UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-Q





x
              QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the quarterly period ended September 30, 2009ORo
              TRANSITION
      REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934For
      the transition period from ______________to
  ______________


Commission
file number:     000-29341





iVOICE,
      INC(Exact
      name of registrant as specified in its
charter)
  New
      Jersey
                
                51-0471976(State
      or other jurisdiction of incorporation or organization)
                
                (I.R.S.
      Employer Identification No.)750
      Highway 34, Matawan, NJ
                
                07747(Address
      of Principal Executive Offices)
                
                (Zip
      Code)





Registrant’s
Telephone Number, Including Area Code:   (732) 441-7700





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




Indicate
by check mark whether the registrant has submitted electronically and posted on
its Web site, if any, every Interactive Data File required to be submitted and
posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or
for such shorter period that the registrant was required to submit and post such
files).   YES o  NO x





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





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





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





Number of
shares of Class A, common stock,


No par value,
      outstanding as of November 13, 2009:
              3,401,867,145




Table of Contents
  iVOICE,
INC. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
 SEPTEMBER
30, 2009 AND 2008
 
 TABLEOF
CONTENTS
 
 Page
      No.PART
      I. FINANCIAL INFORMATIONItem
      1.
                Condensed Consolidated Financial Statements
      (Unaudited)
                2Condensed Consolidated Balance Sheets – September 30, 2009 and
      December 31, 2008
                2Condensed Consolidated Statements of Operations - For the nine
      months and three months ended September 30, 2009 and
    2008
                3Condensed Consolidated Statement of Accumulated Other
      Comprehensive Loss – For the nine months ended September 30,
      2009
                4Condensed Consolidated Statements of Cash Flows - For the nine
      months ended September 30, 2009 and 2008
                5 -
      6Notes to Condensed Consolidated Financial Statements
      (Unaudited)
                7 -
      14Item
      2.
                Management’s Discussion and Analysis of Financial Condition
      and Results of Operations
                15 -
      17Item
      4T.
                Controls and Procedures
                18PART
      II. OTHER INFORMATIONItem
      5.
                Other Information
                19Item
      6.
                Exhibits
                19
   Table of Contents
 
 ITEM1.   CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS
(UNAUDITED)
 iVOICE, INC. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED BALANCE SHEETS
 (UNAUDITED)
 
 September
      30, 2009
                
                
                December
      31, 2008ASSETSCURRENT
      ASSETSCash
      and cash equivalents, net of restricted cash of $0 and $1,512,104,
      respectively
                
                $
                2,364,404
                
                
                $
                3,442,590Securities
      available for sale
                
                
                10,901
                
                
                
                13,016Accounts
      receivable, net of allowance for doubtful accounts $12,083
                
                
                11,412
                
                
                
                --Inventory
                
                
                97
                
                
                
                6,246Prepaid
      expenses and other current assets
                
                
                111,561
                
                
                
                21,811Total
      current assets
                
                
                2,498,375
                
                
                
                3,483,663PROPERTY
      AND EQUIPMENT, net of accumulated depreciation of $233,204 and
      $221,162, respectively
                
                
                62,514
                
                
                
                23,556OTHER
      ASSETSIntangible
      assets, net of accumulated amortization of $2,161 and $1,608,
      respectively
                
                
                238,779
                
                
                
                233,939Deposits
      and other assets
                
                
                6,667
                
                
                
                6,666Total
      other assets
                
                
                245,446
                
                
                
                240,605TOTAL
      ASSETS
                
                $
                2,806,335
                
                
                $
                3,747,824LIABILITIES
      AND STOCKHOLDERS’ DEFICITCURRENT
      LIABILITIESAccounts
      payable and accrued expenses
                
                $
                2,185,935
                
                
                $
                2,171,229Convertible
      debentures payable, net of discounts of $66,607 and $170,808,
      respectively
                
                
                1,088,893
                
                
                
                996,092Derivative
      liability on convertible debentures
                
                
                1,635,549
                
                
                
                1,659,991Due
      to related parties
                
                
                587,856
                
                
                
                648,058Deferred
      revenues
                
                
                4,269
                
                
                
                9,407Total
      current liabilities
                
                
                5,502,502
                
                
                
                5,484,777COMMITMENTS
      AND CONTINGENCIES
 
 STOCKHOLDERS’
      DEFICITStockholders’
      equity (deficit):Preferred
      stock, $1 par value; authorized 1,000,000 shares;no
      shares issued and outstanding
                
                
                --
                
                
                
                --Common
      stock, Class A, no par value; authorized 10,000,000,000
      shares;2009
      – 3,268,536,812 shares issued; 3,268,533,812 shares
      outstanding2008
      - 2,602,173,527 shares issued; 2,602,170,527 shares
      outstanding
                
                
                24,731,124
                
                
                
                24,613,184Common
      stock, Class B, $0.01 par value; authorized 50,000,000
    shares;2009
      - 2,204,875 shares issued; 0 shares outstanding2008
      - 2,204,875 shares issued; 1,512,104 shares outstanding
                
                
                --
                
                
                
                --Additional
      paid-in capital
                
                
                801,420
                
                
                
                719,702Accumulated
      other comprehensive income
                
                
                5,858
                
                
                
                1,785Accumulated
      deficit
                
                
                (28,205,769
                )
                
                
                (27,042,824
                )Treasury
      stock, 3,000 Class A shares, at cost
                
                
                (28,800
                )
                
