2009
 
 F-1
 Table of Contents
 
 
 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 the related statements of operations,
changes in stockholders’ deficit, and cash flows for the year 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 audit.
 
 We
conducted our audit in accordance with standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit 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 audit
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 the results of its operations, changes in stockholders’
deficit, and cash flows for the year then ended, and are in conformity with
accounting principles generally accepted in the United States of
America.
 
 The
accompanying financial statements for the year ended December 31, 2007 have been
prepared assuming that the Company will continue as a going
concern.   As discussed in Note 14 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 14.  The
financial statements do not include any adjustments that might result from the
outcome of these uncertainties.
 
 
 
 
 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
 Table of Contents
 
  THOMASPHARMACEUTICALS, LTD
 CONSOLIDATED
BALANCE SHEETS
 December
31,
  2008
                                            
                                            
                                            2007ASSETSCurrent
      Assets:Cash
      and cash equivalents
                                            
                                            $
                                            6,557
                                            
                                            
                                            $
                                            9,705Prepaid
      and other current assets
                                            
                                            
                                            4,699
                                            
                                            
                                            
                                            4,699Total
      Current Assets
                                            
                                            
                                            11,256
                                            
                                            
                                            
                                            14,404Property
      and equipment, net of accumulated depreciation of $118,555 and $117,428,
      respectively
                                            
                                            
                                            2,253
                                            
                                            
                                            
                                            3,380TOTAL
      ASSETS
                                            
                                            $
                                            13,509
                                            
                                            
                                            $
                                            17,784LIABILITIES AND STOCKHOLDERS’
      DEFICITLIABILITIESCurrent
      Liabilities:Accounts
      payable and accrued expenses
                                            
                                            $
                                            1,121,244
                                            
                                            
                                            $
                                            768,130Notes
      payable, net of discount of $107,495 and $0, respectively
                                            
                                            
                                            123,007
                                            
                                            
                                            
                                            --Dividends
      payable
                                            
                                            
                                            157,315
                                            
                                            
                                            
                                            102,164Derivative
      liability
                                            
                                            
                                            1,297,494
                                            
                                            
                                            
                                            1,132,379Convertible
      debentures payable, net of discount of $416,012 and $519,048,
      respectively
                                            
                                            
                                            281,620
                                            
                                            
                                            
                                            190,952Total
      Current Liabilities
                                            
                                            
                                            2,980,680
                                            
                                            
                                            
                                            2,193,625Long
      Term Liabilities:Notes
      payable, net of discount of $111,833 and $133,833,
      respectively
                                            
                                            
                                            42,167
                                            
                                            
                                            
                                            40,167Total
      Long Term Liabilities
                                            
                                            
                                            42,167
                                            
                                            
                                            
                                            40,167Total
      Liabilities
                                            
                                            
                                            3,022,847
                                            
                                            
                                            
                                            2,233,792COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS’
      DEFICITSeries
      A Convertible Preferred stock, no par value, 500,000
sharesauthorized;
      0 shares issued and outstanding
                                            
                                            
                                            --
                                            
                                            
                                            
                                            --Series
      B Convertible Preferred stock, no par value, 1,000 sharesauthorized;
      550 shares issued and outstanding
                                            
                                            
                                            550,000
                                            
                                            
                                            
                                            550,000Common
      stock:Class
      A, no par value, 10,000,000,000 shares authorized;477,810,067
      and 248,276,105 shares issued and outstanding,
respectively
                                            
                                            
                                            26,161
                                            
                                            
                                            
                                            5,100Class
      B, no par value, 50,000,000 shares authorized;no
      shares issued and outstanding
                                            
                                            
                                            --
                                            
                                            
                                            
                                            --Accumulated
      deficit
                                            
                                            
                                            (3,585,499
                                            )
                                            
                                            
                                            (2,771,108
                                            )Total
      Stockholders’ Deficit
                                            
                                            
                                            (3,009,338
                                            )
                                            
                                            
                                            (2,216,008
                                            )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                                            
                                            $
                                            13,509
                                            
                                            
                                            $
                                            17,784
 
  The
accompanying notes are an integral part of these financial
statements.
  F-3
 Table of Contents
 
 THOMASPHARMACEUTICALS, LTD
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 FOR
THE YEARS ENDED DECEMBER 31,
  2008
                                        
                                        
                                        2007NET
      REVENUES
                                        
                                        $
                                        46,651
                                        
                                        
                                        $
                                        22,857COST
      OF GOODS SOLD
                                        
                                        
                                        --
                                        
                                        
                                        
                                        61,055GROSS
      PROFIT (LOSS)
                                        
                                        
                                        46,651
                                        
                                        
                                        
                                        (38,198
                                        )OPERATING
      EXPENSESSelling
      and marketing expenses
                                        
                                        
                                        --
                                        
                                        
                                        
                                        176,371General
      and administrative expenses
                                        
                                        
                                        508,197
                                        
                                        
                                        
                                        480,814Depreciation
      and amortization expenses
                                        
                                        
                                        1,127
                                        
                                        
                                        
                                        186,237Total
      selling, general and administrative expenses
                                        
                                        
                                        509,324
                                        
                                        
                                        
                                        843,422LOSS
      BEFORE OTHER EXPENSE
                                        
                                        
                                        (462,673
                                        )
                                        
                                        
                                        (881,620
                                        )OTHER
      EXPENSEAmortization
      of debt discount
                                        
                                        
                                        141,643
                                        
                                        
                                        
                                        122,905Loss
      on revaluation of derivatives
                                        
                                        
                                        40,563
                                        
                                        
                                        
                                        126,459Interest
      expense
                                        
                                        
                                        114,361
                                        
                                        
                                        
                                        95,531Total
      Other Expense
                                        
                                        
                                        296,567
                                        
                                        
                                        
                                        344,895LOSS
      BEFORE PROVISION FOR INCOME TAXES
                                        
                                        
                                        (759,240
                                        )
                                        
