Edgar Filing: USA TELCOM INTERNATIONALE

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

Form 10-KSB

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934

For the Fiscal Year Ended December 31, 2003

[ ] 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 000-49672

USA TELCOM INTERNATIONALE
----------------------------------
(Name of small business issuer in its charter)

Nevada 88-0408213
---------------- -----------------
(State or other jurisdiction of (I.R.S. employer identification
incorporation or organization) number)

2620 S. Maryland Parkway, Suite 14
Las Vegas, Nevada 89109
------------------------------------ --------
(Address of principal executive (Zip code)
offices)

Issuer's telephone number: (702) 524-4149

Securities Registered Pursuant to Section 12(b) of the Act: NONE

Title of each class Name of each exchange on which registered

----------------------- -----------------------------------------

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

COMMON
------------
(Title of class)

------------
(Title of class)

-1-

Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No

Check if there is no disclosure of delinquent filers in response
to Item 405 of Regulation S-B is not contained in this form, and
no disclosure will be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [ ]

The issuer's revenue for its most recent fiscal year was $0.

The Company's common stock is listed on the Over-the-Counter
Bulletin Board under the stock ticker symbol "USTC." The
aggregate market value of the voting and non-voting common equity
held by non-affiliates as of March 18, 2004 was $112,500.

The number of shares outstanding of each of the issuer's classes
of common equity, as of December 31, 2003 was 4,250,000.

DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g.,
Part I, Part II, etc.) into which the document is incorporated:
(1) any annual report to security holders; (2) any proxy or
information statement; and (3) any prospectus filed pursuant to
Rule 424(b) or (c) of the Securities Act of 1933 ("Securities
Act"). The listed documents should be clearly described for
identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1990).

Transitional Small Business Disclosure Format (Check one): Yes [ ] No [X]

PART I 3

ITEM 1. BUSINESS. 3

ITEM 2. DESCRIPTION OF PROPERTY 7

ITEM 3. LEGAL PROCEEDINGS 7

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 7

PART II 7

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS 7

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 9

ITEM 7. FINANCIAL STATEMENTS 10

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE 23

PART III 23

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT 23

ITEM 10. EXECUTIVE COMPENSATION 24

ITEM 11. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY HOLDERS 25

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 25

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K 26

ITEM 14. CONTROLS AND PROCEDURES 26

SIGNATURES 27

-2-

FORWARD LOOKING STATEMENTS

This Annual Report contains forward-looking statements about
our business, financial condition and prospects that reflect our
management's assumptions and beliefs based on information
currently available. We can give no assurance that the
expectations indicated by such forward-looking statements will be
realized. If any of our assumptions should prove incorrect, or
if any of the risks and uncertainties underlying such
expectations should materialize, USTC's actual results may differ
materially from those indicated by the forward-looking
statements.

The key factors that are not within our control and that may
have a direct bearing on operating results include, but are not
limited to, acceptance of our services, our ability to expand its
customer base, managements' ability to raise capital in the
future, the retention of key employees and changes in the
regulation of our industry.

There may be other risks and circumstances that management
may be unable to predict. When used in this Report, words such
as, "believes," "expects," "intends," "plans," "anticipates,"
"estimates" and similar expressions are intended to identify and
qualify forward-looking statements, although there may be certain
forward-looking statements not accompanied by such expressions.

PART I

ITEM 1. BUSINESS.

Business Development

We were organized under the name USA Telecom by the filing
of the Articles of Incorporation with the Secretary of State in
the State of Nevada on November 5, 1998 (NV #25940-98). The name
of the Company was subsequently changed to USA Telcom on November
17, 1998 and to USA Telcom Internationale on April 25, 2000 by
filing Amended Articles of Incorporation with the Secretary of
State in the State of Nevada. Our Articles of Incorporation
authorized the issuance of 25,000,000 shares of $0.001 par value
Common Stock and no shares of Preferred Stock. As of April 11,
2003, we had approximately 4,250,000 shares of Common Stock
issued and outstanding held by approximately 25 shareholders of
record.

Our primary business objective is to establish ourselves as
an intermediary serving Vietnamese individuals and/or entities
seeking to acquire goods and services from the United States and
other locales and providers of such goods and services. USA
Telcom is a service company and its primary asset is the long-
standing relationships cultivated by our President and CEO Mr.
Allen Jones in Vietnam. The focus is on general trade and
commerce with Vietnam. We expect to continue to generate revenue
primarily by engaging as an intermediary in exporting and
importing of industrial and consumer goods to and from Vietnam.
As of the date of this report, we have been engaged in providing
these intermediary services and have successfully consummated
several transactions. We further seek to promote economics,
trade and investment activities between Vietnam and foreign
organizations.

Mr. Jones has been personally involved in business in
Vietnam since 1993. During that time, Mr. Jones has built
business contacts with individuals associated with Vietnamese
government agencies and other entities engaged in international
commerce. Those contacts eventually led to joint exploration of
business opportunities. Over the course of the past 50 months
Mr. Jones has visited Vietnam on over 20 separate occasions
directly related to our efforts in developing new contacts and
additional business.

At the present time, we act as an agent in commercial
transactions between Vietnamese purchasers and U.S.
manufacturers. In particular, USA Telcom (a) identifies suitable
(with respect to products, quantities and trade terms) U.S.
suppliers for Vietnamese buyers, (b) facilitates communications
between the parties, and (c) assists Vietnamese buyers with the
preparation of letter of credit (L.C.) documentation and
submitting of such to the seller for approval. After buyer and
seller approval, the buyer's bank issues a L.C. directly to the
seller. The goods transaction is completed based upon the L.C.
terms and conditions.

We do not acquire and resell goods, rather, it functions in
an agency capacity. We participate in a bidding process for the
purchase of goods by Vietnamese governmental agencies and
associated entities and seek to extend our business so as to
provide similar services to private enterprises throughout
Vietnam. Once we are awarded a purchase contract, we act on
behalf of Vietnamese purchasers in the United States to locate
negotiate the purchase of requested goods. We generate revenue
in the form of finder fees or sales commissions based upon a
percentage of the overall procurement order. On occasion our
services are provided on the basis of a flat consulting fee.

-3-

USA Telcom has commenced revenue-producing operations. In
the year ended December 31, 2003, we generated net income of
$19,029 as a result of realizing other income of $126,850. We
generated revenues of $134,664, for the fiscal year ended
December 31, 2002, resulting in net income of $89,711.

