UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-K




[X]
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
              For
      the fiscal year ended March 31,
2008





[  ]
            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: 000-32797





IVI
Communications, Inc.


(Exact
name of registrant as specified in its charter)




Nevada
            33-0965560(State
      or other jurisdiction of
            (I.R.S.
      Employer Identification No.)incorporation
      or organization)1818
      North Farwell Ave.,Milwaukee,
      WI53202
            414-727-2699(Address
      of principal executive offices)
            (Issuer’s
      telephone number)




(Registrant's
Telephone Number, Including Area Code)





Securities
registered under Section 12(b) of the Act:




Title
      of Each Class
            Name
      of Each Exchange on whichto be so
      Registered:
            Each Class is to be
      Registered:None
            None





Securities
registered under Section 12(g) of the Act:





Common Stock, Par Value
$.001


(Title of
Class)




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.  Yes £     No R




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Exchange
Act.  Yes £     No R




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 R     No £




Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.  R




Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a small reporting company. See
definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):




Large accelerated
      filer £
            Accelerated
      Filer £Non-accelerated
      Filer £
            Smaller reporting
      company  R(Do not check if a Small reporting
    company)




Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes £     No R





State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the price at which the common equity was
sold, or the average bid and asked price of such common equity, as of a
specified date within the past 60 days. (See definition of affiliate in Rule
12b-2 of the Exchange Act.) Approximately $45,563 based on the average bid and
asked price on July 23, 2008.





State the
number of shares outstanding of each of the issuer’s classes of common equity,
as of the last practicable date.


Shares
outstanding as of July 1, 2008:


399,999,991
shares of common stock, par value $.001


4,000,000
shares of preferred class A stock, par value $.001


1,000,000
shares of preferred class B stock, par value $.001











TABLE
OF CONTENTS




PART
      IItem
      1.
            Business
            4Item
      1A.
            Risk
      Factors
            8Item
      1B.
            Unresolved
      Staff Comments
            16Item
      2.
            Properties.
            16Item
      3.
            Legal
      Proceedings.
            16Item
      4.
            Submission
      of Matters to a Vote of Security Holders.
            16PART
      IIItem
      5.
            Market
      For Registrant’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities.
            16Item
      6.
            Selected
      Financial Data.
            18Item
      7.
            Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations.
            18Item
      7A.
            Quantitative
      and Qualitative Disclosures About Market Risk.Item
      8.
            Financial
      Statements and Supplementary Data.
            26Item
      9.
            Changes
      in and Disagreements With Accountants on Accounting and Financial
      Disclosure.
            27Item
      9A.
            Controls
      and Procedures.
            27Item
      9A(T).
            Controls
      and Procedures.Item
      9B.
            Other
      Information.
            28PART
      IIIItem
      10.
            Directors,
      Executive Officers, and Corporate Governance.
            29Item
      11.
            Executive
      Compensation.
            30Item
      12.
            Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters.
            31Item
      13.
            Certain
      Relationships and Related Transactions, and Director
      Independence.
            31Item
      14.
            Principal
      Accountant Fees and Services.
            31PART
      IVItem
      15.
            Exhibits
      and Financial Statement Schedules.
            33SIGNATURES
            35Consolidated
      Financial Statements
            F-1





2





Cautionary
Note Regarding Forward Looking Statements


This
Annual Report on Form 10-K (the “Annual Report”) contains ‘‘forward-looking
statements’’ that represent our beliefs, projections and predictions about
future events. All statements other than statements of historical fact are
‘‘forward-looking statements’’, including any projections of earnings, revenue
or other financial items, any statements of the plans, strategies and objectives
of management for future operations, any statements concerning proposed new
projects or other developments, any statements regarding future economic
conditions or performance, any statements of management’s beliefs, goals,
strategies, intentions and objectives, and any statements of assumptions
underlying any of the foregoing. Words such as ‘‘may’’, ‘‘will’’, ‘‘should’’,
‘‘could’’, ‘‘would’’, ‘‘predicts’’, ‘‘potential’’, ‘‘continue’’, ‘‘expects’’,
‘‘anticipates’’, ‘‘future’’, ‘‘intends’’, ‘‘plans’’, ‘‘believes’’, ‘‘estimates’’
and similar expressions, as well as statements in the future tense, identify
forward-looking statements.





These
statements are necessarily subjective and involve known and unknown risks,
uncertainties and other important factors that could cause our actual results,
performance or achievements, or industry results, to differ materially from any
future results, performance or achievements described in or implied by such
statements. Actual results may differ materially from expected results described
in our forward-looking statements, including with respect to correct measurement
and identification of factors affecting our business or the extent of their
likely impact, the accuracy and completeness of the publicly available
information with respect to the factors upon which our business strategy is
based or the success of our business. Furthermore, industry forecasts are likely
to be inaccurate, especially over long periods of time and in relatively new and
rapidly developing industries such as oil and gas. 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:





(a)
            volatility
      or decline of our stock price;





(b)
            potential
      fluctuation in quarterly results;





(c)
            our
      failure to earn revenues or
profits;





(d)
            inadequate
      capital and barriers to raising the additional capital or to obtaining the
      financing needed to implement its business
  plans;





(e)
            inadequate
      capital to continue business;





(f)
            changes
      in demand for our products and
services;





(g)
            rapid
      and significant changes in markets;





(h)
            litigation
      with or legal claims and allegations by outside
  parties;





(i)
            insufficient
      revenues to cover operating costs.





Forward-looking
statements should not be read as a guarantee of future performance or results,
and will not necessarily be accurate indications of whether, or the times by
which, our performance or results may be achieved. Forward-looking statements
are based on information available at the time those statements are made and
management’s belief as of that time 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 or suggested by the
forward-looking statements. Important factors that could cause such differences
include, but are not limited to, those factors discussed under the headings
‘‘Risk factors’’, ‘‘Management’s discussion and analysis of financial condition
and results of operations’’, ‘‘Business’’ and elsewhere in this
report.





3





PART
I





Item
1.Description of
Business





CORPORATE
HISTORY





Internet
Ventures, Inc., our wholly owned subsidiary, was incorporated in September 1995.
Its mission was to acquire and operate ISPs in Tier 3 markets and to rollout a
hybrid broadband product that was delivered to the customer in partnership with
local cable companies. Effective May 23, 2002, Internet Ventures, Inc. agreed to
recapitalize with Turer Corporation by becoming a wholly owned subsidiary of
Turer. To accommodate this recapitalization, the 12,350,000 shares then
outstanding of Internet Ventures, Inc. were exchanged for 12,350,000 shares of
Turer. In August 2002, Turer changed its name to IVI Communications, Inc.
Because original Turer shareholders retained only five percent of the combined
entity, the purchase was accounted for as a reverse merger. Turer was formed as
a Nevada corporation on May 8, 2001.





On
January 31, 2005, we completed the purchase of Internet Business Consulting,
Inc. and AppState.Net, LLC from James R. Hollis by acquiring 100% of the stock
of IBC and AppState.net. We paid one times annual revenue in a dollar-for-dollar
stock exchange with our stock valued at $1.00 per share, plus $580,000 cash to
be paid over two years.





Due to
lack of funding we were unable to complete the cash payments for IBC and
AppState. We have been unable to come to mutually acceptable terms to cure the
default by the Company on the terms of the Purchase Agreement (“Agreement”)
dated January 1, 2005 by and between IVI Communications, Inc. (“Buyer”),
Internet Business Consulting, Inc. (“IBC”) and AppState.Net, LLC (“AppState”),
jointly referred to as (“Sellers”). Sellers have exercised the remedies for
default as provided in the Agreement and confirmed that the Remedies, which were
that foreclosure and repossession occurred December 31, 2006, are in effect.
“Seller Exercising Remedies” dated February 1, 2007, Exhibit 2.6, is
incorporated by reference to the exhibits filed in the Company’s Form 8-K filed
May 31, 2007.





Pursuant
to those remedies, ownership of Sellers reverts to James Hollis, effective
December 31, 2006.





Per the
terms of the Agreement, Sellers were to return 2,574,312 shares of IVI common
stock and on July 6, 2007 the stock was returned and cancelled.





On
February 6, 2006 we entered into a Purchase Agreement and acquired 100% of the
outstanding stock of Futura, Inc. from Francis and Lois Allen, the shareholders
of Futura, Inc. Futura, Inc. is an operating subsidiary, and is an Internet
Service Provider founded in 1995 in Cabot, Arkansas, that provides dialup and
DSL broadband Internet access, and associated services such as Email spam and
virus filtering, VoIP telephony, "Kid Safe" surfing (Parental Control), and web
accelerator services, to communities surrounding Little Rock Arkansas including
Cabot, Carlisle, Clarendon, DeValls Bluff, DeWitt, England, Hazen, Jacksonville,
and Stuttgart.




On March
28, 2007 we issued 2,500,000 shares of unregistered common stock valued at
$25,000 to Francis Allen to pay the remainder of the agreed upon cash component
of the purchase agreement between IVI Communications, Inc. and Futura, Inc. thus
completing the purchase.





Futura
currently operates a network operation center (NOC) located in the one of the
tallest buildings in Little Rock that will serve as an excellent base of
operations.




4




Futura,
has completed the installation of three wireless broadband tower sites, serving
Cabot (population 15,000) and Ward (population 2,580) and the rural households
surrounding the local Country Club that brings Futura's total service area to
150 square miles.




Our
business plan is to:





o
            Acquire
      Positive Cash Flow ISP's and other telecommunications businesses for
      Recurring Revenueo
            Preserve
      the Brand and Maintain Local
Presence


o
            Consolidate
      to Achieve Economy of Scaleo
            Deploy
      Nationally Branded Fixed Wireless
Broadband


o
            Migrate
      Dialup Customers to Broadband to Increase Revenueo
            Deliver
      VoIP and Rich Media Content





Our
objective is to be an ex-urban provider of highly focused broadband services for
businesses, schools, libraries and residential consumers. Our products include
high-speed broadband access that is comparable to DSL and cable-based broadband
products and offerings that scale from 128 kbps (residential opportunities) to
155 Mbps (OC3 equivalent) for customers with very large bandwidth needs. In
addition to providing high-speed access, we will offer a complete suite of
telecom products by serving as a full service Internet Service Provider (ISP),
and providing toll grade (where applicable) voice over Internet protocol
("VoIP"), local and long distance services, and other aggregated value added
services that management believes will improve our competitive
position.





OUR
STRATEGY





We are
focused principally on acquiring dial-up ISP's and aggregating them into
regional clusters primarily in tier III and tier IV markets. In addition to this
"roll-up" strategy, we intend to develop a fixed wireless infrastructure that
will be deployed in each independent market or "cluster". Management believes
this will allow us to migrate our existing dial-up customer base to a broadband
fixed wireless alternative that could increase the average revenue per unit
("ARPU"). The fundamental structure of this strategy is to "up-sell" or upgrade
to a captive audience. We believe that this strategy will greatly impact our
ability to garner immediate market share while improving our financial
condition.




We intend
to exploit what we believe is a competitive void in tier III & IV cities
nationwide left by the collapse of many Competitive Local Exchange Companies
("CLECs") and the limited competition inherent with ex-urban and smaller
markets. We believe that these markets hold valuable demographic pockets that
are currently ignored by Incumbent Local Exchange Companies ("ILECs") In
addition, management believes that the combination of the lack of CLECs,
limited   DSL/cable competitors and poor service offered by the
incumbent local exchange carriers suggest great opportunity for a new entrant
that can offer a better product at a more competitive price.





We will
seek to take full advantage of local brand loyalty by maintaining the local
brand, the store-front, and sales staff.





We intend
to market expanded and enhanced services to attract new customers:





o
            A
      fixed wireless broadband service will be launched;o
            Customer
      support hours will be expanded to
24/7;


o
            VOIP
      (Voice over IP) services will be offered;o
            Enhanced
      filtering (Spam and Web).




5


We intend
to generate economies of scale by consolidating the ISPs various operational
functions:





o
            Centralize
      all administration (accounting, billing, collections, A/R and
      A/P);o
            Outsource
      customer support (technical
support);





FORCES OF
CONVERGENCE




Management
believes that the opportunity afforded to us is a result of the convergence of
many forces simultaneously. Convergence means that voice, data, and video share
the same format for transmission and ultimately share the same delivery
mechanism for receipt. With convergence, management believes that each service
provider must ultimately differentiate on performance rather than relying on
branding, geographical boundaries or regulatory policies for success. With the
transformation to an IP world, co-ax, twisted pair copper and wireless all
become access methods for delivery of a wide variety of services. However,
unlike co-ax and copper, wireless is portable and affords a number of other
advantages.





We
believe that our plan to utilize license exempt spectrum creates greater
coverage potential and increases the size of the potential addressable market
while only limiting expansion to what our management believes makes good
financial and business sense. While the nature of wireless technology allows for
the deployment of capital efficiently, it also allows us to only provide areas
covering customers who we believe have the ability to pay. We believe that this
selective method of customer acquisition combined with e-billing methods and
credit card subscriptions, will allow us to limit bad debt, minimize traditional
telecom back office expenses, while maximizing cash flow.




FIXED
WIRELESS STRATEGY




We
believe that fixed wireless broadband is the most plausible alternative for
hard-to-reach areas. We intend to deploy, market, and maintain a nationally
branded fixed wireless broadband solution with newly acquired ISPs.





Fixed
wireless systems use microwave frequencies allocated by the Federal
Communications Commission ("FCC") to transmit signals over the air from a
transmission tower to a microwave receiver installed at the subscriber's home or
business. Because microwave signals are transmitted over the air, wireless
Internet technology does not require the large networks of fiber optics, cables
or copper wire that are required by local telephone or cable television
companies. Thus, wireless technology has been developed as a reliable, yet
relatively low cost, medium to provide services to subscribers in single family
homes, multiple dwelling units and commercial properties.





Management
believes that as more compelling content becomes available, the demand for and
profitability of broadband services will increase dramatically. ISPs having a
track record of success in broadband will not only retain customers by
converting dialup to broadband but will gain new customers migrating from other
dialup providers.





We intend
to deploy, market, and maintain a nationally branded fixed wireless broadband
solution with newly acquired ISPs.





OPERATIONAL
SYNERGIES




Management
believes that deploying a fixed wireless broadband product via the acquired ISPs
offers a unique opportunity to re-purpose local assets during the assimilation
process. As dialup customers are transitioned to the outsourced network,
management believes that new wireless customers will be accessing the Internet
on existing upstream circuits.





6





TECHNOLOGY
ADVANCES




Other
benefits to the forces of convergence impact the technology selection and
strategy to utilize such technology. We propose to utilize equipment that will
be compatible with the Institute of Electrical and Electronics Engineers
("IEEE") standard known as 802.16 - Worldwide Interoperability for Microwave
Access - (often termed "WiMAX"). Standards-based equipment ensures that
infrastructure costs will decrease similarly to the history of the cost
efficiencies realized from the mass adoption of wireless products such as GSM or
IEEE standard 802.11 a/b/g "WI-FI" based equipment. The promise of retail
mass-market end user products reduces the expected cost of providing service
over time while preserving the technical capabilities of the offering. WiMAX has
wide support from companies such as Siemens, Alcatel, Motorola, Alvarion and
Intel and is envisioned to be the fourth generation ("4G") evolution of wireless
technology that offers broadband and voice, while maintaining portable features.
The standards process is important in that it removes the reliance upon
proprietary standards and their vendors and reduces the technology risks for the
venture. The WiMAX standard addresses the security concerns of earlier WI-FI
while allowing for multiple bands of frequencies to share the standard. With
adoption of WiMAX, the possibility of software definable radios provides a path
for rural subscribers to "roam" with broadband closer to reality.




Our
business model follows what management believes to be a typical telecom
investment cycle. Capital-intensive infrastructure investments early in the
project support increasing subscriber growth and generate very strong revenue
streams. Incremental capital for network capacity is largely supported by
positive cash flow from these revenues. Significant footprint expansion follows
similar investment cycles although infrastructure is increasingly funded by
retained earnings and efficiencies gained in staffing, back-office systems, and
core networks.





COMPETITION




In the
past year, competitive conditions in the wireless industry have increased
dramatically. Currently, our existing and potential competitors in the wireless
arena consist of a broad range of companies engaged in the communications and
entertainment businesses, including franchise cable operators, digital satellite
program providers, competitive local exchange carriers ("CLECs") and regional
bell operating companies ("RBOCs"). To date, we have sought to differentiate
ourselves from our competitors through lower prices, streamlined pricing plans,
service guarantees, high-quality customer service, system performance, and local
community involvement and support. As the number of companies entering the
industry increases, the impact of these differentiating factors begins to
decrease. Many of the current digital satellite providers and cable companies
are offering services similar to our services, but at comparable or lower
monthly rates. Many of our existing or potential competitors have substantially
greater name recognition and financial, technical and human resources than us
and may be better equipped to develop and operate systems providing subscription
television service. Our principal existing competitors are described
below.





MARKETS




We intend
to operate under a decentralized management structure in order to maximize our
local presence in each market. To enhance our operating efficiency and maintain
quality customer service, we intend to consolidate or "cluster" operations of
systems by geographical areas. Most of our operational systems or system
clusters will be managed by a regional manager. Each operating system will be
staffed with customer service and sales representatives and service technicians.
We intend to offer most of our non-executive employees incentive compensation
programs that are tied to service quality levels and sales goals. Pricing and
programming decisions will be made at the local level, subject to review by our
executive management.





7





EQUIPMENT
AND FACILITIES




Our
wireless systems will utilize a diverse array of subscriber equipment based on
many topographical considerations. We are not dependent upon any one supplier
for its equipment.  We depend upon access provided by telephone
companies where there is considerable Governmental regulation.





There has
been no research and development.





The
Company is not aware of any governmental regulations or approvals that would
affect our business at the present time, nor any environmental laws that would
affect the Company.





As of
March 31, 2008 there are 2 corporate employees.





Item
1A.Risk
Factors





We
Have a History of Losses and We Expect Continuing Losses and May Never Achieve
Profitability





For the
years ended March 31, 2008 and 2007, we generated revenues of $316,474 and
$1,859,811 respectively and incurred a consolidated net loss in the year ending
March 31, 2008 of $2,107,373 and a net profit in the year ending March 31, 2007
of $313,283. We cannot assure you that we can achieve or sustain profitability
on a quarterly or annual basis in the future. Our operations are subject to the
risks and competition inherent in the establishment of a business
enterprise.




There can
be no assurance that future operations will be profitable. Revenues and profits,
if any, will depend upon various factors, including whether our services will
achieve market acceptance. We may not achieve our business objectives and the
failure to achieve such goals would have an adverse impact on us. These matters
raise substantial doubt about our ability to continue as a going
concern.




Our
Auditors Have Included a Going Concern in Their Opinion which Could Cause
Investors to Lost their Investment In the Company





Our
auditors have included in their opinion to our financial statements a paragraph
that addressed concerns about our ability to continue as a going concern. These
concerns arise from the fact that we have sustained operating losses for the
years ending March 31, 2008 and 2007 and have sustained large capital deficits
and have been unable to come to mutually acceptable terms to cure the default by
the Company on the terms of the Purchase Agreement (“Agreement”) dated January
1, 2005 by and between IVI Communications, Inc. (“Buyer”), Internet Business
Consulting, Inc. (“IBC”) and AppState.Net, LLC (“AppState”), jointly referred to
as (“Sellers”). Sellers have exercised the remedies for default as provided in
the Agreement and confirmed that the Remedies, which were that foreclosure and
repossession occurred December 31, 2006, are in effect. Purchase Agreement,
Exhibit 2.4, is incorporated by reference to the exhibits filed in the Company’s
Form 8-K filed February 4, 2005.





Pursuant
to those remedies, ownership of Sellers reverted to James Hollis, effective
December 31, 2006.





Per the
terms of the Agreement, Sellers were to return 2,574,312 shares of IVI common
stock. The stock was returned and cancelled on July 6, 2007.




In
addition there has been no formal settlement agreement signed by all
parties.





Our
future success is dependent upon our ability to achieve profitable operations
and generate cash from operating activities, and upon additional established an
ongoing source of revenues sufficient to cover our operating costs and that we
must raise additional capital in order to continue to operate our business. If
we are unable to continue as a going concern, you could lose your entire
investment in us.





8




We
May Need to Raise Additional Capital Which May Not Be Available to Us on
Acceptable Terms or At All





On March
27, 2006, the Company entered into a securities purchase agreement with YA
Global L.P. providing for the sale by the Company to Cornell of our 12% secured
convertible debentures in the aggregate principal amount of $600,000 of which
$200,000 was advanced immediately. The second installment of $200,000 was
advanced on April 18, 2006. The last installment of $200,000 was advanced on
August 16, two (2) business days after the date the registration statement was
declared effective.




In
addition the Company received $75,000 in funds from outside sources and recorded
them as debentures.