                
                (28,800
                )Total
      stockholders' deficit
                
                
                (2,696,167
                )
                
                
                (1,736,953
                )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                
                $
                2,806,335
                
                
                $
                3,747,824
 
 See
accompanying notes to condensed consolidated financial
statements.
   2
 Table of Contents


iVOICE, INC. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)


For
      the nine months
                                                                              
                                                                              
                                                                              
                                                                              For
      the three monthsEnded
      September 30,
                                                                              
                                                                              
                                                                              
                                                                              Ended
      September 30,2009
                                                                              
                                                                              
                                                                              
                                                                              2008
                                                                              
                                                                              
                                                                              
                                                                              2009
                                                                              
                                                                              
                                                                              
                                                                              2008SALES
                                                                              
                                                                              $
                                                                              73,969
                                                                              
                                                                              
                                                                              $
                                                                              125,152
                                                                              
                                                                              
                                                                              $
                                                                              28,721
                                                                              
                                                                              
                                                                              $
                                                                              46,448COST
      OF SALES
                                                                              
                                                                              
                                                                              34,473
                                                                              
                                                                              
                                                                              
                                                                              --
                                                                              
                                                                              
                                                                              
                                                                              13,934
                                                                              
                                                                              
                                                                              
                                                                              --GROSS
      PROFIT
                                                                              
                                                                              
                                                                              39,496
                                                                              
                                                                              
                                                                              
                                                                              125,152
                                                                              
                                                                              
                                                                              
                                                                              14,787
                                                                              
                                                                              
                                                                              
                                                                              46,448GENERAL
      AND ADMINISTRATIVE EXPENSESGeneral
      and administrative expenses
                                                                              
                                                                              
                                                                              948,756
                                                                              
                                                                              
                                                                              
                                                                              1,024,529
                                                                              
                                                                              
                                                                              
                                                                              299,191
                                                                              
                                                                              
                                                                              
                                                                              324,158Amortization
      of financing costs
                                                                              
                                                                              
                                                                              --
                                                                              
                                                                              
                                                                              
                                                                              72,396
                                                                              
                                                                              
                                                                              
                                                                              --
                                                                              
                                                                              
                                                                              
                                                                              --Depreciation
      and amortization
                                                                              
                                                                              
                                                                              11,595
                                                                              
                                                                              
                                                                              
                                                                              4,738
                                                                              
                                                                              
                                                                              
                                                                              4,057
                                                                              
                                                                              
                                                                              
                                                                              1,443Total
      selling, general and administrative expenses
                                                                              
                                                                              
                                                                              960,351
                                                                              
                                                                              
                                                                              
                                                                              1,101,663
                                                                              
                                                                              
                                                                              
                                                                              303,248
                                                                              
                                                                              
                                                                              
                                                                              325,601LOSS
      FROM OPERATIONS
                                                                              
                                                                              
                                                                              (920,855
                                                                              )
                                                                              
                                                                              
                                                                              (976,511
                                                                              )
                                                                              
                                                                              
                                                                              (288,461
                                                                              )
                                                                              
                                                                              
                                                                              (279,153
                                                                              )OTHER
      INCOME (EXPENSE)Other
      income
                                                                              
                                                                              
                                                                              103,051
                                                                              
                                                                              
                                                                              
                                                                              461,320
                                                                              
                                                                              
                                                                              
                                                                              19,892
                                                                              
                                                                              
                                                                              
                                                                              116,465Gain
      on revaluation of derivatives
                                                                              
                                                                              
                                                                              24,442
                                                                              
                                                                              
                                                                              
                                                                              3,690,731
                                                                              
                                                                              
                                                                              
                                                                              24,009
                                                                              
                                                                              
                                                                              
                                                                              65,927Amortization
      of discount on debt
                                                                              
                                                                              
                                                                              (104,201
                                                                              )
                                                                              
                                                                              
                                                                              (1,840,677
                                                                              )
                                                                              
                                                                              
                                                                              (34,734
                                                                              )
                                                                              
                                                                              
                                                                              (81,757
                                                                              )Interest
      expense
                                                                              
                                                                              
                                                                              (265,381
                                                                              )
                                                                              
                                                                              
                                                                              (825,598
                                                                              )
                                                                              
                                                                              
                                                                              (179,127
                                                                              )
                                                                              
                                                                              
                                                                              (117,618
                                                                              )Total
      other income (expense)
                                                                              
                                                                              
                                                                              (242,089
                                                                              )
                                                                              
                                                                              
                                                                              1,485,776
                                                                              
                                                                              
                                                                              
                                                                              (169,960
                                                                              )
                                                                              
                                                                              
                                                                              (16,983
                                                                              )INCOME
      (LOSS) BEFORE PROVISIONFOR
      INCOME TAXES
                                                                              
                                                                              
                                                                              (1,162,944
                                                                              )
                                                                              
                                                                              
                                                                              509,265
                                                                              
                                                                              
                                                                              
                                                                              (458,421
                                                                              )
                                                                              
                                                                              
                                                                              (296,136
                                                                              )PROVISION
      FOR INCOME TAXES
                                                                              
                                                                              
                                                                              --
                                                                              
                                                                              
                                                                              
                                                                              --
                                                                              
                                                                              
                                                                              
                                                                              --
                                                                              
                                                                              
                                                                              