We maintain our corporate office at 2620 S. Maryland
Parkway, Suite 14, Las Vegas, NV 89107, (Telephone: (702) 524-
4149). We also maintain an office at 1601 Dove Street Suite 205,
Newport Beach California, 92660 (Telephone: (949) 955-
2971/Facsimile: (949) 955-2973).
Business of Issuer

Principal Products and Principal Markets

We plans to function primarily in an agency capacity
facilitating the introduction of parties engaged in the purchase
and sales of goods and services and the consummation of such
transactions. We have targeted the country of Vietnam as our
primary market. We have developed marketing contacts with local,
indigenous consulting firms and informal relationships with
officials representing various Vietnamese government ministries.
Through such contacts, we participate in a bidding process for
the sale of goods to Vietnamese government ministries or local
government agencies.

USA Telcom may respond to a newspaper ad placed by a
government agency soliciting project or equipment bids. We
employ our knowledge of the market to identify suitable suppliers
for a particular bid. Then we obtain information about available
trade terms from the target supplier and submit a bid on
supplier's behalf on a competitive basis. Once we have secured
an agreement to procure goods on behalf of purchasers, we act as
an agent on behalf of these purchasers in the United States to
locate, negotiate and purchase the requested goods.

USA Telcom's typical agreements address specific projects
and are short-term in nature. Typically, USA Telcom signs an
agreement with a Vietnamese counterpart for (a) one-time
intermediary services as relates to procurement of specific
equipment or (b) a specific consulting project. Typically USA
Telcom charges a fee calculated as a percentage of the value of
the export/import contract, to which our services apply.
Sometimes USA Telcom charges a flat consulting fee for
information and document preparation advice. The payment to USA
Telcom is due typically when USA Telcom has performed the
services.

We do not currently acquire, manufacture or ship any goods.
We simply act as an agent in commercial transactions between
Vietnamese purchasers and U.S. manufacturers. The Vietnamese
purchaser contracts with us to procure specific U.S. goods. We
then identify potential suppliers or manufacturers (generally
located in the United States) of the specified goods and
facilitates the consummation of the sale. Once the U.S.
manufacturer is paid by Vietnamese purchaser usually through
letters of credit, wire transfers or cash payments, the goods are
shipped directly by the U.S. manufacturer to the Vietnamese
purchaser via freight forwarder. The Vietnamese buyer will
receive shipment of the ordered goods by ocean freight,
airfreight, federal express or similar shipping method.
Generally, the freight forwarder prepares all required export
documents and obtains insurance for the shipment. Our customers
are typically responsible for all customs, clearance procedures,
and duties and/or taxation of all goods delivered to and within
Vietnam.

We have established relationships with Vietnamese Government
authorities responsible for the procurement of goods in their
effort to accomplish the objectives of the Ministry or Agency at
issue. We likewise seek similar relationships with private
enterprises. While initial transactions involved certain
security equipment sought by police enforcement agencies, we have
not opted to specialize in any given set or sector of goods.
Rather, we identify a demand for certain goods and seek to
provide such goods in an optimal and expeditious fashion on
behalf of our customers.

We have acted as an intermediary in transactions involving
exports of security equipment to a Vietnamese entity affiliated
with the Ministry of Police. Such equipment included the
following: x-ray letter and package screening equipment, drug
detection equipment, narcotic trace detection equipment and
various other products related to general law enforcement. Such
equipment may in the future include digital wireless emergency
communications systems, digital wireless local loop systems,
wireless television transmitting stations, miniature transmitter
locating devices, receiving systems, night vision devices,
security surveillance systems, audio recording devices, x-ray
equipment, handheld radar guns, and fixed-line telecommunications
monitoring devices given due authorization from U.S. and
Vietnamese regulatory authorities.
Distribution Methods of Our Products

-4-

We do not acquire, manufacture or distribute any goods. We
act as an agent in commercial transactions between Vietnamese
purchasers and U.S. manufacturers. The Vietnamese purchaser
contracts with us to procure specific U.S. goods. We then
identify potential suppliers or manufacturers of the specified
goods and facilitate the consummation of the sale. Once the U.S.
manufacturer is paid by Vietnamese purchaser usually through
letters of credit, wire transfers or cash payments, the goods are
shipped directly by the U.S. manufacturer to the Vietnamese
purchaser via freight forwarder. The Vietnamese buyer will
receive shipment of the ordered goods by ocean freight,
airfreight, federal express or similar shipping method.
Generally, the freight forwarder prepares all required export
documents and obtains insurance for the shipment. Our customers
are typically responsible for all customs, clearance procedures,
and duties and/or taxation of all goods delivered to and within
Vietnam.

Competitive Business Conditions and the Issuer's Competitive
Position

We are an intermediary service provider assisting customers
in procuring consumer and industrial goods from overseas. We
face significant competition from manufacturers and suppliers
with a physical presence in Vietnam marketing their products
directly. Many of these competitors are substantially larger and
have substantially greater financial resources than we do.
Likewise, major manufacturers and suppliers often engage the
services of distributors located in target markets including
cities throughout Vietnam. The distributors often are staffed by
local Vietnamese fluent in the language, customs and culture of
the country. Often such relationships provide these distributors
with exclusivity in the representation of products in the target
country. These direct manufacturers/suppliers and distributors
aggressively compete for the market share in their given
segments. Likewise, such local distributors seek to secure
exclusive licensing rights for the distribution of new product
not presently available in the target market. We endeavor to
secure similar rights as an agent working on behalf of purchasers
and likewise anticipate securing distributions rights from
manufacturers and suppliers of goods produced or otherwise
originating in the United States. However, the substantial
competition faced by us grows significantly as Vietnam continues
to grow its economy and demand for international goods increases.
This may have a significant impact on our ability to compete
effectively and derive revenue. Notwithstanding these
uncertainties, we believe that our efforts in establishing
relationships in the public and private sector of Vietnam's
growing economy will enhance our ability to compete successfully.
However, in nurturing business relationships in Vietnam, USA
Telcom is counting primarily on the reputation, experience, and
contacts of its president, Mr. Allen Jones. There appear to be
no significant barriers to enter the U.S.-Vietnamese trade
consulting business.

Government Approval of Principal Products or Services

The Company acts exclusively in an agency capacity. As an
intermediary service provider, the Company is not directly
affected by government regulation. Any government approval of
products or services are secured by manufacturers and suppliers
of the goods sold.

The U.S. Department of Commerce provides a list of goods,
which require or do not require export licenses. Every time USA
Telcom responds to an inquiry from a prospective Vietnamese
customer, the Company contacts manufacturers as to the
availability and type of export license required. Then USA
Telcom confirms the license requirements via a direct contact
with a Department of Commerce representative. However, it
remains the responsibility of the seller to supply all required
export documentation and export licenses.

Effect of Existing or Probable Government Regulations

The Vietnamese government closely controls trade activities
such as import and export, sale and purchase of goods through
tariff and non-tariff measures. These non-tariff measures may
include outright bans, quotas, licenses, stamps and surcharges
that are specified on an annual and ad hoc basis. Vietnam
imposes export duties on selected goods. However, in recent
years rates of import and export duties have been revised
downward in keeping with the country's treaty and other
international obligations a particularly as these issues
related to the United States. The Company is potentially
subject to regulatory uncertainty as regulations are
potentially subject to change and as an indirect consequence,
adversely affect the Company's capacity to conduct business.

