UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended March 31, 2009
OR
o	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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes oNo x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated files, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the exchange act:

Large accelerated filer o Accelerated filer o Non-accelerated filer o 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 o

Number of shares of Class A, common stock, No par value, outstanding as of May 15, 2009:  541, 216, 038

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

MARCH 31, 2009 AND 2008

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements (Unaudited)
	Balance Sheets – March 31, 2009 (Unaudited) and December 31, 2008 (Audited)	2
	Statements of Operations - For the three months ended March 31, 2009 and 2008 (Unaudited)	3
	Statements of Cash Flows – For the three months ended March 31, 2009 and 2008 (Unaudited)	4
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6-17
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 4T.	Controls and Procedures	21
PART II. OTHER INFORMATION
Item 5.	Other Information	22
Item 6.	Exhibits	22

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31,			December 31,
	2009			2008
	(unaudited)			(audited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	4,589		$	6,557
Prepaid expenses and other current assets		4,699			4,699
Total current assets		9,288			11,256
PROPERTY AND EQUIPMENT, net of accumulated depreciation of $118,836 and $118,555, respectively		1,972			2,253
TOTAL ASSETS	$	11,260		$	13,509
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses	$	1,182,036		$	1,121,244
Notes payable, net of discounts of $101,717 and $107,945, respectively		129,235			123,007
Dividends payable		170,877			157,315
Derivative liability on convertible debentures		1,335,729			1,297,494
Convertible debentures payable, net of discounts of $431,572 and $416,012, respectively		304,240			281,620
Total current liabilities		3,122,117			2,980,680
LONG TERM DEBT
Notes payable, net of discounts of $106,333 and $111,833, respectively		47,667			42,167
Total liabilities		3,169,784			3,022,847
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT
Series A Convertible Preferred stock, no par value; authorized 500,000 shares;
no shares issued and outstanding		--			--
Series B Convertible Preferred stock, no par value; authorized 1,000 shares;
550 shares issued and outstanding		550,000			550,000
Common stock, Class A – no par value; authorized 10,000,000,000 shares;
541,810,067 at March 31, 2009 and 477,810,067 at December 31, 2008
shares issued and outstanding		31,481			26,161
Common stock, Class B - no par value; authorized 50,000,000 shares;
no shares issued or outstanding		--			--
Accumulated deficit		(3,740,005	)		(3,585,499	)
Total stockholders' deficit		(3,158,524	)		(3,009,338	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	11,260		$	13,509

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

2

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

	For the three months
	ended March 31,
	2009			2008
NET REVENUES, net of provision for product returns
and credits of $0 and $0, respectively	$	--		$	285
COST OF SALES		--			--
GROSS PROFIT		--			285
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES
General and administrative expenses		92,953			88,455
Depreciation and amortization		281			282
Total selling, general and administrative expenses		93,234			88,737
LOSS FROM OPERATIONS		(93,234	)		(88,452	)
OTHER (INCOME) EXPENSE
Amortization of debt discount		38,668			31,259
Gain on revaluation of derivatives		(4,265	)		(3,699	)
Interest expense		29,021			70,881
Gain on settlement of debt		(15,714	)		--
Total other (income) expense		47,710			98,441
LOSS BEFORE PROVISION FOR
INCOME TAXES		(140,944	)		(186,893	)
PROVISION FOR INCOME TAXES		-			-
LOSS BEFORE PREFERRED DIVIDENDS		(140,944	)		(186,893	)
PREFERRED DIVIDENDS		13,562			13,713
NET LOSS APPLICABLE TO COMMON SHARES	$	(154,506	)	$	(200,606	)
NET LOSS PER COMMON SHARE
Basic and diluted	$	(0.00	)	$	(0.00	)
WEIGHTED AVERAGE SHARES OUTSTANDING
Basic and diluted		488,654,511			269,429,951