                                                                              --NET
      INCOME (LOSS)
                                                                              
                                                                              $
                                                                              (1,162,944
                                                                              )
                                                                              
                                                                              $
                                                                              509,265
                                                                              
                                                                              
                                                                              $
                                                                              (458,421
                                                                              )
                                                                              
                                                                              $
                                                                              (296,136
                                                                              )NET
      INCOME (LOSS) PER COMMON SHAREHOLDERBasic
                                                                              
                                                                              $
                                                                              ( 0.00
                                                                              )
                                                                              
                                                                              $
                                                                              0.00
                                                                              
                                                                              
                                                                              $
                                                                              ( 0.00
                                                                              )
                                                                              
                                                                              $
                                                                              (0.00
                                                                              )Diluted
                                                                              
                                                                              $
                                                                              --
                                                                              
                                                                              
                                                                              $
                                                                              0.00
                                                                              
                                                                              
                                                                              $
                                                                              --
                                                                              
                                                                              
                                                                              $
                                                                              --WEIGHTED
      AVERAGE SHARES OUTSTANDINGBasic
                                                                              
                                                                              
                                                                              2,669,670,752
                                                                              
                                                                              
                                                                              
                                                                              1,528,962,237
                                                                              
                                                                              
                                                                              
                                                                              2,804,671,201
                                                                              
                                                                              
                                                                              
                                                                              2,342,834,778Diluted
                                                                              
                                                                              
                                                                              --
                                                                              
                                                                              
                                                                              
                                                                              10,000,000,000
                                                                              
                                                                              
                                                                              
                                                                              --
                                                                              
                                                                              
                                                                              
                                                                              --




See
accompanying notes to condensed consolidated financial statements.




3
 Table of Contents
 iVOICE, INC. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF
 ACCUMULATED
OTHER COMPREHENSIVE INCOME (LOSS) (UNAUDITED)
 FOR
THE NINE MONTHS ENDED SEPTEMBER 30,


2009
                                                    
                                                    
                                                    
                                                    2008Balance
      at beginning of the period
                                                    
                                                    $
                                                    1,785
                                                    
                                                    
                                                    $
                                                    (1,096,000
                                                    )Unrealized
      gain (loss) on securities available for sale:Unrealized
      gain (loss) arising during the period
                                                    
                                                    
                                                    4,604
                                                    
                                                    
                                                    
                                                    (9,246
                                                    )Less:
      reclassification adjustment and lossesincluded in net
      loss
                                                    
                                                    
                                                    (531
                                                    )
                                                    
                                                    
                                                    (9,741
                                                    )Net
      change for the period
                                                    
                                                    
                                                    4,073
                                                    
                                                    
                                                    
                                                    (18,987
                                                    )Balance
      at end of the period
                                                    
                                                    $
                                                    5,858
                                                    
                                                    
                                                    $
                                                    (1,114,987
                                                    )




See
accompanying notes to condensed consolidated financial statements.




4
 Table of Contents


iVOICE, INC. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 FOR
THE NINE MONTHS ENDED SEPTEMBER 30,


2009
                                                  
                                                  
                                                  2008CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                                                  
                                                  $
                                                  (1,162,944
                                                  )
                                                  
                                                  $
                                                  509,265Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      of fixed assets and amortization of intangibles
                                                  
                                                  
                                                  11,595
                                                  
                                                  
                                                  
                                                  4,504Amortization
      of prepaid finance costs
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  72,396Amortization
      of discount on debt conversion
                                                  
                                                  
                                                  104,201
                                                  
                                                  
                                                  
                                                  1,238,514Beneficial
      interest on issuance of stock
                                                  
                                                  
                                                  82,253
                                                  
                                                  
                                                  
                                                  293,951Gain
      on sales of securities available for sale
                                                  
                                                  
                                                  (14,895
                                                  )
                                                  
                                                  
                                                  (10,239
                                                  )Interest
      and dividends earned on investments
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  (110,659
                                                  )(Gain)
      on revaluation of derivatives
                                                  
                                                  
                                                  (24,442
                                                  )
                                                  
                                                  
                                                  (2,591,292
                                                  )Issuance
      of common stock for services
                                                  
                                                  
                                                  14,218
                                                  
                                                  
                                                  
                                                  6,000Equipment
      received for note receivable previously written-off
                                                  
                                                  
                                                  (50,000
                                                  )
                                                  
                                                  
                                                  --Changes
      in certain assets and liabilities:(Increase)
      in accounts receivable
                                                  
                                                  
                                                  (11,412
                                                  )
                                                  
                                                  
                                                  (84,588
                                                  )Decrease
      in inventory
                                                  
                                                  
                                                  6,149
                                                  
                                                  
                                                  
                                                  --(Increase)
      in prepaid expenses and other assets
                                                  
                                                  
                                                  (89,752
                                                  )
                                                  
                                                  
                                                  (2,397
                                                  )Increase
      in accounts payable and accrued liabilities
                                                  
                                                  
                                                  38,993
                                                  
                                                  
                                                  
                                                  379,085(Decrease)
      in deferred revenues
                                                  
                                                  
                                                  (5,138
                                                  )
                                                  
                                                  
                                                  --Increase
      in related party liabilities
                                                  
                                                  
                                                  7,298
                                                  
                                                  
                                                  
                                                  86,331Total
      cash (used in) operating activities
                                                  
                                                  
                                                  (1,093,876
                                                  )
                                                  