-5-

Currently, USA Telcom is not required and does not maintain
a licensed representative office in Vietnam. However, once the
extent of USA Telcom's operations warrants it, USA Telcom plans
to establish a licensed representative office in Vietnam. A
representative office requires formal authorization from the
government of Vietnam. In particular, the process involves (a)
preparation of required Ministry of Trade forms, which
must disclose information on business purpose, office location,
number of employees, etc., and (b) submission to government
authorities of such forms accompanied by financial statements
and notarized copies of incorporation documents. The
corporate activities in Vietnam at the representative office
would be subject to the laws of Vietnam as enforced by the
Ministry of Trade.

Employees

We do not have any employees. Instead, we presently rely on
the efforts of our President, Allen Jones. We believe that our
operations are currently on a small scale that is manageable by a
one individual. We believe that the addition of employees is not
required over the next 12 months.

Reports to Security Holders

Annual Reports

We intend to deliver annual reports to security holders and
the United States Securities and Exchange Commission on Form 10-
KSB in accordance with the provisions of Section 12 of the
Securities Exchange Act of 1934, as amended. Such annual reports
will include audited financial statements.

Periodic Reports with the SEC

As of the date of this annual report, we have filed all
necessary periodic reports with the SEC, as required by law and
regulations applicable to fully reporting companies.

Availability of Filings

You may read and copy any materials we file with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. You may obtain information on the
operation of the Public Reference Room by calling the SEC at 1-
800-SEC-0330. Additionally, the SEC maintains an Internet site
(http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding issuers that file
electronically with the SEC.

Risk Factors

We may not be able to compete against our larger competitors.

We compete for business opportunities with trading companies
of various sizes and, as the Vietnamese economy is opening up for
foreign trade, we expect competition to increase. Increased
competition may result in fewer opportunities and higher costs of
growth. Significantly all of our competitors have greater
financial, distribution, marketing and other resources and have
achieved greater brand recognition than we have. As a result,
some of these competitors may be able to devote greater resources
to marketing and promotional activities or adopt more aggressive
pricing policies than we may be able to. Increased competition
in this manner may result in reduced operating margins or loss of
market share.

Economic sanctions imposed on Vietnam by the United States could
restrict our access to technology and limit its ability to
conduct business.

Regional conflicts in Southeast Asia could adversely affect
the Vietnamese economy and cause our business to suffer.
Southeast Asia has from time to time experienced instances of
civil unrest and hostilities among neighboring countries. Events
of this nature in the future could influence the Vietnamese
economy and could have a material adverse effect on the market
for our services. The government of Vietnam may change its
regulation of our business. Any such change could decrease our
revenues and/or increase our costs, which would adversely affect
our operating results.

-6-

Our management is involved with other business activities, which
could reduce the time they allocate to our operations.

Our operations depend substantially on the skills and
experience of Mr. Allen Jones, our President. Mr. Jones is
involved in other business activities and may, in the future,
become involved in other business opportunities. If a specific
business opportunity becomes available, one or more of these
individuals may face a conflict in selecting between USTC and his
other business interests. We have not formulated a policy for
the resolution of such conflicts.

Certain Nevada corporation law provisions could prevent a
potential takeover, which could adversely affect the market price
of our common stock.

We are incorporated in the State of Nevada. Certain
provisions of Nevada corporation law could adversely affect the
market price of our common stock. Because Nevada corporation law
requires board approval of a transaction involving a change in
our control, it would be more difficult for someone to acquire
control of us. Nevada corporate law also discourages proxy
contests making it more difficult for you and other shareholders
to elect directors other than the candidate or candidates
nominated by our board of directors. Our articles of
incorporation and by-laws contain no similar provisions.

ITEM 2. DESCRIPTION OF PROPERTY

Description of Property

The Company's principal offices are located at 2620 S.
Maryland Parkway, Suite 14, Las Vegas, NV 89107. Mr. Allen
Jones, President, rents provides this office space and it at no
expense to the Company. USA Telcom conducts U.S. business
operations, meetings, and stockholder relation activities from
this Nevada office.

The Company has access and use of an office in the office
complex at 1601 Dove, Suite 205, Newport Beach, CA 92660. The
size of the office is approximately 400 square feet. This
facility is used for Board of Director Meetings and provides a
modest office space and a conference room. Use of the office
provided to the Company at no charge by the Company's
former Secretary and Treasurer, Mr. Browning, who rents the
space.

The Company also uses a temporary office in Vietnam at
2Huynh Huu Bac W4 Tan Binh, HCMC. This office is part of a
family residence of USA Telcom's president. The size of the
office space is approximately 400 square feet. The office is
equipped with a personal computer and other office equipment
and furniture. USA Telcom uses this space for Vietnam business
operations.

Investment Policies

Our management does not currently have policies regarding
the acquisition or sale of real estate assets primarily for
possible capital gain or primarily for income. We do not
presently hold any investments or interests in real estate,
investments in real estate mortgages or securities of or
interests in persons primarily engaged in real estate activities.

ITEM 3. LEGAL PROCEEDINGS

We are not currently involved in any legal proceedings nor
do we have knowledge of any threatened litigation.

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

We did not hold a shareholders meeting in 2003, thus there
was no vote of securities holders in 2003.

-7-

PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market information

The Company's common stock is currently traded on the Over-
the-Counter Bulletin Board under the stock ticker symbol "USTC."
The following table sets forth the monthly high and low prices
for the Company's common stock on the OTCBB(R) for each quarter
of the last two fiscal years:

Quarter Ended High Low
---------------------------------------------
December 31, 2003 $0.25 $0.05
September 30, 2003 $0.15 $0.05
June 30, 2003 $0.20 $0.15
March 31, 2003 $0.25 $0.15

December 31, 2002 $0.25 $0.25

OTCBB(R) quotations of the Company's Common Stock reflect
inter-dealer prices, without retail mark-ups, markdowns or
commissions, and may not necessarily represent actual
transactions.

Holders

As of March 15, 2004, USA Telcom had approximately 4,250,000
shares of $0.001 par value common stock issued and outstanding
held by approximately 25 shareholders of record. USA Telcom's
Transfer Agent is Shelley Godfrey, Pacific Stock Transfer
Company, 500 East Warm Springs Road, Suite 240, Las Vegas, Nevada
89119, (702) 361-3033.
Dividends

We have never declared or paid any cash dividends on our
common stock. For the foreseeable future, we intend to retain
any earnings to finance the development and expansion of our
business, and we do not anticipate paying any cash dividends on
its common stock. Any future determination to pay dividends will
be at the discretion of the Board of Directors and will be
dependent upon then existing conditions, including our financial
condition and results of operations, capital requirements,
contractual restrictions, business prospects, and other factors
that the board of directors considers relevant.