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

3

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

FOR THE THREE MONTHS ENDED MARCH 31,

	2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) before preferred dividends	$	(140,944	)	$	(186,893	)
Adjustments to reconcile net (loss) to net cash (used in) operating activities:
Depreciation expense		281			282
Amortization of debt discount		38,668			31,259
Gain on revaluation of derivatives		(4,265	)		(3,699	)
Provision for product returns and reserve for bad debt		--			(285	)
Beneficial interest on conversion of debt		--			45,500
Gain on settlement of debt		(15,714	)		--
Changes in certain assets and liabilities:
Decrease in accounts receivable		--			285
(Increase) in prepaid expenses and other assets		--			(881	)
Increase in accounts payable and accrued liabilities		120,006			106,018
Total cash (used in) operating activities		(1,968	)		(8,414	)
NET (DECREASE) IN CASH AND CASH EQUIVALENTS		(1,968	)		(8,414	)
CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD		6,557			9,705
CASH AND CASH EQUIVALENTS – END OF PERIOD	$	4,589		$	1,291
CASH PAID DURING THE PERIOD FOR:
Interest expense	$	-		$	-
Income taxes	$	-		$	-
NON CASH TRANSACTIONS DURING THE PERIOD:
Convertible debenture issued for unsecured debt	$	42,500		$	-
Common stock issued for settlement of unsecured debt	$	1,000		$	-

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

4

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(Continued)

SUPPLEMENTAL CASH FLOW INFORMATION

For the three months ended March 31, 2009:

a)    The Company issued 10,000,000 shares of Class A common stock as partial settlement of outstanding unsecured debt, valued at $1,000.

b)    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 $4,320.

c)    The Company issued a 6% convertible debenture as settlement of outstanding unsecured debt, valued at $42,500.

d)    The Company accrued $13,562 of preferred stock dividends.

For the three months ended March 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 $47,500. The difference in the market value and the reduction in debt of $2,000 was charged to beneficial interest in the amount of $45,500.

b)    The Company accrued $13,713 of preferred stock dividends.

5

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

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 + All™, 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 believes this is no longer a viable approach to gaining new investors, and in fact, current IR strategies may actually be undermining marketing efforts and diminishing shareholder goodwill.  The Company has developed a process which it calls “SEO-IR”, which involves a search engine optimization approach to IR.  SEO-IR is designed to build awareness, credibility,  relevance, and a community of dedicated shareholders for the Company’s clients. Furthermore, SEO-IR will facilitate 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 unaudited condensed 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 financial statements of Thomas Pharmaceuticals had 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 periods presented.

These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Regulation S-X.  Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements.  In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included.  It is suggested that these condensed consolidated financial statements be read in conjunction with the December 31, 2008 audited financial statements and the accompanying notes thereto.

6

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

The accompanying condensed 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.

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 March 31, 2009 and December 31, 2008, 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 March 31, 2009 or December 31, 2008.

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.

Advertising Costs

Advertising costs are expensed as incurred and are included in selling and marketing expenses.  For the three months ended March 31, 2009 and 2008, the Company incurred $0 in advertising costs.

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.

7

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

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 three months ended March 31, 2009 and 2008, include the recognition of the derivative liability on the underlying securities issuable upon conversion of the iVoice Secured Convertible Debentures, iVoice Secured Promissory Notes and Thomas Pharmaceuticals Acquisition Corp. (“Thomas Acquisition”) Promissory Notes.

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.

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.

The following is a reconciliation of the computation for basic and diluted EPS:

The Company has shares issuable upon conversion of the iVoice Convertible Debentures, the iVoice Promissory Notes, the Thomas Acquisition Convertible Debenture and the Series B Convertible Preferred Stock. At March 31, 2009 and 2008, the Company had common stock equivalents of 20,236,973,469 and 9,112,500,000, respectively.

Recent Accounting Pronouncements

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 143-3 must be applied prospectively to intangible assets acquired after January 1, 2009.  The Company’s adoption of FSP 142-3 did not have a material impact on the Company’s condensed consolidated financial statements.