                                        
                                        (1,226,515
                                        )Provision
      for income taxes
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —LOSS
      BEFORE PREFERRED DIVIDENDS
                                        
                                        
                                        (759,240
                                        )
                                        
                                        
                                        (1,226,515
                                        )Preferred
      dividends
                                        
                                        
                                        55,151
                                        
                                        
                                        
                                        54,999NET
      LOSS APPLICABLE TO COMMON SHARES
                                        
                                        $
                                        (814,391
                                        )
                                        
                                        $
                                        (1,281,514
                                        )NET
      LOSS PER BASIC AND DILUTED SHARES
                                        
                                        $
                                        (0.00
                                        )
                                        
                                        $
                                        (0.01
                                        )WEIGHTED
      AVERAGE NUMBER OF COMMONSHARES
      OUTSTANDING
                                        
                                        
                                        325,809,211
                                        
                                        
                                        
                                        243,435,943
   The
accompanying notes are an integral part of these financial
statements.
  F-4
 Table of Contents
 
 THOMASPHARMACEUTICALS, LTD
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIT
 FOR
THE YEARS ENDED DECEMBER 31, 2008 AND 2007
  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
                                
                                
                                DeficitBalance,
      January 1, 2007
                                
                                
                                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, 2007
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                (1,226,515
                                )
                                
                                
                                (1,226,515
                                )Balance,
      December 31, 2007
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                550
                                
                                
                                
                                550,000
                                
                                
                                
                                248,276,105
                                
                                
                                
                                5,100
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                (2,771,108
                                )
                                
                                
                                (2,216,008
                                )Issuance
      of stock as repayment of principal on outstanding convertible
      debentures
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                142,600,000
                                
                                
                                
                                12,368
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                12,368Issuance
      of stock as repayment of deferred compensation
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                69,575,000
                                
                                
                                
                                6,957
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                6,957Issuance
      of stock for accrued legal services
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                17,358,962
                                
                                
                                
                                1,736
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                1,736Preferred
      stock dividends declared, but unpaid
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                (55,151
                                )
                                
                                
                                (55,151
                                )Net
      loss for the year ended December 31, 2008
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                —
                                
                                
                                
                                (759,240
                                )
                                
                                
                                (759,240
                                )Balance,
      December 31, 2008
                                
                                
                                —
                                
                                
                                $
                                —
                                
                                
                                
                                550
                                
                                
                                $
                                550,000
                                
                                
                                
                                477,810,067
                                
                                
                                $
                                26,161
                                
                                
                                
                                —
                                
                                
                                $
                                —
                                
                                
                                $
                                (3,585,499
                                )
                                
                                $
                                (3,009,338
                                )
 
  The
accompanying notes are an integral part of these financial
statements.
 
 F-5
 Table of Contents
  THOMASPHARMACEUTICALS, LTD
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
THE YEARS ENDED DECEMBER 31,
 
  2008
                                    
                                    
                                    2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      (loss) before preferred dividends
                                    
                                    $
                                    (759,240
                                    )
                                    
                                    $
                                    (1,226,515
                                    )Adjustments
      to reconcile net (loss) to net cash (used in) operatingactivities:Depreciation
      expense
                                    
                                    
                                    1,127
                                    
                                    
                                    
                                    104,784Amortization
      of intangible assets
                                    
                                    
                                    —
                                    
                                    
                                    
                                    81,453Amortization
      of debt discount on beneficial conversion
                                    
                                    
                                    141,643
                                    
                                    
                                    
                                    122,905Loss
      on revaluation of derivatives
                                    
                                    
                                    40,563
                                    
                                    
                                    
                                    126,459Provision
      for product returns
                                    
                                    
                                    —
                                    
                                    
                                    
                                    54,398Provision
      for excess and obsolete inventory
                                    
                                    
                                    —
                                    
                                    
                                    
                                    26,117Beneficial
      interest on conversion of accounts payable and deferredcompensations
                                    
                                    
                                    1,738
                                    
                                    
                                    
                                    —Issuance
      of debt for compensation expense
                                    
                                    
                                    70,000
                                    
                                    
                                    
                                    —Changes
      in assets and liabilitiesDecrease in accounts receivable
                                    
                                    
                                    —
                                    
                                    
                                    
                                    1,277Decrease in inventory
                                    
                                    
                                    —
                                    
                                    
                                    
                                    8,640Decrease in prepaid and other assets
                                    
                                    
                                    —
                                    
                                    
                                    
                                    56,177Increase
      in accounts payable and accrued expenses
                                    
                                    
                                    450,771
                                    
                                    
                                    
                                    466,510Net
      cash (used in) operating activities
                                    
                                    
                                    (53,398
                                    )
                                    
                                    
                                    (177,795
                                    )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of intangibles
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (3,247
                                    )Net
      cash (used in) investing activities
                                    
                                    
                                    —
                                    
                                    
                                    
                                    (3,247
                                    )CASH
      FLOWS FROM FINANCING ACTIVITIESGross
      proceeds from debt financing
                                    
                                    
                                    77,250
                                    
                                    
                                    
                                    185,000Repayment
      of debt financing
                                    
                                    
                                    (27,000
                                    )
                                    
                                    
                                    (6,000
                                    )Net
      cash provided by financing activities
                                    
                                    
                                    50,250
                                    
                                    
                                    
                                    179,000NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                    
                                    
                                    (3,148
                                    )
                                    
                                    
                                    (2,042
                                    )CASH
      AND CASH EQUIVALENTS - BEGINNING OF YEAR
                                    
                                    
                                    9,705
                                    
                                    
                                    
                                    11,747CASH
      AND CASH EQUIVALENTS - END OF YEAR
                                    
                                    $
                                    6,557
                                    
                                    
                                    $
                                    9,705CASH
      PAID DURING THE YEAR FOR:Interest
      expense
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    —Income
      taxes
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    —
  