The
Convertible Debentures mature on the third anniversary of the date of issuance
and the Company is not required to make any payments until the maturity date.
Holders of the Debentures may convert at any time amounts outstanding under the
debentures into shares of our common stock at a conversion price per share equal
to the lower of (i) $0.20 or (ii) ninety percent (90%) of the lowest closing Bid
Price of the Common Stock during the thirty (30) trading days immediately
preceding the conversion date as quoted by Bloomberg, LP. Cornell has agreed not
to short any of the shares of Common Stock. The Company has the right to redeem
a portion or all amounts outstanding under the debenture prior to the maturity
date at a 20% redemption premium provided that the closing bid price of our
common stock is less than $0.20.




In the
future, we may be required to raise additional funds, particularly if are unable
to generate positive cash flow as a result of our operations and are required to
repay the convertible debentures as a result of Cornell Capital's failure to
convert the debentures into common stock. There can be no assurance that
financing will be available in amounts or on terms acceptable to us, if at all.
The inability to obtain additional capital may reduce our ability to continue to
conduct business operations. If we are unable to obtain additional financing, we
will likely be required to curtail our wireless network deployment plans. Any
additional equity financing may involve substantial dilution to our then
existing shareholders.




Our
future success also depends on our ability to identify, attract, hire, retain
and motivate other well-qualified managerial, technical, sales and marketing
personnel. There can be no assurance that these professionals will be available
in the market or that we will be able to meet their compensation
requirements.





We intend
to pursue additional acquisitions to further the development of our Internet
services business. Our strategy is unproven and the revenue and income potential
from our strategy is unproven. We will encounter risks and difficulties
frequently encountered by early-stage companies in new and rapidly changing
markets, including the risks described elsewhere in this section. Our business
strategy may not be successful and we may not be able to successfully address
these risks.





Our
Business Revenue Generation Model is Unproven and Could Fail





Our
revenue model is new and evolving, and we cannot be certain that it will be
successful. Our ability to generate revenue depends, among other things, on our
ability to provide quality internet connectivity and services to our customers.
Our success is largely dependent upon our ability to successfully integrate and
manage our acquisitions. Accordingly, we cannot assure you that our business
model will be successful or that we can sustain revenue growth or achieve or
sustain profitability.





9





If
We Are Not Able to Compete Effectively in the Higly Competitive Internet Service
Provideer and Wireless Communications Industries We May be Forced to Reduce or
Cease Operations





Our
ability to compete effectively with our competitors depends on the following
factors, among others:





the
      performance of our products, services and technology in a manner that
      meets customer expectations;




the
      success of our efforts to develop effective channels
  of




distribution
      for our products;




our
      ability to price our products that are of a quality and at a price point
      that is competitive with similar or comparable products offered by our
      competitors;




general
      conditions in the wireless communications and internet
      industries;




the
      success of our efforts to develop, improve and satisfactorily address any
      issues relating to our technology;




our
      ability to effectively compete with companies that have substantially
      greater market presence and financial, technical, marketing and other
      resources than the Company including (i) local ISPs, (ii) national and
      regional ISPs, (iii) established online services; (iv) nonprofit or
      educational ISPs; (v) national telecommunications companies; (vi) Regional
      Bell Operating Companies ("RBOCs"); (vii) competitive local exchange
      carriers; and (viii)cable operators; and our ability to adapt to the
      consolidation of existing ISPs with or into larger entities, or entry of
      new entities into the Internet services market, would likely result in
      greater competition for the
Company.





Consolidation
in the Markets in Which We Compete Could Adversely Effect Our Businesses to
Include a Reduction or Elimination of Our Proportionate Share of those
Markets





The
wireless communications industry has experienced consolidation of participants,
and this trend may continue. If wireless carriers consolidate with companies
that utilize technologies that are similar to or compete with our wireless
technology, our proportionate share of the emerging market for wireless
technologies may be reduced or eliminated. This reduction or elimination of our
market share could reduce our ability to obtain profitable operations and could
cause us to reduce or cease operations. We believe that our ability to compete
successfully in the Internet services market depends on a number of factors,
including market presence; the adequacy of our member and technical support
services; the capacity, reliability and security of our network infrastructure;
the ease of access to and navigation of the Internet provided by our services;
our pricing policies, our competitors and our suppliers; the timing of
introductions of new services by us and our competitors; our ability to support
existing and emerging industry standards; and industry and general economic
trends. There can be no assurance that we will have the financial resources,
technical expertise or marketing and support capabilities to compete
successfully.





We
May Not Effectively Manage the Growth Necessary to Execute Our Business Plan,
Which Could Adversely Effect the Quality of Our Operations and
Costs





In order
to achieve the critical mass of business activity necessary to successfully
execute our business plan, we must significantly increase the number of
strategic partners and customers that use our technology. This growth will place
significant strain on our personnel, systems and resources. We also expect that
we will continue to hire employees, including technical, management-level
employees, and sales staff for the foreseeable future. This growth will require
us to improve management, technical, information and accounting systems,
controls and procedures. We may not be able to maintain the quality of our
operations, control our costs, continue complying with all applicable
regulations and expand our internal management, technical information and
accounting systems in order to support our desired growth. We cannot be sure
that we will manage our growth effectively, and our failure to do so could cause
us to reduce or cease operations.




10


We
May Not be Able to Prevent Third Parties from Acquiring Domain Names that
Infringe or Otherwise Decrease the Value of Our Trademarks and Other Proprietary
Rights





We own
several Internet domain names, including, among others, www.ivn.net, www.ivcm.net,
www.futura.net, www.lickity-split.net,
www.lickity-split.tv,
and www.lickitysplit.tv. The regulation of domain names in the United States and
in foreign countries may change. Regulatory bodies could establish additional
top-level domains or modify the requirements for holding domain names, any or
all of which may dilute the strength of our name. We may not acquire or maintain
our domain name or additional common names in all of the countries in which our
marketplace may be accessed, or for any or all of the top-level domains that may
be introduced. The relationship between regulations governing domain names and
laws protecting proprietary rights is unclear. Therefore, we may not be able to
prevent third parties from acquiring domain names that infringe or otherwise
decrease the value of our trademarks and other proprietary rights.





We may
have to resort to litigation to enforce our intellectual property rights,
determine the validity and scope of the proprietary rights of others, or defend
ourselves from claims of infringement, invalidity or unenforceability Litigation
may be expensive and divert resources even if we win. This could adversely
affect our business, financial condition and operating results such that it
could cause us to reduce or cease operations.





We
May Not Be Able to Keep Up With Rapid Technological Changes, Which Could Render
Our Products and Processes Obsolete





The
wireless communications industry is characterized by rapid technological change,
changes in customer requirements and preferences, frequent introduction of
products and services embodying new technologies and the emergence of new
industry standards and practices that could render our existing technology and
systems obsolete. Our future success will depend on our ability to enhance and
improve the responsiveness, functionality, accessibility and features of our
products. We expect that our marketplace will require extensive technological
upgrades and enhancements to accommodate many of the new products and services
that we anticipate will be added to our marketplace. We cannot assure you that
we will be able to expand and upgrade our technology and systems, or
successfully integrate new technologies or systems we develop in the future, to
accommodate such increases in a timely manner.




We
May Not Be Able To Successfully Execute or  Integrate our
Acquisitions





Our
business model is dependent upon growth through acquisition of other Internet
service providers. Acquisitions involve numerous risks, including the
following:





o
            Difficulties
      in integrating the operations, technologies, products and personnel of the
      acquired companies;o
            Diversion
      of management's attention from normal daily operations of the
      business;


o
            Difficulties
      in entering markets in which we have no or limited direct prior experience
      and where competitors in such markets have stronger market
      positions;o
            Initial
      dependence on unfamiliar partners;


o
            Insufficient
      revenues to offset increased expenses associated with acquisitions;
      ando
            The
      potential loss of key employees of the acquired
  companies.




11


Acquisitions
may also cause us to:





o
            Issue
      common stock that would dilute our current shareholders' percentage
      ownership;o
            Assume
      liabilities;


o
            Record
      goodwill and non-amortizable intangible assets that will be subject to
      impairment testing on a regular basis and potential periodic impairment
      charges;o
            Incur
      amortization expenses related to certain intangible
  assets;


o
            Incur
      large and immediate write-offs, and restructuring and other related
      expenses; oro
            Become
      subject to litigation.





Mergers
and acquisitions of high-technology companies are inherently risky, and no
assurance can be given that our previous or future acquisitions will be
successful and will not materially adversely affect our business, operating
results or financial condition. Failure to manage and successfully integrate
acquisitions we make could harm our business and operating results in a material
way.





Our
Business is Highly Dependent on the Continued Growth and Maintenance of the
Internet





Our
success will depend on the continued growth and maintenance of the internet
infrastructure. This includes maintenance of a reliable network backbone with
the necessary speed, data capacity and security for providing reliable internet
services. Internet infrastructure may be unable to support the demands placed on
it if the number of internet users continues to increase, or if existing or
future internet users access the internet more often or increase their bandwidth
requirements. In addition, viruses, worms and similar programs may harm the
performance of the internet. The Internet has experienced a variety of outages
and other delays as a result of damage to portions of its infrastructure, and it
could face outages and delays in the future. These outages and delays could
reduce the level of internet usage as well as our ability to provide our
solutions. Additionally, for many of our customers we rely upon ILECs to assist
in provisioning T-1 and dial-up lines. In the event that these ILECs are unable
or unwilling to provide service, our ability to service existing customers or
add new customers could be impaired.




We
May Fail to be Able to Establish and Maintain Strategic
Relationships





We
believe that the establishment of strategic partnerships will greatly benefit
the growth of our business, and we intend to seek out and enter into strategic
alliances. We may not be able to enter into these strategic partnerships on
commercially reasonable terms or at all. Even if we enter into strategic
alliances, our partners may not attract significant numbers of customers or
otherwise prove advantageous to our business. Our inability to enter into new
distribution relationships or strategic alliances could have a material and
adverse effect on our business.





Risk
Relating to Our Convertible Debentures





There
are a Large Number of Shares Underlying Our Convertible Notes and Warrants Which
Could Lead to Dilution of Our Common Stock





As of
March 31, 2008, we had 253,885,261 shares of common stock issued and
outstanding. In connection with the financing arrangements that we entered into
in March 2006, we also have outstanding secured convertible debentures or an
obligation to issue callable secured convertible notes that may be converted
into an estimated  1,224,769,444 shares of common stock at current
market prices, and outstanding warrants to purchase 1,539,802,632 shares of
common stock.




On March
31, 2008, the closing bid price of our common stock was $0.0002. The debentures
issued in March are convertible at the lower of (i) $0.20 or (ii) ninety percent
(90%) of the lowest closing Bid Price of the Common Stock during the thirty (30)
trading days immediately preceding the conversion date as quoted by Bloomberg,
LP. Cornell has agreed not to short any of the shares of Common Stock Therefore,
the number of shares of common stock issuable upon conversion of the secured
convertible debentures may increase if the market price of our stock declines.
Upon effectiveness of the registration statement of which this prospectus forms
a part, all of the shares, including all of the shares issuable upon conversion
of the notes and upon exercise of our warrants, may be sold without restriction.
The sale of these shares may adversely affect the market price of our common
stock.




12




The
variable price feature of our convertible debentures could require us to issue a
substantially greater number of shares, which will cause dilution to our
existing stockholders. The number of shares we will be required to issue upon
conversion of the debentures will increase if the market price of our stock
decreases. This will cause dilution to our existing stockholders.





The
following is an example of the amount of shares of our common stock issuable
upon conversion of the entire $600,000 in convertible debentures, based on
market prices assumed to be 25%, 50% and 75% below the closing price on March
31, 2008 of $.0003.




%
      BELOW MARKET
            PRICE
      PER SHARE
            WITH
      10% DISCOUNT
            NUMBER
      OF SHARES
            PERCENTAGE
      OF TOTAL*25%
            $0.0002
            $0.0002
            2,458,543,210
            90.64%50%
            $0.0002
            $0.0001
            3,687,814,815
            93.56%75%
            $0.0001
            $0.0001
            7,375,629,630
            96.67%





* Based
upon 253,885,261 shares of common stock issued as of March 31, 2008





The
number of shares issuable upon conversion of the debentures is determined by the
market price of our common stock prevailing at the time of each conversion. The
lower the market price, the greater the number of shares issuable under the
debentures. Upon issuance of the shares, to the extent that holders of
those  shares will attempt to sell the shares into the market, these
sales may further reduce the market price of our common stock. This in turn will
increase the number of shares issuable under the debentures. This may lead to an
escalation of lower market prices and an increasing number of shares to be
issued. A larger number of shares issuable at a discount to a continuously
declining stock price will expose our shareholders to greater dilution and a
reduction of the value of their investment.




The
Issuance of Our Stock Upon Conversion of The Debentures Could Encourage Short
Sales By Third Parties, Which Could Contribute To the Future Decline of Our
Stock Price and  Materially Dilute the Existing Stockholders Equity
and Voting Rights





The
debentures have the potential to cause significant downward pressure on the
price of our common stock. This is particularly the case if the shares being
placed into the market exceed the market's ability to absorb the increased
number of shares of stock. Such an event could place further downward pressure
on the price of our common stock, which presents an opportunity to short sellers
and others to contribute to the future decline of our stock price. If there are
significant short sales of our stock, the price decline that would result from
this activity will cause the share price to decline more so, which, in turn, may
cause long holders of the stock to sell their shares thereby contributing to
sales of stock in the market. If there is an imbalance on the sell side of the
market for the stock, our stock price will decline. If this occurs, the number
of shares of our common stock that is issuable upon conversion of the debentures
will increase, which will materially dilute existing stockholders' equity and
voting rights.





If
We are Required For Any Reason to Repay Our Outstanding Secured Convertible
Debentures We Would be Required to Deplete Our Working Capital , if Available,
or Raise Additional Funds, and Our Failure to Repay the Secured Convertible
Debentures, if Required, Could Result in Legal Action Against Us, Which Could
Require the Sale of Substantial Assets





13





On March
27, 2006, the Company entered into a securities purchase agreement with YA
Global L.P. providing for the sale by the Company to Cornell of our 12% secured
convertible debentures in the aggregate principal amount of $600,000 of which
$200,000 was advanced immediately. The second installment of $200,000 was
advanced on April 18, 2006. The last installment of $200,000 was advanced on
August 16, two (2) business days after the date the registration statement was
declared effective.




In
addition the Company received $75,000 in funds from outside sources and recorded
them as debentures.





The
Convertible Debentures mature on the third anniversary of the date of issuance
and the Company is not required to make any payments until the maturity date.
Holders of the Debentures may convert at any time amounts outstanding under the
debentures into shares of our common stock at a conversion price per share equal
to the lower of (i) $0.20 or (ii) ninety percent (90%) of the lowest closing Bid
Price of the Common Stock during the thirty (30) trading days immediately
preceding the conversion date as quoted by Bloomberg, LP. Cornell has agreed not
to short any of the shares of Common Stock. The Company has the right to redeem
a portion or all amounts outstanding under the debenture prior to the maturity
date at a 20% redemption premium provided that the closing bid price of our
common stock is less than $0.20.





These
debentures are due and payable, with interest, three years from their respective
dates of issuance, unless sooner converted into shares of our common stock. Any
event of default such as our failure to repay the principal or interest when
due, our failure to issue shares of common stock upon conversion by the holder,
or our failure to timely file a registration statement or have such registration
statement declared effective, could require the early repayment of the
convertible debentures. We anticipate that the full amount of the convertible
debentures will be converted into shares of our common stock, in accordance with
the terms of these debentures. If we were required to repay the convertible
debentures, we would be required to use our limited working capital and raise
additional funds. If we were unable to repay the debentures when required, the
holders could commence legal action against us and foreclose on all of our
assets to recover the amounts due. Any such action would require us to curtail
or cease operations.





The
Large Number of Shares Issuable Upon Conversion of the Secured Convertible
Debentures May Result in a Change of Control, Allowing __________to Exert
Substantial Influence Over All Company Matters




As there
is no limit on the number of shares that may be issued upon conversion of the
convertible debentures, these issuances may result in Cornell controlling us. It
may be able to exert substantial influence over all matters submitted to a vote
of the shareholders, including the election and removal of directors, amendments
to our articles of incorporation and by-laws, and the approval of a merger,
consolidation or sale of all or substantially all of our assets. In addition,
this concentration of ownership could inhibit the management of our business and
affairs and have the effect of delaying, deferring or preventing a change in
control or impeding a merger, consolidation, takeover or other business
combination which our shareholder, may view favorably.





The
Following Risk Relate Principally to Our Common Stock and Its Market
Value:





There
is a Limited Market for Our Common Stock





Our
common stock is quoted on the OTC Bulletin Board under the symbol "IVCM.OB."
There is a limited trading market for our common stock. Accordingly, there can
be no assurance as to the liquidity of any markets that may develop for our
common stock, the ability of holders of our common stock to sell our common
stock, or the prices at which holders may be able to sell our common
stock.




14


Our
Common Stock Price May Be Volatile





The
market price of our common stock is likely to be highly volatile and could
fluctuate widely in price in response to various factors, many of which are
beyond our control, including:





o
            technological
      innovations or new products and services by us or our
      competitors;o
            additions
      or departures of key personnel;


o
            sales
      of our common stock;o
            our
      ability to integrate operations, technology, products and
      services;


o
            our
      ability to execute our business plan;o
            operating
      results below expectations;


o
            loss
      of any strategic relationship;o
            industry
      developments;


o
            economic
      and other external factors; ando
            Period-to-period
      fluctuations in our financial
results.





Because
we have a limited operating history with limited revenues to date, you may
consider any one of these factors to be material. Our stock price may fluctuate
widely as a result of any of the above.





In
addition, the securities markets have from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. These market fluctuations may also materially and
adversely affect the market price of our common stock.




We
Have Not Paid Dividends In the Past and Do Not Expect to Pay Dividends in The
Future.





We have
never paid cash dividends on our common stock and do not anticipate paying cash
dividends in the foreseeable future. The payment of dividends on our common
stock will depend on earnings, financial condition and other business and
economic factors affecting it at such time as the board of directors may
consider relevant. If we do not pay dividends, our common stock may be less
valuable because a return on your investment will only occur if its stock price
appreciates.





Our
Common Stock is Deemed “Penny Stock”





Our
common stock is currently listed for trading on the OTC Bulletin Board which is
generally considered to be a less efficient market than markets such as NASDAQ
or other national exchanges, and which may cause difficulty in conducting trades
and difficulty in obtaining future financing. Further, our securities are
subject to the "penny stock rules" adopted pursuant to Section 15 (g) of the
Securities Exchange Act of 1934, as amended, or Exchange Act. The penny stock
rules apply to non-NASDAQ companies whose common stock trades at less than $5.00
per share or which have tangible net worth of less than $5,000,000 ($2,000,000
if the company has been operating for three or more years). Such rules require,
among other things, that brokers who trade "penny stock" to persons other than
"established customers" complete certain documentation, make suitability
inquiries of investors and provide investors with certain information concerning
trading in the security, including a risk disclosure document and quote
information under certain circumstances. Many brokers have decided not to trade
"penny stock" because of the requirements of the penny stock rules and, as a
result, the number of broker-dealers willing to act as market makers in such
securities is limited. In the event that we remain subject to the "penny stock
rules" for any significant period, there may develop an adverse impact on the
market, if any, for our securities. Because our securities are subject to the
"penny stock rules," investors will find it more difficult to dispose of our
securities. Further, for companies whose securities are traded in the OTC
Bulletin Board, it is more difficult: (i) to obtain accurate quotations, (ii) to
obtain coverage for significant news events because major wire services, such as
the Dow Jones News Service, generally do not publish press releases about such
companies, and (iii) to obtain needed capital.




15


Item
1B.Unresolved Staff
Comments





None





Item
2.Description of
Property





The
Company corporate, accounting and administrative offices are located at 1818
North Farwell Avenue, Milwaukee, WI, 53202.





Operating
facilities for our subsidiary, Futura, in Cabot, AR, are leased.




Item
3.Legal
Proceedings




The
Company is currently negotiating settlements with vendors and debt holders for
amounts currently outstanding. As of March 31, 2008, the Company has recognized
the full liability for all amounts that are due.




On
December 1, 2004, a judgment was entered against Internet Ventures, Inc., the
predecessor Company, in favor of Catherine and Joe Santistevan in the amount of
$1,367,500.  On September 30, 2006 a confidential Settlement Agreement
and Release was entered by and among Joe and Catherine Santistevan and IVI
Communications, Inc., successor in interest defendant Internet Ventures, Inc.,
to set aside the default judgment entered against Internet Ventures, Inc in the
amount of $1,367,500.  Under the terms of the agreement IVI
Communications will pay the Santistevans a total four hundred and fifty thousand
dollars ($450,000), to settle a claim of $1,367,500.  If IVI
Communications, Inc. defaults on the agreement a judgment would be entered by
stipulation in the amount of $1,367,500.  The balance on this
settlement at March 31, 2008 is $448,675.