                                                  
                                                  (209,129
                                                  )CASH
      FLOWS FROM INVESTING ACTIVITIES:Costs
      of trademarks and other intangibles
                                                  
                                                  
                                                  (5,393
                                                  )
                                                  
                                                  
                                                  (9,160
                                                  )Net
      proceeds from sales of securities available for sale
                                                  
                                                  
                                                  21,083
                                                  
                                                  
                                                  
                                                  20,737Investment
      in securities and loans in unaffiliated companies
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  (77,250
                                                  )Net
      redemption of principal and interest on marketable
    securities
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  4,913,964Net
      effect on cash flow from consolidation of majority owned
      investment
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  (622,151
                                                  )Total
      cash provided by investing activities
                                                  
                                                  
                                                  15,690
                                                  
                                                  
                                                  
                                                  4,226,140CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from short term borrowings
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  5,660,000Repayment
      of short term borrowings
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  (1,746,968
                                                  )Repayment
      of convertible debentures
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  (4,796,510
                                                  )Total
      cash (used in) financing activities
                                                  
                                                  
                                                  --
                                                  
                                                  
                                                  
                                                  (883,478
                                                  )NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                                                  
                                                  
                                                  (1,078,186
                                                  )
                                                  
                                                  
                                                  3,133,533CASH
      AND CASH EQUIVALENTS – BEGINNING OF PERIOD
                                                  
                                                  
                                                  3,442,590
                                                  
                                                  
                                                  
                                                  79,919CASH
      AND CASH EQUIVALENTS – END OF PERIOD
                                                  
                                                  $
                                                  2,364,404
                                                  
                                                  
                                                  $
                                                  3,213,452CASH
      PAID DURING THE PERIOD FOR:Interest
      expense
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  36,825Income
      taxes
                                                  
                                                  $
                                                  -
                                                  
                                                  
                                                  $
                                                  -
 SUPPLEMENTAL
CASH FLOW INFORMATION:
 a)
                                                On
      March 12, 2008, the Company acquired 1,444.44 shares of iVoice Technology,
      Inc.’s Series A 10% Convertible Preferred Stock for
      $1,444,444.  This transaction was eliminated in
      consolidation.
 b)
                                                During
      2008 and 2009, the Company exchanged an aggregate of $175,933 of amounts
      due from iVoice Technology, Inc. and B Green Innovations, Inc. into
      Convertible Promissory Notes of the same amount. These transactions were
      eliminated in consolidation.
 
 See
accompanying notes to condensed consolidated financial
statements.
  5
 Table of Contents
 iVOICE,
INC. AND SUBSIDIARIES
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)(Continued)
 FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
 
 SUPPLEMENTAL
SCHEDULE OF NON-CASH FINANCING ACTIVITIES:
 
 For the nine months ended
September 30, 2009:
 
 a)
                                          The
      holder of the Class B Common Shares elected for the Company to redeem
      1,512,104 shares of Class B Common Stock for cash pursuant to the
      provisions of the redemption rights in the Certificate of
      Incorporation.  This transaction was reflected in the accounts
      of the Company at December 31, 2008 in anticipation of this
      event.
 
 b)
                                          The
      Company received 16,724,000 shares of iVoice Technology, Inc. Class A
      common stock on conversion of $5,352 of convertible notes
      receivable.  This transaction was eliminated in
      consolidation.
 
 c)
                                          The
      Company received 54,000,000 shares of Thomas Pharmaceuticals, Ltd. Class A
      common stock on conversion of $4,320 of convertible debentures receivable.
      Management determined that these shares should be impaired for the same
      amount.
 
 d)
                                          The
      Company issued an aggregate of 539,696,618 shares of Class A common stock
      to an Officer, a Director and an affiliate for payment of $24,286 of
      deferred compensation and legal services. The stock was valued at $79,940
      and $55,654 was charged to beneficial interest
  expense.
 
 e)
                                          The
      Company issued 126,666,667 shares of Class A common stock to YA Global
      Investments, LP as repayment of $11,400 of principal on outstanding
      convertible debentures. The stock was valued at $38,000 and $26,600 was
      charged to beneficial interest
expense.
 
 f)
                                          iVoice
      Technology issued 67,750,000 shares of its Class A common stock to
      minority shareholders for a value of
$81,718.
 
 For the nine months ended
September 30, 2008:
 
 a)
                                          The
      Company issued 1,805,499,209 shares of Class A common stock to YA Global
      Investments, LP. as repayment of principal on outstanding convertible
      debentures, valued at $778,751.
 
 b)
                                          The
      Company issued 316,000,000 shares of Class A Common upon the conversion of
      40,380 shares of Class B Common
Stock.
 
 c)
                                          The
      Company received 96,600,000 shares of Thomas Pharmaceuticals, Ltd. Class A
      common stock on conversion of $10,167 of convertible debentures
      receivable.
 
 g)
                                          The
      Company exchanged $80,198 of amounts due from SpeechSwitch, Inc. into a
      Convertible Promissory Note of the same
amount.
 
 h)
                                          The
      Company received 151,000,000 shares of SpeechSwitch, Inc. Class A common
      stock on conversion of $12,080 of convertible notes
      receivable.
 
 i)
                                          The
      Company received 42,000,000 shares of iVoice Technology, Inc. Class A
      common stock on conversion of $13,440 of convertible notes
      receivable.  This transaction was eliminated in
      consolidation.
 