Recent Sales of Unregistered Securities

On January 10, 1999, we issued 600,000 shares of its $.001
par value Common Stock to our officers as founders stock as
follows: USA Telcom issued to Allen Jones 200,000 shares of the
Common Stock of the Company and to Michael Browning 400,000
shares of our Common Stock.

On December 10, 1999, we effectuated a 2-for-1 stock split
for all issued and outstanding shares of Common Stock issued and
outstanding.

On December 10, 2000, we issued 1,800,000 shares of its
$.001 par value Common Stock to our president as follows: USA
Telcom issued to Allen Jones 1,800,000 shares of the Common
Stock.

All founders' shares were issued in accordance with Section
4(2) of the Securities Act of 1933.

On July 9, 2001, the State of Nevada issued a permit to USA
Telcom to sell securities pursuant to registration by
qualification in the state. The offering was exempt from federal
registration pursuant to Regulation D, Rule 504 of the 1933
Securities and Exchange Act, as amended. On October 31, 2001,
USA Telcom closed that offering, in which it sold a total of
1,250,000 shares of its $0.001 par value common stock at $0.05
per share for cash in the amount of $61,500 net of offering
costs.

In connection with the offering pursuant to Regulation D,
Rule 504, USA Telcom issued 125,000 warrants to NevWest
Securities Corporation to purchase our $0.001 par value common
stock on a one-for-one basis. The warrant exercise price is
$0.055 per share of common stock and substantially all warrants
will expire on or before November 7, 2004. No warrants have been
exercised as of the date of this report.

There have been no other issuances of common stock of the
Company.

-8-

Securities Authorized for Issuance Under Equity Compensation Plans

The following table provides the following information as of
December 31, 2003, for equity compensation plans previously
approved by security holders, as well as those not previously
approved by security holders:

1. The number of securities to be issued upon the exercise of
outstanding options, warrants and rights;
2. The weighted-average exercise price of the outstanding
options, warrants and rights; and
3. Other than securities to be issued upon the exercise of the
outstanding options, warrants and rights, the number of
securities remaining available for future issuance under the
plan.

Plan Category Number of Weighted Number of
Securities average securities
to be exercise remaining
issued upon price of available
exercise of outstanding for future
outstanding options, issuance
options, warrants
warrants and rights
and rights
(a) (b) (c)
----------------------------------------------------------------------
Equity compensation plans - - -
approved by security holders

Equity compensation plans - - -
not approved by security
holders

Total - - -

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF
OPERATION

Forward Looking Statements

Some of the statements contained in this Form 10-KSB that
are not historical facts are "forward-looking statements" which
can be identified by the use of terminology such as "estimates,"
"projects," "plans," "believes," "expects," "anticipates,"
"intends," or the negative or other variations, or by discussions
of strategy that involve risks and uncertainties. We urge you to
be cautious of the forward-looking statements, that such
statements, which are contained in this Form 10-KSB, reflect our
current beliefs with respect to future events and involve known
and unknown risks, uncertainties and other factors affecting our
operations, market growth, services, products and licenses. No
assurances can be given regarding the achievement of future
results, as actual results may differ materially as a result of
the risks we face, and actual events may differ from the
assumptions underlying the statements that have been made
regarding anticipated events. Factors that may cause actual
results, our performance or achievements, or industry results, to
differ materially from those contemplated by such forward-looking
statements include without limitation:

1. Our ability to maintain, attract and integrate internal
management, technical information and management information
systems;

2. Our ability to generate customer demand for our products;

3. The intensity of competition; and

4. General economic conditions.

All written and oral forward-looking statements made in
connection with this Form 10-KSB that are attributable to us or
persons acting on our behalf are expressly qualified in their
entirety by these cautionary statements. Given the uncertainties
that surround such statements, you are cautioned not to place
undue reliance on such forward-looking statements.

-9-

Twelve Months Ended December 31, 2003 Compared to the Twelve
Months Ended December 31, 2002

In the twelve months ended December 31, 2003, we generated
no revenues compared to approximately $134,664 in the twelve
months ended December 31, 2002. The total operating expenses for
the twelve months ended December 31, 2003 were approximately
$103,159 as compared to approximately $46,922 for the twelve
months ended December 31, 2002. The increase resulted primarily
from an increase in administrative expenses and the cost of being
a public reporting company. Such expenses include legal,
accounting, consulting and filing fees.

We also generated $128,150 in interest income during the
year ended December 31, 2003, compared to $3,381 in the year ago
period. In January 2003, we executed an irrevocable loan
agreement in the amount of $300,000 to be due on or before
December 31, 2003. This note receivable was not satisfied by the
due date and the principal balance of $171,850 has since been
extended to March 31, 2006 at an interest rate of 6% per annum.
The accrued interest amount of $125,150 was extended to December
15, 2004.

In the twelve months ended December 31, 2003, USA Telcom's
operations resulted in net income of approximately $19,029 as
compared to net income of approximately $89,711 for the twelve
months ended December 31, 2002.

Liquidity and Capital Resources

At December 31, 2003, USA Telcom had current assets of $615
consisting of cash in the amount of $115 and marketable
securities of $500. At December 31, 2003, USA Telcom had current
assets of $178,354, consisting of $176,354 in cash and $500 in
marketable securities. The decrease in cash is attributable
primarily to the issuance of a note receivable in the aggregate
of $300,000, which consists of $171,850 in principal and $125,150
in accrued interest.

We do not believe that our current assets are sufficient to
continue operations for the next 12 months. Our president has
verbally committed to provide us with capital to sustain limited
operations. However, there can be no assurance that we will be
able to enforce such verbal agreement or that our president will
continue to be able to provide us with ongoing financing. We
will be forced to seek additional sources of funds through sales
of equity or debt securities. We cannot assure you that such
financing will be available, or if available, will be on
satisfactory terms. If we are unable to obtain sufficient
financing, we will be forced to cease our operations.
Revenue and Cost Recognition

We recognize revenue on an accrual basis as we invoice for
finder's fees and consulting services. We only recognizes
revenue as goods are shipped from a third-party vendor, and
contractual terms are fulfilled. We do not acquire and resell
the goods. The goods are sold and shipped directly from a third-
party vendor and we receive a finder's fee from the transaction.
No shipping or other costs of goods are recorded on our financial
statements as of December 31, 2003.

Typically payment for our services is due and payable at the
time services are rendered or procurement is completed.

The currency used by our customers to pay for our services
and the currency used by us to pay the majority of our expenses
is the U.S. Dollar.

