----

----

|                                                                    |   |                                      |   |
|-------------------------------------------------------------------------|--------|-------------------------------------------|--------|
| Delaware                                                                |   | 75-2440201                                |   |
| (State      or other jurisdiction ofincorporation      or organization) |   | (I.R.S.      Employer Identification No.) |   |

| 6500      Greenville AvenueSuite      570Dallas,      TX |   | 75206           |   |
|----------------------------------------------------------|--------|-----------------|--------|
| (Address      of Principal ExecutiveOffices)             |   | (Zip      Code) |   |

|                                                            | (214)      265-9580 |   |
|-----------------------------------------------------------------|---------------------|--------|
| (Registrant’s      Telephone Number, including areacode.) |

|                                                                                          | Not      Applicable |   |
|-----------------------------------------------------------------------------------------------|---------------------|--------|
| (Former      name, Former Address and Former Fiscal year, if changed since last      report.) |

|                           |                     |                                               |                             |
|--------------------------------|--------------------------|----------------------------------------------------|----------------------------------|
| Large accelerated      filer o | Accelerated filer      o | Non-accelerated      filer o                       | Smaller reporting      company x |
|                           |                     | (Do      not check if a smaller reporting company) |                             |

----

|          |   |                                                                                                  |   |   |
|---------------|--------|-------------------------------------------------------------------------------------------------------|--------|--------|
| Part      I.  |   | Financial      Information                                                                            |   | 1      |
|          |   |                                                                                                  |   |   |
| Item      1.  |   | Financial      Statements                                                                             |   | 1      |
|          |   |                                                                                                  |   |   |
|          |   | Balance      Sheets-June 30, 2009 and March 31, 2009.                                                 |   |   |
|          |   |                                                                                                  |   |   |
|          |   | Statements      of Operations-Three Months Ended June 30, 2009 and 2008.                              |   |   |
|          |   |                                                                                                  |   |   |
|          |   | Statements      of Cash Flows-Three Months Ended June 30, 2009 and 2008.                              |   |   |
|          |   |                                                                                                  |   |   |
|          |   | Notes      to Financial Statements - June 30, 2009.                                                   |   |   |
|          |   |                                                                                                  |   |   |
| Item      2.  |   | Management’s      Discussion and Analysis of Financial Condition and      Results of Operations |   | 11     |
|          |   |                                                                                                  |   |   |
| Item      3.  |   | Quantitative      and Qualitative Disclosures About Market Risk                                       |   | 13     |
|          |   |                                                                                                  |   |   |
| Item      4T. |   | Controls      and Procedures                                                                          |   | 14     |
|          |   |                                                                                                  |   |   |
| Part      II. |   | Other      Information                                                                                |   | 14     |
|          |   |                                                                                                  |   |   |
| Item      1.  |   | Legal      Proceedings                                                                                |   | 14     |
|          |   |                                                                                                  |   |   |
| Item      1A. |   | Risk      Factors                                                                                     |   | 14     |
|          |   |                                                                                                  |   |   |
| Item      2.  |   | Unregistered      Sales of Securities and Use of Proceeds                                             |   | 14     |
|          |   |                                                                                                  |   |   |
| Item      3.  |   | Defaults      upon Senior Securities                                                                  |   | 14     |
|          |   |                                                                                                  |   |   |
| Item      4.  |   | Submission      of Matters to a Vote of Security Holders                                              |   | 14     |
|          |   |                                                                                                  |   |   |
| Item      5.  |   | Other      Information                                                                                |   | 14     |
|          |   |                                                                                                  |   |   |
| Item      6.  |   | Exhibits      and Reports on Form 8-K                                                                 |   | 15     |
|          |   |                                                                                                  |   |   |
| Signatures    |   | 16                                                                                                    |