 j)
                                          The
      Company exchanged $59,302 of amounts due from Thomas Pharmaceuticals, Ltd.
      into a Convertible Promissory Note of the same
  amount.
 
 k)
                                          The
      Company issued 60,000,000 shares of Class A common stock to Kenneth Glynn
      for legal services, valued at $6,000, related to continuation of work on
      patent prosecution.
  See
accompanying notes to condensed consolidated financial statements.
  6
 Table of
Contents




iVOICE, INC. AND SUBSIDIARIES


NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


SEPTEMBER
30, 2009 AND 2008


NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of
      Presentation
 The
accompanying unaudited condensed consolidated financial statements include the
accounts of iVoice, Inc. (the “Company” or “iVoice”) and its wholly owned
subsidiary, iVoice Innovations, Inc. and its majority owned public company,
iVoice Technology, Inc.  These unaudited condensed consolidated
financial statements have been prepared in accordance with accounting principles
generally accepted in the United States for interim financial information and
with the instructions to Form 10-Q and Regulation S-X.  Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements.  In
the opinion of management, all adjustments (consisting only of normal recurring
adjustments) considered necessary for a fair presentation have been
included.  It is suggested that these condensed consolidated financial
statements be read in conjunction with the December 31, 2008 audited financial
statements and the accompanying notes thereto.
 
 Between
February 11, 2004 and August 5, 2005, the Company completed the transfer of
certain business segments and their related assets and liabilities to its four
wholly owned subsidiaries Trey Resources, Inc, SpeechSwitch, Inc, iVoice
Technology, Inc and Deep Field Technologies, Inc.  These companies
were then spun-off from iVoice as special dividends of the shares of Class A
common Stock of the respective companies to the iVoice stockholders. Effective
with the spin-off of the four subsidiaries, SpeechSwitch, iVoice Technology,
Trey Resources and Deep Field Technologies now operate as independent publicly
traded entities.
 
 On March
12, 2008, the Company acquired 1,444.44 shares of iVoice Technology, Inc.’s
Series A 10% Convertible Preferred Stock for $1,444,444.  At the time
that the Company acquired these shares, the holder of each share of Series A
Preferred Stock had the right to one vote for each share of Common Stock into
which such Series A Preferred Stock could then be converted, and the holders of
the Series A Preferred Stock shall not have in the aggregate more than seventy
percent (70%) of the total votes of all classes of voting stock of the
Corporation that would vote at a meeting of shareholders. On March 6, 2009,
iVoice Technology amended their Certificate of Incorporation to remove the
voting and conversion rights of the Series A Convertible Preferred Stock. Based
on this change, the Company no longer has any voting rights in the stock of
iVoice Technology. The Company and iVoice Technology continue to share common
management and as such, according to provisions of FASB Accounting Standards
Codification (“ASC”) Topic 810 “Consolidation”, iVoice, Inc.
is required to consolidate the results of operations of iVoice Technology with
those of iVoice and its other subsidiary.
 
 The
Company is publicly traded and is currently traded on the Over the Counter
Bulletin Board (“OTCBB”) under the symbol “IVOI”.


Principles of
Consolidation
 The
accompanying condensed consolidated financial statements include the accounts of
the Company and its wholly owned subsidiary, iVoice Innovations, Inc. and its
Variable Interest Entity, iVoice Technology, Inc. (“iVoice Technology”). All
significant inter-company transactions and balances have been eliminated in
consolidation.
 
 Use of
Estimates
 The
preparation of financial statements are in conformity with accounting principles
generally accepted in the United States of America which requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period.  Actual results could differ from those
estimates.
 
 Revenue
Recognition
 The
parent Company obtains its income primarily from the sales or licensing of its
patents and patent applications. Revenues for the sales of our patents are
recorded upon transfer of title. The patent revenues are reported net of any
broker fees or commissions.
 
 The
Company also is reporting revenues for iVoice Technology which derives its
revenues from the licensing of its software product and optional customer
support (maintenance) service. iVoice Technology’s standard license agreement
provides for a one-time fee for use of the company's product in perpetuity for
each computer or CPU in which the software will reside. iVoice Technology’s
software application is fully functional upon delivery and implementation and
does not require any significant modification or alteration. iVoice Technology
also offers customers an optional annual software maintenance and support
agreement for the subsequent one-year periods.
 
 iVoice
Technology’s wholly owned subsidiary, B Green Innovations, Inc., derives
revenues from the shipments of “green products” which are recognized at the time
of shipment to, or acceptance by customer, provided title and risk of loss is
transferred to the customer. Provisions, when appropriate, are made where the
right to return exists.
 7
 Table of Contents
 
 iVOICE, INC. AND SUBSIDIARIES
 NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 Cash and Cash
Equivalents
 The
Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. The Company had cash
and cash equivalents at September 30, 2009 and December 31, 2008 of $2,364,404
and $3,442,590 (net of restricted cash of $1,512,104),
respectively.
 
 Concentration of Credit
Risk
 The
Company maintains cash balances at a financial institution that is insured by
the Federal Deposit Insurance Corporation up to applicable limits. The cash
equivalents are not insured. The Company has uninsured cash balances at
September 30, 2009 and December 31, 2008 of $1,682,681 and $4,604,226,
respectively.