On
October 7, 2005, a Complaint for Damages was filed in Superior Court of the
State of California, County of San Joaquin, Case No. CV027700, by Annette S.
Paoletti as Successor Trustee of the Clare P. Evelyn B. McEnerney Family
Trust.  No dollar amount was stated, but a note payable and accrued
interest in the amount of $263,403 was recorded in notes payable and interest on
notes payable.  On March 31, 2007 a confidential Settlement Agreement
was reached between Paoletti and The Company.  Under the terms of the
agreement IVI Communications, Inc. will pay the Paolettis a total of
$110,000.  If IVI Communications, Inc. defaults on the agreement a
judgment would be entered by stipulation in the amount of $143,000 minus any
amounts actually paid.  .  The balance on this settlement at
March 31, 2008 is $110,000.





The
Company has six default judgments against it for a total amount of
$146,504.  The amounts are recorded in other liabilities and
contingencies.





During
the fiscal year ending March 31, 2008, on advice of legal counsel, the Company
realized income in the amount of $215,730 for the forgiveness of debt for notes,
debentures and vendor payables.




Item
4.Submission of
Matters to a Vote of Security Holders





No matters were submitted to a vote of
our security holders during the fourth quarter of fiscal year 2008 ended March
31, 2008.




PART
II




Item
5.Market for Common
Equity and Related Stockholder Matters





Our
common stock has been quoted on the Pink Sheets under the symbol IVCMPK and
moved to the OTC Bulletin Board under the symbol "IVCM.OB" on September 8, 2005.
The following table shows the reported high and low closing bid quotations per
share for our common stock based on information provided by the OTC Bulletin
Board. Particularly since our common stock is traded infrequently, such
over-the-counter market quotations reflect inter-dealer prices, without markup,
markdown or commissions and may not necessarily represent actual transactions or
a liquid trading market.




16




Year
      Ended March 31, 2008
            High
            LowFirst
      Quarter ended June 30, 2007
            $0.0085
            $0.004Second
      Quarter ended September 30, 2007
            $0.0071
            $0.0031Third
      Quarter ended December 31, 2007
            $0.0049
            $0.001Fourth
      Quarter ended March 31, 2008
            $0.0025
            $0.0003





Year
      Ended March 31, 2007
            High
            LowFirst
      Quarter ended June 30, 2006
            $0.13
            $0.045Second
      Quarter ended September 30, 2006
            $0.055
            $0.035Third
      Quarter ended December 31, 2006
            $0.040
            $0.014Fourth
      Quarter ended March 31, 2007
            $0.038
            $0.0075




Stockholders





As of
March 31, 2008, we believe there were approximately 795 holders of record of our
common stock.





Dividends





We have
never declared or paid cash dividends on our common stock. We currently intend
to retain all available funds and any future earnings to fund the development
and growth of our business and do not anticipate declaring or paying any cash
dividends on our common stock in the foreseeable future.





Recent
Issuances of Securities without registering under the Securities
Act.




In the
fiscal year ending March 31, 2008, we issued the following:





On April
17, 20007 we issued 3,703,704 shares of unregistered common stock valued at
$20,000 for conversion on a debenture.





On April
25, 2007, we issued 3,703,704 shares of unregistered common stock valued at
$20,000 for conversion on a debenture.





On May 3,
2007, we issued 3,814,510 shares of unregistered common stock valued at $19,454
for conversion of accured payroll.





On June
6, 2007 we issued 5,807,848 shares of unregistered common stock valued at
$42,405 in settlement of a contingent liability.





On June
12 2007 we issued 2,361,111 shares of unregistered common stock valued at
$8,500.00 to YA Global for conversion on a debenture.





On August
10, 2007 we issued 1,000,000 shares of unregistered common stock valued at
$6,000 for consulting services.





On August
17, 2007 we issued 12,000,000 shares of stock valued at $48,000, 10,713,948 of
which were unregistered, for a conversion on a convertible note.





On August
30, 2007 we issued 1,000,000 shares of unregistered common stock valued at
$3,100 for consulting services.




17




During
the quarter ended Sepember 30, 2007, 2,574,312 shares of stock receivable were
returned to the Company and cancelled.





During
the quarter ended December 31, 2007, 12,052,815 shares valued ato $26,200 were
issued for conversion on a convertible note.





On March
5, 2008 we issued 7,500,000 shares of unregistered common stock valued at $3,375
to YA Global for conversion on a debenture





On March
13, 2008 we issued 7,800,000 shares of unregistered common stock valued at
$2,184 to YA Global for conversion on a debenture





On March
17, 2008 we issued 8,200,000 shares of unregistered common stock valued at
$2,296 to YA Global for conversion on a debenture





On March 20, 2008 we issued 8,600,000
shares of unregistered common stock valued at $2,408 to YA Global for conversion
on a debenture.





During
the quarter ended March 31, 2008 68,127,207 shares valued at $54,423 were issued
for a conversion on a convertible note.





Each of
the above issuances of common stock were exempt from registration pursuant to
Section 4(2) of the Securities Act of 1933.




Item
6.Selected
Financial Data.





Not
Applicable.





Item
7.Management’s
Discussion and Analysis or Plan of Operation





FORWARD
LOOKING STATEMENTS





Please
see page i of this Annual Report for “Information Regarding Forward Looking
Statements” appearing throughout this Annual Report.





OVERVIEW





We are an
ISP Management Company. We intend to acquire, consolidate and operate locally
branded ISPs offering state of the art dialup and nationally branded wireless
Internet access to residential and business customers. Management believes that
local ISPs are hampered in their ability to provide the highest quality services
and achieve profitability because they lack buying power. Through consolidation,
economies of scale are achieved and profit can be maximized. We intend to
deploy, market, and maintain a nationally branded fixed wireless broadband
solution with newly acquired ISPs in tier 3 markets.





We
currently operate one subsidiary, Futura, Inc.





On
February 6, 2006 we entered into a Purchase Agreement to acquire 100% of the
outstanding stock of Futura, Inc. from Francis and Lois Allen, the shareholders
of Futura, Inc. In consideration for the Futura stock, we paid to the Allens
$150,000 in cash (to be paid over a 10-month period) and $550,000 in shares of
the Company's restricted common stock (an aggregate of 2,813,299 shares
calculated as of the close of the transaction). Futura is an Internet Service
Provider that provides dialup and DSL broadband Internet access, and associated
services such as Email spam and virus filtering, VoIP telephony, "Kid Safe"
surfing (Parental Control), and web accelerator services, to communities
surrounding Little Rock Arkansas including Cabot, Carlisle, Clarendon, DeValls
Bluff, DeWitt, England, Hazen, Jacksonville, and Stuttgart.




18




The
Company expects operating losses and negative operating cash flows to continue
for at least the next twelve months, because of expected additional costs and
expenses related to brand development; marketing and other promotional
activities; strategic relationship development; and potential acquisitions of
related complementary businesses.





Liquidity and Capital
Resources





As of
March 31, 2008 the Company has an accumulated operating deficit of $27,438,741
and negative stockholders' equity of $3,678,220.





The
Company’s principal source of operating capital has been provided by the sale of
its stock and securities, corporate consulting services, and operations of its
wholly owned subsidiaries.




On March
27, 2006, the Company entered into a securities purchase agreement with YA
Global  providing for the sale by the Company to Cornell of our 12%
secured convertible debentures in the aggregate principal amount of $600,000 of
which $200,000 was advanced immediately. The second installment of $200,000 was
advanced on April 18, 2006 upon the filing of the SB2 Registration Statement.
The last installment of $200,000 was advanced August 21, 2006, two (2) business
days after the registration statement was declared effective.




The
Convertible Debentures mature on the third anniversary of the date of issuance
and the Company is not required to make any payments until the maturity date.
Holders of the Debentures may convert at any time amounts outstanding under the
debentures into shares of our common stock at a conversion price per share equal
to the lower of (i) $0.20 or (ii) ninety percent (90%) of the lowest closing Bid
Price of the Common Stock during the thirty (30) trading days immediately
preceding the conversion date as quoted by Bloomberg, LP. Cornell has agreed not
to short any of the shares of Common Stock. The Company has the right to redeem
a portion or all amounts outstanding under the debenture prior to the maturity
date at a 20% redemption premium provided that the closing bid price of our
common stock is less than $0.20.





A holder
of the Convertible Debenture may not convert or receive shares as payment of
interest to the extent such conversion or receipt of such interest payment would
result in the holder, together with any affiliate of the holder, beneficially
owning in excess of 4.99% of the then issued and outstanding shares of Common
Stock, including shares issuable upon conversion of, and payment of
interest.




On August
22, 2006, the debenture holder converted $5,000 of principal for 158,730 shares
of common stock; the conversion price was $.0315, 90% of the lowest closing bid
price of $.035 during the prior 30 days.





On
September 21, 2006, the debenture holder converted $10,000 of principal for
336,700 shares of common stock; the conversion price was $.0297, 90% of the
lowest closing bid price of  $.033 during the prior 30
days.





On
October 17, 2006, the debenture holder converted $10,000 of principal for
444,444 shares of common stock; the conversion price was $.0225, 90% of the
lowest closing bid price of $.025 during the prior 30 days.





On
November 9, 2006, the debenture holder converted $20,000 of principal for
1,388,889 shares of common stock; the conversion price was $.0144, 90% of the
lowest closing bid price of $.016 during the prior 30 days.




19




On
December 20, 2006, the debenture holder converted $20,000 of principal for
1,481,481 shares of common stock; the conversion price was $.0135, 90% of the
lowest closing bid price of $.015 during the prior 30 days.





On
January 23, 2007, the debenture holder converted $25,000 of principal for
2,314,815 shares of common stock; the conversion price was $.0108, 90% of the
lowest closing bid price of $.012 during the prior 30 days.





On
February 9, 2007, the debenture holder converted $20,000 of principal for
2,222,222 shares of common stock; the conversion price was $.009, 90% of the
lowest closing bid price of $.01 during the prior 30 days.





On March
1, 2007, the debenture holder converted $20,000 of principal for 2,222,222
shares of common stock; the conversion price was $.009, 90% of the lowest
closing bid price of $.01 during the prior 30 days.





On March
27, 2007, the debenture holder converted $20,000 of principal for 2,469,136
shares of common stock; the conversion price was $.0081, 90% of the lowest
closing bid price of $.009 during the prior 30 days.




A
beneficial interest charge of $47,205 was recognized on the conversions in the
year ending March 31, 2007.





On April
17, 2007, the debenture holder converted $20,000 of principal for 3,703,704
shares of common stock; the conversion price was $.0054, 90% of the lowest
closing bid price during the prior 30 days.





On April
25, 2007, the debenture holder converted $20,000 of principal for 3,703,704
shares of common stock; the conversion price was $.0054, 90% of the lowest
closing bid price during the prior 30 days.





On May 3,
2007, 3,814,510 shares were issued to convert accrued payroll valued at
$19,454.





On June
6, 2007, 5,807,848 shares were issued to convert contingent liability valued at
$42,405.





On June
12, 2007, the debenture holder converted $8,500 of principal for 2,361,111
shares of common stock; the conversion price was $.0036, 90% of the lowest
closing bid price during the prior 30 days.





On August
10, 2007, 1,000,000 shares valued at $6,000 were issued for
services.





On August
17, 2007 12,000,000 shares valued at $48,000 were issued for a conversion on a
convertible note.





On August
30, 2007, 1,000,000 shares valued at $3,100 were issued for
services.





During
the quarter ended September 30, 2007, 2,574,312 shares of stock receivable were
returned to the Company and cancelled.





During
the quarter ended December 31, 2007, 12,052,815 shares were issued to convert
$26,200 of a convertible note.





On March
5, 2008, the debenture holder converted $3,375 of principal for 7,500,000 shares
of common stock; the conversion price was $.00045, 90% of the lowest closing bid
price during the prior 30 days.





On March
13, 2008, the debenture holder converted $2,184 of principal for 7,800,000
shares of common stock; the conversion price was $.00028, 90% of the lowest
closing bid price during the prior 30 days.





On March
17, 2008, the debenture holder converted $2,296 of principal for 8,200,000
shares of common stock; the conversion price was $.00028, 90% of the lowest
closing bid price during the prior 30 days.




20


On March
20, 2008, the debenture holder converted $2,408 of principal for 8,600,000
shares of common stock; the conversion price was $.00028, 90% of the lowest
closing bid price during the prior 30 days.





During
the quarter ended March 31, 2008, 68,127,204 shares valued at $54,423 were
issued to convert a note.





A
beneficial interest charge of $73,017 was recognized on the conversions in the
year ending March 31, 2008.





The
Company also issued to Cornell five-year warrants to purchase 2,000,000 and
1,500,000 shares of Common Stock at prices of $0.30, and $0.40, respectively. If
at the time of exercise of the Warrants, the shares of Common Stock underlying
the Warrant are not subject to an effective registration statement under the
Securities Act of 1933, as amended (the "Act") or if an event of default under
the Convertible Debentures has occurred, which is not cured in any applicable
cure period, the holder of the Warrant, in lieu of making payment of the
Exercise Price in cash, may elect a cashless exercise in accordance with the
formula set forth in the Warrant. If, subject to the exceptions set forth in the
warrants, during the time that the Warrants are outstanding, the Company issues
or sells, or is deemed to have issued or sold, any shares of Common Stock for a
consideration per share less than a price equal to the then exercise price, then
the exercise price will be reduced to an amount equal to such consideration per
share. Upon each such adjustment, the number of shares of Common Stock issuable
upon exercise of the Warrants will be adjusted to the number of shares
determined by multiplying the exercise price in effect immediately prior to such
adjustment by the number of shares issuable upon exercise of the warrants
immediately prior to such adjustment and dividing the product by the exercise
price resulting from such adjustment. Similar adjustments will be made upon any
issuance or sale by us of options to purchase Common Stock or convertible
securities.




On August
8, 2006 the company issued stock at a market price of $.04.  This
increased the number of warrants from 3,500,000 to 30,000,000 at $.04 exercise
price.




On
December 19, 2006 the company issued stock at a market price of
$.0242.  This increased the number of warrants from 30,000,000 to
49,586,777 at $.0242 exercise price.




On
January 17, 2007, by Board Resolution, the exercise price on the warrants was
reduced to $.0085, resulting in an increase in the number of warrant shares to
141,176,471.




On
February 22, 2007, Cornell exercised 3,500,000 warrants at a price of $.0085 for
$29,750.  This reduced the number of warrants from 141,176,471 to
137,676,471.  Beneficial interest of $12,250 was
recognized.




On May 3,
2007 the company issued stock at a market price of $.0051.  This
increased the number of warrants from 137,676,471 to 229,460,784 at $.0051
exercise price.





On August
30, 2007 the company issued stock at a market price of $.0031.  This
increased the number of warrants from 229,460,784 to 377,500,000 at $.0031
exercise price.





On
December 3, 2007 the company issued stock at a market price of
$.0019.  This increased the number of warrants from 377,500,000 to
615,921,053 at $.0019 exercise price.





On
February 27, 2008  the company issued stock at a market price of
$.00076.  This increased the number of warrants from 615,921,053 to
1,539,802,632 at $.00076 exercise price.





In
connection with the Purchase Agreement, the Company also entered into a
registration rights agreement with Cornell providing for the registration of the
shares of common stock issuable upon conversion of the debentures and exercise
of the warrants. The Company is obligated to use its best efforts to cause the
registration statement to be declared effective no later than July 25, 2006 and
to insure that the registration statement remains in effect until all of the
shares of common stock issuable upon conversion of the debentures and exercise
of the warrants have been sold. In the event of a default of the Company’s
obligations under the registration rights agreement, including its agreement to
file the registration statement no later than May 11, 2006, or if the
registration statement is not declared effective by July 25, 2006, the Company
is required to pay to Cornell, as liquidated damages, for each month that the
registration statement has not been filed or declared effective, as the case may
be, either a cash amount or shares of its common stock equal to 2% of the
liquidated value of the Debentures.




21


The
registration statement was declared effective on August 14, 2006.





The
Company’s obligations under the purchase agreement are secured by substantially
all of its assets and the assets of its subsidiaries. As further security for
its obligations thereunder, Nyhl Henson, Former Chief Executive Officer, and
Charles Roodenburg, Chief Executive Officer, have granted a security
interest in an aggregate of 925,000 shares of their common stock and 3,300,000
shares of their Series A Preferred Stock. The Company also granted a security
interest in 15,000,000 shares of its stock, issued from treasury.





On July
14, 2006, the Company entered into an agreement with YA Global to cancel the
security interest in the 15,000,000 shares. These shares were subsequently
returned and cancelled.




In May
2006 the company borrowed $5,000 on a one year note due May 22,
2007.  This note carries no interest.  At March 31, 2008
this note remains unpaid.




The
Company sold a security for $12,500 to one entity in September
2006.  This debenture carries no interest and has a conversion rate of
50% discount to market of the ten day average closing bid price.  No
conversion or repayment of the debenture has occurred as of March 31,
2008.




The
Company sold a security for $12,500 to one entity in October
2006.  This debenture carries no interest and has a conversion rate of
50% discount to market of the ten day average closing bid price.  No
conversion or repayment of the debenture has occurred as of March 31,
2008.




In
December 2006 the company borrowed $4,000 on a one year note due December 22,
2007.  This note carries no interest.  At March 31, 2008
this note remains unpaid.




In
January 2007 the company borrowed $6,756 from Nyhl Henson, former President, on
a one year note due January 19, 2008.   This note carries no
interest and is convertible at the previous 10-day average closing
price.  No conversion or repayment of the debenture has occurred as of
March 31, 2008.




In
January 2007 the company borrowed $3,243 from Charles Roodenburg, President, on
a one year note due January 19, 2008.  This note carries no interest
and is convertible at the previous 10-day average closing price.  No
conversion or repayment of the debenture has occurred as of March 31,
2008.





In
February 2007 the company borrowed $20,000 from Nyhl Henson, President, on a
note due on demand.  The note carries no interest and is convertible
at the previous 10-day average closing price.  No conversion or
repayment of the debenture has occurred as of March 31, 2008.





In
February 2007 the company borrowed $25,000 from Nyhl Henson, President, on a
note due on demand.  The note carries no interest and is convertible
at the previous 10-day average closing price.  No conversion or
repayment of the debenture has occurred as of March 31, 2008.





The
Company anticipates expenditures for acquisitions in excess of $1,000,000 to
expand its operation during the next twelve months. The Company believes that
the current cash flows generated from its revenues will not be sufficient to
fund the anticipated expansion of operations. The Company will require
additional funding to finance its operations through private sales and public
debt or equity offerings. However, there is no assurance that the Company can
obtain such financing. Recurring revenues are anticipated from ISP management
services but no management service contracts have been executed at this time.
There can be no assurance that the Company will secure these
contracts.




22




Results of
Operations




Year
Ended March 31, 2008 Compared to Year Ended March 31, 2007




Effective
January 1, 2007, IBC and AppState.net were returned to the former owner which
was caused by the default of IVI Communications, Inc. on the original
acquisition contract.  The Results of Operations for the twelve months
ended March 31, 2007 included nine months IBC and AppState.net. Accordingly,
comparisons from 2008 to 2007 are not meaningful.  The numbers below
compare the consolidated results of operations March 31, 2008 and March 31,
2007, and also compare the results of existing operations, which are corporate
and the Futura subsidiary, for the same periods.




Revenue
for the year ending March 31, 2008 was $316,474 compared to $1,859,811 for the
year ending March 31, 2007.  Revenue for existing operations for the
year ending March 31, 2007 was $589,630, a reduction of $273,156 from March 31,
2007 to March 31, 2008.  There was a reduction in corporate consulting
of $86,810 and a reduction in service fees provided by Futura of
$186,346.




Cost of
operations for the year ending March 31, 2008 was $171,480 compared to
$1,200,215 for the year ending March 31, 2007.  Cost of operations for
existing operations for the year ending  March 31, 2007 was $295,093,
a reduction of $123,613 from March 31, 2007 to March 31, 2008.  The
reduction in cost of operations is a result of the reduction
of  dial-up subscribers at the Futura
subsidiary.




General
and administrative expenses for the year ending March 31, 2008 were $1,290,701
compared to $2,028,031 for the year ending March 31, 2007.  General
and administrative expenses for existing operations for the year ending March
31, 2007 were $1,577,253, a reduction of $546,552.  The largest
components of general and administrative for the year ending March 31, 2008,
were corporate and operations compensation of $361,626, a $245,813 reduction
from March 31, 2007, and consulting services of $602,431, a reduction of $64,983
from March 31, 2007. There were reductions in professional services of $68,911
and reductions of $60,540 in occupancy and other operating
expenses.   These reductions were offset by an expense of
$171,695 for bad debt associated with a settled receivable




There was
a loss on settlement of a contract for the year ending March 31, 2007 in the
amount of $553,643.  We have been unable to come to mutually
acceptable terms to cure the default by the Company on the terms of the Purchase
Agreement (“Agreement”) dated January 1, 2005 by and between IVI Communications,
Inc. (“Buyer”), Internet Business Consulting, Inc. (“IBC”) and AppState.Net, LLC
(“AppState”), jointly referred to as (“Sellers”).  Sellers have
exercised the remedies for default as provided in the Agreement and confirmed
that the Remedies, which were that foreclosure and repossession occurred
December 31, 2006, are in effect.  Pursuant to those remedies,
ownership of Sellers reverted to James Hollis, effective December 31,
2006.