ITEM 7. FINANCIAL STATEMENTS

The following documents (pages F-1 to F-8) form part of the
report on the Financial Statements

PAGE

Independent Auditor's Report F-1
Balance Sheets F-2
Statements of Operations F-3
Statement of Stockholders' Equity F-4
Statements of Cash Flows F-5
Footnotes F-6

-10-

USA TELCOM INTERNATIONALE
(A Nevada Corporation)

Balance Sheets
as of
December 31, 2003 and 2002

and

Statements of Operations,
Stockholders' Equity, and
Cash Flows
for the years ended
December 31, 2003 and 2002

-11-

TABLE OF CONTENTS

PAGE

Independent Auditors' Report 1

Balance Sheets 2

Statements of Operations 3

Statement of Stockholders' Equity 4

Statements of Cash Flows 5

Footnotes 6

-12-

Beckstead and Watts, LLP
Certified Public Accountants
3340 Wynn Road, Suite B
Las Vegas, NV 89102
702.257.1984
702.362.0540 (fax)

INDEPENDENT AUDITORS' REPORT

Board of Directors
USA TELCOM INTERNATIONALE
Las Vegas, NV

We have audited the Balance Sheets of USA Telcom Internationale
(A Nevada Corporation), (the "Company"), as of December 31,
2003 and 2002, and the related Statements of Operations,
Stockholders' Equity, and Cash Flows for the years then ended.
These financial statements are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted
auditing standards in the United States of America. Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statement presentation. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of USA Telcom Internationale as of December 31, 2003 and
2002, and the results of its operations and cash flows for the
years then ended, in conformity with generally accepted
accounting principles in the United States of America.

/s/ Beckstead and Watts, LLP

March 16, 2004

-13- F-1

USA TELCOM INTERNATIONALE
(A Nevada Corporation)
Balance Sheets

December 31,
2003 2002
------------------
Assets

Current assets:
Cash and equivalents $115 $176,354
Marketable securities 500 500
------------------
Total current assets 615 176,854
------------------

Fixed assets, net 569 741

Note receivable 300,000 -

Other assets - 5,000
------------------
$301,184 $182,595
==================
Liabilities and Stockholders' Equity

Current liabilities:
Accrued and other liabilities $ 15,508 $-
Loan payable to shareholder 84,052 -
------------------
Total current liabilities 99,560 -
------------------

Stockholders' equity:
Common stock, $0.001 par value, 25,000,000 shares
authorized, 4,250,000 shares issued and
outstanding as of 12/31/03 and 12/31/02 4,250 4,250
Additional paid in capital 174,743 174,743
Retained earnings 22,631 3,602
------------------
201,624 182,595
------------------

$301,184 $182,595
==================

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

-14- F-2

USA TELCOM INTERNATIONALE
(A Nevada Corporation)
Statements of Operations

For the years ended
December 31,
2003 2002
---------------------

Revenue $- $134,664
---------------------
Expenses:
General & administrative expenses 102,987 45,326
Depreciation 172 1,596
---------------------
Total expenses 103,159 46,922
---------------------

Other income (expense):
Interest income 128,150 3,381
Other (expense) (1,300) -
(Loss) on the sale of fixed assets - (1,412)
---------------------
Total other income (expense) 126,850 1,969
---------------------

Income before provision for taxes 23,691 89,711

Provision for income taxes (4,662) -
---------------------
Net income $19,029 $89,711
=====================
Weighted average number of
common shares outstanding - basic and fully diluted 4,250,000 4,250,000
=====================

Net (loss) per share - basic and fully
diluted $0.00 $0.02
=====================

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

-15- F-3

USA TELCOM INTERNATIONALE
(A Nevada Corporation)
Statement of Stockholders' Equity

Additional Retained Total
Common Stock Paid-in Earnings Stockholers'
Shares Amount Capital (Deficit) Equity
--------------------------------------------------------------

Balance, December 31, 1998 - $- $- $- $-

Shares issued for cash 1,200,000 600 - - 600

Net (loss) for the year ended
December 31, 1999 (2,983) (2,983)
--------------------------------------------------------------

Balance, December 31, 1999 1,200,000 600 - (2,983) (2,383)

Shares issued for cash 1,800,000 900 91,636 92,536

2-for-1 forward split 1,500 (1,500) -

Net (loss) for the year ended
December 31, 2000 (76,059) (76,059)
--------------------------------------------------------------

Balance, December 31, 2000 3,000,000 3,000 90,136 (79,042) 14,094

Donated capital 24,607 24,607

Shares issued pursuant to 1,250,000 1,250 60,000 61,250
Rule 504 offering

Net (loss) for the year ended
December 31, 2001 (7,067) (7,067)

--------------------------------------------------------------
Balance, December 31, 2001 4,250,000 4,250 174,743 (86,109) 92,884

Net (loss) for the year ended
December 31, 2002 89,711 89,711
--------------------------------------------------------------

Balance, December 31, 2002 4,250,000 4,250 174,743 3,602 182,595

Net (loss) for the year ended
December 31, 2003 19,029 19,029
--------------------------------------------------------------

Balance, December 31, 2003 4,250,000 $4,250 $174,743 $22,631 $201,624
==============================================================

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

-16- F-4

USA TELCOM INTERNATIONALE
(A Nevada Corporation)
Statements of Cash Flows

For the years ended
December 31,
2003 2002
----------------------

Cash flows from operating activities
Net income $19,029 $89,711
Depreciation 172 1,596
(Loss) on the sale of fixed assets - 1,412
Proceeds from the sale of fixed assets - 11,450
Adjustments to reconcile net income to
cash provided (used) by operating activities:
Decrease in accounts receivable - 7,500
(Increase) in note receivable (300,000) -
Decrease in interest receivable - shareholder - 871
Decrease in other assets 5,000 -
Increase in accrued and other liabilities 15,508 -
----------------------
Net cash provided (used) by operating activities (260,291) 112,540
----------------------

Cash flows from investing activities
Purchase of fixed assets - (14,717)
Increase in investments - (500)
----------------------
Net cash (used) by investing activities - (15,217)
----------------------
Cash flows from financing activities
Donated capital - -
Shareholder loans receivable - 30,667
Shareholder loan payable 84,052 -
----------------------
Net cash provided by financing activities 84,052 30,667
----------------------

Net increase (decrease) in cash (176,239) 127,990
Cash - beginning 176,354 48,364
----------------------
Cash - ending $115 $176,354
======================

Supplemental disclosures:
Interest paid $- $-
======================
Income taxes paid $- $-
======================

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

-17- F-5

USA Telcom Internationale
(a Nevada Corporation)
Notes

Note 1 - Significant accounting policies and procedures

Organization
The Company was organized November 5, 1998 (Date of Inception)
under the laws of the State of Nevada, as USA Telecom. The
Company is authorized to issue 25,000,000 shares of $0.001 par
value common stock.

On November 17, 1998, the Company amended its articles of
incorporation to change its name to USA Telcom.