 The
accompanying notes are an integral part of these financial
statements.
  F-6
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD
 CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)
 FOR
THE YEARS ENDED DECEMBER 31, 2008 and 2007
 
 SUPPLEMENTAL CASH FLOW
      INFORMATIONFor
      the year ended December 31, 2008:a)
                                                                                          The
      Company issued 142,600,000 shares of Class A common stock to iVoice, Inc.
      as repayment of principal on an outstanding convertible debenture, valued
      at $12,368.b)
                                                                                          The
      Company issued an aggregate of 69,575,000 shares of Class A common stock
      to Mr. Meller and Mr. Mahoney for deferred compensation pursuant to the
      employment and consulting agreements. The value of the shares at issue was
      $6,957. The difference in the market value and the reduction in debt of
      $5,566 was charged to beneficial interest in the amount of
      $1,391.c)
                                                                                          The
      Company issued 17,358,962 shares of Class A common stock to Meritz and
      Muenz, LLP for legal services valued at $1,389. The value of the shares at
      issue was $1,736. The difference of $347 was charged to beneficial
      interest.d)
                                                                                          The
      Company executed an employment agreement and a consulting agreement with
      Mr. Meller and Mr. Mahoney, respectively. Pursuant to the terms of these
      agreements, the Company issued two promissory notes, in lieu of cash, in
      the amount of $70,000 for signing bonuses.e)
                                                                                          The
      Company converted $90,702 of accounts payable related to the
      administrative service agreement, into convertible promissory
      notesf)
                                                                                          The
      Company declared $55,151 of preferred stock dividends. This amount remains
      unpaid.For
      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 at December 31, 2008.
 
  The
accompanying notes are an integral part of these financial
statements.
   F-7
 Table of Contents
  THOMASPHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS
 DECEMBER 31, 2008
and 2007
  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. On November
21, 2007, the Company was spun-off from iVoice and is now an independent public
reporting company. 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.
 
 Currently
the Company no longer produces any products. Earned sales are derived from
finished goods inventory on hand and the reversal of reserves recorded in 2007
for chargebacks, rebates and product returns as the criteria for meeting the
recognition of this revenue has occurred in 2008.
 
 In June
2008, the Company formed a new, wholly owned subsidiary, Small Cap Advisors,
Inc., to provide investor relation (“IR”) services to small and medium sized
public companies. Micro-cap public companies typically take a stock promotion
approach to IR. This involves sending out un-targeted mass emails to potential
investors, or getting profiled on investor relations websites.  The
Company believed this was no longer a viable approach to gaining new investors,
and in fact, current IR strategies may have actually undermined marketing
efforts and diminishing shareholder goodwill.  The Company developed a
process which it called “SEO-IR”, which involved a search engine optimization
approach to IR.  SEO-IR was designed to build awareness, credibility,
relevance, and a community of dedicated shareholders for the Company’s clients.
Furthermore, SEO-IR would have facilitated the convergence of the client’s
corporate marketing strategy and IR strategy by aligning multiple distribution
channels to reach a targeted, engaged audience. However, the Company abandoned
this business model in the fall of 2008 after the economic crisis in the U.S.
began and the stock markets began to rapidly deteriorate in
value.  The Company does not anticipate re-starting the operations of
SEO-IR.
 
 The
Company operates its businesses from the home office of iVoice in Matawan,
NJ.
 
 Basis of
Presentation
 
 The
accompanying audited consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, Small Cap Advisors, Inc. (“Small
Cap Advisors”). Prior to November 21, 2007, 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.
  F-8
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 NOTE
2 - SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES
 
 Principles of
Consolidation
 
 The
accompanying consolidated financial statements include the accounts of the
Company and its wholly owned subsidiary, Small Cap Advisors, Inc. All
significant inter-company transactions and balances have been eliminated in
consolidation.
 
 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.
 
 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, 2008 and 2007, 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 $250,000. The
Company had no uninsured cash balances at December 31, 2008 and
2007.
 
 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.
  F-9
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 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, 2008 and 2007 was $8,070 and
$149,225, 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.
 
 As of
December 31, 2008 and 2007, the accounts receivable, net of allowance for
product returns and bad debt, is as follows:
  2008
                    
                    
                    2007Accounts
      receivable
                    
                    $
                    8,070
                    
                    
                    $
                    191,256Less:
      allowance for product returns
                    
                    
                    (8,070
                    )
                    
                    
                    (149,225
                    )Less:
      provision for bad debt
                    
                    
                    --
                    
                    
                    
                    (42,031
                    )Net
      accounts receivable
                    
                    $
                    --
                    
                    
                    $
                    --
  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. During the year ended December 31, 2008, several open
accounts receivable were written off to the bad debt provision of $42,031. At
December 31, 2008, Management has determined that no further provision for bad
debt was required.
 
 Inventory
 
 Inventory,
consisting primarily of raw materials and finished goods such as antacid
tablets, tins, display boxes and completed shipping boxes, 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.
  F-10
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 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, 2008 and 2007, the inventory at cost and reserves for excess and
slow-moving inventory is as follows:
  2008
                    
                    
                    2007Inventory
      at cost
                    
                    $
                    0
                    
                    
                    $
                    56,116Less:
      Reserve for excess and slow-moving inventory
                    
                    
                    0
                    
                    
                    
                    (56,116
                    )Net
      inventory
                    
                    $
                    0
                    
                    
                    $
                    0
 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.
 
 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.
 
 Advertising
Costs
 
 Advertising
costs are expensed as incurred and are included in selling and marketing
expenses.  For the years ended December 31, 2008 and 2007, the Company
incurred $0 and $29,259, respectively, in advertising costs.
  F-11
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 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, 2008 and 2007 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. Also see Note 7.
 
