Highlights for the quarter include:
" The 2nd quarter 2006 results represent a more than 55% reduction in losses with a reported net loss of $6.1 million as compared to the 1st quarter 2006 loss of $13.8 million. 

" The Company has demonstrated a continuing trend of reduction in its overall loss for three consecutive quarters, beginning with the 4th quarter 2005 net loss of $14.5 million.

" Approximately $10 million (50%) of the six-month loss was non-cash (including stock/option compensation expense, depreciation, amortization and other non-cash expenses).

" 2nd quarter 2006 produced positive gross margin of $230,000 (+3% of sales) - first positive gross margin reported by company in past four (4) quarters.

" The 2nd quarter 2006 results show a continuing improvement trend in gross margins for three consecutive quarters with current 2nd quarter gross margins at +3% versus -6% of sales (-$619,000) in 1st quarter 2006 and  -7.2% of sales (-$708,000) in 4th quarter 2005.

"It is gratifying to see that our profit improvement actions implemented over the past several quarters are now taking hold," said Gary Post, VoIP, Inc.'s President and CEO.  "We now have our sights set firmly ahead toward break-even," Mr. Post added.

"We have developed a lot of useful technologies at VoIP, Inc., and we are now on course to commercializing these technologies.  These positive results will be reflected in customer growth and our future financial statements," said VoIP, Inc.'s CTO/COO Shawn Lewis.

VoIP, Inc.'s full 2006 2nd quarter financial statements will be included in its Quarterly Report on Form 10-Q, expected to be filed on Wednesday, August 16, 2006.