On April 25, 2000, the Company amended its articles of
incorporation to change its name to USA Telcom Internationale.

Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles 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 revenue and expenses during the reporting
period. Actual results could differ from those estimates.

Cash and cash equivalents
The Company maintains a cash balance in a non-interest-bearing
account that currently does not exceed federally insured limits.
For the purpose of the statements of cash flows, all highly
liquid investments with an original maturity of three months or
less are considered to be cash equivalents.

Fixed assets
Fixed assets are recorded at cost. Minor additions and renewals
are expensed in the year incurred. Major additions and renewals
are capitalized and depreciated over their estimated useful
lives. Depreciation is calculated using the straight-line method
over the estimated useful lives as follows:

Office equipment 5 years
Vehicles 3 to 5 years

Revenue recognition
The Company recognizes revenue on an accrual basis as it invoices
for services.

Reporting on the costs of start-up activities
Statement of Position 98-5 (SOP 98-5), "Reporting on the Costs of
Start-Up Activities," which provides guidance on the financial
reporting of start-up costs and organizational costs, requires
most costs of start-up activities and organizational costs to be
expensed as incurred. SOP 98-5 is effective for fiscal years
beginning after December 15, 1998. With the adoption of SOP 98-
5, there has been little or no effect on the Company's financial
statements.

Earning per share
Basic earning per share is computed by dividing the net income by
the weighted average number of common shares outstanding
available to common stockholders during the period. The basic
weighted average number of common shares outstanding was
4,250,000 for the years ended December 31, 2003 and 2002. The
fully diluted weighted average number of common shares
outstanding was 4,375,000 for the years ended December 31, 2003
and 2002. The computation for earnings per common share,
assuming dilution, for the year ended December 31, 2003, was
antidilutive, and therefore is not included. Outstanding
warrants as of December 31, 2003 and 2002 totaled 125,000.

-18- F-6

USA Telcom Internationale
(a Nevada Corporation)
Notes

Advertising Costs
The Company expenses all costs of advertising as incurred. There
were $0 and $58 in advertising costs included in selling, general
and administrative expenses in 2003 and 2002, respectively.

Concentration of Credit Risk
Financial instruments, which subject the Company to credit risk,
consist primarily of trade accounts receivable. Concentration of
credit risk with respect to trade accounts receivable are
generally diversified due to the large number of entities
comprising the Company's customer base and their geographic
dispersion. The Company performs ongoing credit evaluations of
its customers and maintains an allowance for potential credit
losses

Fair value of financial instruments
Fair value estimates discussed herein are based upon certain
market assumptions and pertinent information available to
management as of December 31, 2003 and 2002. The respective
carrying value of certain on-balance-sheet financial instruments
approximated their fair values. These financial instruments
include cash and accounts payable. Fair values were assumed to
approximate carrying values for cash and payables because they
are short term in nature and their carrying amounts approximate
fair values or they are payable on demand.

Impairment of long lived assets
Long lived assets held and used by the Company are reviewed for
possible impairment whenever events or circumstances indicate the
carrying amount of an asset may not be recoverable or are
impaired. No such impairments have been identified by management
at December 31, 2003 and 2002.

Segment reporting
The Company follows Statement of Financial Accounting Standards
No. 130, "Disclosures About Segments of an Enterprise and Related
Information". The Company operates as a single segment and will
evaluate additional segment disclosure requirements as it expands
its operations.

Dividends
The Company has not yet adopted any policy regarding payment of
dividends. No dividends have been paid or declared since
inception.

Recent pronouncements
In July 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities", which addresses
financial accounting and reporting for costs associated with exit
or disposal activities and supersedes EITF No. 94-3, "Liability
Recognition for Certain Employee Termination Benefits and Other
Costs to Exit an Activity (including Certain Costs Incurred in a
Restructuring)." SFAS No. 146 requires that a liability for a
cost associated with an exit or disposal activity be recognized
when the liability is incurred. Under EITF No. 94-3, a liability
for an exit cost was recognized at the date of an entity's
commitment to an exit plan. SFAS No. 146 also establishes that
the liability should initially be measured and recorded at fair
value. The provisions of SFAS No. 146 will be adopted for exit or
disposal activities that are initiated after December 31, 2002.

In December 2002, the FASB issued SFAS No. 148, "Accounting for
Stock-Based Compensation-Transition and Disclosure-an amendment
of SFAS No. 123." This Statement amends SFAS No. 123, "Accounting
for Stock-Based Compensation", to provide alternative methods of
transition for a voluntary change to the fair value based method
of accounting for stock-based employee compensation. In addition,
this statement amends the disclosure requirements of SFAS No. 123
to require prominent disclosures in both annual and interim
financial statements about the method of accounting for stock-
based employee compensation and the effect of the method used on
reported results. The adoption of SFAS No. 148 is not expected to
have a material impact on the company's financial position or
results of operations.

-19- F-7

USA Telcom Internationale
(a Nevada Corporation)
Notes

In November 2002, the FASB issued FASB Interpretation ("FIN") No.
45, "Guarantors Accounting and Disclosure Requirements for
Guarantees, Including Indirect Guarantees and Indebtedness of
Others", an interpretation of FIN No. 5, 57 and 107, and
rescission of FIN No. 34, "Disclosure of Indirect Guarantees of
Indebtedness of Others". FIN 45 elaborates on the disclosures to
be made by the guarantor in its interim and annual financial
statements about its obligations under certain guarantees that it
has issued. It also requires that a guarantor recognize, at the
inception of a guarantee, a liability for the fair value of the
obligation undertaken in issuing the guarantee. The initial
recognition and measurement provisions of this interpretation are
applicable on a prospective basis to guarantees issued or
modified after December 31, 2002; while, the provisions of the
disclosure requirements are effective for financial statements of
interim or annual periods ending after December 15, 2002. The
company believes that the adoption of such interpretation will
not have a material impact on its financial position or results
of operations and will adopt such interpretation during fiscal
year 2003, as required.

In January 2003, the FASB issued FIN No. 46, "Consolidation of
Variable Interest Entities", an interpretation of Accounting
Research Bulletin No. 51. FIN No. 46 requires that variable
interest entities be consolidated by a company if that company is
subject to a majority of the risk of loss from the variable
interest entity's activities or is entitled to receive a majority
of the entity's residual returns or both. FIN No. 46 also
requires disclosures about variable interest entities that
companies are not required to consolidate but in which a company
has a significant variable interest. The consolidation
requirements of FIN No. 46 will apply immediately to variable
interest entities created after January 31, 2003. The
consolidation requirements will apply to entities established
prior to January 31, 2003 in the first fiscal year or interim
period beginning after June 15, 2003. The disclosure requirements
will apply in all financial statements issued after January 31,
2003. The company will begin to adopt the provisions of FIN No.
46 during the first quarter of fiscal 2003 and the Company
believes that the adoption of such interpretation will not have a
material impact on its financial position or results of
operations.