 Income
Taxes
 
 Prior to
November 2007, 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.
  F-12
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 As of
December 31, 2008 and 2007, the costs and accumulated depreciation for the
property and equipment is as follows:
  2008
                    
                    
                    2007Property
      and equipment at cost
                    
                    $
                    120,808
                    
                    
                    $
                    120,808Less:
      Accumulated depreciation
                    
                    
                    (118,555
                    )
                    
                    
                    (117,428
                    )Net
      property and equipment
                    
                    $
                    2,253
                    
                    
                    $
                    3,380
  Depreciation
expense for the years ended December 31, 2008 and 2007 was $1,127 and $104,784,
respectively.
  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.
 
 The
following is a reconciliation of the computation for basic and diluted
EPS:
  2008
                      
                      
                      2007Net
      loss applicable to common shares
                      
                      $
                      (814,391
                      )
                      
                      $
                      (1,281,514
                      )Weighted-average
      common sharesOutstanding
                      
                      
                      325,809,211
                      
                      
                      
                      243,435,943Net
      loss per share
                      
                      $
                      (0.00
                      )
                      
                      $
                      (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, 2008, the Company had common stock
equivalents of 19,857,300,000. At December 31, 2007, the Company had common
stock equivalents of 1,825,000,000.
 
 Recent Accounting
Pronouncements
 
 On
January 1, 2008, the Company adopted SFAS No. 159, "The Fair Value Option
for Financial Assets and Financial Liabilities, Including an amendment of FASB
Statement No. 115" ("SFAS No. 159"). SFAS No. 159 permits
entities to choose to measure many financial instruments and certain other items
at fair value, which are not otherwise currently required to be measured at fair
value. Under SFAS No. 159, the decision to measure items at fair value is
made at specified election dates on an instrument-by-instrument basis and is
irrevocable. Entities electing the fair value option are required to recognize
changes in fair value in earnings and to expense upfront costs and fees
associated with the item for which the fair value option is elected. The new
standard did not impact the Company's Consolidated Financial Statements, as the
Company did not elect the fair value option for any instruments existing as of
the adoption date. However, the Company will evaluate the fair value measurement
election with respect to financial instruments the Company enters into in the
future.
 
 F-13
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets. FSP 142-3 amends the factors an entity should consider in
developing renewal or extension assumptions used in determining the useful life
of recognized intangible assets under SFAS 142, Goodwill and Other Intangible
Assets, and adds certain disclosures for an entity’s accounting policy of the
treatment of the costs, period of extension, and total costs
incurred.  FSP 142-3 must be applied prospectively to intangible
assets acquired after January 1, 2009.  The Company is currently
evaluating the impact that FSP 142-3 will have on its financial position or
results of operations.
 
 In May
2008, the Financial Accounting Standards Board (the “FASB”) issued FAS No. 162,
“The Hierarchy of Generally Accepted Accounting Principles” (“FAS 162”). This
statement identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in accordance with GAAP. With the
issuance of this statement, the FASB concluded that the GAAP hierarchy should be
directed toward the entity and not its auditor, and reside in the accounting
literature established by the FASB as opposed to the American Institute of
Certified Public Accountants (AICPA) Statement on Auditing Standards No. 69,
“The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” This statement is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” The adoption of FAS 162 is not expected to have a material impact
on the Company’s results from operations or financial position.
 
 In
December 2007, the FASB issued SFAC No 141(R), “Business
Combinations.”  This statement provides new accounting guidance and
disclosure requirements for business combinations.  SFAS No 141(R) is
effective for business combinations which occur in the first fiscal year
beginning on or after December 15, 2008.
 
 In
September 2006, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 157, "Fair Value Measurements" ("SFAS No. 157"), which
clarifies the definition of fair value whenever another standard requires or
permits assets or liabilities to be measured at fair value. Specifically, the
standard clarifies that fair value should be based on the assumptions market
participants would use when pricing the asset or liability, and establishes a
fair value hierarchy that prioritizes the information used to develop those
assumptions. SFAS No. 157 does not expand the use of fair value to any new
circumstances, and must be applied on a prospective basis except in certain
cases. The standard also requires expanded financial statement disclosures about
fair value measurements, including disclosure of the methods used and the effect
on earnings.
  In
February 2008, FASB Staff Position ("FSP") FAS No. 157-2, "Effective
Date of FASB Statement No. 157" ("FSP No. 157-2") was issued. FSP
No. 157-2 defers the effective date of SFAS No. 157 to fiscal years
beginning after December 15, 2008, and interim periods within those fiscal
years, for all nonfinancial assets and liabilities, except those that are
recognized or disclosed at fair value in the financial statements on a recurring
basis (at least annually). Examples of items within the scope of FSP
No. 157-2 are nonfinancial assets and nonfinancial liabilities initially
measured at fair value in a business combination (but not measured at fair value
in subsequent periods), and long-lived assets, such as property, plant and
equipment and intangible assets measured at fair value for an impairment
assessment under SFAS No. 144.
 
 The
partial adoption of SFAS No. 157 on January 1, 2008 with respect to
financial assets and financial liabilities recognized or disclosed at fair value
in the financial statements on a recurring basis did not have a material impact
on the Company's financial statements. See Note 3 for the fair value
measurement disclosures for these assets and liabilities. The Company is in the
process of analyzing the potential impact of SFAS No. 157 relating to its
planned January 1, 2009 adoption of the remainder of the
standard.
 
