Our financial statements and related notes, which are included in this filing, provide additional information relating to the following discussion of our financial condition, changes in financial condition and results of operations over the last two fiscal years.

Management's discussion and Analysis contains various "forward looking statements" within the meaning of Section 21E of the Exchange Act, regarding future events or the future financial performance of eTelcharge that involve risk and uncertainties. Certain statements included in this Form 10-K, including, without limitation, statements related to anticipated cash flow sources and uses, and words such as "anticipates", "believes", "plans", "expects", "continue", "will", and similar expressions are intended to identify forward- looking statements regarding events, conditions, and financial trends that may affect our future plans of operations, business strategy, operation results and financial position. We caution readers that a variety of factors could cause our actual results to differ materially from the anticipated results or other matters expressed in forward-looking statements.

Overview

eTelcharge was incorporated in Nevada in June 1999 to provide customers of online merchants the ability to charge their online purchases to their local telephone bill. In May of 2003, eTelcharge expanded its service by offering credit card processing for merchants and becoming a merchant service company. eTelcharge has worked closely with the changes in service offerings of the telco operators in the US throughout its history. As those offerings have changed, eTelcharge has sought to adapt its offerings to match the requirements of the telcos. eTelcharge has endeavored to operate by selling its services to consumers and merchants making a profit on the transaction processing fees generated at the point of sale. eTelcharge entered into an agreement with AT&T in February of 2006 for provision of billing and collection services which was amended in April 2006, and which allows it to process, subject to AT&T's prior approval, non-credit card transactions for AT&T customers and have those transactions applied to their AT&T land-line telephone bills. Under the April 2006 amendment, eTelcharge and AT&T entered into a trial of billing information and entertainment type charges on the AT&T Telco End User monthly bill. eTelcharge launched its new Version 2.0 software and procedures to the public in September 2007, and it continues to refine and extend its services under that Version. In April of 2009 the company received an executed copy of a new contract with AT&T under which AT&T issues bills to, and collects revenues from, its End-User customers ("End Users") who subscribe to local exchange telecommunications services from the AT&T ILECs. The Services provided under this Agreement permit AT&T to issue bills to, and collect revenues from, End Users on behalf of eTelcharge. Services are limited to the billing and collection of those types of Customer/Client services and charges approved for billing.

eTelcharge will continue to promote consumer awareness of its brand and offers through the issuance of press releases to related trade publications, advertising in general interest media publications, print media and Internet media.

Results of Operations

Revenues

We are a development stage company and, as such, have generated nominal revenues. Revenues were $17,567 for the three months ended March 31, 2009, as compared to $9,164 for the three months ended March 31, 2008, a 92% increase. This increase is due to more residual income caused by an increase in the transactions processed by our credit card merchants. We have generated $174,743 in revenues since our inception.

Operating Expenses

Operating expenses for the three months ended March 31, 2009, were $48,507 a decrease of $533,177, or 92%, as compared to $582,684 for the three months ended March 31, 2008. The decrease primarily relates to a decrease in professional fees of approximately $406,000 and a decrease in compensation of approximately $99,000.

Net Loss

eTelcharge had a net loss of $57,023 for the three months ended March 31, 2009, a decrease of $525,210, or 91%, as compared to a net loss of $582,233 for the three months ended March 31, 2008. The decreased loss primarily resulted from a decrease in the operating expenses as discussed above. Since inception, we have incurred a cumulative net loss of $17,662,927. Our ability to operate profitably depends on generating sales and achieving sufficient gross profit margins. We cannot be certain that we will achieve or maintain profitable operations in the future.

Financial Condition


The following table sets forth certain relevant measures of our liquidity and
capital resources:



                                                        Three months ended
                                                          March 31, 2009
       Cash and cash equivalents                      $              2,352
       Current Assets                                 $              3,463
       Current liabilities                            $          1,200,444
       Ratio of current assets to current liabilities                  .00
       Stockholders' deficit per common share         $                .06

At March 31, 2009, we had $2,352 in cash, an increase of $2,352, as compared to $0 at December 31, 2008. This increase resulted from a decrease in cash used in operating activities and an increase in cash provided by financing activities. Total cash proceeds, net of offering costs, for financing activities was $22,823 for the three months ended March 31, 2009, a decrease of $26,068, or 54%, as compared to $48,891 for the three months ended March 31, 2008. The funds generated from financing activities during the three months ended March 31, 2009, were used mainly to fund operating expenses. Total cash proceeds, net of offering costs, for financing activities is $2,915,078 for the period from inception through March 31, 2009.

Our current liabilities decreased from $1,204,209 at December 31, 2008, to $1,200,444 at March 31, 2009, a decrease of .05%, primarily from a non-cash extinguishment of debt.

Historically, we have been dependent on financings to fund our development and working capital needs. We do not expect to generate significant revenues from customers in the immediate future. We believe our existing capital resources will not be sufficient to provide needed capital for three months. Accordingly, if we do not raise additional funds from other sources, we would have to continue to severely diminish our operations or halt them entirely. Additional financing may not be available to us on acceptable terms, or at all.

Due to our lack of capital and our need for working capital to continue our business plan, our independent registered public accountants issued a going concern qualification as part of their audit opinion of our financial statements for the year ended December 31, 2008.

OFF-BALANCE SHEET ARRANGEMENTS

None.