In May 2003, the FASB issued SFAS No. 150, "Accounting for
Certain Financial Instruments with Characteristics of Both
Liabilities and Equity." SFAS No. 150 changes the classification
in the statement of financial position of certain common
financial instruments from either equity or mezzanine
presentation to liabilities and requires an issuer of those
financial statements to recognize changes in fair value or
redemption amount, as applicable, in earnings. SFAS No. 150 is
effective for financial instruments entered into or modified
after May 31, 2003, and with one exception, is effective at the
beginning of the first interim period beginning after June 15,
2003. The effect of adopting SFAS No. 150 will be recognized as a
cumulative effect of an accounting change as of the beginning of
the period of adoption. Restatement of prior periods is not
permitted. SFAS No. 150 did not have any impact on the Company's
financial position or results of operations.

Stock-Based Compensation
The Company accounts for stock-based awards to employees in
accordance with Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees" and related
interpretations and has adopted the disclosure-only alternative
of SFAS No. 123, "Accounting for Stock-Based Compensation."
Options granted to consultants, independent representatives and
other non-employees are accounted for using the fair value method
as prescribed by SFAS No. 123.

Year end
The Company has adopted December 31 as its fiscal year end.
Note 2 - Income taxes

-20- F-8

USA Telcom Internationale
(a Nevada Corporation)
Notes

The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS No. 109"), which requires use of the liability
method. SFAS No. 109 provides that deferred tax assets and
liabilities are recorded based on the differences between the tax
bases of assets and liabilities and their carrying amounts for
financial reporting purposes, referred to as temporary
differences. Deferred tax assets and liabilities at the end of
each period are determined using the currently enacted tax rates
applied to taxable income in the periods in which the deferred
tax assets and liabilities are expected to be settled or
realized.

The Company recorded a provision for income taxes of $4,662 and
$0 for the years ended December 31, 2003 and 2002, respectively.

Note 3 - Note receivable

On January 1, 2003, the Company executed an irrevocable loan
agreement in which the borrower agrees to pay the total loan sum
of $300,000 on or before December 30, 2003. This amount includes
the principle of $171,850, and associated points, fees and
interest. During the year ended December 31, 2003, the Company
recorded interest income totaling $128,150.

Note 4 - Fixed assets

During the year ended December 31, 2002, the Company purchased
equipment in the amount of $857 and a vehicle for $13,860. The
vehicle was sold and the Company received $10,950 and recorded a
loss on the sale of fixed assets in the amount of $1,415. There
were no purchases or sales of fixed assets during the year ended
December 31, 2003.

Depreciation expense totaled $172 and $1,596 for the years ended
December 31, 2003 and 2002, respectively.

Note 5 - Stockholders' equity

The Company is authorized to issue 25,000,000 shares of its
$0.001 par value common stock.

All references to shares issued and outstanding reflect the 2-for-
1 stock split effected December 2000.

The Company issued 1,200,000 shares of its $.001 par value common
stock to its officers as founders stock issued for cash in the
amount of $600.

The Company issued 1,800,000 shares of its $.001 par value common
stock to its officers as founders stock issued for cash in the
amount of $92,536.

An officer of the Company donated cash to the Company in the
amount of $24,607.

The Company issued 1,250,000 shares of its $0.001 par value
common stock for cash of $62,500 (net of $1,250 in offering
costs) pursuant to a Rule 504 of the Securities and Exchange
Commission Act of 1933 offering.

There have been no other issuances of common stock.

-21- F-9

USA Telcom Internationale
(a Nevada Corporation)
Notes

Note 6 - Warrants and options

On February 12, 2001, the Company issued 125,000 warrants to an
investment banking firm to purchase the Company's $0.001 par
value common stock on a one-for-one basis. The warrant exercise
price is $0.055 per share of common stock and substantially all
warrants will expire on or before November 7, 2004. During the
years ended December 31, 2003 and 2002, no warrants have been
exercised. The warrant has been determined to have no market
value using the Black-Scholes option pricing model with a market
value per common share of $0.05, a risk free rate of return of
8%, an exercise period of three years and a volatility of 30%.

Note 7 - Related party transactions

During the year ended December 31, 2003, a shareholder of the
Company loaned the Company $84,052. The note is non-interest
bearing and due on demand.

During the year ended December 31, 2003, the president and CEO
was paid $10,000 in executive compensation.

Office space and services are provided without charge by a
director and shareholder. Such costs are immaterial to the
financial statements and, accordingly, have not been reflected
therein. A director of the Company is involved in other business
activities and may, in the future, become involved in other
business opportunities. If a specific business opportunity
becomes available, such persons may face a conflict in selecting
between the Company and their other business interests. The
Company has not formulated a policy for the resolution of such
conflicts.

Note 8 - Mergers and acquisitions

On November 5, 2003, the Company signed an agreement with a
private company to commence negotiations regarding a possible
reverse merger with the Company. In 2004, both parties agreed to
cancel all agreements regarding the reverse merger.

Note 9 - Subsequent events

On January 5, 2004, the Company has extended the note receivable.
The principle amount of $171,850 will be extended to March 31,
2006 at an interest rate of 6% per annum. The accrued interest
amount of $128,150 was extended to December 15, 2004.

-22- F-10

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None--Not Applicable

PART III

ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

The following table sets forth certain information with
respect to each of our executive officers or directors.

NAME POSITION
--------------------------------------------------
Allen Jones President, CEO and Director

Douglas Owen Director

Footnotes:

(1) Directors hold office until the next annual stockholders'
meeting to be held in 2004 or until a successor or successors are
elected and appointed.

Directors, Executive Officers and Significant Employees

Set forth below are summary descriptions containing the name
of our directors and officers, all positions and offices held
with us, the period during which such officer or director has
served as such, and the business and educational experience of
each during at least the last five years:

Mr. Allen Jones, President, CEO and Director of the
Company, founded USA Telcom in 1998. Prior to his involvement
with USA Telcom, Mr. Jones acquired multiple years of experience
working in advisory and intermediary capacity on projects in
South Korea, Hong Kong, China, and Vietnam. From 1993 to
1998, Mr. Jones served as an advisor assisting Saigon
Electronic & Manufacturing Corporation in the development of the
telecommunications business of Saigon Postel in Vietnam. In
1998, Mr. Jones served as Executive Vice-President, Finance,
for Harrison Digicom, a U.S. public company, overseeing the
operations of subsidiaries Airtel in the U.S. and SGN ETMC in
Vietnam. Airtel and SGN ETMC were engaged in telecommunication
service development in Vietnam. Mr. Jones was instrumental to
negotiations that resulted in the raise of US$5 million in
expansion capital from a private European Financial
Consortium. Mr. Jones also has been a contributor to Vietnam
Humanitarian causes, assisting with a Vietnam Humanitarian
Development Corporation setup and donating three forty-
foot containers of used hospital equipment to Vietnam.