Selling
expenses for year ending March 31, 2008 were $1,142 compared to $14,671 for the
year ending March 31, 2007.  Selling expenses for existing operations
for March 31, 2007 were $5,508, a reduction of $4,366 from March 31, 2007 to
March 31, 2008.  This is a result of the reduction of direct
advertising costs.




Depreciation
and amortization expense for the year ending March 31, 2008 was $204,678
compared to $186,026 for the year ending March 31, 2007.  Depreciation
for existing operations for March 31, 2007 was $17,369, which was an increase of
$11,203 from March 31, 2007 to March 31, 2008, and was the result of
depreciation on new wireless equipment at the Futura
subsidiary.  Amortization for existing operations for March 31, 2007
was $143,668, which was an increase of $32,438 from March 31, 2007 to March 31,
2008 and was amortization of the YA Global debentures.




23




Interest
expense for the year ending March 31, 2008 was $172,231 compared to $604,600 for
the year ending March 31, 2007.  Interest expense for existing
operations for March 31, 2007 was $598,351, which was a reduction of $426,119
from March 31, 2007 to March 31, 2008.    This was the
result of the reduction in debenture and notes payable principal
balances.




Other
income for the year ending March 31, 2008 was $35,026 compared to $1,035,742 for
the year ending March 31, 2007.  Other income for existing operations
for March 31, 2007 was $1,006,152, a reduction of $971,126 from March 31, 2007
to March 31, 2008.  For the year ending March 31, 2007 Other income
was realized from a $986,524 litigation settlement.




Forgiveness
of debt for the year ending March 31, 2008 was $215,730 compared to $1,657,853
for the year ending March 31, 2007, a reduction of $1,442,123.  This
debt included notes, debentures and vendor payables that were discharged on
advice of legal counsel.




The
Company had a loss  on the revaluation of derivatives of $234,247 for
the year ending March 31, 2008 compared to a gain of $390,794 for the year
ending March 31, 2007.  This move from a gain to a loss is a result of
the loss of value of the common stock of the company.




The
company had impairment of goodwill in the amount of $600,000 for the year ending
March 31, 2008.  . The Company recorded $674,934 in goodwill in its
acquisition of Futura, Inc. on February 6, 2006.  There was a 38%
reduction in revenue from March 31, 2007 to March 31, 2008, and the Company did
not impair the goodwill at March 31, 2007 due to the fact that it was launching
its fixed wireless system and anticipated increased revenue from that
brand.  Due to a lack of funding, Futura could install only the first
section of the system and there was no increase in revenue from the broadband
services while at the same time the dialup services were
decreasing.  The Company anticipates another 35%  reduction
in revenue for the coming fiscal year based on current revenue figures and
little possibility of funding to grow the broadband service.  There
has been a 104% increase in the liabilities due to the capital lease for the
equipment for the fixed wireless system and an increase in payables due to a
reduction in dialup customers with no corresponding reduction in cost of
services.  Based on these numbers, management has determined that the
goodwill in its acquisition of Futura should be impaired $600,000.




The
Company had miscellaneous other expenses of $123 for the year ending March 31,
2008 compared to $43,905 for the year ending March 31, 2007.




The
Company had interest income of $0 for the year ending March 31, 2008 compared to
$174 for the year ending March 31, 2007.




The
Company had a net loss for the year ending March 31, 2008 of $2,107,373 compared
to income of $313,283 for the year ending March 31, 2007.  The loss
per share was ($0.01) and $0.00 in the fiscal years ended March 31,2008 and 2007
respectively.  The Company expects the trend of losses to continue
through the next fiscal year.




Critical Accounting
Policies




Revenue
Recognition





The
Company recognizes revenues in accordance to Staff Accounting Bulletin No. 101,
"Revenue Recognition in Financial Statements."





Derivative
Instruments





The
Company has an outstanding convertible debt instrument that contains
free-standing and embedded derivative features.  The Company accounts
for these derivatives in accordance with SFAS No. 133, “Accounting for Derivative
Instruments and Hedging Activities”, and EITF Issue No. 00-19, “Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company’s Own
Stock”.  In accordance with the provisions of SFAS No. 133 and
EITF Issue No. 00-19, the embedded derivatives are required to be bifurcated
from the debt instrument and recorded as a liability of fair value on the
consolidated balance sheet.  Changes in the fair value of the
derivatives are recorded at each reporting period and recorded in net gain(loss)
on derivative, a separate component of the other income (expense).




24




New Accounting
Pronouncements





On
December 16, 2004, the Financial Accounting Standards Board (“FASB”) published
Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (“SFAS
123R”).  SFAS 123R requires that compensation cost related to
share-based payment transactions be recognized in the financial statements.
Share-based payment transactions within the scope of SFAS 123R include stock
options, restricted stock plans, performance-based awards, stock appreciation
rights, and employee share purchase plans.  The provisions of SFAS
123R, as amended, are effective for small business issuers beginning as of the
next fiscal year after December 15, 2005.  Accordingly, the Company
will implement the revised standard in the first quarter of fiscal year
2007.  Currently, the Company accounts for its share-based payment
transactions under the provisions of APB 25, which does not necessarily require
the recognition of compensation cost in the financial statements (note
3(e)).  The implementation of this standard did not have a material
impact on its financial position, results of operations or cash
flows.





In
November 2004, the FASB issued Financial Accounting Standards No. 151 (FAS 151),
“Inventory Costs – an
amendment of ARB No. 43, Chapter 4”.  FAS 151 clarifies the
accounting for abnormal amounts of idle facility expense, freight, handling
costs and spoilage.  In addition, FAS 151 requires companies to base
the allocation of fixed production overhead to the costs of conversion on the
normal capacity of production facilities.  FAS 151 is effective for
the Company in 2006.   FAS 151 did not have a material impact on its
results or financial statements.





On
December 16, 2004, the Financial Accounting Standards Board ("FASB") published
FAS No. 123 (Revised 2004), Share-Based Payment ("FAS 123R").  FAS
123R requires that compensation cost related to share-based payment transactions
be recognized in the financial statements.  Share-based payment
transactions within the scope of FAS 123R include stock options, restricted
stock plans, performance-based awards, stock appreciation rights, and employee
share purchase plans.  The provisions of FAS 123R are effective for
small business issuers as of the first interim period that begins after December
15, 2005.  The implementation of this standard did not have a material
impact on its financial position, results of operations or cash
flows.





On
December 16, 2004, FASB issued Financial Accounting Standards No. 153, Exchanges
of Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for
Non-monetary Transactions ("FAS 153").  This statement amends APB
Opinion 29 to eliminate the exception for non-monetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
non-monetary assets that do not have commercial substance.  Under FAS
153, if a non-monetary exchange of similar productive assets meets a
commercial-substance criterion and fair value is determinable, the transaction
must be accounted for at fair value resulting in recognition of any gain or
loss.  FAS153 is effective for non-monetary transactions in fiscal
periods that begin after June 15, 2005.  The implementation of this
standard did not have a material impact on its financial position, results of
operations or cash flows.




In March
2005, the FASB issued Statement of Financial Accounting Standards Interpretation
Number 47 (“FIN 47”), “Accounting for Conditional Asset Retirement
Obligations.”  FIN 47 provides clarification regarding the meaning of
the term “conditional asset retirement obligation” as used in FAS 143,
“Accounting for Asset Retirement Obligations.”  FIN 47 is effective
for the year ended December 31, 2005.  The implementation of this
standard did not have a material impact on its financial position, results of
operations or cash flows.




25




In May
2005, the FASB issued SFAS 154, “Accounting for Changes and Error Corrections—a
replacement of APB Opinion No. 20 and FASB Statement
No. 3.”  FAS 154 changes the requirements with regard to the
accounting for and reporting a change in an accounting principle.  The
provisions of FAS 154 require, unless impracticable, retrospective application
to prior periods presented in financial statements for all voluntary changes in
an accounting principle and changes required by the adoption of a new accounting
pronouncement in the unusual instance that the new pronouncement does not
indicate a specific transition method.  FAS 154 also requires that a
change in depreciation, amortization or depletion method for long-lived,
non-financial assets be accounted for as a change in an accounting estimate,
which requires prospective application of the new method.  FAS 154 is
effective for all changes in an accounting principle made in fiscal years
beginning after December 15, 2005.  The Company adopted FAS 154
beginning January 1, 2006.  Because SAS 154 is directly dependent upon
future events, the Company cannot determine what effect, if any, the expected
adoption of FAS 154 will have on its financial condition, results of operations
or cash flows.





In
February 2006, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (FAS) No. 155, Accounting for Certain
Hybrid Financial Instruments.  FAS No. 155 replaces FAS
No. 133 Accounting for Derivative Instruments and Hedging Activities, and
FAS No. 140 Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities.  FAS No. 155 resolves issues
addressed in Statement 133 Implementation Issue No. D1, “Application of
Statement 133 to Beneficial Interests in Securitized Financial Assets” This
statement will be effective for all financial instruments acquired or issued
after the beginning of an entity’s fiscal year that begins after
September 15, 2006. The adoption of FAS 155 did not have a material impact
on the Company's financial position, results of operations, or cash
flows.





In
September 2006, the FASB issued SFAS No. 157 “Fair Value
Measurements,” which provides a definition of fair value, establishes a
framework for measuring fair value and requires expanded disclosures about fair
value measurements. SFAS No. 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. The provisions of SFAS No. 157
should be applied prospectively. The Company is currently analyzing whether this
new standard will have impact on its financial position and results of
operations.




In
September 2006, the FASB issued SFAS No. 158 “Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans”, which amends
SFAS No. 87 “Employers’ Accounting for Pensions”
(SFAS No. 87), SFAS No. 88 “Employers’ Accounting for
Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits” (SFAS No. 88), SFAS No. 106
“Employers’ Accounting for Postretirement Benefits Other Than Pensions”
(SFAS No. 106), and SFAS No. 132R “Employers’ Disclosures
about Pensions and Other Postretirement Benefits (revised 2003)”
(SFAS No. 132R). This Statement requires companies to recognize an
asset or liability for the overfunded or underfunded status of their benefit
plans in their financial statements. SFAS No. 158 also requires the
measurement date for plan assets and liabilities to coincide with the sponsor’s
year end. The standard provides two transition alternatives related to the
change in measurement date provisions. The recognition of an asset and liability
related to the funded status provision is effective for fiscal year ending after
December 15, 2006 and the change in measurement date provisions is
effective for fiscal years ending after December 15, 2008 The
implementation of this standard did not have a material impact on its financial
position, results of operations or cash flows.




Inflation





In our
opinion, inflation has not had a material effect on our operations.




Item
8.Financial
Statements and Supplementary Data.





Our
consolidated financial statements, together with the independent registered
public accounting firm's report of  Baggell, Josephs, Levine and
Company, LLC, begin on page F-1, immediately after the signature
page.




26


Item
9.Changes in and
Disagreements With Accountants on Accounting and Financial
Disclosure.





None.





Item
9A.Controls and
Procedures.





Evaluation
of Disclosure Controls and Procedures.




The
Company maintains controls and procedures designed to ensure that information
required to be disclosed in this report is recorded, processed, accumulated and
communicated to our management, including our chief executive officer and our
chief financial officer, to allow timely decisions regarding the required
disclosure.




The
management of the Company has evaluated the effectiveness of the issuer’s
disclosure controls and procedures as of the end of the period of the report
(evaluation date) and have concluded that the disclosure controls internal
controls and procedures are adequate and effective based upon their evaluation
as of the evaluation date.




There
were no changes in the  business issuer’s internal controls over
financial reporting identified in connection with the company evaluation
required by paragraph (3) of Rule 13a-15 or Rule 15d-15 under the Exchange Act
that occurred during the small business issuer’s fiscal year that has materially
affected or is reasonably likely to materially affect the small business
issuer’s internal control over financial reporting.




Our Board
of Directors were advised by Bagell, Josephs, Levine and Company, LLC, our
independent registered public accounting firm, that during their assessment of
our internal controls as part of their audit for the year ended March 31, 2008,
they have identified a material weakness as defined in Public Accounting
Oversight Board Standard No. 2 in our internal control over financial reporting.
Our auditors have identified the following material weaknesses in our internal
controls as of March 31, 2008:




A
material weakness in the Company’s internal controls exists in that there is
limited segregation of duties amongst the Company’s employees with respect to
the Company’s preparation and review of the Company’s financial statements. This
material weakness is a result of the Company’s limited number of employees. This
material weakness may affect management’s ability to effectively review and
analyze elements of the financial statement closing process and prepare
financial statements in accordance with U.S. GAAP.




Subsequent
to the notification from our independent registered public accounting firm, our
chief executive officer evaluated our internal controls and concurred that our
disclosure controls and procedures have not been effective to ensure that
information required to be included in our periodic SEC filings is recorded,
processed, summarized, and reported within the time periods specified in the SEC
rules and forms. However, at this time, our resources and size prevent us from
being able to employ sufficient resources to enable us to have adequate
segregation of duties within our internal control system. The Company intends to
remedy the material weakness by hiring additional employees and reallocating
duties, including responsibilities for financial reporting, among the Company’s
employees as soon as the Company has the financial resources to do so.
Management is required to apply judgment in evaluating the cost-benefit
relationship of possible changes in our disclosure controls and
procedures.




27




Other
than the material weakness indicated above, no accounting errors or
misstatements have been identified by our disclosure controls and procedures or
by our independent registered public accounting firm that would have a material
effect on our Financial Statements.




Changes
in internal controls





There
were no changes in the small business issuer’s internal controls over financial
reporting identified in connection with the company evaluation required by
paragraph (3) of Rule 13a-15 or Rule 15d-15 under the Exchange Act that occurred
during the small business issuer’s fiscal year that has materially affected or
is reasonably likely to materially affect the small business issuer’s internal
control over financial reporting





Item
9B.Other
Information





Changes
in Control of Registrant





On June
17, 2008, Titan Global Holdings entered into separate stock purchase agreements
with Mr. Charles J. Roodenburg Chief Executive Officer, President and Chairman
of the Board of Directors of IVI Communications, Inc., Mr. Nyhl Henson and Mr.
Robin Tjon.   Pursuant to these stock
purchase  agreements, Titan Global Holdings acquired 4,000,000 shares
of series A preferred stock of the Company, $.001 par value per share and
1,000,000 shares of series B preferred stock of the Company, $.001 par value per
share, for a total purchase price of Thirty Dollars
($30.00).   As a result of these transactions, Titan Global
Holdings owns 100% of the Series A Shares issued and outstanding and 100% of the
Series B Shares issued and outstanding.   Furthermore as a result
of these transactions and the voting preferences underlying the acquired
Preferred Shares, as detailed below, the Purchaser owns 4,000,000 issued and
outstanding voting shares underlying the Series A Shares and 51% of the vote
required to approve any action of the Company under the Series B Shares, and may
be deemed in control of the Company.





For a
more detailed description of the Change of Control of Registrant please see the
Company’s filing on Form  8-K filed with the SEC on June 23,
2008.




Change
of Management




On June
17, 2008, Charles Roodenburg, resigned as an officer and a director the Company,
effective immediately.  Mr. Roodenburg had served as the President and
Chief Executive Officer of the Company as well as Chairman of the Board of
Directors.




On June
17, 2008, the Company appointed Kurt Jensen to serve as the President and
Secretary of the Company and David Marks and Bryan Chance to serve as directors
of the Company.





For a
more detailed description of the Change of Management please see the Company’s
filing on Form


8-K filed
with the SEC on June 23,2008.





Entry
into a Material Definitive Agreement





On June
25, 2008  the Company entered into a Loan and Security Agreement by
and between the Company and Titan Global Holdings, Inc., a Utah corporation,
pursuant to which Titan Global Holdings will provide funds of up to One Hundred
Thousand dollars ($100,000) from time to time upon the written request of the
Company to Titan Global Holdings.  The lending of any such funds shall
be in the sole discretion of Titan Global Holdings and shall be dependent among
other thing on receipt of the following, all of which shall be to the
satisfaction of Titan Global Holdings:  detailed use of proceeds,
budget, timelines for application of proceeds and milestone
requirements.





For a
more detailed description of the Change of Management please see the Company’s
filing on Form -K filed
with the SEC on June 30, 2008.





28





PART
III





Item
10.Directors,
Executive Officers, and Corporate Governance.




Name
            Age
            PositionKurt
      Jensen
            43
            President
      and Chief Executive OfficerDavid
      Marks
            40
            DirectorBryan
      Chance
            38
            Director





On June
17, 2008, Charles Roodenburg, resigned as an officer and a director the Company,
effective immediately.  Mr. Roodenburg had served as the President and
Chief Executive Officer of the Company as well as Chairman of the Board of
Directors.





On June
17, 2008, the Company appointed Kurt Jensen to serve as the President and
Secretary of the Company and David Marks and Bryan Chance to serve as directors
of the Terms of Directors.





The
Director’s terms expire at the next annual shareholder’s meeting following their
election ..





Business
Experience of the Directors and Executive Officers




Kurt
Jensen


Mr.
Jensen currently serves as the Chief Executive Officer, Communications Division
and as a director of Titan Global Holdings, Inc.On April 10,
2006, Mr. Jensen was appointed to serve as Chief Executive Officer of Oblio
Telecom, Inc.  As an early entrepreneur of the Internet boom, Mr.
Jensen started and operated an Internet Service Provider, selling to and growing
the successor through organic and acquisition into the second largest ISP in the
upper Midwest.  Prior to joining Oblio Telecom, Mr. Jensen acted as an
independent consultant to Crivello Group, LLC and played a critical role in the
acquisition of Oblio Telecom by Titan Global Holdings.  Mr. Jensen
holds a Bachelor of Arts degree from the University of Northern
Iowa.





David
M. Marks


Mr. Marks
has been Chairman of Titan Global Holdings, Inc., a publicly traded diversified
holding company, since May 2005.  He was also Titan’s Chairman from
September 15, 2002 to May 13, 2003 and from May 2003 until May 2005, Mr. Marks
remained as one of its Directors. Mr. Marks has been a member of the Board of
Directors of Tech Laboratories, Inc. since February 22, 2007. Mr. Marks has been
a director of Etotalsource, Inc. since March 2007.  He has been a
director of IVI Communications, Inc. since June 2008.  In addition,
from November 2004 until November 2006, Mr. Marks served as the Chairman of the
Board of Directors of Osiris Corporation, a manufacturer and distributor of skid
steer loaders and pneumatic and hydraulic components and systems. Mr. Marks has
served as Trustee of Irrevocable Children's Trust and Irrevocable Children's
Trust No. 2 since 1994. Irrevocable Children's Trust and Irrevocable Children's
Trust No. 2 currently have an ownership or investment interest in commercial
properties, private residences, natural resources, telecommunications, and
technology companies, and other business and investment ventures. Mr. Marks has
the responsibility in overseeing all investments by Irrevocable Children's Trust
and Irrevocable Children's Trust No. 2 with responsibilities beginning at
acquisition and continuing through ownership. Mr. Marks generally acts in the
capacity of officer or director for all of the operating companies that are
vehicles for investments by the Trusts and is involved in strategic planning,
and major decision-making. Mr. Marks is also a managing member of Farwell Equity
Partners. Mr. Marks holds a BS in Economics from the University of
Wisconsin.




29


Bryan
Chance


Since
August 18, 2006, Mr. Chance was appointed to serve as President and Chief
Executive Officer of Titan Global Holdings, Inc.  From January 24,
2006 to August 18, 2006,  Mr. Chance has served as the Chief Financial
Officer of Titan Global Holdings, Inc. Prior to joining Titan Global Holdings,
Inc, Mr. Chance was the Chairman and Chief Executive Officer of Sigma Global
Corporation and its predecessor company Sigma RX since its inception in 2002.
Prior to founding Sigma RX, Mr. Chance served from 2000 to 2002 as Chief
Financial Officer for Aslung Pharmaceutical, a privately held generic
pharmaceutical manufacturing company specializing in inhalation medications for
the respiratory marketplace. Mr. Chance has also held financial and mergers and
acquisition leadership positions in companies such as Caresouth, Nursefinders,
Home Health Corporation of America, the Baylor Healthcare System, Columbia/HCA
and Price Waterhouse, LLP. Mr. Chance received his Bachelor’s degree from the
University of Tennessee in 1992





Family
Relationships





There are
no family relationships among directors or executive officers.