Securities
Available-for-sale


The
Company has evaluated its investment policies consistent with ASC 320-10-25,
“Classification of Investment Securities”, and determined that all of its
investment securities are to be classified as available-for-sale.
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses reported in Stockholders' Equity under the caption Accumulated
Other Comprehensive Income (Loss).  The Company had securities
available for sale at September 30, 2009 and December 31, 2008 of $10,901 and
$13,016, respectively.
 
 Fair Value of Financial
Instruments
 The
Company estimates that the fair value of all financial instruments at September
30, 2009 and December 31, 2008, as defined in ASC 320-10-35, “Subsequent
Measurement of Investment Securities”, does not differ materially, except for
the items discussed below, from the aggregate carrying values of its financial
instruments recorded in the accompanying condensed consolidated balance sheet.
The estimated fair value amounts have been determined by the Company using
available market information and appropriate valuation methodologies.
Considerable judgment is required in interpreting market data to develop the
estimates of fair value, and accordingly, the estimates are not necessarily
indicative of the amounts that the Company could realize in a current market
exchange.
 
 During
the 4th
Quarter 2008, management of the Company determined that the carrying value of
the of Thomas Pharmaceuticals, Ltd. Series B Convertible Preferred Stock, the
Convertible Promissory notes of Thomas Pharmaceuticals, Ltd. and SpeechSwitch,
Inc. and the Class A Common Stock of Deep Field Technologies, Inc. were severely
impaired due to poor liquidity of their Common Stock in the
marketplace.  Management has taken a fair value adjustment of
$2,982,833 to write down these investments in prior year.
 
 Income (Loss) Per
Share
 ASC 260,
“Earnings Per Share” requires presentation of basic earnings per share (“basic
EPS”) and diluted earnings per share (“diluted EPS”).
 
 The
computation of basic EPS is computed by dividing income available to common
stockholders by the weighted average number of outstanding Common shares during
the period.  Diluted earnings per share gives effect to all dilutive
potential Common shares outstanding during the period. The computation of
diluted EPS for the nine months ended September 30, 2009 and 2008 does not
assume conversion, exercise or contingent exercise of securities that would have
an anti-dilutive effect on earnings.





The
shares used in the computations are as follows:




Nine
      months ended September 302009
                    
                    
                    2008Net
      income (loss) applicable to iVoice, Inc.
                    
                    $
                    (1,162,944
                    )
                    
                    $
                    509,265Weighted
      average shares outstanding - basic
                    
                    
                    2,669,670,752
                    
                    
                    
                    1,528,962,237Weighted
      average shares outstanding - diluted
                    
                    
                    --
                    
                    
                    
                    10,000,000,000Net
      income (loss) per share attributable toiVoice,
      Inc common shareholdersBasic
                    
                    $
                    ( 0.00
                    )
                    
                    $
                    0.00Diluted
                    
                    $
                    --
                    
                    
                    $
                    0.00


The
Company has shares issuable upon conversion of the Class B Common Stock, YA
Global Convertible Debentures and YA Global Warrants. The Company had common
stock equivalents in excess of its authorized capital at September 30, 2008, so
the maximum authorized shares of 10,000,000,000 is shown for diluted earnings
per common share calculations. The Company had common stock equivalents of
16,537,142,857 and 50,302,311,111 at September 30, 2009 and 2008, respectively.
During the first quarter of 2009, the holder of the Class B Common Shares,
elected for the Company to redeem 1,512,104 shares of Class B Common Stock for
cash and eliminated approximately 33.6 billion of the common stock equivalents
at September 30, 2008.




8
 Table of Contents




iVOICE, INC. AND SUBSIDIARIES
 NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008


Accumulated Other
Comprehensive Income (Loss)


ASC 220,
“Comprehensive Income”, establishes standards for the reporting and display of
comprehensive income (loss) and its components in the financial statements. The
items of other comprehensive income (loss) that are typically required to be
displayed are foreign currency items, minimum pension liability adjustments, and
unrealized gains and losses on certain investments in debt and equity
securities. As of September 30, 2009 and 2008, the Company has several items
that represent comprehensive loss, and thus, has included a statement of
comprehensive income (loss).





Reclassification of
accounts


Subsequent
to the year ended December 31, 2008, the Company amended the Certificate of
Incorporation to enable the holders of the Class B Common Stock to elect, at the
holder’s discretion, the redemption for cash by the Corporation at the rate of
$1.00 for each Class B Common Share presented to the Corporation for redemption.
Consequently, the Company reclassified the redemption amount of the Class B
Common Stock from Stockholders’ deficit to current liabilities. The
reclassification had no effect on operations or cash flows.





Concurrent
with the changes made to the iVoice Technologies Series A Convertible Preferred
Stock made on March 12, 2008, the Company adopted provisions of ASC 810 and now
consolidates 100% of the results of operations of iVoice Technology. The Company
reclassified certain accounts in the stockholders’ deficit section to conform to
the current year presentation. The reclassifications had no effect on operations
or cash flows.





Derivative
Liabilities
 During
April 2003, the Financial Accounting Standards Board issued ASC 815,
"Derivatives and Hedging."  ASC 815 amends and clarifies accounting
for derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities under SFAS 133, "Accounting for
Derivative Instruments and Hedging Activities." The statement requires that
contracts with comparable characteristics be accounted for similarly and
clarifies when a derivative contains a financing component that warrants special
reporting in the statement of cash flows.  ASC 815 is effective for
contracts entered into or modified after September 30, 2003, except in certain
circumstances, and for hedging relationships designated after September 30,
2003. The financial statements for the nine months ended September 30, 2009 and
2008 include the recognition of the derivative liability on the underlying
securities issuable upon conversion of the YA Global Convertible
Debentures.
 