----

|                                                                                                                         |   |                         |      |   |                        |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------|--------|-----------------------------|--------|
|                                                                                                                         |   | June      30,2009(unaudited) |      |   | March      31,2009(audited) |   |
|                                                                                                                         |   |                         |      |   |                        |   |
| Assets                                                                                                                       |   |                         |      |   |                        |   |
|                                                                                                                         |   |                         |      |   |                        |   |
| Current      assets:                                                                                                         |   |                         |      |   |                        |   |
| Cash      and cash equivalents                                                                                               |   | $                            | 405,221   |   |                        | $      | 466,187 |   |
| Accounts      receivable, net of allowance for doubtful accounts of $0, and $10,269,      respectively                       |   |                         | 636,099   |   |                        |   | 654,111 |   |
| Inventory                                                                                                                    |   |                         | 25,980    |   |                        |   | 37,641 |   |
| Prepaid      expenses                                                                                                        |   |                         | —   |   |                        |   | 7,500 |   |
| Current      portion deferred loan cost                                                                                      |   |                         | 2,107     |   |                        |   | 4,214 |   |
|                                                                                                                         |   |                         |      |   |                        |   |   |   |
| Total      current assets                                                                                                    |   | $                            | 1,069,407 |   |                        | $      | 1,169,653 |   |
|                                                                                                                         |   |                         |      |   |                        |   |   |   |
| Property      and equipment:                                                                                                 |   |                         |      |   |                        |   |   |   |
| Computer      equipment                                                                                                      |   | $                            | 494,355   |   |                        | $      | 484,898 |   |
| Furniture      and fixtures                                                                                                  |   |                         | 22,317    |   |                        |   | 22,317 |   |
| Office      equipment                                                                                                        |   |                         | 19,271    |   |                        |   | 19,271 |   |
|                                                                                                                         |   |                         |      |   |                        |   |   |   |
|                                                                                                                         |   | $                            | 535,943   |   |                        | $      | 526,486 |   |
| Less      accumulated depreciation                                                                                           |   |                         | 384,495   |   |                        |   | 371,254 |   |
|                                                                                                                         |   |                         |      |   |                        |   |   |   |
| Net      property and equipment                                                                                              |   | $                            | 151,448   |   |                        | $      | 155,232 |   |
|                                                                                                                         |   |                         |      |   |                        |   |   |   |
| Other      assets:                                                                                                           |   |                         |      |   |                        |   |   |   |
| Capitalized      software development costs, net of accumulated amortization of $1,251,217      and $1,249,024, respectively |   | $                            | 6,711     |   |                        | $      | 8,904 |   |
| Deposits                                                                                                                     |   |                         | 29,485    |   |                        |   | 29,485 |   |
| Trademarks      and patents, net of accumulated amortization of $41,921 and $39,915,      respectively                       |   |                         | 65,967    |   |                        |   | 67,566 |   |
|                                                                                                                         |   |                         |      |   |                        |   |   |   |
| Total      other assets                                                                                                      |   | $                            | 102,163   |   |                        | $      | 105,955 |   |
|                                                                                                                         |   |                         |      |   |                        |   |   |   |
| Total      assets                                                                                                            |   | $                            | 1,323,018 |   |                        | $      | 1,430,840 |   |