 In March
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement No. 133”
(“SFAS 161”), which modifies and expands the disclosure requirements for
derivative instruments and hedging activities.  SFAS 161 requires that
objectives for using derivative instruments be disclosed in terms of underlying
risk and accounting designation and requires quantitative disclosures about fair
value amounts and gains and losses on derivative instruments.  It also
requires disclosures about credit-related contingent features in derivative
agreements. SFAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with early
application encouraged.  SFAS 161 encourages, but does not require,
comparative disclosures for earlier periods at initial adoption.  The
adoption of SFAS 161 is not expected to have a material impact on our
consolidated financial condition or results of operations.
  F-14
 Table of Contents
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 NOTE
3 – FAIR VALUE
MEASUREMENTS
 
 Effective
January 1, 2008, the Company adopted Statement of Financial Accounting Standards
(SFAS) No. 157, Fair Value Measurements. This Statement defines fair value for
certain financial and nonfinancial assets and liabilities that are recorded at
fair value, establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. This guidance applies to other
accounting pronouncements that require or permit fair value measurements. On
February 12, 2008, the FASB finalized FASB Staff Position (FSP) No. 157-2,
Effective Date of FASB Statement No. 157. This Staff Position delays the
effective date of SFAS No. 157 for nonfinancial assets and liabilities to fiscal
years beginning after November 15, 2008 and interim periods within those fiscal
years, except for those items that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually). The adoption
of SFAS No. 157 had no effect on the Company’s consolidated financial position
or results of operations.
 
 The
Company partially adopted SFAS 157 on January 1, 2008, delaying application
for non-financial assets and non-financial liabilities as permitted. This
statement establishes a framework for measuring fair value, and expands
disclosures about fair value measurements. SFAS 157 establishes a fair
value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value into three levels as follows:
  Level
      1 Inputs– Quoted prices for identical instruments in active
      markets.
 Level
      2 Inputs– Quoted prices for similar instruments in active markets; quoted
      prices for identical or similar instruments in markets that are not
      active; and model-derived valuations whose inputs are observable or whose
      significant value drivers are
observable.
 Level
      3 Inputs– Instruments with primarily unobservable value
      drivers.
 
 In
accordance with SFAS 157, the Company determines the level in the fair value
hierarchy within which each fair value measurement in its entirety falls, based
on the lowest level input that is significant to the fair value measurement in
its entirety.
 
 The
following table presents the embedded derivative, the Company’s only financial
assets measured and recorded at fair value on the Company’s Consolidated Balance
Sheets on a recurring basis and their level within the fair value hierarchy as
of December 31, 2008.
 
 Level
      I
                      
                      
                      Level II
                      
                      
                      Level III
                      
                      
                      TotalDerivative
      liabilities
                      
                      $
                      -
                      
                      
                      $
                      1,297,494
                      
                      
                      $
                      -
                      
                      
                      $
                      1,297,494
 
 The
following table reconciles, for the year ended December 31, 2008, the beginning
and ending balances for financial instruments that are recognized at fair value
in the consolidated financial statements:
 
 Balance
      of embedded derivative at December 31, 2007
                            
                            $
                            1,132,379Fair
      value of conversion feature on the iVoice promissory notes
                            
                            
                            203,589Conversion
      of convertible debentures into common stock
                            
                            
                            (1,828
                            )Loss
      on fair value adjustments to embedded derivatives
                            
                            
                            (36,646
                            )Balance
      of embedded derivative at December 31, 2008
                            
                            $
                            1,297,494
 The
valuation of the derivatives are calculated using a complex binomial pricing
model that is based on changes in the volatility of our shares, our stock price,
the probability of a reduction in exercise and conversion price, and the time to
conversion of the related financial instruments. See Note 7 for more information
on the valuation methods used.
  F-15
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 NOTE
4 –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 year ended December 31, 2007, the Company recorded an additional $3,247, 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. Based upon
managements’ evaluation of this business at December 31, 2007, it was determined
that the then 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, 2008 and 2007, intangible assets are as follows:
  2008
                    
                    
                    2007Intangible
      assets at cost
                    
                    $
                    111,453
                    
                    
                    $
                    111,453Less:
      Accumulated amortization
                    
                    
                    (2,316
                    )
                    
                    
                    (2,316
                    )Less:
      Accumulated impairment
                    
                    
                    (109,137
                    )
                    
                    
                    (109,137
                    )Net
      intangible assets
                    
                    $
                    0
                    
                    
                    $
                    0
  NOTE
5 – 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.
During the year ended December 31, 2008, the Company issued 142,600,000 shares
of Class A common stock as repayment of principal of $12,368. As of December 31,
2008 and 2007, the remaining principal balance of the convertible debenture was
$347,632 and $360,000, respectively, plus accrued interest of $122,933 and
$77,901, 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, 2008 and 2007, the
remaining principal balance of the convertible debenture was $100,000 plus
accrued interest of $34,299 and $21,639, respectively.
  F-16
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 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, 2008 and 2007, the remaining principal balance of the convertible
debenture was $225,000 plus accrued interest of $68,247 and $40,603,
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, 2008 and 2007 the remaining principal balance of the
convertible debenture was $25,000 plus accrued interest of $5,141 and $2,303,
respectively.
 
 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, 2008 and 2007
is $697,632 and $710,000, respectively. These amounts are shown net of the
unamortized portion of the discount on conversion of $416,012 and $519,048,
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.
 
 NOTE
6 – NOTES
PAYABLE
 
 Current
Portion
 
 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 18, 2009 with a lump
sum payment due of any remaining principal and interest. As of December 31, 2008
and 2007, the unpaid balance on the promissory note is $20,000 plus accrued
interest of $4,253 and $3,095, respectively.    As of the
date of this filing, the Company is in default of this obligation and will incur
additional interest charges at a rate of the lesser of 15% per annum or the
maximum interest rate provided by law, and the interest shall be payable
monthly.
  F-17
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 On April
16, 2008 and May 7, 2008, the Company executed a consulting agreement with
Jerome Mahoney and an employment agreement with Mark Meller, respectively. As
part of their individual compensation agreements, the Company issued two five
(5) year promissory notes in the amount of $35,000, each, for signing bonuses.
The notes carry interest charges of 3% per annum and are convertible into Class
B common stock on a dollar for dollar basis plus accrued interest. As of
December 31, 2008, the balance due on the notes is $35,000 each, plus accrued
interest of $745 and $685, respectively.
 