Involvement in Certain Legal
Proceedings





The
Company is not aware of any material legal proceedings that have occurred within
the past five years concerning any director, director nominee, promoter or
control person which involved a criminal conviction, a pending criminal
proceeding, a pending or concluded administrative or civil proceeding limiting
one’s participation in the securities or banking industries, or a finding of
securities or commodities law violations.  Moreover, no bankruptcy
petition has been filed by or against any business of which a director, director
nominee, promoter or control person was a general partner or executive officer
either at the time of such bankruptcy or within two years prior to that
time.




Item
11.Executive
Compensation





The
following table sets forth the compensation paid by the Company to its Chief
Executive Officer and Directors for services in all capacities to the
Company.





SUMMARY
      COMPENSATION TABLE(a)
            (b)
            
            (
      c)
            (d)
            (e)
            (j)Name
      and
            
            
            
            
            Stockprincipal
            
            
            Salary
            Bonus
            Awards
            Totalposition
            Year
            
            ($)
            ($)
            ($)
            ($)Nyhl
      Henson-CEO/Chairman
            3/31/2008
            (1)
            None
            None
            None
            None3/31/2007
            (2)
            240,000
            None
            None
            240,000Charles
      Roodenburg-CFO/Director
            3/31/2008
            (3)
            None
            None
            None
            None3/31/2007
            (4)
            84,000
            None
            1,000
            85,000Bryan
      Chance- Director
            3/31/2008
            (5)
            N/A
            N/A
            N/A
            N/AKurt
      Jensen- President/Secretary
            3/31/2008
            (6)
            N/A
            N/A
            N/A
            N/ADavid
      Marks-Director
            3/31/2008
            (7)
            N/A
            N/A
            N/A
            N/A




(1)
      On April 1, 2007, Nhyl Henson resigned as officer and a director of the
      Company.(2)
      In fiscal 2007 Nyhl Henson received $50,070 cash salary and $189,930
      accrued salary.(3)
      On June 17, 2008, Charles Roodenburg  resigned as an officer and
      a director the Company(4)
      In fiscal 2007 Charles Roodenburg received $46,552 cash salary, $37,448
      accrued salary and 1,000,000 shares of the Company's preferred series B
      stock valued at $1,000.(5)
      On June 17, 2008, the Company appointed Bryan Chance to serve as director
      of the Company.(6)
      On June 17, 2008, the Company appointed Kurt Jensen to serve as the
      President and Secretary of the Company.(7)
      On June 17, 2008, the Company appointed David Marks to serve as director
      of the Company




30


Item 12.Security Ownership
of Certain Beneficial Owners and Management




The following
table identifies, as of June 27, 2008 the number and percentage of outstanding
shares of Common Stock and Preferred Stock owned by (i) each person known to the
Company who owns more than five percent of the outstanding Common Stock, (ii)
each named executive officer and director, and (iii) and all executive officers
and directors of the Company as a group.  Except as otherwise
indicated, all persons listed below have (i) sole voting power and investment
power with respect to their shares of Common Stock, except to the extent that
authority is shared by spouses under applicable law, and (ii) record and
beneficial ownership with respect to their shares of Common
Stock.




Name
      of Beneficial Owner
            
            Common
      Stock
              Beneficially
              Owned
      (1)
            
            
            Percentage
      of
              Common
      Stock
            
            
            Series
      A
              Preferred
      Stock
              Beneficially
              Owned
            
            
            Percentage
      of
              Series
      A
              Preferred
      Stock
            
            
            Series
      B
              Preferred
      Stock
              Beneficially
              Owned
            
            
            Percentage
      of
              Series
      B
              Preferred
      Stock
            
            
            Percentage
      of
              Total
      Vote
              Stock
      (1)Titan Global Holdings,
      Inc. (3)
              1700
      Jay Ell Drive
              Suite
      200
              Richardson,
      TX 75081
            
            
            0
            
            
            
            0
            %
            
            
            4,000,000
            
            
            
            100
            %
            
            
            1,000,000
            
            
            
            100
            %
            
            
            61.0
            %IVI
      Shareholder Trust
              555
      H St. Suite H
              Eureka,
      CA 95501
            
            
            25,770,514
            
            
            
            23.26
            %
            
            
            0
            
            
            
            0
            %
            
            
            0
            
            
            
            0
            
            
            
            23.26
            %Big
      Apple Consulting USA, Inc.
              280
      Wekiva Springs Road
              Longwood,
      FL 32779
            
            
            14,764,413
            
            
            
            13.33
            %
            
            
            0
            
            
            
            0
            %
            
            
            0
            
            
            
            0
            %
            
            
            13.33
            %Kurt
Jensen,
              President
      and Chief Executive Officer
              1700
      Jay Ell Drive
              Suite
      200
              Richardson,
      TX 75081
            
            
            0
            
            
            
            0
            %
            
            
            0
            
            
            
            0
            %
            
            
            0
            
            
            
            0
            %
            
            
            0
            %David M.
      Marks,
              Director
              1700
      Jay Ell Drive
              Suite
      200
              Richardson,
      TX 75081
            
            
            0
            
            
            
            0
            %
            
            
            0
            
            
            
            0
            %
            
            
            0
            
            
            
            0
            %
            
            
            0
            %Bryan
      Chance,  Director
              1700
      Jay Ell Drive
              Suite
      200
              Richardson,
      TX 75081
            
            
            0
            
            
            
            0
            %
            
            
            0
            
            
            
            0
            %
            
            
            0
            
            
            
            0
            %
            
            
            0
            %TOTAL




(1)
"Beneficial Ownership" means having or sharing, directly or indirectly (i)
voting power, which includes the power to vote or to direct the voting, or (ii)
investment power, which includes the power to dispose or to direct the
disposition, of shares of the Common Stock of an issuer.  The definition of
beneficial ownership includes shares underlying options or warrants to purchase
Common Stock, or other securities convertible into Common Stock, that currently
are exercisable or convertible or that will become exercisable or convertible
within 60 days.  Unless otherwise indicated, the beneficial owner has sole
voting and investment power.





(2) Based
on 399,999,991 shares of Common Stock outstanding as of June 27,
2008.




(3) Titan
Global Holdings, Inc. acquired these shares on June 17, 2008. For more
information on that transaction and the rights and preferences of the Series A
& Series B Preferred Stock please see the Form 8-K filed by IVI
Communications, Inc. on June 23, 2008.





Item 13.Certain
Relationships and Related Transactions




There are
no related transactions or relationships.





Item
14.Principal
Accountant Fees and Services





During
the years ending March 31, 2008 and March 31, 2007, Bagell Josephs, Levine &
Company, LLC billed the Company as follows:





Audit/Review
            Acquisition
            Tax
            OtherYear
            Fees
            Audits
            Fees
            Fees
            Total2008
            $33,000
            $0
            $2,958
            $0
            $35,9582007
            $30,000
            $0
            $6,406
            $25,816
            $62,222





31





PART
IV





Item
15.Exhibits and
Financial Statement Schedules.




The
      following documents are filed as a part of this report or incorporated
      herein by reference:




(1)
            Our
      Consolidated Financial Statements are listed on page F-1 of this Annual
      Report.(2)
            Financial
      Statement Schedules:




None




(3)
            Exhibits:




The
following documents are included as exhibits to this Annual Report:




EXHIBIT
              NUMBER
            TITLE
      OF EXHIBIT





2.10
            Agreement
      and Plan of Reorganization(2)2.20
            Certificate
      of Amendment to Articles of
Incorporation(2)


2.30
            Certificate
      of Amendment to Articles of Incorporation increasing authorized shares of
      common stock (6)2.40
            Business
      Purchase Agreement Between IVI Communications, Inc., Internet Business
      Consulting, Inc.and AppState.Net,
Llc.(9)


2.50
            Purchase
      Agreement between IVI Communications, Inc. and Francis and Lois Allen
      (11)2.60
            Purchase
      Default Seller Exercising Remedies dated February 1,
      2007 (18)


3.10
            Articles
      of Incorporation(2)3.20
            Bylaws
      (2)


3.30
            Certificate
      of Designation, Powers, Preferences and Rights of Series A Preferred
      Stock, filed with the State of Nevada on March 20, 2006
    (12)3.40
            Certificate
      of Designation, Powers, Preferences and Rights of Series B Preferred
      Stock, filed with the State of Nevada on March 12, 2007
    (17)


4.10
            2005
      Employee Stock Compensation Plan (3)4.20
            Amended
      2005 Employee Stock Compensation Plan
(7)


4.30
            Convertible
      Debenture dated March 27, 2006 (13)4.40
            Warrant
      CCP-001 dated March 27, 2006 (13)


4.50
            Warrant
      CCP-002 dated March 27, 2006 (13)


9.00
            Voting
      Trust Agreement(2)10.10
            Employment
      Agreement for Nyhl Henson dated May 1,
2001(2)


10.2
      A & B
            Sale
      Agreements for California ISPs(2)10.30
            Sale
      Agreement for Oregon ISPs (2)


10.40
            Purchase
      Agreement for Quik Communications (2)10.50
            Sale
      Agreement for Colorado ISPs(2)


10.6
      A B & C
            Settlement
      Agreements with Quik Communications (1)10.70
            Stock
      Exchange Agreement IVIC and Broadspot World Wide Wireless
    (5)


10.80
            Consulting
      Contract with Keith Jablon dated July 1, 2004 (6)10.90
            Consulting
      Contract with Big Apple Consulting USA, Inc. dated July 6, 2004
      (6)


10.10
            Advisory
      Agreement with Hunter Wise, LLC dated August 17, 200410.11
            Agreement
      with The Research Works dated August 31,
2004


10.12
            Stock
      Purchase Agreement between IVIC and Seaside Investments PLC dated August
      16, 2004 (8)10.13
            Consulting
      Contract between IVIC and James Farinella dated August 15, 2005
      (10)


10.14
            Consulting
      Contract between IVIC and 729759 Alberta Ltd. dated September 19, 2005
      (10)10.15
            Channel
      Partner Agreement between IVIC and TeleMedium Corporation dated October
      11, 2005 (10)


10.18
              Securities
      Purchase Agreement, dated March 27, 2006.(13)10.19
              Investor
      Registration Rights Agreement dated March 27, 2006
  (13)
 10.20
              Pledge
      and Escrow Agreement (Issuer) dated March 27, 2006(13)10.21
              Pledge
      and Escrow Agreement (Insider) dated March 27, 2006
  (13)
 10.22
              Pledge
      and Escrow Agreement (Insider) dated March 27, 2006(13)10.23
              Security
      Agreement dated March 27, 2006
(13)




32




10.24
            Subsidiary
      Security Agreement dated March 27, 2006 (13)10.25
            Subsidiary
      Security Agreement dated March 27, 2006
(13)


10.26
            Subsidiary
      Security Agreement dated March 27, 2006 (13)10.27
            Irrevocable
      Transfer Agent Instructions (13)


10.28
            Pledge
      and Escrow Agreement Termination dated July 13, 2006
  (15)10.29
            Consulting
      Contract between IVIC and Big Apple Consulting USA, Inc.
    (16)10.30
            Form
      of Stock Purchase Agreement entered into by and between Titan Global
      Holdings, Inc. and Charles Roodenburg (19)10.31
            Form
      of Stock Purchase Agreement entered into by and between Titan Global
      Holdings, Inc. and Nyhl Henson (19)10.32
            Form
      of Stock Purchase Agreement entered into by and between Titan Global
      Holdings, Inc. and Robin Tjon (19)10.33
            Form
      of Loan and Security Agreement entered into by and between IVI
      Communications, Inc. and Titan Global Holdings, Inc.
  (20)


14.00
            Code
      of Ethics (2)16.10
            Malone
      & Bailey, PLLC letter on change in
  accountants(4)


21.00
            Subsidiaries
      of IVI Communications, Inc. (14)23.10
            Consent
      of Sichenzia Ross Friedman Ference LLP
(14)


23.20
            Consent
      of Bagel, Josephs & Company, LLC
(14)





(1)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 10QSB/A filed on
      March 8, 2004, File No 00032797(2)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 10KSB/A filed on
      March 8, 2004, File No 000-32797


(3)
            Incorporated
      by reference to the exhibits filed in the Company’s Form S-8 on June 29,
      2004, File No 333-116954(4)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on July
      7, 2004, File No 000-32797


(5)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 10KSB filed on
      July 14, 2004, File No 000-32797(6)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 10QSB filed on
      August 16, 2004, File No 000-32797


(7)
            Incorporated
      by reference to the exhibits filed in the Company’s Form S-8 on November
      11, 2004, File No 333-120231(8)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 10QSB filed on
      November 15, 2004, File No
000-32797


(9)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on
      February 4, 2005,File No 000-32797(10)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 10QSB filed on
      November 21, 2005, File No
000-32797


(11)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on
      February 21, 2006, File No 000-32797(12)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on
      March 24, 2006, File No 000-32797


(13)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on
      March 31, 2006, File No 000-32797(14)
            Incorporated
      by reference to the exhibits filed in the Company’s Form SB-2 filed on
      April 19, 2006, file No. 333-133409


(15)
            Incorporated
      by reference to the exhibits filed in the Company’s Form SB-2 filed on
      July 25, 2006, 2006, file No. 333-133409(16)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on
      September 15, 2006, File No
000-32797


(17)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on
      March 14, 2007, File No 000-32797(18)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on May
      31, 2007, File No 000-32797(19)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on June
      23, 2008, File No 000-32797(20)
            Incorporated
      by reference to the exhibits filed in the Company’s Form 8-K filed on June
      30, 2008, File No 000-32797




33




SIGNATURES




Pursuant to
the requirements of section 13 or 15 (d) of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.




Date: 
      July 30, 2008
            By:
            /s/ Kurt
    JensenKurt
      Jensen
              Chief
      Executive Officer and Interim Principal AccountingOfficer
              and
      Interim Principal Financial Officer




In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated




SIGNATURE
            
            TITLE
            
            DATE/s/ Kurt
      Jensen
              Kurt Jensen
            
            President,
      Chief Executive Officer and Interim Principal Accounting Officer and
      Interim Principal Financial Officer
            
            July
      30, 2008/s/ David
      Marks
              David
      Marks
            
            Director
            
            July
      30, 2008/s/ Bryan
      Chance
              Bryan
      Chance
            
            Director
            
            July
      30, 2008







35




INDEX
 
  Page(s)Report of
      Independent Registered Public Accounting Firm
              F-2Consolidated Balance
      Sheets as of March 31, 2008 and 2007
              F-3Consolidated
      Statements of Operations for the YearsEnded
      March 31, 2008 and 2007
              F-4Consolidated
      Statement of Changes in Stockholders’ Deficit
      for the Years Ended March 31, 2008 and
      2007
              F-5Consolidated
      Statements of Cash Flow for the Years EndedMarch
      31, 2008 and 2007
              F-6 -
      F-7Notes to
      Consolidated Financial Statements
              F-8 -
      F-31
  
 F-1
 BAGELL,
JOSEPHS, LEVINE & COMPANY, L.L.C.
 Certified
Public Accountants
 406
Lippincott Drive, Suite J
 Marlton,
New Jersey 08053
 (856)
346-2828   Fax (856) 346-2882
 
 
 REPORT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 Board of
Directors
 IVI
Communications, Inc
 
 We have
audited the accompanying consolidated balance sheets of IVI Communications,
Inc., (the “Company”) as of March 31, 2008 and 2007 and the related statements
of operations, changes in stockholders’ deficit and cash flows for the each of
the years in the two-year period ended March 31, 2008.  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 audits.
 
 We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audits to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  The
Company is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting.  Our audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s
internal control over financial reporting.  Accordingly, we express no
such opinion.  An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of IVI Communications, Inc., as
of March 31, 2008 and 2007, and the results of its operations and its cash flows
for the each of the years in the two-year period ended March 31, 2008 in
conformity with accounting principles generally accepted in the United States of
America.
 
 The
accompanying consolidated financial statements have been prepared assuming
the Company will continue as a going concern.  As discussed in Note 9
to the financial statements, the Company has sustained recurring net operating
losses for the year ended March 31, 2008 and has substantial accumulated
deficit. Unless the Company is successful in generating new sources of revenue,
or obtaining debt or equity financing, or restructuring its business, the
Company will deplete its working capital during 2008.  These matters
raise substantial doubt about the Company’s ability to continue as a going
concern.  Management’s plan in regard to these matters is also
described in Note 9.  The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 BAGELL,
JOSEPHS, LEVINE & COMPANY, L.L.C.
 Bagell,
Josephs, Levine & Company, L.L.C.
 Marlton,
New Jersey
 
 July 28,
2008
  
 F-2
 
 IVI COMMUNICATIONS, INC. AND
      SUBSIDIARIESCONSOLIDATED
      BALANCE SHEETSMARCH
      31,ASSETS2008
              
              
              2007CURRENT
      ASSETSCash
      and cash equivalents
              
              $
              3,019
              
              
              $
              4,827Accounts
      receivable
              
              
              32,877
              
              
              
              246,210Other
      current assets
              
              
              6,207
              
              
              
              6,449Total
      current asset
              
              
              42,103
              
              
              
              257,486Fixed
      assets, net of $46,830 and 19,147 accumulated depreciation
              
              
              45,452
              
              
              
              20,741OTHER
      ASSETSGoodwill,
      net of impairment
              
              
              74,934
              
              
              
              674,934TOTAL
      ASSETS
              
              $
              162,489
              
              
              $
              953,161LIABILITIES
      AND STOCKHOLDERS' DEFICITCURRENT
      LIABILITIESCurrent
      portion of notes payable
              
              $
              23,259
              
              
              $
              186,489Current
      portion of obligations under capital lease
              
              
              16,628
              
              
              
              -Accounts
      payable and accrued liabilities
              
              
              2,487,680
              
              
              
              1,798,145Litigation
      settlement
              
              
              -
              
              
              
              448,675Deferred
      revenue
              
              
              1,679
              
              
              
              2,522Liability
      for stock payable
              
              
              398,949
              
              
              
              138,949Derivative
      liability
              
              
              379,807
              
              
              
              164,077Convertible
      debentures, net of discount $136,109 and 312,215
              
              
              514,628
              
              
              
              445,285Total
      current liabilities
              
              
              3,822,629
              
              
              
              3,184,142LONG-TERM
      LIABILITIESObligations
      under capital lease, net of current portion
              
              
              18,079
              
              
              
              -TOTAL
      LIABILITIES
              
              
              3,840,708
              
              
              
              3,184,142COMMITMENTS
      AND CONTINGENCIESSTOCKHOLDERS'
      DEFICITPreferred
      stock, $.001 par value; 5,000,000 shares authorized;4,000,000  issued
      and outstanding series A
              
              
              4,000
              
              
              
              4,0001,000,000  issued
      and outstanding series B
              
              
              1,000
              
              
              
              1,000Common
      stock, $.001 par value; 400,000,000  shares
      authorized;253,885,261
      and 110,788,677 issued and outstanding
              
              
              253,884
              
              
              
              110,787Prepaid
      consulting fees
              
              
              -
              
              
              
              (333,331
              )Additional
      paid-in capital
              
              
              23,308,882
              
              
              
              25,699,488Additional
      paid-in capital - warrants
              
              
              192,755
              
              
              
              192,755Stock
      receivable
              
              
              -
              
              
              
              (2,574,312
              )Accumulated
      deficit
              
              
              (27,438,741
              )
              
              
              (25,331,368
              )Total
      stockholders' deficit
              
              
              (3,678,219
              )
              
              
              (2,230,981
              )TOTAL
      LIABILITIES AND STOCKHOLDERS' DEFICIT
              
              $
              162,489
              
              
              $
              953,161
   See
Accompanying Notes to Financial Statements
  F-3
 IVI
      COMMUNICATIONS, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF OPERATIONSFOR
      YEARS ENDING MARCH 31,2008
              
              
              2007OPERATING
      REVENUE
              
              $
              316,474
              
              
              $
              1,859,811COST
      OF OPERATIONS
              
              
              171,480
              
              
              
              1,200,215GROSS
      PROFIT
              
              
              144,994
              
              
              
              659,596OPERATING
      EXPENSESSelling
              
              
              1,142
              
              
              
              14,671General
      and administrative
              
              
              1,290,701
              
              
              
              2,028,031Loss
      on settlement of contract
              
              
              -
              
              
              
              553,643Depreciation
      / Amortization
              
              
              204,678
              
              
              
              186,026Total
      operating expenses
              
              
              1,496,521
              
              
              
              2,782,371OPERATING
      LOSS
              
              
              (1,351,527
              )
              
              
              (2,122,775
              )OTHER
      INCOME (EXPENSES)Other
      income
              
              
              35,026
              
              
              
              1,035,742Forgiveness
      of debt
              
              
              215,730
              
              
              
              1,657,853Gain
      (Loss) on Revaluation of Derivatives
              
              
              (234,247
              )
              