----

|                                                                                                                       |   | June      30,2009(unaudited) |        |   | March      31,2009(audited) |   |
|----------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|--------|-----------------------------|--------|
|                                                                                                                       |   |                         |        |   |                        |   |
| Liabilities      and stockholders’ equity (deficit)                                                                  |   |                         |        |   |                        |   |
|                                                                                                                       |   |                         |        |   |                        |   |
| Current      liabilities:                                                                                                  |   |                         |        |   |                        |   |
| Accounts      payable                                                                                                      |   | $                            | 197,436     |   |                        | $      | 218,571 |   |
| Accrued      vacation                                                                                                      |   |                         | 9,177       |   |                        |   | 4,314 |   |
| Accrued      payroll and payroll taxes                                                                                     |   |                         | 11,201      |   |                        |   | 5,044 |   |
| Accrued      interest                                                                                                      |   |                         | 52,650      |   |                        |   | 35,100 |   |
| Deferred      revenue                                                                                                      |   |                         | 38,042      |   |                        |   | 56,917 |   |
| Current      portion debentures payable - net of discounts                                                                 |   |                         | 1,731,502   |   |                        |   | 2,000,504 |   |
|                                                                                                                       |   |                         |        |   |                        |   |   |   |
| Total      current liabilities                                                                                             |   | $                            | 2,040,008   |   |                        | $      | 2,320,450 |   |
|                                                                                                                       |   |                         |        |   |                        |   |   |   |
| Commitments      and contingencies (Note E)                                                                                |   |                         |        |   |                        |   |   |   |
|                                                                                                                       |   |                         |        |   |                        |   |   |   |
| Stockholders’      equity (deficit):                                                                                 |   |                         |        |   |                        |   |   |   |
| Common      stock, $.001 par value;100,000,000 shares authorized; 6,130,184      and 6,130,184 shares issued, respectively |   | $                            | 6,130       |   |                        | $      | 6,130 |   |
| Additional      paid-in capital                                                                                            |   |                         | 20,481,148  |   |                        |   | 20,481,148 |   |
| Accumulated      deficit                                                                                                   |   |                         | (21,202,762 | )      |                        |   | (21,375,382 | ) |
| Treasury      stock - 4,500 shares at cost                                                                                 |   |                         | (1,506      | )      |                        |   | (1,506 | ) |
|                                                                                                                       |   |                         |        |   |                        |   |   |   |
| Total      stockholders’ equity (deficit)                                                                            |   | $                            | (716,990    | )      |                        | $      | (889,610 | ) |
|                                                                                                                       |   |                         |        |   |                        |   |   |   |
| Total      liabilities and stockholders’ equity (deficit)                                                            |   | $                            | 1,323,018   |   |                        | $      | 1,430,840 |   |

----

|                                            |   |                                               |      |   |                                               |   |
|-------------------------------------------------|--------|----------------------------------------------------|-----------|--------|----------------------------------------------------|--------|
|                                            |   | Three      monthsendedJune      30,2009(unaudited) |      |   | Three      monthsendedJune      30,2008(unaudited) |   |
|                                            |   |                                               |      |   |                                               |   |
| Net      sales                                  |   | $                                                  | 1,098,125 |   |                                               | $      | 960,173 |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Cost      of sales                              |   |                                               | 542,859   |   |                                               |   | 507,765 |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Gross      profit                               |   | $                                                  | 555,266   |   |                                               | $      | 452,408 |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| General      and administrative expenses        |   | $                                                  | 329,872   |   |                                               | $      | 386,783 |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Income      from operations                     |   | $                                                  | 225,394   |   |                                               | $      | 65,625 |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Other      income (expense):                    |   |                                               |      |   |                                               |   |   |   |
| Interest      expense                           |   | $                                                  | (52,774   | )      |                                               | $      | (55,800 | ) |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Total      other income (expense)               |   | $                                                  | (52,774   | )      |                                               | $      | (55,800 | ) |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Income      from operations before income taxes |   | $                                                  | 172,620   |   |                                               | $      | 9,825 |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Provision      for income taxes                 |   |                                               | —   |   |                                               |   | — |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Net      income                                 |   | $                                                  | 172,620   |   |                                               | $      | 9,825 |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Per      share amounts:                         |   |                                               |      |   |                                               |   |   |   |
| Income      from operations                     |   | $                                                  | 0.03      |   |                                               | $      | — |   |
|                                            |   |                                               |      |   |                                               |   |   |   |
| Net      income                                 |   | $                                                  | 0.03      |   |                                               | $      | — |   |