 On June
10, 2008, the Company received $77,250 from iVoice, Inc. for an initial
investment in Small Cap Advisors. The Company secured the receipt with a
convertible promissory note, at an interest of prime plus 1 (4.25% at December
31, 2008) percent per annum. Additional amounts may be added to this note based
on any unpaid administrative service fees and will accrue interest at the above
specified rate from date of advance until paid. The principal and interest shall
be due and payable as follows: (a) interest shall accrue monthly on the unpaid
balance and shall be paid annually, and (b) principal shall be payable on
demand. As of December 31, 2008, the balance due on the note is $69,250, plus
accrued interest of $2,390.
 
 On June
11, 2008, the Company converted its outstanding accounts due to iVoice, Inc. for
unpaid administrative services in the amount of $47,302 into a convertible
promissory note at the rate of prime plus 1 (4.25% at December 31, 2008) percent
per annum. Additional amounts may be added to this note based on any unpaid
administrative service fees and will accrue interest at the above specified rate
from date of advance until paid. The principal and interest shall be due and
payable as follows: (a) interest shall accrue monthly on the unpaid balance and
shall be paid annually, and (b) principal shall be payable on demand. At
December 31, 2008, the principal balance of the note is $71,302, plus accrued
interest of $1,530.
 
 The
Company determined that the beneficial conversion feature of the two iVoice
convertible promissory notes met the criteria of EITF No. 98-5 and therefore the
conversion feature was 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: 5 years; and volatility: 267.55%. The
aggregate fair value of the beneficial conversion feature was greater that the
proceeds of the promissory note and as such, an aggregate of $79,036 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 balances of the promissory notes at December 31, 2008 is
$230,952. This amount is shown net of the unamortized portion of the discount on
conversion of the iVoice promissory notes of $107,945. This discount is being
amortized over the life of the iVoice promissory notes and is being recorded as
a charge to amortization of discount on beneficial conversion on the statement
of operations.
 
 Long
Term Portion
 
 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, 2008 and 2007, the
unpaid balance on the promissory note is $154,000 plus accrued interest of
$30,187 and $14,530, respectively.
  F-18
 Table of Contents
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 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
principal balance of the promissory notes at December 31, 2008 and 2007 is
$154,000. The principal amounts are shown net of the unamortized portion of the
discount on conversion of the Thomas Acquisition debentures of $111,833 and
$133,833, respectively. 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.
 
 NOTE
7 - 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 Convertible Debentures, iVoice
Promissory Notes 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, a) 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,
2008 and 2007, they had an estimated fair value of $871,460 and $882,912,
respectively; b) the Company had recognized embedded derivatives on the iVoice
promissory notes in the amount of $203,589 as a derivative liability in the
accompanying balance sheet and as of December 31, 2008 they had an estimated
fair value of $176,092; and c). the Company has recognized embedded derivatives
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, 2008 and
2007, it was measured at its estimated fair value of $249,942 and $249,467,
respectively.
 
 The
estimated fair value of the embedded derivatives have been calculated based on a
Black-Scholes pricing model using the following assumptions:
 
   12/31/08
                    
                    
                    12/31/07Fair
      market value of stock
                    
                    $
                    0.00010
                    
                    
                    $
                    0.0010Exercise
      price
                    
                    $
                    0.00008
                    
                    
                    $
                    0.0008Dividend
      yield
                    
                    
                    0.00
                    %
                    
                    
                    0.00
                    %Risk
      free interest rate
                    
                    
                    3.20
                    %
                    
                    
                    5.47
                    %Expected
      volatility *
                    
                    
                    322.06
                    %
                    
                    
                    242.17
                    %Expected
      life
                    
                    4.00
      to 5.08 years
                    
                    
                    5.00
      to 6.08 years
 
 * It was
determined that the historical stock prices of iVoice provided the closest
comparable for determining the expected volatility of the Thomas common
stock.
  F-19
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 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
statements of operations. For the year ended December 31, 2008, there was a
change in the fair value of the embedded derivatives, which resulted in a gain
of $38,474.  This gain was offset by a loss recognized on the issuance
of additional derivatives during the year that exceeded the face value of the
debt in the amount of $79,037, resulting in a net loss of
$40,463.  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.
 
 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 debentures, iVoice notes
and Thomas Acquisition debentures of $710,000, $124,552 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, 2008
and 2007 was $141,643 and $122,905, respectively.
 
 NOTE
8  -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, 2008 and 2007 deferred tax assets consist of the following:
  2008
                    
                    
                    2007Deferred
      tax assets
                    
                    $
                    350,000
                    
                    
                    $
                    110,000Less:
      Valuation allowance
                    
                    
                    (350,000
                    )
                    
                    
                    (110,000
                    )Net
      deferred tax assets
                    
                    $
                    0
                    
                    
                    $
                    0
  At
December 31, 2008 and 2007 the Company had a federal net operating loss carry
forward in the approximate amount of $875,000 and $275,000, respectively,
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
9 - OPERATING
LEASE
 
 The
Company leased a 300 square foot office space in New York City under a lease
that expired on March 31, 2007. Monthly lease payments under the lease were
$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.
  F-20
 Table of Contents
 THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 NOTE
10 - RELATED PARTY
TRANSACTIONS
 
 In
addition to the financing provided, iVoice provides administrative services and
other miscellaneous support to the Company from time to time. For the years
ended December 31, 2008 and 2007, the Company has recorded $76,000 and $55,333
of these charges in the financial accounts of the Company. As of December 31,
2008, the unpaid balance of the current accounts due was transferred to a
secured promissory note payable to iVoice. These amounts will remain unpaid
until the Board of Directors determines that the Company has sufficient
liquidity to make such payments.
 
 NOTE
11 – 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, 2008 and 2007 the
Company recorded $0 and $50,000, respectively, for admin 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 April 29, 2008,
Mr. Lucas resigned his positions with the Company and the board accepted his
resignation. At the time of Mr. Lucas’ resignation, the Company had accumulated
unpaid compensation of $73,558 which is due and owing in cash or Class A Common
Stock, as determined by the Board of Directors.
 