              
              390,794Impairment
      of goodwill
              
              
              (600,000
              )
              
              
              -Other
      expense
              
              
              (123
              )
              
              
              (43,905
              )Interest
      expense
              
              
              (172,231
              )
              
              
              (604,600
              )Interest
      income
              
              
              -
              
              
              
              174Total
      other income (expense)
              
              
              (755,846
              )
              
              
              2,436,058NET
      INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES
              
              
              (2,107,373
              )
              
              
              313,283Provision
      for income taxes
              
              
              -
              
              
              
              -NET
      INCOME (LOSS) APPLICABLE TO COMMON SHAREHOLDERS
              
              $
              (2,107,373
              )
              
              $
              313,283BASIC
      INCOME ( LOSS) PER SHARE
              
              $
              (0.01
              )
              
              $
              0.00DILUATED
      INCOME (LOSS) PER SHARE
              
              $
              (0.01
              )
              
              $
              0.00WEIGHTED
      AVERAGE NUMBER OF COMMON SHARES OUTSTANDINGBASIC
              
              
              144,747,328
              
              
              
              82,157,193DILUTED
              
              
              144,747,328
              
              
              
              220,334,488
  See
Accompanying Notes to Financial Statements
  F-4
 IVI
      COMMUNICATIONS, INC. AND SUBSIDIAIRESCONSOLIDATED
      STATEMENT OF CHANGES IN STOCKHOLDERS' DEFICITFOR
      THE YEARS ENDED MARCH 31, 2008 AND
2007
  
 Prepaid
                
                
                Additional
                
                
                Additional
                  Paid-in
                
                
                
                
                
                Shares
      issuedPreferred
      Stock
                
                
                Common
      Stock
                
                
                Consulting
                
                
                Paid-in
                
                
                Capital
      -
                
                
                Subscription
                
                
                and
      held as
                
                
                AccumulatedShares
                
                
                Amount
                
                
                Shares
                
                
                Amount
                
                
                Fees
                
                
                Capital
                
                
                warrants
                
                
                Receivable
                
                
                Collateral
                
                
                Deficits
                
                
                TotalBalance,
      March 31, 2006
                
                
                4,000,000
                
                
                $
                4,000
                
                
                
                77,985,587
                
                
                $
                77,986
                
                
                $
                -
                
                
                $
                27,334,017
                
                
                $
                154,255
                
                
                $
                -
                
                
                $
                (3,000,000
                )
                
                $
                (25,644,651
                )
                
                $
                (1,074,393
                )Issuance
      of shares for services
                
                
                1,000,000
                
                
                
                1,000
                
                
                
                19,774,330
                
                
                
                19,774
                
                
                
                (333,331
                )
                
                
                986,225
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                673,668Derivative
      created in excess of debtDiscount
      on convertible debenture
                
                
                
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (27,671
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (27,671
                )Issuance
      of shares for conversionof debentures
                
                
                -
                
                
                
                -
                
                
                
                13,038,639
                
                
                
                13,037
                
                
                
                -
                
                
                
                184,167
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                197,204Issuance
      of shares for convertible note
                
                
                -
                
                
                
                -
                
                
                
                8,710,121
                
                
                
                8,710
                
                
                
                -
                
                
                
                245,580
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                254,290Warrants
      exercised
                
                
                -
                
                
                
                -
                
                
                
                3,500,000
                
                
                
                3,500
                
                
                
                -
                
                
                
                
                
                
                
                38,500
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                42,000Issuance
      of shares for debt settlement
                
                
                -
                
                
                
                -
                
                
                
                280,000
                
                
                
                280
                
                
                
                -
                
                
                
                10,920
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                11,200Issuance
      of shares for completion of acquisition
                
                
                -
                
                
                
                -
                
                
                
                2,500,000
                
                
                
                2,500
                
                
                
                -
                
                
                
                21,250
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                23,750Cancel
      shares issued as collateral
                
                
                -
                
                
                
                -
                
                
                
                (15,000,000
                )
                
                
                (15,000
                )
                
                
                -
                
                
                
                (2,985,000
                )
                
                
                -
                
                
                
                -
                
                
                
                3,000,000
                
                
                
                -
                
                
                
                -Issuance
      costs associated with equity financing
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (70,000
                )
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (70,000
                )Stock
      receivable from default on acquisition
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                (2,574,312
                )
                
                
                -
                
                
                
                -
                
                
                
                (2,574,312
                )Net
      income for the year
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                313,283
                
                
                
                313,283Balance,
      March 31, 2007
                
                
                5,000,000
                
                
                $
                5,000
                
                
                
                110,788,678
                
                
                $
                110,787
                
                
                $
                (333,331
                )
                
                $
                25,699,488
                
                
                $
                192,755
                
                
                $
                (2,574,312
                )
                
                $
                -
                
                
                $
                (25,331,368
                )
                
                $
                (2,230,981
                )Issuance
      of shares for services
                
                
                
                
                
                
                
                
                
                
                2,000,000
                
                
                
                2,000
                
                
                
                
                
                
                
                7,100
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                9,100Issuance
      of shares for conversion of debentures
                
                
                
                
                
                
                
                
                
                
                53,868,519
                
                
                
                53,869
                
                
                
                
                
                
                
                104,356
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                158,225Issuance
      of shares for convertible note
                
                
                
                
                
                
                
                
                
                
                80,180,019
                
                
                
                80,180
                
                
                
                
                
                
                
                19,190
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                99,370Issuance
      of shares for debt settlement
                
                
                
                
                
                
                
                
                
                
                9,622,358
                
                
                
                9,622
                
                
                
                
                
                
                
                50,487
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                60,109Stock
      returned from default on acquisition
                
                
                
                
                
                
                
                
                
                
                (2,574,313
                )
                
                
                (2,574
                )
                
                
                
                
                
                
                (2,571,739
                )
                
                
                
                
                
                
                2,574,312
                
                
                
                
                
                
                
                
                
                
                
                0Fully
      amortized prepaid consulting fees
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                333,331
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                333,331Net
      loss for the year
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                (2,107,373
                )
                
                
                (2,107,373
                )Balance,
      March 31, 2008
                
                
                5,000,000
                
                
                $
                5,000
                
                
                
                253,883,261
                
                
                $
                253,884
                
                
                $
                -
                
                
                $
                23,308,882
                
                
                $
                192,755
                
                
                $
                -
                
                
                $
                -
                
                
                $
                (27,438,741
                )
                
                $
                (3,678,219
                )
 See Accompanying
Notes to Financial Statements
 F-5
  IVI
      COMMUNICATIONS, INC. AND SUBSIDIARIESCONSOLIDATED
      STATEMENTS OF CASH FLOWFOR
      THE YEARS ENDED MARCH 31,2008
              
              
              2007CASH
      FLOW FROM OPERATING ACTIVITIESNet
      Income (Loss)
              
              $
              (2,107,373
              )
              
              $
              313,283Adjustments
      to reconcile net loss to net cashprovided
      by (used in) operating activities:Depreciation
              
              
              28,572
              
              
              
              42,360Amortization
      of debt discount
              
              
              176,106
              
              
              
              143,668Impairment
      of goodwill
              
              
              600,000
              
              
              
              -(Gain)
      on forgiveness of debt
              
              
              (215,728
              )
              
              
              (1,657,853
              )Amortization
      of prepaid consulting fees
              
              
              333,331
              
              
              
              -Loss
      on settlement of contract
              
              
              -
              
              
              
              553,645Loss
      (gain)  on revaluation of derivatives
              
              
              215,729
              
              
              
              (390,794
              )(Gain)
      on contingent liability settlement
              
              
              (1,750
              )
              
              
              (987,169
              )(Gain)
      on conversion of debt
              
              
              (9,290
              )
              
              
              (19,514
              )(Gain)
      on conversion of notes
              
              
              (2,808
              )
              
              
              -Net
      beneficial interest on debt conversions
              
              
              73,017
              
              
              
              -Stock
      issued for services and compensation
              
              
              9,100
              
              
              
              673,668Allowance
      for doubtful accounts
              
              
              171,456
              
              
              
              35,705Changes
      in assets and liabilitiesDecrease
      in accounts receivable, net
              
              
              39,867
              
              
              
              17,890Decrease
      in inventory
              
              
              -
              
              
              
              50,090(Increase)
      decrease in prepaid expenses
              
              
              242
              
              
              
              (1,512
              )Increase
      (decrease) in accounts payable and  accrued
      liabilities
              
              
              894,311
              
              
              
              997,173Increase
      (decrease) in accounts payable and accrued liabilities
              
              
              260,000
              
              
              
              -Decrease
      in acquisition contracts
              
              
              -
              
              
              
              (270,000
              )Decrease
      in litigation settlement
              
              
              (448,675
              )
              
              
              -Decrease
      in deferred revenue
              
              
              (843
              )
              
              
              (6,969
              )Total
      adjustments
              
              
              2,122,637
              
              
              
              (819,612
              )Net
      cash provided by (used in) operating activities
              
              
              15,264
              
              
              
              (506,329
              )CASH
      FLOWS FROM INVESTING ACTIVITIESAcquisition
      of fixed assets
              
              
              (3,619
              )
              
              
              (34,181
              )Proceeds
      from sale of fixed assets
              
              
              1,840
              
              
              
              0Net
      cash (used in) investing activities
              
              
              (1,779
              )
              
              
              (34,181
              )
  F-6
  CASH
      FLOWS FROM FINANCING ACTIVITIESIssuance
      costs for equity financing
              
              
              -
              
              
              
              (70,000
              )Proceeds
      from stock to be issued
              
              
              -
              
              
              
              138,949Proceeds
      from derivative liability
              
              
              -
              
              
              
              55,000(Payments)
      on derivative liability
              
              
              -
              
              
              
              (39,312
              )Cash
      paid on settlement of contract
              
              
              -
              
              
              
              (261,357
              )Proceeds
      from exercise of warrants
              
              
              -
              
              
              
              42,000Proceeds
      from convertible debentures
              
              
              -
              
              
              
              475,000Payments
      on litigation settlement
              
              
              -
              
              
              
              (1,325
              )Payments
      on installment note payable
              
              
              -
              
              
              
              (1,116
              )Payments
      on notes payable
              
              
              -
              
              
              
              -Payments
      on capital lease obligations
              
              
              (15,293
              )
              
              
              24,724Payments
      on officer loans
              
              
              -
              
              
              
              (50,770
              )Net
      cash provided by (used in) financing activities
              
              
              (15,293
              )
              
              
              311,793NET
      DECREASE INCASH
      AND CASH EQUIVALENTS
              
              
              (1,808
              )
              
              
              (228,717
              )CASH
      AND CASH EQUIVALENTS -BEGINNING
      OF PERIOD
              
              
              4,827
              
              
              
              233,544CASH
      AND CASH EQUIVALENTS - END OF PERIOD
              
              $
              3,019
              
              
              $
              4,827SUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Cash
      paid during the period for:Interest
      paid
              
              $
              -
              
              
              $
              1,403Income
      taxes
              
              $
              -
              
              
              $
              -SUPPLEMENTAL
      DISCLOSURE OF NON-CASH INFORMATION:Common
      stock issued for prepaid consulting fees, classified as
    equity
              
              
              
              
              
              $
              987,500Common
      stock issued for debt settlements and payables
              
              $
              31,859
              
              
              $
              486,444Common
      stock issued for services and compensation
              
              $
              9,100
              
              
              $
              179,916Common
      stock receivable for settlement of contract
              
              $
              -
              
              
              $
              2,574,312Cancellation
      of shares
              
              $
              2,574,312
              
              
              $
              3,000,000Accounts
      payable converted to note payable
              
              $
              -
              
              
              $
              283,398Note
      payable converted to litigation settlement
              
              $
              -
              
              
              $
              450,000Embedded
      derivatives on convertible debt and notes payable
              
              $
              215,729
              
              
              $
              283,554Fixed
      assets acquired for debt
              
              $
              50,615
              
              
              $
              -
  See
Accompanying Notes to Financial Statements
  F-7
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  
 NOTE
1- ORGANIZATION AND BASIS OF
PRESENTATION
 
 The
Company was formed in California in September 1995 to acquire traditional local
and regional Internet access Service Providers (ISP’s) in the Western States to
achieve economies of operation and accelerated growth through centralized
management.
  Effective
May 23, 2002, Internet Ventures, Inc. agreed to recapitalize with Turer
Corporation by becoming a wholly owned subsidiary of Turer. To accommodate this
recapitalization, the 11,930,746 shares then outstanding of Internet Ventures,
Inc. were exchanged for 11,930,746 shares of Turer. In August 2002, Turer
changed its name to IVI Communications, Inc.
  For
accounting purposes, the transaction has been accounted for as a reverse
acquisition under the purchase method of accounting. Accordingly, IVI
Communications, Inc. will be treated as the continuing entity for accounting
purposes, and the financial statements presented herein are those of IVI
Communications, Inc.
  From
inception through September 1999, 13 acquisitions were completed in the states
of Colorado, California, Oregon and Washington.  In August 2000, all
of the Washington state operations were sold. In December 2002 and March 2003,
all of the California operations were sold. In May 2003, all of the Oregon
operations were sold, and in July 2003, the Colorado operations were
sold.
  On June
29, 2004, the Company issued 4,500,000 shares of common stock to management and
consultants as an S-8 stock issuance. On July 1, 2004, the Company amended its
Articles of Incorporation and pursuant to a board resolution, increased the
authorized level of common stock from 50,000,000 to 100,000,000.  In
addition, the Company’s board of directors’ authorized a 2:1 stock split on July
2, 2004. All share and per share amounts have been restated to reflect
retroactive treatment of this stock split in 2004 and for 2005 shares issued
prior to the stock split.
  On
October 27, 2004, the Company filed an amended S-8, bringing the total number of
registered shares that will be classified as unrestricted to
12,000,000.
  On
January 31, 2005, the Company completed the purchase of Internet Business
Consulting, Inc. and AppState.Net, LLC. The Company paid one times annual
revenue in a stock exchange with the shares valued at $1.00 per share, plus
$580,000 cash to be paid over a two-year period.  The purchase
approximated 3.2 million dollars.
  Effective
December 31, 2006, the Company defaulted on this acquisition
contract.
 See Note
10-  Contract Settlement.
  F-8
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
1- ORGANIZATION AND BASIS OF
PRESENTATION (CONTINUED)
 
 On
February 6, 2006, the Company completed the purchase of Futura,
Inc.  The Company issued 2,813,300 shares with a fair market value of
$550,000, plus $150,000 cash, of which $75,000 was paid at close and the balance
was paid in three increments of  $25,000, due on June 1, September 1,
and December 1, 2006.
  On
October 4, 2006, by vote of a majority of the issued and outstanding shares of
IVI Communications common and preferred stock as of the date of record for the
Annual Meeting of the shareholders, the Articles of Incorporation were amended
to increase the Company's authorized shares of common stock to four hundred
million shares and to approve the   Amendment of the
Articles  of Incorporation  to increase
the  authorized  capital from  100,000,000 to
400,000,000 common shares.
  NOTE 2-SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
  Principles of
Consolidation
  The
consolidated financial statements include the accounts of the Company and its
wholly owned subsidiaries.  All significant inter-company accounts and
transactions 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. There were no cash equivalents as of March 31, 2008 and
2007.
  The
Company maintains cash and cash equivalent balances at several financial
institutions that are insured by the Federal Deposit Insurance Corporation up to
$100,000.  At March 31, 2008 and 2007, the Company had no funds in
excess of the insured limit.
  F-9
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
 NOTE 2- SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED)
 
 Revenue
Recognition
  Internet
service subscription revenues are recognized over the period that services are
provided.  The Company generally bills for Internet access service on
the terms that range from one month to one year in advance.  Monthly
access fees are not prorated, and refunds are not given for partial
months.  Therefore, revenues for the first month of service paid in
advance are recognized at the inception of the service
month.  Revenues for terms of service greater than one month that are
paid in advance are deferred and amortized over the period in which the services
are provided.
  Consulting
revenues are recognized upon the service being provided. All equipment sales are
final upon delivery of the merchandise.
  Income
Taxes
  The
Company has adopted the provisions of Statement of Financial Accounting
Standards No. 109 (the Statement), Accounting for Income Taxes.  The
Statement requires an asset and liability approach for financial accounting and
reporting for income taxes, and the recognition of deferred tax assets and
liabilities for the temporary differences between the financial reporting bases
and tax bases of the Company’s assets and liabilities at enacted tax rates
expected to be in effect when such amounts are realized or settled.
  Fair Value of Financial
Instruments
 
 The
carrying amounts reported in the consolidated balance sheets for cash and cash
equivalents, accounts receivable, accounts payable, accrued expenses and notes
payable approximate fair value because of the immediate or short-term maturity
of these financial instruments.
  Advertising
Costs
  The
Company expenses the costs associated with advertising as
incurred.  Advertising expenses are included in general and
administrative expenses in the consolidated statements of operations for the
years ended March 31, 2008 and 2007.  Advertising costs for the years
ended March 31, 2008 and 2007 were $1,142 and $14,671
respectively.
 
 F-10
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE 2-SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED)
 
 Equipment
  Equipment
is stated at cost.  Depreciation is computed using the straight-line
method over the estimated useful lives of the assets, generally three to five
years.
  When the
assets are retired or otherwise disposed of, the costs and related accumulated
depreciation are removed from the accounts, and any resulting gain or loss is
recognized in income for the period.  The cost of maintenance and
repairs is charged to expense as incurred; significant renewals and betterments
are capitalized.  Deduction is made for retirements resulting from
renewals or betterments.
  Accounts
Receivable
  The
Company conducts business and extends credit based on an evaluation of the
customers’ financial condition, generally without requiring
collateral.  Exposure to losses on receivables is expected to vary by
customer due to the financial condition of each customer.  The Company
monitors exposure to credit losses and maintains allowances for anticipated
losses considered necessary under the circumstances. The Company had no
allowance for doubtful accounts at March 31, 2008 and 2007.
  Earnings (Loss) Per Share of
Common Stock3
  Historical
net income (loss) per common share is computed using the weighted average number
of common shares outstanding.  Diluted earnings per share (EPS)
include additional dilution from common stock equivalents, such as stock
issuable pursuant to the exercise of stock options and
warrants.  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 as of
March 31;
   2008
              
              
              2007Net income
      (loss)
              
              $
              (2,107,373
              )
              
              $
              313,283Weighted
      average common shares
                Outstanding
      (Basic)
              
              
              144,747,328
              
              
              
              82,157,193Weighted
      average common stock
                Equivalents:
      Warrants
              
              
              -0-
              
              
              
              138,177,295Weighted
      average common shares
                Outstanding
      (Diluted)
              
              
              144,747,328
              
              
              
              220,334,488
  
 F-11
 
 IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE 2-SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
 