 Recent Accounting
Pronouncements
 In
June 2009, the FASB issued Accounting Standards Update 2009-01, “The FASB
Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles-a replacement of FASB Statement No. 162”. The FASB
Accounting Standards Codification (“ASC”) is intended to be the source of
authoritative U.S. generally accepted accounting principles (“GAAP”) and
reporting standards as issued by the Financial Accounting Standards Board. Its
primary purpose is to improve clarity and use of existing standards by grouping
authoritative literature under common topics. This Statement is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009. The Codification does not change or alter existing GAAP and
there was no impact on our consolidated financial position or results of
operations.
 
 In May
2009, the FASB issued ASC 855, “Subsequent Events”, which establishes general
standards of accounting for and disclosure of events that occur after the
balance sheet date but before the financial statements are issued or are
available to be issued. The Company adopted FASB ASC 855 effective April 1,
2009 and has evaluated subsequent events after the balance sheet date of
September 30, 2009 through the date the financial statements were
issued.
 
 In
August 2009, the FASB issued Accounting Standards Update 2009-05, “Fair
Value Measurements and Disclosures (Topic 820)”. The purpose of this Update is
to clarify that in circumstances in which a quoted price in an active market for
the identical liability is not available, a reporting entity is required to
measure fair value using a valuation technique that uses either the quoted price
of the identical liability when traded as an asset or quoted prices for similar
liabilities or similar liabilities when traded as assets. This guidance is
effective upon issuance. There was no material impact to the Company from the
adoption of this standard.
 
 In
October 2009, the FASB issued Accounting Standards Update 2009-13, “Revenue
Recognition (Topic 605)”. This Update provides amendments to the criteria in
Subtopic 605-24 for separating consideration in multiple-deliverable revenue
arrangements. It establishes a hierarchy of selling prices to determine the
selling price of each specific deliverable which includes vendor-specific
objective evidence (if available), third-party evidence (if vendor-specific
evidence is not available), or estimated selling price if neither of the first
two are available. This Update also eliminates the residual method for
allocating revenue between the elements of an arrangement and requires that
arrangement consideration be allocated at the inception of the arrangement.
Finally, this Update expands the disclosure requirements regarding a vendor’s
multiple-deliverable revenue arrangements. This Update is effective for fiscal
years beginning on or after June 15, 2010. We do not anticipate any
material impact from this Update.
 
 9
 Table of Contents




iVOICE,
INC. AND SUBSIDIARIES
 NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008


NOTE
2 – FAIR VALUE MEASUREMENTS
 
 In
September 2006, the FASB issued ASC 820, “Fair Value Measurements and
Disclosures”, which defines fair value, establishes a framework for measuring
fair value, and expands disclosures about fair value measurements. The
provisions of ASC 820 were effective January 1, 2008. As defined in ASC 820,
fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date (exit price). The Company utilizes market data or
assumptions that market participants would use in pricing the asset or
liability, including assumptions about risk and the risks inherent in the inputs
to the valuation technique. These inputs can be readily observable, market
corroborated, or generally unobservable. The Company classifies fair value
balances based on the observability of those inputs. ASC 820 establishes a fair
value hierarchy that prioritizes the inputs used to measure fair value. The
hierarchy gives the highest priority to unadjusted quoted prices in active
markets for identical assets or liabilities (level 1 measurement) and the lowest
priority to unobservable inputs (level 3 measurement).
 
 ASC 820
classifies these inputs into the following hierarchy:
 
 Level
      1 Inputs– Quoted prices are available in active markets for identical
      assets or liabilities as of the reporting date. Active markets are those
      in which transactions for the asset or liability occur in sufficient
      frequency and volume to provide pricing information on an ongoing basis.
      Level 1 primarily consists of financial instruments such as
      exchange-traded derivatives, marketable securities and listed
      equities.
 Level
      2 Inputs– Pricing inputs are other than quoted prices in active markets
      included in level 1, which are either directly or indirectly observable as
      of the reported date. Level 2 includes those financial instruments that
      are valued using models or other valuation methodologies. These models are
      primarily industry-standard models that consider various assumptions,
      including quoted forward prices for commodities, time value, volatility
      factors, and current market and contractual prices for the underlying
      instruments, as well as other relevant economic measures. Substantially
      all of these assumptions are observable in the marketplace throughout the
      full term of the instrument, can be derived from observable data or are
      supported by observable levels at which transactions are executed in the
      marketplace. Instruments in this category generally include
      non-exchange-traded derivatives such as commodity swaps, interest rate
      swaps, options and collars.
 Level
      3 Inputs– Pricing inputs include significant inputs that are generally
      less observable from objective sources. These inputs may be used with
      internally developed methodologies that result in management’s best
      estimate of fair value.





The
following table sets forth by level within the fair value hierarchy the
Company’s financial assets and liabilities that were accounted for at fair value
as of September 30, 2009 and December 31, 2008. As required by ASC 820,
financial assets and liabilities are classified in their entirety based on the
lowest level of input that is significant to the fair value measurement. The
Company’s assessment of the significance of a particular input to the fair value
measurement requires judgment, and may affect the valuation of fair value assets
and liabilities and their placement within the fair value hierarchy
levels.
 