----

|                                                      |   |            |      |   |            |   |
|-----------------------------------------------------------|--------|-----------------|-----------|--------|-----------------|--------|
|                                                      |   | 2009(unaudited) |      |   | 2008(unaudited) |   |
|                                                      |   |            |      |   |            |   |
| Cash      flows from operating activities:                |   |            |      |   |            |   |
| Cash      received from customers                         |   | $               | 1,116,137 |   |            | $      | 1,001,783 |   |
| Cash      paid to suppliers and employees                 |   |            | (863,015  | )      |            |   | (905,711 | ) |
| Interest      paid                                        |   |            | (11,726   | )      |            |   | (14,752 | ) |
|                                                      |   |            |      |   |            |   |   |   |
| Net      cash provided by operating activities            |   | $               | 241,396   |   |            | $      | 81,320 |   |
|                                                      |   |            |      |   |            |   |   |   |
| Cash      flows from investing activities:                |   |            |      |   |            |   |   |   |
| Capital      expenditures                                 |   | $               | (9,862    | )      |            | $      | (16,016 | ) |
|                                                      |   |            |      |   |            |   |   |   |
| Net      cash used by investing activities                |   | $               | (9,862    | )      |            | $      | (16,016 | ) |
|                                                      |   |            |      |   |            |   |   |   |
| Cash      flows from financing activities:                |   |            |      |   |            |   |   |   |
| Repayment      of notes payable                           |   | $               | (292,500  | )      |            | $      | — |   |
|                                                      |   |            |      |   |            |   |   |   |
| Net      cash provided (used) by financing activities     |   | $               | (292,500  | )      |            | $      | — |   |
|                                                      |   |            |      |   |            |   |   |   |
| Net      (decrease) increase in cash and cash equivalents |   | $               | (60,966   | )      |            | $      | 65,304 |   |
|                                                      |   |            |      |   |            |   |   |   |
| Cash      and cash equivalents:                           |   |            |      |   |            |   |   |   |
| Beginning      of period                                  |   |            | 466,187   |   |            |   | 283,220 |   |
|                                                      |   |            |      |   |            |   |   |   |
| End      of period                                        |   | $               | 405,221   |   |            | $      | 348,524 |   |