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.

8

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

In June 2008, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 08-3, Accounting for Lessees for Maintenance Deposits Under Lease Arrangements ("EITF 08-3"). EITF 08-3 provides guidance for accounting for nonrefundable maintenance deposits. It also provides revenue recognition accounting guidance for the lessor. EITF 08-3 is effective for fiscal years beginning after December 15, 2008. The Company’s adoption of EITF 08-3 is not expected to have a material impact on the Company’s consolidated financial statements.

In November 2008, the FASB issued EITF Issue No. 08-7, Accounting for Defensive Intangible Assets (“EITF 08-7”). EITF 08-7 addresses the accounting for assets acquired in a business combination or asset acquisition that an entity does not intend to actively use, otherwise referred to as a ‘defensive asset.’ EITF 08-7 requires defensive intangible assets to be initially accounted for as a separate unit of accounting and not included as part of the cost of the acquirer’s existing intangible asset(s) because it is separately identifiable. EITF 08-7 also requires that defensive intangible assets be assigned a useful life in accordance with paragraph 11 of SFAS 142 and is effective for financial statements issued for fiscal years beginning after December 15, 2008. The Company’s adoption of this EITF is not expected to have a material impact on the Company’s consolidated financial statements.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. This FSP amends the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments in the financial statements. The most significant change the FSP brings is a revision to the amount of other-than-temporary loss of a debt security recorded in earnings. FSP FAS 115-2 and FAS 124-2 is effective for interim and annual reporting periods ending after June 15, 2009. The Company does not believe that the implementation of this standard will have a material impact on its consolidated financial statements.

In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. This FSP provides additional guidance for estimating fair value in accordance with FASB Statement No. 157, Fair Value Measurements, when the volume and level of activity for the asset or liability have significantly decreased. This FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. This FSP emphasizes that even if there has been a significant decrease in the volume and level of activity for the asset or liability and regardless of the valuation technique(s) used, the objective of a fair value measurement remains the same. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction (that is, not a forced liquidation or distressed sale) between market participants at the measurement date under current market conditions. FSP FAS 157-4 is effective for interim and annual reporting periods ending after June 15, 2009, and is applied prospectively. The Company does not believe that the implementation of this standard will have a material impact on its consolidated financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. This FSP amends FASB Statement No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This FSP also amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. FSP FAS 107-1 and APB 28-1 is effective for interim and annual reporting periods ending after June 15, 2009. The Company does not believe that the implementation of this standard will have a material impact on its consolidated financial statements.

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 condensed consolidated financial position or results of operations.

The Company adopted SFAS 157 on January 1, 2009. 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.

9

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

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 Condensed Consolidated Balance Sheets on a recurring basis and their level within the fair value hierarchy as of March 31, 2009.

The following table reconciles, for the three months ended March 31, 2009, the beginning and ending balances for financial instruments that are recognized at fair value in the consolidated financial statements:

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 6 for more information on the valuation methods used.

NOTE 4 – CONVERTIBLE DEBENTURES

On January 6, 2006 the Company issued to iVoice a $360,000 secured convertible debenture due on January 1, 2013 bearing interest of 10%, compounded quarterly. During the three months ended March 31, 2009, the Company issued 54,000,000 shares of Class A common stock as repayment of principal of $4,320. As of March 31, 2009 the remaining principal balance of the convertible debenture was $343,312 plus $134,524 of accrued interest.

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 March 31, 2009 the remaining principal balance of the convertible debenture was $100,000 plus $37,610 of accrued interest.

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 March 31, 2009 the remaining principal balance of the convertible debenture was $225,000 plus $75,475 of accrued interest.

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 March 31, 2009 the remaining principal balance of the convertible debenture was $25,000 plus $5,884 of accrued interest.

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 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 (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.