 On March
1, 2007 the Company entered into a five-year employment agreement with Jerome
Mahoney, which became 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
compensation payable to Mr. Mahoney under the agreement may be paid in the form
of cash, debt or shares of Class B Common Stock. On April 16, 2008, Mr. Mahoney
resigned his positions with the Company and the board accepted his resignation.
At the time of Mr. Mahoney’s resignation, the Company had accumulated unpaid
compensation of $48,997 which is due and owing in cash or Class A Common Stock,
as determined by the Board of Directors.
 
 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. On June
11, 2008, the administrative services agreement was amended to provide that any
fees that are earned and remain unpaid shall be converted into a secured
convertible promissory note which shall accrue interest at prime plus 1% (4.25%
at December 31, 2008) per annum. As of December 31, 2008, the unpaid fees in the
amount of $71,302 were converted to the promissory note and remain
unpaid.
  F-21
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 On June
10, 2008,the
Company entered into an administrative services agreement with iVoice on behalf
of its wholly owned subsidiary, Small Cap Advisors. 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. For these services, Small Cap Advisors will
pay iVoice a fee of $4,000 per month. In addition, fees that are earned and
remain unpaid at the end of a month shall be added to iVoice secured convertible
promissory note which shall accrue interest at prime plus 1% (4.25% at December
31, 2008) per annum. As of December 31, 2008, the unpaid fees in the amount of
$19,400 were converted to the promissory note and remain unpaid.
 
 On May
22, 2008, the Company entered into a consulting agreement with Jerome Mahoney to
provide consulting services on strategic plans, policies and procedures,
acquisitions, personnel matters and other assignments as directed by the Chief
Executive Officer. As consideration, the Company will pay Mr. Mahoney the sum of
$80,000 the first year with an annual increase of 10% every year thereafter.
This compensation may be paid in Class B Common Stock, in lieu of cash, at the
option of Board of Directors. In addition, the Company issued a five (5) year
promissory note in the amount of $35,000 for a signing bonus. The promissory
note carries an interest charge of 3% per annum and is convertible into Class B
common stock on a dollar for dollar basis plus accrued interest. As of December
31, 2008, unpaid compensation in the amount of $53,884 is due and
owing.
 
 On May
22, 2008, the Company entered into an Employment Agreement with Mark Meller to
serve as its President, Chief Executive Officer and Director through May 7, 2013
at an annual salary of $80,000 with an annual increase of 10% every year
thereafter. This compensation may be paid in Class B Common Stock, in lieu of
cash, at the option of Board of Directors. In addition, the Company issued a
five (5) year promissory note in the amount of $35,000 for a signing bonus. The
promissory note carries an interest charge of 3% per annum and is convertible
into Class B common stock on a dollar for dollar basis plus accrued interest. As
of December 31, 2008, unpaid compensation in the amount of $59,039 is due and
owing.
 
 On
December 13, 2007, Independent Can filed suit against the Company seeking
payment of monies owed equal to $19,100.80. Independent Can had provided the
Company the tins that held the Acid+All® tablets.  In June 2008, the
Company defaulted on a settlement agreement and Independent Can was awarded a
judgment for $14,785.32 for amounts due on the original stipulation of
settlement. As of the date of this filing, the judgment is still
outstanding.
  On May
27, 2008, Lebhar Friedman, Inc. filed suit against the Company in the Superior
Court of New Jersey, Monmouth County, for the sum of $16,230.80 for failure to
pay for goods and/or services received by the Company.  On December 1,
2008 a Default Judgment was entered against the Company.  On February
11, 2009, the Company executed a settlement with Lebhar Friedman by the issuance
of 10,000,000 shares of Class A Common Stock and a cash payment of
$1,500.
  On August
7, 2008, the intellectual property attorney Ursula Day asserted a claim against
the Company for unpaid bills equal to $9,547.  The Company has been in
discussions attempting to resolve this dispute. Ms. Day has been gathering
documentation to support her claim. As soon as this is completed, the Company
will attempt to settle this dispute.
  F-22
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 NOTE
12 - 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, of which 501,000 shares are in the designations listed below. The balance
of the shares, 499,000, remain available for designation by the
Company.
 
 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.
 
 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, 2008 and 2007, there are no shares issued and
outstanding.
  F-23
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 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. On June 12, 2008, the Certificate of Incorporation was
amended such that 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 thirty (30) trading
days immediately preceding the conversion date and to limit the Series B
Preferred stockholders to hold no more than 9.99% of the total Class A Common
Stock at that time of conversion.   The holders of these shares
shall have one vote for each share of Class A Common Stock into which each share
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 thirty (30) trading days immediately preceding the record date and to
limit the voting rights of the Series B Preferred stockholders 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. 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, 2008 and 2007, 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, 2008, there are 477,810,067
shares issued and outstanding. As of December 31, 2007, there are 248,276,105
shares issued and outstanding.
 
 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-24
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 For the
year ended December 31, 2008, the Company had the following transactions in its
Class A common stock:
 
 The
Company issued 142,600,000 shares of Class A common stock to iVoice, Inc. as
repayment of principal on an outstanding convertible debenture, valued at
$12,368.
 
 The
Company issued an aggregate of 69,575,000 shares of Class A common stock to Mr.
Meller and Mr. Mahoney for deferred compensation pursuant to the employment and
consulting agreements. The value of the shares at issue was $6,957. The
difference in the market value and the reduction in debt of $5,566 was charged
to beneficial interest in the amount of $1,391.
 
 The
Company issued 17,358,962 shares of Class A common stock to Meritz and Muenz,
LLP for legal services valued at $1,389. The value of the shares at issue was
$1,736. The difference of $347 was charged to beneficial interest.
 
 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, 2008 and 2007, 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.
  F-25
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 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.
 