 Earnings (Loss) Per Share of
Common Stock (Continued)
  Warrants
outstanding to purchase stock were not included in the computation of diluted
EPS for March 31, 2008 because inclusion would have been
anti-dilutive.  However, warrants that would have been available at
March 31, 2008 were 1,540,303,457.
  Goodwill and Other
Intangible Assets
 In June
2001, the FASB issued Statement No. 142 “Goodwill and
Other   Intangible Assets”. This statement addresses financial
accounting and reporting for acquired goodwill and other intangible assets and
supersedes APB Opinion No. 17, Intangible Assets. It addresses how intangible
assets that are acquired individually or with a group of other assets (but not
those acquired in a business combination) should be accounted for in financial
statements upon their acquisition. This Statement also addresses how goodwill
and other intangible assets should be accounted for after they have been
initially recognized in the financial statements. The Company recorded $674,934
in goodwill in its acquisition of Futura, Inc. on February 6,
2006.  There was a 38% reduction in revenue from March 31, 2007 to
March 31, 2008, and the Company did not impair the goodwill at March 31, 2007
due to the fact that it was launching its fixed wireless system and anticipated
increased revenue from that brand.  Due to a lack of funding, Futura
could install only the first section of the system and there was no increase in
revenue from the broadband services while at the same time the dialup services
were decreasing.  The Company anticipates another
35%  reduction in revenue for the coming fiscal year based on current
revenue figures and little possibility of funding to grow the broadband
service.  There has been a 104% increase in the liabilities due to the
capital lease for the equipment for the fixed wireless system and an increase in
payables due to a reduction in dialup customers with no corresponding reduction
in cost of services.  Based on these numbers, management has
determined that the goodwill in its acquisition of Futura should be impaired
$600,000.
  Stock-Based
Compensation
  Employee
stock awards under the Company's compensation plans are accounted for in
accordance with Accounting Principles Board Opinion No. 25 (“APB 25”), “Accounting for Stock Issued to
Employees”, and related interpretations. The Company provides the
disclosure requirements of Statement of Financial Accounting Standards No. 123,
“Accounting for Stock-Based
Compensation” (“SFAS 123”), and related
interpretations.  Stock-based awards to non-employees are accounted
for under the provisions of SFAS 123 and has adopted the enhanced disclosure
provisions of SFAS No. 148 “Accounting for Stock-Based Compensation- Transition
and Disclosure, an amendment of SFAS No. 123”.The Company measures compensation
expense for its employee stock-based compensation using the intrinsic-value
method.  Under the intrinsic-value method
  F-12
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
 NOTE
2- SUMMARY OF
SIGNIFICANT ACCOUNTING POLICIES CONTINUED
  Stock-Based Compensation
(Continued)
  of
accounting for stock-based compensation, when the exercise price of options
granted to employees is less than the estimated fair value of the underlying
stock on the date of grant, deferred compensation is recognized and is amortized
to compensation expense over the applicable vesting period. In each of the
periods presented, the vesting period was the period in which the options were
granted. All options were expensed to compensation in the period granted rather
than the exercise date.
  The
Company measures compensation expense for its non-employee stock-based
compensation under the Financial Accounting Standards Board (FASB) Emerging
Issues Task Force (EITF) Issue No. 96-18, “Accounting for Equity Instruments
that are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services”.  The fair value of the option
issued is used to measure the transaction, as this is more reliable than the
fair value of the services received.  The fair value is measured at
the value of the Company’s common stock on the date that the commitment for
performance by the counterparty has been reached or the counterparty’s
performance is complete. The fair value of the equity instrument is charged
directly to compensation expense and additional paid-in capital.
  Derivative
Instruments
 The
Company has an outstanding convertible debt instrument that contains an embedded
derivative.  The Company accounts for this derivative in accordance
with FAS No. 133, “Accounting
for Derivative Instruments and Hedging Activities”, and EITF Issue No.
00-19, “Accounting for
Derivative Financial Instruments Indexed to, and Potentially Settled in, a
Company’s Own Stock.”  In accordance with the provisions of FAS
No. 133 and EITF Issue No. 00-19, the embedded derivative is required to be
bifurcated from the debt instrument and recorded as a liability at fair value on
the consolidated balance sheet.  The Company also has notes payable
with conversion features that qualify as derivative
instruments.  Changes in the fair value of the derivatives are
recorded at each reporting period and recorded in net gain (loss) on derivative,
a separate component of the other income (expense).  As of March 31,
2008 and 2007, the fair value of the derivatives was $379,807 and $164,077,
respectively.
  Recent Accounting
Pronouncements
  On
December 16, 2004, the Financial Accounting Standards Board (“FASB”) published
Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (“SFAS
123R”).  SFAS 123R requires that compensation cost related to
share-based payment transactions be recognized in the financial statements.
Share-based payment transactions within the scope of SFAS 123R
  
 F-13
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE 2-SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED)
 
 Recent Accounting
Pronouncements (continued)
  include
stock options, restricted stock plans, performance-based awards, stock
appreciation rights, and employee share purchase plans.  The
provisions of SFAS 123R, as amended, are effective for small business issuers
beginning as of the next fiscal year after December 15,
2005.  Accordingly, the Company has implemented the revised standard
in the first quarter of fiscal year 2007.
  In
November 2004, the FASB issued Financial Accounting Standards No. 151 (FAS 151),
“Inventory Costs – an
amendment of ARB No. 43, Chapter 4”.  FAS 151 clarifies the
accounting for abnormal amounts of idle facility expense, freight, handling
costs and spoilage.  In addition, FAS 151 requires companies to base
the allocation of fixed production overhead to the costs of conversion on the
normal capacity of production facilities.  FAS 151 is effective for
the Company in 2006.  FAS 151 did not have a material impact on its
results or financial statements.
  On
December 16, 2004, FASB issued Financial Accounting Standards No. 153, Exchanges
of Non-monetary Assets, an amendment of APB Opinion No. 29, Accounting for
Non-monetary Transactions ("FAS 153").  This statement amends APB
Opinion 29 to eliminate the exception for non-monetary exchanges of similar
productive assets and replaces it with a general exception for exchanges of
non-monetary assets that do not have commercial substance.  Under FAS
153, if a non-monetary
exchange of similar productive assets meets a commercial-substance criterion and
fair value is determinable, the transaction must be accounted for at fair value
resulting in recognition of any gain or loss.  FAS153 is effective for
non-monetary transactions in fiscal periods that begin after June 15,
2005.  The implementation of this standard did not have a material
impact on its financial position, results of operations or cash
flows.
  In March
2005, the FASB issued Statement of Financial Accounting Standards Interpretation
Number 47 (“FIN 47”), “Accounting for Conditional Asset Retirement
Obligations.”  FIN 47 provides clarification regarding the meaning of
the term “conditional asset retirement obligation” as used in FAS 143,
“Accounting for Asset Retirement Obligations.”  FIN 47 is effective
for the year ended December 31, 2005.  The implementation of this
standard did not have a material impact on its financial position, results of
operations or cash flows.
  In May
2005, the FASB issued SFAS 154, “Accounting for Changes and Error Corrections—a
replacement of APB Opinion No. 20 and FASB Statement
No. 3.”  FAS 154 changes the requirements with regard to the
accounting for and reporting a change in an accounting principal.  The
provisions of FAS 154 require, unless impracticable, retrospective application
to prior periods presented in financial statements for all voluntary changes in
an accounting principle and changes required by the adoption of a new accounting
pronouncement in the unusual
 
 F-14
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE 2-SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED)
 
 Recent Accounting
Pronouncements (continued)
  instance
that the new pronouncement does not indicate a specific transition
method.  FAS 154 also requires that a change in depreciation,
amortization or depletion method for long-lived, non-financial assets be
accounted for as a change in an accounting estimate, which requires prospective
application of the new method.  FAS 154 is effective for all changes
in an accounting principle made in fiscal years beginning after
December 15, 2005.  The Company adopted FAS 154 beginning January
1, 2006.  Because SAS 154 is directly dependent upon future events,
the Company cannot determine what effect, if any, the expected adoption of FAS
154 will have on its financial condition, results of operations or cash
flows.
  In
February 2006, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards (FAS) No. 155, Accounting for Certain
Hybrid Financial Instruments.  FAS No. 155 replaces FAS
No. 133 Accounting for Derivative Instruments and Hedging Activities, and
FAS No. 140 Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities.  FAS No. 155 resolves issues
addressed in Statement 133 Implementation Issue No. D1, “Application of
Statement 133 to Beneficial Interests in Securitized Financial Assets.” This
statement will be effective for all financial instruments acquired or issued
after the beginning of an entity’s fiscal year that begins after
September 15, 2006. The adoption of FAS 155 did not have a material impact
on the Company's financial position, results of operations, or cash
flows.
  In
September 2006, the FASB issued SFAS No. 157 “Fair Value
Measurements,” which provides a definition of fair value, establishes a
framework for measuring fair value and requires expanded disclosures about fair
value measurements. SFAS No. 157 is effective for financial statements
issued for fiscal years beginning after November 15, 2007 and interim
periods within those fiscal years. The provisions of SFAS No. 157
should be applied prospectively. The Company is currently analyzing whether this
new standard will have impact on its financial position and results of
operations.
  In
September 2006, the FASB issued SFAS No. 158 “Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans”, which amends
SFAS No. 87 “Employers’ Accounting for Pensions”
(SFAS No. 87), SFAS No. 88 “Employers’ Accounting for
Settlements and Curtailments of Defined Benefit Pension Plans and for
Termination Benefits” (SFAS No. 88), SFAS No. 106
“Employers’ Accounting for Postretirement Benefits Other Than Pensions”
(SFAS No. 106), and SFAS No. 132R “Employers’ Disclosures
about Pensions and Other Postretirement Benefits (revised 2003)”
(SFAS No. 132R). This Statement requires companies to recognize an
asset or liability for the overfunded or underfunded status of their benefit
plans in their financial
   F-15
 IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE 2-SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED)
 
 Recent Accounting
Pronouncements (continued)
  statements.
SFAS No. 158 also requires the measurement date for plan assets and
liabilities to coincide with the sponsor’s year end. The standard provides two
transition alternatives related to the change in measurement date provisions.
The recognition of an asset and liability related to the funded status provision
is effective for fiscal year ending after December 15, 2006 and the change
in measurement date provisions is effective for fiscal years ending after
December 15, 2008. The implementation of this standard did not have a
material impact on its financial position, results of operations or cash
flows.
  Fair Value of Financial
Instruments
  The
carrying amounts of cash, accounts receivable, other current assets, accounts
payable and accrued expenses approximates fair market value because of the short
maturity of these instruments.
  Reclassification
  Certain
amounts included in the prior year’s financial statements for the year-ended
March 31, 2007 have been reclassified to conform to the current year’s
representation.  These reclassifications had no effect on the reported
total assets, liabilities, accumulated deficit or net income.
 
 NOTE
3- EQUIPMENT
  Equipment
as of March 31, 2008 and 2007 was as follows:
 
 Estimated
      UsefulLives (Years)2008
              
              
              2007Equipment
              
              
              3-5
              
              
              $
              92,282
              
              
              $
              39,888Less
      accumulated depreciation
              
              
              
              
              
              
              (46,830
              )
              
              
              (19,147
              )Equipment,
      net
              
              
              
              
              
              $
              45,452
              
              
              $
              20,741
  Depreciation
expense was $28,572 and $42,360 for the years ended March 31, 2008 and 2007,
respectively.
 
 F-16
 
 IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
4- INSTALLMENT
DEBT
 
 Installment
debt consists of approximately 11 notes for various pieces of equipment. The
Company has not reflected the asset value on the books because the assets are
considered to have no value remaining. These assets are however collateral for
the debt. The Company has reflected these balances in the consolidated balance
sheets as accounts payable and accrued liabilities. All amounts are
overdue.
 
 NOTE
5- OBLIGATION UNDER CAPITAL
LEASE
  Capital
leases consist of one subsidiary equipment lease, which is reflected in fixed
assets.  The minimum lease payments due on the lease total $37,824,
which includes
interest of $3,117.  The liability is $34,707 at March 31, 2008, of
which $16,628 is current and $18,079 is due through fiscal 2010.
  FUTURE
      PAYMENTS:
              
              Principal
              
              
              Interest
              
              
              Total4/1/2008
              3/31/2009
              
              
              16,628
              
              
              
              2,284
              
              
              
              18,9124/1/2009
              3/31/2010
              
              
              18,079
              
              
              
              833
              
              
              
              18,91234,707
              
              
              
              3,117
              
              
              
              37,824
 
 NOTE
6- NOTES
PAYABLE
  Notes
Payable
  The
Company borrowed a total of  $1,077,955 from 22 different individuals
from 1999 through 2001, at interest rates ranging from 7-12%, with no collateral
and payment terms of 2 or 3 years. As of March 31, 2008 and 2007, all amounts
unpaid are overdue.
  As of
March 31, 2008 and 2007, the notes payable balance is $23,259 and $186,489, and
the accrued interest on those notes as of March 31, 2008 and 2007 is $5,479 and
$92,599 respectively. These amounts are reflected as current portion of notes
payable and current liabilities in the consolidated balance sheet at March 31,
2008 and 2007 respectively.
  The
following transactions occurred for the year ended March 31, 2008:
  During
the year ended March 31, 2008, $82,607 in principal and $95,634 in accrued
interest was written-off due to state jurisdiction time bar.
  In
November 2005 a note was issued to Nyhl Henson for $80,623 for
compensation.  The note carried no interest and was due November 30,
2006 and was convertible at the average closing price during the 10 preceding
trading days.  During the year ending March 31, 2008, the note was
converted at a weighted average price of $.001, for a total of 80,180,019 shares
of common stock.  A beneficial interest charge of $21,555 was
recorded.
 
 F-17
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
6- NOTES PAYABLE
(CONTINUED)
 
 In May
2006 the Company borrowed $5,000 on a one-year note due May 22,
2007.  This note carries no interest.  At March 31, 2008 the
note remains unpaid.
  In
December 2006 the Company borrowed $4,000 on a one-year note due December 22,
2007.  This note carries no interest.  At March 31, 2008 the
note remains unpaid.
 
 NOTE
7- CONVERTIBLE
DEBENTURES
 
 The
Company sold a security for $25,000 to one entity in January 2005. This
debenture, which was for services rendered, accrues interest at 10% per annum
and was due January 31, 2006. The conversion price is $.10 per common share. No
conversion or repayment of the debenture has occurred as of March 31,
2008.
  The
Company sold a security for $257,500 to one entity in March
2006.  This debenture, which was for services rendered, accrues
interest at 9% per annum and was due May 15, 2007.    In the
event the Company receives funding in the amount of at least Six Hundred
Thousand Dollars ($600,000), Forty Five Thousand Dollars ($45,000) immediately
becomes due and payable to the holder.  The conversion price is the
lower of $.05 or the lowest bid price in the preceding 5 trading
days.  On August 17, 2007, $48,000 of principal was converted for
12,000,000 shares of which 10,713,948 shares were restricted.  The
conversion price was $.004, the lowest bid price in the preceding 5 trading
days, resulting in a beneficial interest charge of $24,000.
  On March
27, 2006, the Company entered into a securities purchase agreement with YA
Global providing for the sale by the Company to Cornell of our 12% secured
convertible debentures in the aggregate principal amount of $600,000 of which
$200,000 was advanced immediately. The second installment of $200,000 was
advanced on April 18, 2006. The last installment of $200,000 was advanced August
14, 2006, two (2) business days after the registration statement was declared
effective.
  The
Convertible Debentures mature on the third anniversary of the date of issuance
and the Company is not required to make any payments until the maturity date.
Holders of the Debentures may convert at any time amounts outstanding under the
debentures into shares of our common stock at a conversion price per share equal
to the lower of (i) $0.20 or (ii) ninety percent (90%) of the lowest closing Bid
Price of the Common Stock during the thirty (30) trading days immediately
preceding the conversion date as quoted by Bloomberg, LP. Cornell has agreed not
to short any of the shares of Common Stock. The Company has the right to redeem
a portion or all amounts outstanding under the debenture prior to the maturity
date at a 20% redemption premium provided that the closing bid price of our
common stock is less than $0.20.
  F-18
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
 NOTE
7- CONVERTIBLE DEBENTURES
(CONTINUED)
  On August
22, 2006, the debenture holder converted $5,000 of principal for 158,730 shares
of common stock; the conversion price was $.0315, 90% of the lowest closing bid
price of $.035 during the prior 30 days.
  On
September 21, 2006, the debenture holder converted $10,000 of principal for
336,700 shares of common stock; the conversion price was $.0297, 90% of the
lowest closing bid price of  $.033 during the prior 30
days.
  On
October 17, 2006, the debenture holder converted $10,000 of principal for
444,444 shares of common stock; the conversion price was $.0225, 90% of the
lowest closing bid price of $.025 during the prior 30 days.
  On
November 9, 2006, the debenture holder converted $20,000 of principal for
1,388,889 shares of common stock; the conversion price was $.0144, 90% of the
lowest closing bid price of $.016 during the prior 30 days.
  On
December 20, 2006, the debenture holder converted $20,000 of principal for
1,481,481 shares of common stock; the conversion price was $.0135, 90% of the
lowest closing bid price of $.015 during the prior 30 days.
  On
January 23, 2007, the debenture holder converted $25,000 of principal for
2,314,815 shares of common stock; the conversion price was $.0108, 90% of the
lowest closing bid price of $.012 during the prior 30 days.
  On
February 9, 2007, the debenture holder converted $20,000 of principal for
2,222,222 shares of common stock; the conversion price was $.009, 90% of the
lowest closing bid price of $.01 during the prior 30 days.
  On March
1, 2007, the debenture holder converted $20,000 of principal for 2,222,222
shares of common stock; the conversion price was $.009, 90% of the lowest
closing bid price of $.01 during the prior 30 days.
  On March
27, 2007, the debenture holder converted $20,000 of principal for 2,469,136
shares of common stock; the conversion price was $.0081, 90% of the lowest
closing bid price of $.009 during the prior 30 days.
  Beneficial
interest of $25,072 was recognized on the conversions in the year ending March
31, 2007.
  On
February 22, 2007, Cornell exercised 3,500,000 warrants at a price of $.0085 for
$29,750.  Beneficial interest of $12,250 was recognized.
  F-19
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  CONVERTIBLE DEBENTURES
(CONTINUED)
 
 During
the year ended March 31, 2008, the debenture holder converted $58,763 of
principal for 41,868,519 shares of common stock at a weighted average price of
$.0014.  A beneficial interest charge of $27,462 was recorded on the
conversions.
  Derivative
Liability
  The
Company sold a security for $12,500 to one entity in September
2006.  This debenture carries no interest and has a conversion rate of
50% discount to market of the
ten-day average closing bid price.  This has been recorded as a
derivative liability.  No conversion or repayment of the debenture has
occurred as of March 31, 2008.  The value at March 31, 2008 is
$126.
  The
Company sold a security for $12,500 to one entity in October
2006.  This debenture carries no interest and has a conversion rate of
50% discount to market of the ten-day average closing bid price.  This
has been recorded as a derivative liability.  No conversion or
repayment of the debenture has occurred as of March 31, 2008.  The
value at March 31, 2008 is $126.
  A holder
of the Convertible Debenture may not convert or receive shares as payment of
interest to the extent such conversion or receipt of such interest payment would
result in the holder, together with any affiliate of the holder, beneficially
owning in excess of 4.99% of the then issued and outstanding shares of Common
Stock, including shares issuable upon conversion of, and payment of
interest.
  In
January 2007 the Company borrowed $3,243 from Charles Roodenburg, President, on
a one-year note due January 19, 2008.  This note carries no interest
and is convertible at the previous 10-day closing price.  No
conversion or repayment of the debenture has occurred as of March 31,
2008.  The value at March 31, 2008 is $2,478.
  In
January 2007 the Company borrowed $6,756 from Nyhl Henson, the former President,
on a one-year note due January 19, 2008.   This note carries no
interest and is convertible at the previous 10-day closing price.  No
conversion or repayment of the debenture has occurred as of March 31,
2008.
  In
February 2007 the Company borrowed $45,000 from Nyhl Henson, former President,
on two notes due on demand.  The note carries no interest and is
convertible at the previous 10-day closing price.  No conversion or
repayment of the debenture has occurred as of March 31, 2008.  The
value for both instruments at March 31, 2008 is $39,549.
  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
  F-20
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
7- CONVERTIBLE DEBENTURES
(CONTINUED)
  Derivative Liability
(Continued)
  conversion
feature associated with the $600,000 convertible debenture represents an
embedded derivative. The Company recognized the embedded derivative in the
amount of $593,988 as a liability in the accompanying consolidated balance sheet
and it is now measured it at its estimated fair value of $379,807. The
estimated  fair value of the embedded derivative has been calculated
based on a Black-Scholes pricing model using the following
assumptions:
  Fair market value of
      stock
              
              
              $0.0004Exercise
      price
              
              
              $0.00036Dividend
      yield
              
              
              0.00
              %Risk free interest
      rate
              
              
              3.45
              %Expected
      volatility
              
              
              235.02
              %Expected
      life
              
              4.0
      Years
  
 The
Company also issued to Cornell five-year warrants to purchase 2,000,000 and
1,500,000 shares of Common Stock at prices of $0.30, and $0.40, respectively. If
at the time of exercise of the Warrants, the shares of Common Stock underlying
the Warrant are not subject to an effective registration statement under the
Securities Act of 1933, as amended (the "Act") or if an event of default under
the Convertible Debentures has occurred, which is not cured in any applicable
cure period, the holder of the Warrant, in lieu of making payment of the
Exercise Price in cash, may elect a cashless exercise in accordance with the
formula set forth in the Warrant. If, subject to the exceptions set forth in the
warrants, during the time that the Warrants are outstanding, the Company issues
or sells, or is deemed to have issued or sold, any shares of Common Stock for a
consideration per share less than a price equal to the then exercise price, then
the exercise price will be reduced to an amount equal to such consideration per
share. Upon each such adjustment, the number of shares of Common Stock issuable
upon exercise of the Warrants will be adjusted to the number of shares
determined by multiplying the exercise price in effect immediately prior to such
adjustment by the number of shares issuable upon exercise of the warrants
immediately prior to such adjustment and dividing the product by the exercise
price resulting from such adjustment. Similar adjustments will be made upon any
issuance or sale by us of options to purchase Common Stock or convertible
securities.
  As of
March 31, 2006, the fixed freestanding warrants issued in connection with the
$600,000 convertible debenture has been valued at $192,755 based on a
Black-Scholes pricing model using the following assumptions:
 
 
 F-21
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
 NOTE
7- CONVERTIBLE DEBENTURES
(CONTINUED)
 