10

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

On March 30, 2009, the Company issued to Bagell Josephs Levine & Co, LLC (“BJL”) a $42,500 convertible debenture (the “BJL Debenture”) due on March 30, 2012 bearing interest of 6% per annum. BJL 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 ninety eighty percent (98%) 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 BJL Debenture 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 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 (3.20%); expected dividend yield (0%); expected life (3 years); and volatility (360.13%). The fair value of the beneficial conversion feature was greater that the proceeds of the debenture and as such, an amount of $793 has been charged to loss on revaluation of derivatives, and the balance has been recorded as a discount on debt conversion. As of March 31, 2009 the remaining principal balance of the convertible debenture was $42,500 plus $7 of accrued interest.

The aggregate principal value of the iVoice and BJL debentures at March 31, 2009 is $753,812. This amount is shown net of the unamortized portion of the discount on conversion of $431,572. 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 5 – 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 matured on January 19, 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. As of March 31, 2009, the unpaid balance on the promissory note is $20,000 plus accrued interest of $4,550.

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 March 31, 2009) 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 March 31, 2009, the balance due on the note is $69,650, plus accrued interest of $3,120.

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 March 31, 2009) 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 March 31, 2009, the principal balance of the note is $71,302, plus accrued interest of $2,277.

The Company determined that the beneficial conversion feature of the 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.

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 March 31, 2009, the balance due on the notes is $35,000 each, plus accrued interest of $1,004 and $944, respectively.

11

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

The aggregate principal balances of the promissory notes at March 31, 2009 is $230,952. This amount is shown net of the unamortized portion of the discount on conversion of the iVoice promissory notes of $101,717. 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 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 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 the term shall be seven (7) years and shall be due and payable on January 8, 2014. On February 12, 2007, the Company repaid $6,000 that was applied to the principal balance of the promissory note. As of March 31, 2009, the unpaid balance on the promissory note is $154,000 plus accrued interest of $34,037.

The Company determined that the beneficial conversion feature of the Thomas Acquisition Debentures 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: 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 amount of the promissory note at March 31, 2009 is $154,000. This amount is shown net of the unamortized portion of the discount on conversion of the Thomas Acquisition debentures of $106,333. 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 6 - DERIVATIVE LIABILITY

In accordance with SFAS 133, " Accounting for Derivative Instruments and Hedging Activities" and EITF 00-19, " Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock", the beneficial conversion feature associated with the iVoice Convertible Debentures, the iVoice Promissory Notes, the Thomas Acquisition Convertible Debentures and the BJL Debenture 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 has 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 March 31, 2009 they had an estimated fair value of $866,295; 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 March 31, 2009 they had an estimated fair value of $176,157; 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 March 31, 2009 it was measured at its estimated fair value of $249,984; and d) the Company has recognized embedded derivatives on the BJL Debenture in the amount of $43,293 as a derivative liability in the accompanying balance sheet and as of March 31, 2009 it was measured at its estimated fair value of $43,293.

The estimated fair values of the embedded derivatives have been calculated based on a Black-Scholes pricing model using the following assumptions:

	March 31, 2009
Fair market value of stock	$	0.00010
Exercise price	$	0.00008-$0.000098
Dividend yield		0.00	%
Risk free interest rate		3.20	%
Expected volatility		360.13	%
Expected life	3.00 to 4.83 years

Changes in the fair value of the embedded derivatives are calculated at each reporting period and recorded in (gain) loss on revaluation of derivatives in the condensed consolidated statements of operations. For the three months ended March 31, 2009, there was a change in the fair value of the embedded derivatives, which resulted in a gain of $5,058.  This gain was offset by the immediate recognition of loss on revaluation of derivatives issued during the same period in the amount of $793, resulting in a net gain of $4,265. For the three months ending March 31, 2008, there was a change in the fair value of the embedded derivatives, which resulted in a gain of $3,699.

12

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

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, the iVoice notes, the Thomas Acquisition debentures and the BJL debenture of $710,000, $124,552, $154,000 and $42,500, respectively, is being amortized over the life of the convertible debentures. Amortization expense on the debt discount for the three months ended March 31, 2009 and 2008 was $38,668 and $31,259, respectively.