 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
13 - STOCK OPTIONS, STOCK INCENTIVES & WARRANTS
 
 2008 Stock Incentive
Plan
  The
Thomas Pharmaceuticals 2008 Stock Incentive Plan (the "Plan") was approved by
the Board of Directors, and became effective, on October 3, 2008.  The
shares that may be delivered or purchased or used for reference purposes under
the Plan shall not exceed an aggregate of twenty percent (20%) of the issued and
outstanding shares of the Company's Class A Common Stock, no par value per
share, as determined by the Board from time to time. The purpose of the Plan is
to (i) provide long-term incentives and rewards to employees, directors,
independent contractors or agents of Thomas Pharmaceuticals and its
subsidiaries; (ii) assist Thomas Pharmaceuticals in attracting and retaining
employees, directors, independent contractors or agents with experience and/or
ability on a basis competitive with industry practices; and (iii) associate the
interests of such employees, directors, independent contractors or agents with
those of Thomas Pharmaceuticals' stockholders. Awards under the Plan may
include, but need not be limited to, stock options (including non-statutory
stock options and incentive stock options, stock appreciation rights, warrants,
dividend equivalents, stock awards, restricted stock, phantom stock, performance
shares or other securities or rights that the Board of Directors determines to
be consistent with the objectives and limitations of the Plan. Under the Plan,
the Board may provide for the issuance of shares of the Company's Class A Common
Stock as a stock award for no consideration other than services rendered or, to
the extent permitted by applicable state law, to be rendered. The Board shall
have all the powers vested in it by the terms of the Plan, such powers to
include exclusive authority (within the limitations of the Plan) to select the
Eligible Participants to be granted awards under the Plan, to determine the
type, size and terms of the awards to be made to each Eligible Participant
selected, to determine the time when the awards will be granted, when they will
vest, when they may be exercised, and when they will be paid, to amend awards
previously granted, and the establish objectives and conditions, if any, for
earning awards and whether awards will be paid after the end of the award
period.
 
 During
the year ended December 31, 2008, the Company issued 17,358,962 shares of Class
A common stock to Meritz and Muenz, LLP for legal services pursuant to the terms
of the 2008 Stock Incentive Plan.
  F-26
 Table of Contents
  THOMAS
PHARMACEUTICALS, LTD.
 NOTES TO FINANCIAL
STATEMENTS (Continued)
 DECEMBER 31, 2008
and 2007
 2008 Directors’ and
Officers’ Stock Incentive Plan
  The
Thomas Pharmaceuticals, Inc. 2008 Directors' and Officers' Stock Incentive Plan
(the "D&O Plan") was approved by the Board of Directors, and become
effective, on October 3, 2008. The shares that may be delivered or purchased or
used for reference purposes under the D&O Plan shall not exceed an aggregate
of twenty percent (20%) of the issued and outstanding shares of the Company's
Class A Common Stock, no par value per share, as determined by the Board from
time to time.  The purpose of the D&O Plan is to (i) provide
long-term incentives and rewards to officers and directors of the Company and
its subsidiaries;  (ii) assist the Company in attracting and retaining
officers and directors, with experience and/or ability on a basis competitive
with industry practices; and (iii) associate the interests of such officers and
directors with those of the Company's stockholders.  Awards under the
D&O Plan may include, but need not be limited to, stock options (including
non-statutory stock options and incentive stock options), stock appreciation
rights, warrants, dividend equivalents, stock awards, restricted stock, phantom
stock, performance shares or other securities or rights that the Board of
Directors determines to be consistent with the objectives and limitations of the
D&O Plan.  Under the D&O Plan, the Board may provide for the
issuance of shares of the Company's Class A Common Stock as a stock award for no
consideration other than services rendered or, to the extent permitted by
applicable state law, to be rendered. The Board shall have all the powers vested
in it by the terms of the Plan, such powers to include exclusive authority
(within the limitations of the Plan) to select the Eligible Participants to be
granted awards under the Plan, to determine the type, size and terms of the
awards to be made to each Eligible Participant selected, to determine the time
when the awards will be granted, when they will vest, when they may be
exercised, and when they will be paid, to amend awards previously granted, and
the establish objectives and conditions, if any, for earning awards and whether
awards will be paid after the end of the award period.
 
 During
the year ended December 31, 2008, the Company issued an aggregate of 69,575,000
shares of Class A common stock to Mr. Meller and Mr. Mahoney for deferred
compensation pursuant to terms of the 2008 Directors’ and Officers’ Stock
Incentive Plan
 
 NOTE
14 - GOING
CONCERN
 
 As shown
in the accompanying financial statements, the Company has sustained net
operating losses for the years ended December 31, 2008 and 2007. 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.
 
 NOTE
15 – SUBSEQUENT
EVENTS
 
 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 matured on January 18, 2009 with a lump
sum payment due of any remaining principal and interest. As of the date of this
filing, the Company is in default of this obligation and will incur additional
interest charges at a rate of the lesser of 15% per annum or the maximum
interest rate provided by law, and the interest shall be payable
monthly.
  On
January 22, 2009, the accounting firm of Rosen, Seymour, Shapss, Martin &
Company LLP filed suit against the Company for the sum of $25,000 claiming that
the Company did not pay the accounting firm fees previously agreed
upon.  The Company has retained local counsel to represent it in the
negotiations.
 
 On
February 11, 2009, the Company issued 10,000,000 shares of Class A Common Stock
to Lebhar Friedman as part of a settlement of all outstanding debts due to
Lebhar Friedman pursuant to the agreement executed on the same day.
 
 On March
23, 2009, the Company issued 54,000,000 shares of Class A common stock to
iVoice, Inc. as repayment of principal on an outstanding convertible debenture,
valued at $5,400.
 
 On March
30, 2009, the Company issued a three year Convertible Debenture, valued at
$42,500, to Bagell Josephs Levine and Company in settlement of all fees due and
owing for audit and tax services.
 
 
 F-27
 Table of Contents