 Derivative Liability
(Continued)
  Fair market value of
      stock
                
                
                $0.20Exercise
    price
                
                
                $0.30 and
      $0.40Dividend
      yield
                
                
                0.00
                %Risk free interest
      rate
                
                
                4.00
                %Expected
      volatility
                
                
                235.02
                %Expected
      life
                
                5.0
      Years
  On August
8, 2006 the Company issued stock at a price of $.04.  This increased
the number of warrants from 3,500,000 to 30,000,000 at $.04 exercise
price.
  On
December 29, 2006 the Company issued stock at a price of $.0242.  This
increased the number of warrants from 30,000,000 to 49,586,777 at $.0242
exercise price.
  On
January 17, 2007, by Board Resolution, the Company reduced the exercise price to
$.0085 which increased the number of warrants from 49,586,777 to
141,176,471.
  On
February 22, 2007, Cornell exercised 3,500,000 warrants at a price of $.0085 for
$29,750.  Beneficial interest of $12,250 was
recognized.  This reduced the number of warrants from 141,176,471 to
137,676,471 at $.0085.
  On May 3,
2007 the Company issued stock at a price of $.0051.  This increased
the number of warrants from 137,676,471 to 229,460,784 at $.0051 exercise
price.3
  On August
30, 2007 the Company issued stock at a price of $.0031.  This
increased the number of warrants from 229,460,784 to 337,500,000 at $.0031
exercise price.
  On
December 3, 2007 the Company issued stock at a price of $.0019.  This
increased the number of warrants from 337,500,000 to 615,921,053 at
$.0019
  On
February 27, 2008 the Company issued stock at a price of
$.00076.  This increased the number of warrants from 615,921,053 to
1,539,802,632 at $.00076
  The
allocation of the proceeds of the convertible debenture to the warrants and the
recognition of the embedded derivative resulted in discounts to the convertible
debenture at March 31, 2008 and March 31, 2007 of $136,109 and $312,215,
respectively. The discount on debt of $200,000 is being amortized to interest
through March 31, 2009 using the effective interest method.
  In
connection with the Purchase Agreement, the Company also entered into a
registration rights agreement with Cornell providing for the registration of
the
  F-22
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
7- CONVERTIBLE DEBENTURES
(CONTINUED)
 
 Derivative Liability
(Continued)
  shares of
common stock issuable upon conversion of the debentures and exercise of the
warrants. The Company is obligated to use its best efforts to cause the
registration statement to be declared effective no later than July 25, 2006 and
to insure that the registration statement remains in effect until all of the
shares of common stock issuable upon conversion of the debentures and exercise
of the warrants have been sold. In the event of a default of the Company’s
obligations  under the registration rights agreement, including its
agreement to file the registration statement no later than May 11, 2006, or if
the registration statement is not declared effective by July 25, 2006, the
Company is required to pay to Cornell, as liquidated damages, for each month
that the registration statement has not been filed or declared effective, as the
case may be, either a cash amount or shares of its common stock equal to 2% of
the liquidated value of the Debentures.
  On August
14, 2006, the registration statement for 22,500,000 shares of common stock for
YA Global was declared effective.  The Company was liable for
liquidated damages up to 2% per month for failure to have an effective
registration statement by July 25, 2006.  YA Global has verbally
agreed to waive said damages.
  The
Company’s obligations under the purchase agreement are secured by substantially
all of its assets and the assets of its subsidiaries. As further security for
its obligations thereunder, Nyhl Henson, former Chief Executive Officer, and
Charles Roodenburg, former Chief Operating Officer, have granted a security
interest in an aggregate of 925,000 shares of their common stock and 3,300,000
shares of their Series A Preferred Stock. The Company also granted a security
interest in 15,000,000 shares of its stock, issued from treasury.
  On July
14, 2006, the Company entered into an agreement with YA Global to cancel the
security interest in the 15,000,000 shares. These shares were subsequently
returned and cancelled.
 
 NOTE
8- STOCKHOLDERS’
DEFICIT
 
 Preferred
Stock
  The
Company has 5,000,000 shares of preferred stock authorized, 4,000,000 Class A
and 1,000,000 Class B; and 5,000,000 shares of preferred stock issued and
outstanding as of March 31, 2008 and 2007.
  For the
year ended March 31, 2007, 1,000,000 shares of preferred Class B stock valued at
$1,000 were issued as compensation and outstanding.
  F-23
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
8- STOCKHOLDERS’ DEFICIT(CONTINUED)
 
 Common
Stock
  As of
March 31, 2008 and 2007, the Company has 400,000,000 shares of common stock
authorized, 253,885,261 and 110,788,677 issued and outstanding,
respectively.
  The
following details the stock transactions for the year ended March 31,
2007
  15,000,000
shares issued as collateral on the YA Global convertible debenture were returned
to the Company.
  In the
quarter ended September 30, 2006, 14,764,413 shares were issued for prepaid
consulting services valued at $780,000; and 495,430 shares were issued for
Cornell debenture conversions (see Note 7 Convertible Debentures).
  In the
quarter ended December 31, 2006, 280,000 shares were issued for debt settlement
valued at $28,000; 200,000 shares were issued for consulting services valued at
$11,000; 1,000,000 shares were issued for prepaid consulting services valued at
$50,000; 309,917 shares were issued for public relations services valued at
$7,500; and 3,314,814 shares were issued for Cornell debenture conversions (see
Note 7 Convertible Debentures).
  In the
quarter ended March 31, 2007, 3,500,000 shares were issued for prepaid
consulting services valued at $157,500; 8,710,121 shares were issued to convert
a note in the amount of $122,812; 2,500,000 shares were issued in exchange for
the $25,000 final payment for the completion of the Futura, Inc. purchase;
3,500,000 shares were issued for the exercise of warrants by Cornell for
$42,000; and 9,228,395 shares were issued for Cornell debenture conversions (see
Note 7 Convertible Debentures).
  The
following details the stock transactions for the year ended March 31,
2008
  In the
quarter ended June 30, 2007, 3,814,510 shares were issued to convert accrued
payroll valued at $19,454, 5,807,848 shares were issued to convert a contingent
liability valued at $42,405, and 9,768,519 shares were issued to convert $48,500
of Cornell debentures.  $5,625 in beneficial interest was recorded on
these transactions.
  In the
quarter ended September 30, 2007, 2,574,312 shares of stock receivable were
returned to the company and cancelled, 2,000,000 shares were issued for services
valued at $9,100, and 12,000,000 shares valued at $48,000 were issued for
conversion on a convertible note.  $24,000 in beneficial interest was
recorded on these transactions.
 
 F-24
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
8- STOCKHOLDERS’ DEFICIT(CONTINUED)
 
 Common
Stock (Continued)
  In the
quarter ended December 31, 2007,  12,052,815 shares were issued to
convert $26,200 of a convertible note.  $7,850 in beneficial interest
was recorded on these transactions.
  In the
quarter ended March 31, 2008, 68,127,204 shares valued at $54,423 were issued to
convert a note, and 32,100,000 shares valued at $10,263 were issued on Cornell
debenture conversions.  $35,541 in beneficial interest was recorded on
these transactions.
  Stock Options and
Warrants
  The
Company has 1,540,303,457 and 138,177,295 stock warrants outstanding and vested
as of March 31, 2008 and 2007.   In 2007 the 3,500,000 warrants
issued in 2006 were adjusted to 141,176,470.  3,500,000 warrants were
exercised and 26,880 warrants expired in 2007.
  The
Company has the following warrants exercisable for the purchase of its common
stock:
 
 Year
      EndedExercise
              
              
              
              March 31,Price
              
              Expiration Date
              
              2008
              
              
              2007$
              5.00
              
              June,
      2010
              
              
              250,000
              
              
              
              250,000$
              2.50
              
              June,
      2010
              
              
              80,000
              
              
              
              80,000$
              5.00
              
              July,
      2010
              
              
              50,000
              
              
              
              50,000$
              2.50
              
              July,
      2010
              
              
              2,500
              
              
              
              2,500$
              2.50
              
              August,
      2010
              
              
              18,325
              
              
              
              18,325$
              2.00
              
              August,
      2010
              
              
              100,000
              
              
              
              100,000$
              0.0085
              
              March,
      2011
              
              
              
              
              
              
              137,676,470$
              0.00076
              
              March,
      2011
              
              
              1,539,802,6321,540,303,457
              
              
              
              138,177,295Weighted
      average exercise price
              
              $
              0.002
              
              
              $
              .022
   F-25
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
9- GOING
CONCERN
 
 As shown
in the accompanying consolidated financial statements the Company has sustained
net operating losses for the years ended March 31, 2008 and 2007, has sustained
large accumulated deficits, and currently does not have the revenues to sustain
its operations. In addition, the Company sold off its operations in Colorado,
Oregon and California, and defaulted on the acquisition of Internet Business
Consulting/AppState.net, LLC.  This raises substantial doubt about the
Company’s ability to continue as a going concern.
  Management
is in the process of restructuring the Company and is continuing to search for
more profitable internet and communications related service companies to
acquire. The Company’s future success is dependent upon its ability to achieve
profitable operations and generate cash from operating activities, and upon
additional financing. There is no guarantee that the Company will be able to
raise enough capital or generate revenues to sustain its
operations.
  The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.
  NOTE
10-         CONTRACT
SETTLEMENT
 
 We have
been unable to come to mutually acceptable terms to cure the default by the
Company on the terms of the Purchase Agreement (“Agreement”) dated January 1,
2005 by and between IVI Communications, Inc. (“Buyer”), Internet Business
Consulting, Inc. (“IBC”) and AppState.Net, LLC (“AppState”), jointly referred to
as (“Sellers”).  Sellers have exercised the remedies for default as
provided in the Agreement and confirmed that the Remedies, which were that
foreclosure and repossession occurred December 31, 2006, are in
effect.
  Pursuant
to those remedies, ownership of Sellers reverted to James Hollis, effective
December 31, 2006.
  Per the
terms of the Agreement, Sellers returned 2,574,312 shares of IVI common
stock.  The stock was returned and cancelled on July 6,
2007.
  In
addition, there has been no formal settlement agreement signed by all
parties.
  The loss
on the settlement of the contract was $553,643.
  F-26
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
11PROVISION FOR 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 consolidated 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, 2008 and 2007, deferred tax assets approximated the following:
  2008
              
              
              2007Deferred tax
      assets
              
              $
              9,345,000
              
              
              $
              8,264,000Less: 
      valuation allowance
              
              
              (9,345,000
              )
              
              
              (
      8,264,000
              )Net deferred tax
      assets
              
              $
              -0-
              
              
              $
              -0-
  
 At March
31, 2008 and 2007, the Company had accumulated deficits approximating
$27,438,000 and $25,331,000, respectively, available to offset future taxable
income through 2026. The Company established valuation allowances equal to the
full amount of the deferred tax assets due to the uncertainty of the utilization
of the operating losses in future periods.  On June 17, 2008, the
Company became under control of others therefore some of the net operating
losses may note be available (see Note 15).
 
 NOTE
12LITIGATION / ARBITRATION /
OTHER INCOME
  The
Company is currently negotiating settlements with vendors and debt holders for
amounts currently outstanding. As of March 31, 2008, the Company has recognized
the full liability for all amounts that are due.
  On
December 1, 2004, a judgment was entered against Internet Ventures, Inc., the
predecessor Company, in favor of Catherine and Joe Santistevan in the amount of
$1,367,500.  On September 30, 2006 a confidential Settlement Agreement
and Release was entered by and among Joe and Catherine Santistevan
(“Santistevans”) and IVI Communications, Inc., successor in interest defendant
Internet Ventures, Inc., to set aside the default judgment entered against
Internet Ventures, Inc. in the amount of $1,367,500 plus accrued
interest.  Under the terms of the agreement IVI
  F-27
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
12 LITIGATION / ARBITRATION /
OTHER INCOME (CONTINUED)
  Communications
will pay the Santistevans a total four hundred and fifty thousand dollars
($450,000), to settle a claim of $1,367,500.  If IVI Communications,
Inc. defaults on the agreement a judgment would be entered by stipulation in the
amount of 1,367,500.  The balance on this settlement at March 31, 2008
and 2007 was $448,675.  The Company realized income for the year ended
March 31, 2007 in the amount of $986,523.
  The
Company has six default judgments against it for a total amount of
$146,504.  The amounts are recorded in other liabilities and
contingencies.
  On
October 7, 2005, a Complaint for Damages was filed in Superior Court of the
State of California, County of San Joaquin, Case No. CV027700, by Annette S.
Paoletti as Successor Trustee of the Clare P. Evelyn B. McEnerney Family
Trust.  No dollar amount was stated, but a note payable and accrued
interest in the amount of $263,403 was recorded in notes payable and interest on
notes payable.  On March 31, 2007 a confidential Settlement Agreement
was reached between Paoletti and The Company.  Under the terms of the
agreement IVI Communications will pay the Paolettis a total of $110,000. If IVI
Communications, Inc. defaults on the agreement a judgment would be entered by
stipulation in the amount of $143,000.  The Company realized income in
the amount of $153,403 for the year ended March 31, 2007.
 
 NOTE
13- FORGIVENESS OF
DEBT
 
 On March
31, 2008,  on advice of legal counsel, which rendered an opinion
citing California Statutes of Limitations on time barred debt, the Company
realized income in the amount of $215,730 for the forgiveness of debt for notes
and vendor payables.
 
 NOTE
14-          CHANGE OF
MANAGEMENT
 
 Effective
April 24, 2007 Nyhl Henson resigned his position as President and Chairman of
the Board of Directors of IVI Communications, Inc, and
Charles  Roodenburg was named as President and Chairman of the Board
of Directors of IVI Communications, Inc. (See Note 15).
 
 F-28
 
 IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
 NOTE
15- SUBSEQUENT
EVENTS
 
 From
April 10, 2008 through April 25, 2008, 69,923,980 shares were issued on
conversion of notes in the amount of $35,597.  Beneficial interest of
$34,327 was recorded on these transactions.
 
 From
April 4, 2008 through May 2, 2008, 76,190,750 shares were issued on Cornell
debenture conversions valued at $12,952.  Beneficial interest of
$63,238 was recorded on these transactions.
 
 Changes
in Control of Registrant
 
 On June
17, 2008, Titan Global Holdings (the “Purchaser”) entered into separate stock
purchase agreements with Mr. Charles J. Roodenburg Chief Executive Officer,
President and Chairman of the Board of Directors of IVI Communications, Inc.
(the “Company”)(the “Roodenburg Agreement”), Mr. Nyhl Henson (the “Henson
Agreement”) and Ms. Robin Tjon (the “Tjon Agreement”).  The Roodenburg
Agreement, Henson Agreement and Tjon Agreement shall be referred to collectively
as the “Agreements.”  Pursuant to the Agreements, the Purchaser
acquired 4,000,000 shares of series A preferred stock of the Company, $.001 par
value per share (the “Series A Shares”), and 1,000,000 shares of series B
preferred stock of the Company, $.001 par value per share (the “Series B Shares”
and together with the Series A Shares, the “Preferred Shares”) for a total
purchase price of Thirty Dollars ($30.00).   As a result of these
transactions, Purchaser owns 100% of the Series A Shares issued and outstanding
and 100% of the Series B Shares issued and
outstanding.   Furthermore as a result of these transactions and
the voting preferences underlying the acquired Preferred Shares, as detailed
below, the Purchaser owns 4,000,000 issued and outstanding voting shares
underlying the Series A Shares and 51% of the vote required to approve any
action of the Company under the Series B Shares, and may be deemed in control of
the Company.
 
 The
Roodenburg Agreement
 
 Under the
Roodenburg Agreement, Purchaser acquired 900,000 Series A Shares and 1,000,000
Series B Shares for the purchase price of Ten Dollars ($10.00) paid to Mr.
Roodenburg. Pursuant to the Roodenburg Agreement, Mr. Roodenburg, has appointed
David Marks and Bryan Chance as members of the Company’s Board of Directors and
appointed Kurt Jensen as President and Secretary of the Company.  Mr.
Roodenburg has also resigned as an officer and as a director of the
Company.  Additionally, Mr. Roodenburg has forgiven, released
and
  F-29
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
 NOTE
15-          SUBSEQUENT EVENTS
(CONTINUED)
  Changes
in Control of Registrant (continued)
  forever
discharged any debt, monies owed or other obligation owed to him by the Company
or any of its subsidiaries or affiliates.
  The
Henson Agreement
  Under the
Henson Agreement, Purchaser acquired 2,400,000 Series A Shares for the purchase
price of Ten Dollars ($10.00) paid to Mr. Henson. Mr. Henson has also forgiven,
released and forever discharged any debt, monies owed or other obligation owed
to him by the Company or any of its subsidiaries or affiliates.3
  The
Tjon Agreement
  Under the
Tjon Agreement, Purchaser acquired 700,000 Series A Shares for the purchase
price of Ten Dollars ($10.00) paid to Ms. Tjon. Ms. Tjon has also forgiven,
released and forever discharged any debt, monies owed or other obligation owed
to him by the Company or any of its subsidiaries or affiliates.
  Series
A Preferred Stock
  The
Series A Shares have a stated value of $0.05 and a liquidation preference over
the Company's common stock and any other class or series of capital stock whose
terms expressly provide that the holders of Series A Shares should receive
preferential payment. Holders of Series A Shares are entitled to vote on all
matters submitted to shareholders of the Company and are entitled to ten votes
for each Series A Share owned. Holders of Series A Shares vote together with the
holders of common stock on all matters and do not vote as a separate class.
Beginning one year from the date of issuance of the Series A Shares, each Series
A Share is convertible, at the option of the holder, into ten shares of the
Company's common stock. However, holders cannot convert Series A Shares if the
Company reports annual revenue of less than ten million (10,000,000) dollars.
Notwithstanding the limitation on any conversions of the Series A Shares when
the Company's annual revenue is less than ten million (10,000,000) dollars, if
prior to one year from the date of issuance, there is a sale or other
disposition of all or substantially all of the Company's assets, a transaction
or series of related transactions in which more than 50% of the voting power of
the Company is disposed of, or upon a consolidation, merger or other business
combination where the Company
  F-30
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
15-          SUBSEQUENT EVENTS
(CONTINUED)
 
 Changes
in Control of Registrant (continued)
  is not
the survivor, then immediately prior to such event each holder of Series A
Shares may convert any or all of such holder's Series A Shares into common stock
as described above. The Certificate of Designation also provides that the
holders of Series A Shares shall be entitled to any distribution by the Company
of its assets, which would have been payable to the holders of the Series A
Shares with respect to the shares of common stock issuable upon conversion had
such holders been the holders of such shares of common stock on the record date
for the determination of shareholders entitled to such
distribution.
  Series
B Preferred Stock
  The
Series B Shares have a deemed purchase price of one cent ($0.01) per share and a
liquidation preference over the Company's common stock and any other class or
series of capital stock whose terms expressly provide that the holders of Series
B Shares should receive preferential payment.
  In the
event of any liquidation, dissolution or winding up of the Company, either
voluntary or involuntary, the Holders of Series B Shares shall be entitled to
receive, immediately after any distributions to senior securities required by
the Company's Certificate of Incorporation or any certificate of designation,
and prior in preference to any distribution to junior securities but in parity
with any distribution to parity securities, an amount per share equal to $.10
per share. If upon the occurrence of such event, and after payment in full of
the preferential amounts with respect to the senior securities, the assets and
funds available to be distributed among the holders of the Series B Shares and
parity securities shall be insufficient to permit the payment to such holders of
the full preferential amounts due to the holders of the Series B Shares and the
parity securities, respectively, then the entire assets and funds of the Company
legally available for distribution shall be distributed among the holders of the
Series B Shares and the parity securities, pro rata, based on the respective
liquidation amounts to which each such series of stock is entitled by the
Company's Certificate of Incorporation and any certificate(s) of designation
relating thereto.
  The
record holders of the Series B Shares shall have the right to vote on any matter
with holders of common stock voting together as one (1) class. The record
holders of the 1,000,000 Series B Shares shall have that number of votes
(identical in every other respect to the voting rights of the holders of common
stock entitled to vote at any regular or special meeting
  F-31
 
  IVI
COMMUNICATIONS, INC. AND SUBSIDIARIES NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
 MARCH
31, 2008 AND 2007
  NOTE
15-          SUBSEQUENT EVENTS
(CONTINUED)
 
 Changes
in Control of Registrant (continued)
  of the
shareholders) equal to that number of common shares which is not less than 51%
of the vote required to approve any action, which Nevada law provides may or
must be approved by vote or consent of the holder of common shares or the
holders of other securities entitled to vote, if any.
  Departure
of Directors or Principal Officers; Election of Directors; Appointment of
Principal Officers
  On June
17, 2008, Charles Roodenburg, in accordance with the Roodenburg Agreement,
resigned as an officer and a director the Company, effective
immediately.  Mr. Roodenburg had served as the President and Chief
Executive Officer of the Company as well as Chairman of the Board of
Directors.
  On June
17, 2008, the Company appointed Kurt Jensen to serve as the President and
Secretary of the Company and David Marks and Bryan Chance to serve as directors
of the Company.
 
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