NOTE 7 - RELATED PARTY TRANSACTIONS

In addition to the financing provided, iVoice provided administrative services and other miscellaneous support to the Company from time to time. As of January 1, 2009, iVoice no longer provides administrative services to the Company. For the three months ended March 31, 2009 and 2008, the Company has recorded $0 and $12,000 of these charges in the financial accounts of the Company. As of March 31, 2009, 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 8 – COMMITMENTS AND CONTINGENCIES

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.  On June 11, 2007, this agreement was amended to add the additional title of President and allow the Company to issue Class A Common Stock in lieu of cash payments for any compensation due and owing to Mr. Lucas. On 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 March 31, 2009) per annum. As of January 1, 2009, iVoice no longer provides administrative services to the Company. As of March 31, 2009, the unpaid fees in the amount of $71,302 were converted to the promissory note and remain unpaid.

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 March 31, 2009) per annum. As of January 1, 2009, iVoice no longer provides administrative services to the Company. As of March 31, 2009, the unpaid fees in the amount of $19,400 were converted to the promissory note and remain unpaid.

13

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

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 March 31, 2009, the total unpaid compensation in the amount of $122,881 is due and owing.

On May 22, 2008, the Company entered into an Employment Agreement with Mark Meller to serve as its 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 March 31, 2009, unpaid compensation in the amount of $82,639 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.

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.

NOTE 9 - STOCKHOLDERS’ DEFICIT

Pursuant to the Company’s Certificate of Incorporation, the Company is authorized to issue 1,000,000 shares of preferred stock, no par value per share, 10,000,000,000 shares of Class A Common Stock, no par value per share, and 50,000,000 shares of Class B Common Stock, no par value per share. Of the 1,000,000 authorized shares of Preferred Stock, 500,000 shares are designated as “Series A Convertible Preferred Stock” and 1,000 shares are designated as “Series B Convertible Preferred Stock”.

14

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

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 were subject to adjustment for stock dividends, combinations, splits, recapitalizations and the like. On January 6, 2006, the Company completed the merger with Thomas NY and 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. Following the spin-off from iVoice in November 2007, the holders of 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 March 31, 2009 and 2008, there are no shares 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 March 31, 2009 and 2008, there are 550 shares issued and outstanding.

b)  Class A Common Stock

Class A Common Stock consists of 10,000,000,000 shares with no par value.  As of March 31, 2009, there are 541,810,067 shares issued and outstanding. As of March 31, 2008, there are 273,276,105 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.

15

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

For the three months ended March 31, 2009, the Company had the following transactions in its Class A common stock:

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.

For the three months ended March 31, 2008, the Company had the following transactions in its Class A common stock:

The Company issued 25,000,000 shares of Class A common stock to iVoice, Inc. as repayment of principal on an outstanding convertible debenture, valued at $47,500. The difference in the market value and the reduction in debt of $2,000 was charged to beneficial interest in the amount of $45,500.

c)  Class B Common Stock

Class B Common Stock consists of 50,000,000 shares with no par value.  As of March 31, 2009 and 2008 there are no shares issued and outstanding.

Upon the consummation of a Spin-off Transaction and the commencement of public trading of the Class A Common Stock of the Corporation, each holder of Class B Common Stock shall have the right to convert each share of Class B Common Stock into the number of Class A Common Stock Shares calculated by dividing the number of Class B Common Stock Shares being converted by eighty percent (80%) of the lowest price that the Company had previously issued its Class A Common Stock since the Class B Common Stock Shares were issued.