----

|                                                                                               |   | 2009(unaudited) |    |   | 2008(unaudited) |   |
|----------------------------------------------------------------------------------------------------|--------|-----------------|---------|--------|-----------------|--------|
|                                                                                               |   |            |    |   |            |   |
| Reconciliation      of net income (loss) to net cash provided by operating      activities:        |   |            |    |   |            |   |
|                                                                                               |   |            |    |   |            |   |
| Net      income                                                                                    |   | $               | 172,620 |   |            | $      | 9,825 |   |
|                                                                                               |   |            |    |   |            |   |   |   |
| Adjustments      to reconcile net income (loss) to net cash provided by operating      activities: |   |            |    |   |            |   |   |   |
| Depreciation      and amortization                                                                 |   | $               | 19,545  |   |            | $      | 25,597 |   |
|                                                                                               |   |            |    |   |            |   |   |   |
| Changes      in operating assets and liabilities:                                                  |   |            |    |   |            |   |   |   |
| Decrease      in accounts receivable                                                               |   |            | 18,012  |   |            |   | 41,610 |   |
| Decrease      in inventory                                                                         |   |            | 11,661  |   |            |   | 504 |   |
| Decrease      in prepaid expenses                                                                  |   |            | 7,500   |   |            |   | — |   |
| Decrease      in accounts payable                                                                  |   |            | (21,135 | )      |            |   | (28,860 | ) |
| Decrease      in deferred revenue                                                                  |   |            | (18,875 | )      |            |   | (14,376 | ) |
| Increase      in accrued expenses                                                                  |   |            | 52,068  |   |            |   | 47,020 |   |
|                                                                                               |   |            |    |   |            |   |   |   |
| Total      adjustments                                                                             |   | $               | 68,776  |   |            | $      | 71,495 |   |
|                                                                                               |   |            |    |   |            |   |   |   |
| Net      cash provided by operating activities                                                     |   | $               | 241,396 |   |            | $      | 81,320 |   |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Basis      of presentation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |      The      accounting policies followed by Preferred Voice, Inc. are set forth in the      Company’s financial statements that are a part of its March 31, 2009, Form      10KSB and should be read in conjunction with the financial statements for      the three months ended June 30, 2009, contained herein.                                                                                                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |      The      financial information included herein as of June 30, 2009, and for the      three months ended June 30, 2009 and 2008, has been presented without an      audit, pursuant to accounting principles for the interim financial      information generally accepted in the United States of America and the      rules of the Securities and Exchange Commission. The Company believes that      the disclosures are adequate to make the information presented not      misleading. The information presented reflects all adjustments (consisting      solely of normal recurring adjustments) which are, in the opinion of      management, necessary for a fair statement of results for the      period. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Cash      and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |      For      purposes of reporting cash flows, cash and cash equivalents include all      amounts due from banks with original maturities of three months or      less.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Inventory                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |      Inventory,      consisting of ringback platforms and their related components was $1,194      and digital signage and their related components was $24,786, is stated at      the lower of cost or market. Cost is determined using the first-in,      first-out method.                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Concentration      of business, market and credit risks                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |      In      the normal course of business, the Company extends unsecured credit to its      customers with payment terms generally 30 days. Because of the credit risk      involved, management provides an allowance for doubtful accounts which      reflects its opinion of amounts which will eventually become      uncollectible. In the event of complete nonperformance by the Company’s      customers, the maximum exposure to the Company is the outstanding accounts      receivable balance at the date of nonperformance.                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | Receivables      and credit policies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |      Accounts      receivable are uncollateralized customer obligations due under normal      trade terms requiring payment within 30 days from the invoice date. Unpaid      accounts receivable with invoice dates over 30 days old bear no      interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |      Accounts      receivable are stated at the amount billed to the customer. Customer      account balances with invoices dated over 90 days are considered      delinquent.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |      Payments      of accounts receivable are allocated to the specific invoices identified      on the customer’s remittance advice or, if unspecified, are applied to the      earliest unpaid invoice.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |      The      carrying amount of accounts receivable is reduced by a valuation allowance      that reflects management’s best estimate of amounts that will not be      collected. Management individually reviews all accounts receivable      balances that exceed 90 days from invoice date and, based on an assessment      of current creditworthiness, estimates that portion, if any, of the      balance that will not be collected. Accounts receivable past 90 days due      are $2,683 and $18,870 as of June 30, 2009 and March 31, 2009,      respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Capitalized      software development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |      The      Company has adopted the provisions of FASB No. 86,      Accounting for the Costs of Computer Software to Be Sold, Leased, or      Otherwise Marketed, to account for its internally developed      software costs since the Company is dependent on the software to provide      the voice recognition services. Under the provisions of FASB No. 86, costs      incurred prior to the product’s technological feasibility are expensed as      incurred. The capitalization of software development costs begins when a      product’s technological feasibility has been established and ends when the      product is available for use and released to customers. Capitalized      software development costs include direct costs incurred subsequent to      establishment of technological feasibility for significant product      enhancements. Amortization is computed on an individual product basis      using the straight-line method over the estimated economic life of the      product, generally three years. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   | Property      and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |      The      cost of property and equipment is depreciated over the estimated useful      lives of the related assets. Depreciation is computed on the straight-line      method for financial reporting purposes and the double declining method      for income tax purposes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |      Maintenance      and repairs are charged to operations when incurred. Betterments and      renewals are capitalized.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|   |      The      useful lives of property and equipment for purposes of computing      depreciation are as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

| Computer      equipment     | 5      years |
|-----------------------------|--------------|
| Furniture      and fixtures | 5      years |
| Office      equipment       | 5      years |