Mr. Douglas Owen, Director, has more than twenty years of
real estate development and marketing experience.
Previously associated with the Stearns Company and Bentall
Development Co., Mr. Owen is currently President of Uni-Med
Realty Advisors. Mr. Owen advised multiple clients, including
Marriot Hotel Corporation and Bank America, on real estate
matters. Mr. Owens holds a degree in Business
Administration and Marketing from the University of Utah.

Directors of the Company serve for a term of three years
which has been renewed.

Board Committees

We currently have no compensation committee or other board
committee performing equivalent functions. Currently, all
members of our board of directors participate in discussions
concerning executive officer compensation.

-23-

Involvement on Certain Material Legal Proceedings During the Last
Five Years

No director, officer, significant employee or consultant has
been convicted in a criminal proceeding, exclusive of traffic
violations.

No bankruptcy petitions have been filed by or against any
business or property of any director, officer, significant
employee or consultant of the Company nor has any bankruptcy
petition been filed against a partnership or business association
where these persons were general partners or executive officers.

No director, officer, significant employee or consultant has
been permanently or temporarily enjoined, barred, suspended or
otherwise limited from involvement in any type of business,
securities or banking activities.

No director, officer or significant employee has been
convicted of violating a federal or state securities or
commodities law.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as
amended, requires the Company's directors and executive officers,
and persons who beneficially own more than 10% of a registered
class of the Company's equity securities, to file reports of
beneficial ownership and changes in beneficial ownership of the
Company's securities with the SEC on Forms 3 (Initial Statement
of Beneficial Ownership), 4 (Statement of Changes of Beneficial
Ownership of Securities) and 5 (Annual Statement of Beneficial
Ownership of Securities). Directors, executive officers and
beneficial owners of more than 10% of the Company's Common Stock
are required by SEC regulations to furnish the Company with
copies of all Section 16(a) forms that they file. Except as
otherwise set forth herein, based solely on review of the copies
of such forms furnished to the Company, or written
representations that no reports were required, the Company
believes that for the fiscal year ended December 31, 2003
beneficial owners did not comply with Section 16(a) filing
requirements applicable to them to the extent they filed all form
required under Section 16(a) in February 2004 and had no trading
activity in 2003.

ITEM 10. EXECUTIVE COMPENSATION

Remuneration of Directors, Executive Officers and Significant
Employees

We do not have employment agreements with our executive
officers. We have yet to determine the appropriate terms needed
for the creation of employment agreements for our officers.
There has been no discussion with any of our officers regarding
any potential terms of these agreements, nor have such terms been
determined with any specificity. We plan to have these
agreements completed by the beginning of the next year. We have
no proposal, understanding or arrangement concerning accrued
earnings to be paid in the future. In the meanwhile, none of our
executive officers have been drawing salaries since they were
appointed to their positions.
Summary Compensation Table

Annual Long-Term Compensation
Compensation
------------------- ------------------------------------------
Name and Year Salary Bonus Other Restricted Securities LTIP All
Principal Annual Stock Underlying Payouts Other
Position Compens Awards Options Compens
ation ation
($) ($) ($) ($) (#) ($) ($)

Allen Jones 2003 10,000 - - - - - -
President 2002 - - - - - - -
2001 - - - - - - -
2000 - - - - - - -

Directors' Compensation

We have no formal or informal arrangements or agreements to
compensate our directors for services they provide as directors
of our company.

Stock Option Plan And Other Long-term Incentive Plan

We currently do not have existing or proposed option/SAR
grants.

-24-

ITEM 11. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN SECURITY
HOLDERS

Security Ownership of Management and Certain Beneficial Owners

The following table sets forth as of December 31, 2003
certain information regarding the beneficial ownership of our
common stock by:

1. Each person who is known us to be the beneficial owner of
more than 5% of the common stock,

2. Each of our directors and executive officers and

3. All of our directors and executive officers as a group.

Except as otherwise indicated, the persons or entities
listed below have sole voting and investment power with respect
to all shares of common stock beneficially owned by them, except
to the extent such power may be shared with a spouse. No change
in control is currently being contemplated.

Title of Name and Address Amount and % of
Class of Beneficial Owner Nature of Class
Beneficial
Owner
-------------------------------------------------------------------------

Common Allen Jones, President and 2,200,000 51.77%
Stock Director(1)

Officers and Directors as a Group 2,200,000 51.77%

Common Michael F. Browning (2) 400,000 9.41%
Stock

Footnotes:

(1) The address of officers and directors in the table is c/o
USA TelCom Internationale, 2620 S. Maryland Parkway, Suite 14,
Las Vegas, NV 89107.
(2) Michael F. Browning, although he is no longer an officer or
director of our Company, may be reached at 1601 Dove, Suite 205,
Newport Beach, CA 92660.

Change in Control

No arrangements exist that may result in a change of control
of UBDF.

ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the year ended December 31, 2003, Allen Jones loaned
us $84,052. The note is non-interest bearing and due on demand.

During the year ended December 31, 2003, Allen Jones was
paid $10,000 in executive compensation.

Office space and services are provided without charge by a
director and shareholder. Such costs are immaterial.

-25-

ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K

Exhibit Name and/or Identification of Exhibit
Number

3 Articles of Incorporation & By-Laws

a. Articles of Incorporation of the Company
incorporated by reference herein filed as Exhibit
3(a) to Form 10SB12G filed on March 11, 2002
b. By-Laws of the Company incorporated by reference
herein filed as Exhibit 3(b) to Form 10SB12G filed on
March 11, 2002

31 Rule 13a-14(a)/15d-14(a) Certifications

32 Certification under Section 906 of the Sarbanes-Oxley Act
(18 U.S.C. Section 1350)

ITEM 14. CONTROLS AND PROCEDURES

Within 90 days prior to the date of filing of this report,
we carried out an evaluation, under the supervision and with the
participation of our management, including the Chief Executive
Officer and our Chief Financial Officer, of the design and
operation of our disclosure controls and procedures. Based on
this evaluation, our Chief Executive Officer and Chief Financial
Officer have concluded that our disclosure controls and
procedures are effective for the gathering, analyzing and
disclosing the information we are required to disclose in the
reports we file under the Securities Exchange Act of 1934, within
the time periods specified in the SEC's rules and forms. There
have been no significant changes in our internal controls or in
other factors that could significantly affect internal controls
subsequent to the date of this evaluation.

-26-

SIGNATURES

Pursuant to the requirements of Section 12 of the Securities
Exchange Act of 1934, the Company has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.

USA Telcom Internationale

Signature Title Date
--------- ------- ------

/s/ Allen Jones Chief Executive March 18, 2004
---------------- Officer and
Allen Jones Chief Financial
Officer

-27-