Each holder of Class B common stock is entitled to one vote for each share of Class B common stock held.  Each holder has full voting rights and powers equal to the voting rights and powers of the holders of Class A Common Stock and is entitled to vote, together with holders of Class A Common Stock and not as a separate class (except as required by law), with respect to any question upon which holders of Class A Common Stock have the right to vote. Upon the consummation of a Spin-off Transaction and the commencement of public trading of the Class A common stock, then every holder of the outstanding shares of the Class B Common Stock shall be entitled on each matter to cast the number of votes equal to the number of Class A Common Stock Shares that would be issued upon the conversion of the Class B Common Stock Shares held by that holder, had all of the outstanding Class B Common Stock Shares held by that holder been converted on the record date used for purposes of determining which shareholders would vote in such an election.  With respect to all matters upon which shareholders are entitled to vote or to which shareholders are entitled to give consent, the holders of the outstanding shares of Class B Common Stock Shares shall vote together with Class A Common Stock Shares without regard to class, except as to those matters on which separate class voting is required by applicable law.

Each share of Class B Common Stock shall receive dividends or other distributions, as declared, equal to the number of Class A Common Stock Shares that would be issued upon the conversion of the Class B Common Stock Shares, had all of the outstanding Class B Common Stock Shares been converted on the record date established for the purposes distributing any dividend or other shareholder distribution.

16

THOMAS PHARMACEUTICALS, LTD. AND SUBSIDIARY

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

MARCH 31, 2009 AND 2008

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 10 - 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 March 31, 2009 and December 31, 2008 deferred tax assets consist of the following:

	March 31, 2009			December 31, 2008
Deferred tax assets	$	390,000		$	350,000
Less: Valuation allowance		(390,000	)		(350,000	)
Net deferred tax assets	$	0		$	0

At March 31, 2009 and December 31, 2008, the Company had a federal net operating loss carry forwards in the approximate amount of $975,000 and $875,000, 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 11 - GOING CONCERN

The Company has sustained net operating losses, has a deficit working capital and has negative cash flows from operations for the year ended December 31, 2008 and for the three months ended March 31, 2009. 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 from additional financing. There is no guarantee that the Company will be able to raise enough capital or generate revenues to sustain its operations. The Company continues to search for potential merger candidates with or without compatible technology and products, which management feels may make financing more appealing to potential investors.

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.

17

ITEM 2 - 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 audited financial statements and related notes included in the Form 10-KSB previously filed with the SEC. Our fiscal year currently ends on December 31, and each of our fiscal quarters ends on the final day of a calendar quarter (each March 31, June 30 and September 30). The following discussion contains forward-looking statements. Please see Forward-Looking Statements for a discussion of uncertainties, risks and assumptions associated with these statements

Overview

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

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

Three months ended March 31, 2009 compared to three months ended March 31, 2008.

Total revenues for the three months ended March 31, 2009 and 2008 were $0 and $285, respectively. There were no revenues in the three months ended March 31, 2009. Revenues in the three months ended March 31, 2008 were from 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.

Gross profit for the three months ended March 31, 2009 and 2008 was $0 and $285, respectively. There is no gross profit in the three months ended March 31, 2009. The gross profit for the three months ended March 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.

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Operating expenses for the three months ended March 31, 2009 and 2008 were $93,234 and $88,737, respectively, for an increase of $4,497.  The increase primarily consist of an increase of $41,618 in consulting and legal fees offset by a decrease in executive compensation and benefits of approximately $25,000 and a decrease in administrative service fees of $12,000.

Total other expense for the three months ended March 31, 2009 was an expense of $47,710. This total was primarily comprised of $38,668 amortization of the discount on debt and $29,021 of interest expense on the debentures and promissory notes offset by $4,265 gain on revaluation of the derivatives and $15,714 gain on the write-off of the Lebhar-Friedman debt in the settlement. Total other expense for the three months ended March 31, 2008 was an expense of $98,441. This total was primarily comprised of $31,259 amortization of the discount on debt, $45,500 of beneficial interest on debt conversion and $25,381 of interest expense on the debentures and promissory notes offset by a $3,699 gain on revaluation of the derivatives. 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 three months ended March 31, 2009 and 2008 were $140,944 and $186,893, respectively. The decrease in loss before preferred dividends of $45,949 was primarily the results the gain on the write-off of debt and the non-recurrence of the beneficial interest charge in the current year.