|   | Fair      value of financial instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |      The      Company defines the fair value of a financial instrument as the amount at      which the instrument could be exchanged in a current transaction between      willing parties. Financial instruments included in the Company’s financial      statements include cash and cash equivalents, trade accounts receivable,      other receivables, other assets, notes payable and long-term debt. Unless      otherwise disclosed in the notes to the financial statements, the carrying      value of financial instruments is considered to approximate fair value due      to the short maturity and characteristics of those instruments. The      carrying value of long-term debt approximates fair value as terms      approximate those currently available for similar debt      instruments.                                                                                                                                                                                                                           |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   | Revenue      recognition                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |      For      recognizing revenue, the Company applies the provisions of SEC Staff      Accounting Bulletin (SAB) No. 104, Revenue      Recognition which was issued in December 2003. In most cases, the      services being performed do not require significant production,      modification or customization of the Company’s software or services;      therefore, revenues are recognized when evidence of a completed      transaction exists, generally when services have been rendered. In      situations where the Company receives an initial payment for future      services, the Company defers recognition of revenue, and recognizes the      revenue over the life of the respective contract. SAB No. 104 codified,      revised and rescinded certain sections of Staff Accounting Bulletin (SAB)      No. 101, Revenue      Recognition in Financial Statements, in order to make this      interpretive guidance consistent with current authoritative accounting      guidance and SEC rules andregulations. |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Income      or loss per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | The      Company adopted the provisions of Statement of Financial Accounting      Standards (SFAS) No. 128, Earnings      per Share. SFAS No. 128 reporting requirements replace primary and      fully-diluted earnings per share (EPS) with basic and diluted EPS. Basic      EPS is calculated by dividing net income or loss (available to common      stockholders) by the weighted average number of common shares outstanding      for the period. Diluted EPS reflects the potential dilution that could      occur if securities or other contracts to issue common stock were      exercised or converted into common stock. For the three months ended June      30, 2009 and 2008, potential dilutive securities had an anti-dilutive      effect and were not included in the calculation of diluted net income per      common share.                                                                                                                                                                                                                                                                                                                                                                                                    |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |      Income      per share for the three months ended June 30, 2009 and 2008, respectively,      is based on the weighted average number of shares outstanding of 6,130,184      for both periods.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Income      taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |      Income      taxes are accounted for under the asset and liability method. Deferred tax      assets and liabilities are recognized for the future tax consequences      attributable to differences between the financial statement carrying      amounts of existing assets and liabilities and their respective tax basis.      Deferred tax assets and liabilities are measured using enacted tax rates      that will apply in the years in which those temporary differences are      expected to be recovered or settled. The effect on deferred tax assets and      liabilities of a change in tax rates is recognized in income in the period      that includes the enactment date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |      The      Company adopted the provisions of FASB Interpretation No. 48,      Accounting for Uncertainty in Income Taxes (“FIN 48”), on December 1,      2007. Previously, the Company had accounted for tax contingencies in      accordance with SFAS No. 5, Accounting for Contingencies. As required      by Interpretation 48, which clarifies SFAS No. 109, Accounting for      Income Taxes, the Company recognizes the financial statement benefit of a      tax position only after determining that the relevant tax authority would      more likely than not sustain the position following an audit. For tax      positions meeting this standard, the amount recognized in the financial      statements is the largest benefit that has a greater than 50 percent      likelihood of being realized upon ultimate settlement with the relevant      tax authority.                                                                                                                                                                                                                                                                                                               |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Trademarks      and patents                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |      Trademarks      and patents are recorded at cost. Amortization is computed on the      straight-line method over the identifiable lives of the trademarks and      patents. The Company has adopted the provisions of Statement of Financial      Accounting Standards (SFAS) No. 142, Goodwill      and Other Intangible Assets, effective for periods beginning      January 1, 2002, and thereafter. SFAS 142 addresses financial accounting      and reporting for acquired goodwill and other intangible assets and      supersedes APB Opinion No. 17, Intangible      Assets. Specifically, the statement addresses how intangible assets      that are acquired should be accounted for in financial statements upon      their acquisition, as well as how goodwill and other intangible assets      should be accounted for after they have been initially recognized in the      financial statements. The statement requires intangible assets to be      reviewed for impairment whenever events or changes in circumstances      indicate that their carrying amounts may not be recoverable and that a      loss shall be recognized if the carrying amount of an intangible exceeds      its fair value. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | Impairment      of long-lived assets and long-lived assets to be disposed      of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   |      The      Company adopted the provisions of SFAS No. 144, Accounting      for the Impairment or Disposal of Long-Lived Assets, effective for      periods beginning January 1, 2002 and thereafter. SFAS 144 replaces SFAS      121, Accounting      for the Impairment of Long-Lived Assets for Long-Lived Assets to Be      Disposed Of, and, among other matters, addresses financial      accounting and reporting for the impairment or disposal of long-lived      assets. SFAS 144 retains the basic provisions of SFAS 121, but broadens      its scope and establishes a single model for long-lived assets to be      disposed of by sale.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 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 amounts      reported in the financial statements and accompanying notes. Actual      results could differ from these estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Reporting      comprehensive income and operating  segments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |      The      Company has adopted the provisions of SFAS No. 130, Reporting      Comprehensive Income and SFAS No. 131, Disclosures      about Segments of an Enterprise and Related Information. SFAS No.      130 requires that an enterprise report, by major components and as a      single total, the change in its net assets during the period from      non-owner sources. SFAS No. 131 establishes annual and interim reporting      standards for an enterprise’s operating segments and related disclosures      about its products, services, geographic areas and major customers.      Adoption of these statements has had no impact on the Company’s financial      position, results of operations, cash flow or related      disclosures.                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Stock-based      compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |      Effective      April 1, 2006, the Company adopted the provisions of SFAS No. 123R, Share-Based      Payment, which is a revision of SFAS No. 123, Accounting      for Stock-Based Compensation. This statement now requires the      Company to recognize compensation costs related to stock-based payment      transactions (i.e. granting of stock options and warrants to employees) in      the financial statements. With limited exceptions, the amount of      compensation cost will be measured based on the grant-date fair value of      the equity or liability instruments issued. In addition, liability awards      will be remeasured each reporting period. Compensation cost will be      recognized over the period that an employee provides services in exchange      for the award. Compensation expense recognized during the three months      ended June 30, 2009 and 2008 was $-0- for both periods. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| Note      C - Convertible debt and warrants:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|      On      March 31, 2005, the Company closed a Securities Purchase Agreement and      issued $975,000 in principal amount of 6% Convertible Debentures due March      31, 2008 and subsequently extended to December 31, 2009, (the      “Debentures”), to a group of institutional and high net worth investors.      The company has repaid $390,000 of the principal balance to the Debenture      holders leaving an outstanding balance of $585,000. All but $60,000 of the      debentures have been extended to December 31, 2009. The Debentures pay an      interest rate of 6% on an annual basis and are convertible into 1,170,000      shares of the Company’s common stock at a price of $0.50 per share. The      Company recorded the intrinsic value of the beneficial conversion of      $257,500 as interest expense as the shareholders approved an increase in      its authorized shares to 100,000,000 shares on April 27, 2006. The      investors also received warrants to purchase an additional 975,000 shares      of common stock with an exercise price of $0.60 per share. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|      The      Company allocated the proceeds from the issuance of the Debentures to the      warrants and the Debentures based on their relative fair market values at      the date of issuance. The value assigned to the warrants of $427,416 was      recorded as an increase in additional paid in capital. The assignment of a      value to the warrants results in a loan discount being recorded for the      same amount. The discount was amortized over the original three-year term      of the Debentures as additional interest expense. The loan costs incurred      on the issuance of the Debentures amounted to $2,430.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|      On      September 29, 2006, the Company closed a Securities Purchase Agreement and      issued $1,170,000 in principal amount of 6% Convertible Debentures due      September 29, 2009 (the “Debentures”), to a group of institutional and      high net worth investors. The Debentures pay an interest rate of 6% on an      annual basis and are convertible into 3,342,857 shares of the Company’s      common stock at a price of $0.35 per share. The investors also received      warrants to purchase an additional 1,671,429 shares of common stock with      an exercise price of $0.50 pershare.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |

----

|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Stock      purchase warrants                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |      At      June 30, 2009, the Company had outstanding warrants to purchase 5,291,072      shares of the Company’s common stock at prices which ranged from $0.50 per      share to $0.85 per share. The warrants are exercisable at any time and      expire through September 29, 2011. At June 30, 2009, 5,291,072 shares of      common stock were reserved for that purpose. On March 2, 2009, the Board      of Directors approved a unanimous consent to extend the expiration date of      1,310,000 warrants issued to various private placement investors and      employees from May 18, 2009 for an additional year to May 18,      2010. |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | Common      stock reserved                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   |      At      June 30, 2009, shares of common stock were reserved for the following      purposes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

|   | Exercise      of stock warrants and debt conversion                                                                 |   |   | 9,803,929  |   |   |
|--------|---------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|
|   | Exercise      of future grants of stock options and stock appreciation rights under the      2000 stock option plan |   |   | 844,133    |   |   |
|   |                                                                                                                |   |   | 10,648,062 |   |   |

|   |                           |   |   |    |   |   |
|--------|--------------------------------|--------|--------|---------|--------|--------|
|   | Year      endingMarch      31, |   | Amount |    |   |
|   |                           |   |   |    |   |   |
|   | 2010                           |   | $      | 43,318  |   |   |
|   | 2011                           |   |   | 461     |   |   |
|   | 2012                           |   |   | — |   |   |
|   | 2013                           |   |   | — |   |   |
|   | 2014                           |   |   | — |   |   |
|   |                           |   | $      | 43,779  |   |   |

----

|   |    |                                                                                                                                                                                             |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | secure      adequate financial and human resources to meet our requirements, including      adequate numbers of technical support staff to provide service for our      phone company customers; |
|   | ● | establish      and maintain relationships with phone companies;                                                                                                                                  |
|   | ● | make      sure the GAP system works with the telephone switches of all of the major      manufacturers;                                                                                          |
|   | ● | achieve      user acceptance for our services;                                                                                                                                                   |
|   | ● | generate      reasonable margins on our services;                                                                                                                                                |
|   | ● | continue      to deploy and install GAP systems on a timely and acceptable      schedule;                                                                                                        |

----

|   | ● | respond      to competitive market developments;                                                                                                   |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------|
|   | ● | mitigate      risk associated with our technology by obtaining patents and copyrights      and other protections of our intellectual property; and |
|   | ● | continually      update and add to our product offerings to meet the needs of      consumers.                                                      |

----

----

| PART      II. | OTHER      INFORMATION |
|---------------|------------------------|

----

| ExhibitNumber |                                                                                                                            | Exhibit      Description |   |
|---------------|---------------------------------------------------------------------------------------------------------------------------------|--------------------------|--------|
|          |                                                                                                                            |
| 31.1          | Certification      of Chief Executive Officer and Chief Financial Offier                                                        |
| 32.1          | Certification      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of      the Sarbanes-Oxley Act of2002 |

----

|                |   |                                      |
|---------------------|--------|-------------------------------------------|
|                |   | PREFERRED      VOICE, INC.                |
|                |   |                                      |
| August      3, 2009 |   | /s/      Mary G. Merritt                  |   |
| Date                |   | Mary      G. Merritt                      |
|                |   | Chairman      and Chief Executive Officer |
|                |   | (Principal      ExecutiveOfficer)         |