Preferred dividends for the three months ended March 31, 2009 and 2008 were $13,562 and $13,713, respectively. These dividends are accrued pursuant to the provisions of the Series B Convertible Preferred Stock and remain unpaid.

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.

iVoice has the right to convert $710,000 in principal (plus accrued and unpaid interest) of convertible debentures into an indeterminate number of shares of Thomas Pharmaceuticals Class A Common Stock. The debentures are convertible at the option of iVoice any time up to maturity at a conversion price equal to 80% of the lowest closing bid price of the common stock for the 30 trading days immediately preceding the conversion date. In the event the debentures are redeemed, Thomas Pharmaceuticals will pay $125,000 plus interest for each $100,000 redeemed. There is no limitation on the number of shares of Class A Common Stock that we may be required to issue to iVoice upon the conversion of this indebtedness.

iVoice also has the right to convert each share of Series B Convertible Preferred Stock into the number of shares of Thomas Pharmaceuticals’ Class A Common Stock determined by dividing 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 30 trading days immediately preceding the conversion date. There is no limit upon the number of shares of Class A Common Stock that we may be required to issue upon conversion of any of these shares, except that the holders of the Series B Convertible Preferred Stock cannot hold more than 9.99% of the total Class A Common stock at the time of the conversion.

iVoice executed a Security Agreement with Thomas Pharmaceuticals to secure the obligations of Thomas Pharmaceuticals under the various debentures set forth above.

On August 9, 2006, iVoice entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) by and among Thomas Pharmaceuticals, Thomas Pharmaceutical Acquisition Corp. (“Thomas Acquisition”) and iVoice, whereby Thomas Acquisition, an entity unaffiliated with Thomas Pharmaceuticals or iVoice, agreed to purchase all of the securities of Thomas Pharmaceuticals outstanding as of such date and owned by iVoice (the “Securities”), for the purchase price of $1,235,100 plus twenty-five (25%) percent thereof, plus interest and dividends accrued under the terms of such securities through the closing date. iVoice had the right to terminate the Stock Purchase Agreement in the event the closing did not occur by October 31, 2006.

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On January 26, 2007, iVoice entered into an Extension Agreement (the “Extension Agreement”) by and among Thomas Pharmaceuticals, Thomas Acquisition and iVoice. The Extension Agreement amended the Stock Purchase Agreement whereby the expiration date provided for in the Stock Purchase Agreement was extended to and through the date on which the Securities and Exchange Commission declares effective a registration statement for the distribution of Class A Common Stock of Thomas Pharmaceuticals to the shareholders of the iVoice (the “Effective Date”). It was also agreed by the parties that Thomas Acquisition would provide $160,000 to Thomas Pharmaceuticals as bridge financing.  Upon effectiveness of the registration statement on October 26, 2007, the Stock Purchase Agreement was terminated and Thomas Acquisition no longer had the right to purchase the iVoice Securities and iVoice is proceeding with the Distribution.  

On January 26, 2007, Thomas Acquisition issued to BioBridge LLC 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 Thomas Pharmaceuticals. The $103,200 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 Thomas Pharmaceuticals 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 Thomas Pharmaceuticals Class A Common Stock for the five trading days before the conversion date. The $96,800 convertible debentures provide that, at the holder’s option, principal and interest due on the debentures can be converted into the Thomas Pharmaceuticals Series B Convertible Preferred Stock having a stated value of $1,000 per share. The Thomas Pharmaceuticals 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 Thomas Pharmaceuticals Series B Convertible Preferred Stock being converted by a 20% discount to the lowest closing bid price of the Thomas Pharmaceuticals Class A Common Stock for the five trading days before the conversion date. There is no limit upon the number of shares that Thomas Pharmaceuticals may be required to issue upon conversion of any of these obligations. The $103,200 convertible debenture was secured by substantially all of the assets of Thomas Pharmaceuticals (including goods, inventory, contract rights, accounts receivable, products and proceeds), subordinate to the security interest previously granted to iVoice. The net proceeds of $160,000 from the convertible debentures were loaned by Thomas Acquisition to Thomas Pharmaceuticals and Thomas Pharmaceuticals executed a Promissory Note for such funds. The Promissory Note bears interest at the rate of ten (10%) percent per annum and has a term of seven years.  In exchange for and in consideration of BioBridge LLC purchasing the secured convertible debenture and thereby permitting Thomas Acquisition to loan the net proceeds to Thomas Pharmaceuticals for operations, Thomas Pharmaceuticals agreed to have the convertible debenture secured with assets of Thomas Pharmaceuticals and convertible into shares of Thomas Pharmaceuticals.

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 percent per annum. Additional amounts of $12,000 was 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.

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 percent per annum. Additional amounts of $12,000 was 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.

On March 30, 2009, the Company issued to Bagell Josephs Levine & Co, LLC a $42,500 convertible debenture due on March 30, 2012 bearing interest of 6% per annum. BJL 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 ninety eighty percent (98%) of the lowest closing bid price of the Common Stock for the five (5) trading days immediately preceding the conversion date.

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.

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During the three months ended March 31, 2009, the Company had a net decrease in cash of $1,968. The Company’s principal sources and uses of funds were as follows:

Cash used by operating activities. The Company used $1,968 in cash for operating activities in the three months ended March 31, 2009. The use of funds is primarily the result of the cash losses from operations sustained by the Company offset by increases in accounts payable and accrued expenses.

Off-balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

Forward Looking Statements - Cautionary Factors

Certain information included in this Form 10-Q and other materials filed or to be filed by us with the Securities and Exchange Commission (as well as information included in oral or written statements made by us or on our behalf), may contain forward-looking statements about our current and expected performance trends, growth plans, business goals and other matters.  These statements may be contained in our filings with the Securities and Exchange Commission, in our press releases, in other written communications, and in oral statements made by or with the approval of one of our authorized officers.  Information set forth in this discussion and analysis contains various “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  The Private Securities Litigation Reform Act of 1995 (the “Act”) provides certain “safe harbor” provisions for forward-looking statements.  The reader is cautioned that such forward-looking statements are based on information available at the time and/or management’s good faith belief with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the statements.  Forward-looking statements speak only as of the date the statement was made.  We assume no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information.  Forward-looking statements are typically identified by the use of terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “predict,” “project,” “should,” “will,” and similar words, although some forward-looking statements are expressed differently.  Although we believe that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct.

ITEM 4T - CONTROLS AND PROCEDURES

Management's report on internal control over financial reporting.

Management of the Company has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer of the Company had concluded that the Company's disclosure controls and procedures as of the period covered by this Quarterly Report on Form 10-Q were 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.

Changes in internal control over financial reporting.

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 that occurred during the period covered by this Quarterly Report on Form 10-Q and determined that there was no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

ITEM 1- LEGAL PROCEEDINGS

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 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 to represent it in the negotiations.

ITEM 5 - OTHER INFORMATION

(b)   The Company does not have a standing nominating committee or a committee performing similar functions as the Company’s Board of Directors consists of only two members and therefore there would be no benefit in having a separate nominating committee that would consist of the same number of members as the full board of directors.  Both members of the Board of Directors participate in the consideration of director nominees.

ITEM 6 - EXHIBITS

31.1 Rule 13a-14(a)/15d-14(a) Certifications.

32.1 Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Thomas Pharmaceuticals, Ltd.

By: /s/ Mark Meller                                                                                                                                                 Date:  May 20, 2009

Mark Meller, Chief Executive Officer and

Principal Accounting Officer

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Index of Exhibits

31.1 Rule 13a-14(a)/15d-14(a) Certifications.

32.1 Certification of Chief Executive and Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

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