 September
30, 2009
 
 Assets
                          
                          Level
      I
                          
                          
                          Level II
                          
                          
                          Level III
                          
                          
                          TotalSecurites
      available for sale
                          
                          $
                          10,901
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          10,901Total
      Assets
                          
                          $
                          10,901
                          
                          
                          $
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          10,901Convertible
      debentures
                          
                          $
                          -
                          
                          
                          $
                          1,088,893
                          
                          
                          $
                          -
                          
                          
                          $
                          1,088,893Derivative
      liabilities
                          
                          
                          -
                          
                          
                          
                          1,635,549
                          
                          
                          
                          -
                          
                          
                          
                          1,635,549Total
      Liabilities
                          
                          $
                          -
                          
                          
                          $
                          2,724,442
                          
                          
                          $
                          -
                          
                          
                          $
                          2,724,442
  December
31, 2008
 
 Assets
                            
                            Level
      I
                            
                            
                            Level II
                            
                            
                            Level III
                            
                            
                            TotalSecurites
      available for sale
                            
                            $
                            13,016
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            13,016Total
      Assets
                            
                            $
                            13,016
                            
                            
                            $
                            -
                            
                            
                            $
                            -
                            
                            
                            $
                            13,016Convertible
      debentures
                            
                            $
                            -
                            
                            
                            $
                            996,092
                            
                            
                            $
                            -
                            
                            
                            $
                            996,092Derivative
      liabilities
                            
                            
                            -
                            
                            
                            
                            1,659,991
                            
                            
                            
                            -
                            
                            
                            
                            1,659,991Total
      Liabilities
                            
                            $
                            -
                            
                            
                            $
                            2,656,083
                            
                            
                            $
                            -
                            
                            
                            $
                            2,656,083
  The
Company’s derivatives are classified within Level 2 of the valuation hierarchy.
The Company’s derivatives are valued using internal models that use as their
basis readily observable market inputs, such as time value, forward interest
rates, and volatility factors. Refer to Note 5 for more discussion on
derivatives.
  10
 Table of Contents
  iVOICE, INC. AND SUBSIDIARIES
 NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
 NOTE
3 – CONSOLIDATED FINANCIAL STATEMENTS AND NON-CONTROLLING INTEREST
 
 On March
12, 2008, the Company acquired 1,444.44 shares of iVoice Technology, Inc.’s
Series A 10% Secured Convertible Preferred Stock for $1,444,444.  At
the time that the Company acquired these shares, the holder of each share of
Series A Preferred Stock had the right to one vote for each share of Common
Stock into which such Series A Preferred Stock could then be converted, and the
holders of the Series A Preferred Stock shall not have in the aggregate more
than seventy percent (70%) of the total votes of all classes of voting stock of
the Corporation that would vote at a meeting of shareholders. These securities
are also secured by the assets of iVoice Technology, Inc. On March 6, 2009,
iVoice Technology amended its Certificate of Incorporation to remove the voting
and conversion rights of the Series A Convertible Preferred Stock. Based on this
change, the Company no longer has any voting rights in the stock of iVoice
Technology. The Company and iVoice Technology continue to share common
management and as such, according to ASC 810, “Consolidation”, iVoice, Inc. is
required to consolidate the results of operations of iVoice Technology with
those of iVoice, Inc. and its other subsidiary.


NOTE
4  - CONVERTIBLE DEBENTURES PAYABLE





On May
11, 2006 the Company issued to YA Global a $5,544,110 secured convertible
debenture due on May 11, 2008 bearing interest of 7.5%. This debenture replaced
a promissory note with a principal balance of $5,000,000 and $544,110 of accrued
interest due to YA Global from June 15, 2005. During the period of January 1,
2008 until May 12, 2008, we issued 882,165,877 shares of Class A common stock,
with a value of $529,640, as repayment of $401,700 of principal. The difference
of $127,940 is charged to the Statement of Operations as beneficial interest. On
May 12, 2008, the remaining principal balance of $4,796,510 was repaid in cash
from the proceeds of the Smith Barney short term loans and sales of the auction
rate preferred shares (“ARPS”). As of September 30, 2009, the unpaid balance of
accrued interest was $799,139.





On May
25, 2006, the Company issued to YA Global a $1,250,000 secured convertible
debenture due on May 25, 2008 bearing interest of 7.5% per annum pursuant to a
Securities Purchase Agreement entered into between us and YA Global. On February
21, 2008, this debenture was amended to extend the maturity date until May 25,
2010 and to raise the interest rate to 15% per annum. During the nine months
ended September 30, 2009, we issued 126,666,667 shares of Class A common stock,
with a value of $38,000, as repayment of $11,400 of principal. During the year
ended December 31, 2008, we issued 923,333,332 shares of Class A common stock,
with a value of $249,111, as repayment of $83,100 of principal. As of September
30, 2009, the unpaid principal balance on the secured convertible debenture is
$1,155,500 plus accrued interest of $451,579.





On
October 31, 2007, the Company executed a waiver agreement with YA Global that
provides that if the Company reduces the debt to $141,523 that YA Global will
waive its rights to any future payments and will consider the account paid in
full. This waiver agreement was executed to compensate the Company for losses
incurred on the sales of the Corporate Strategies investments.





The
aggregate principal value of the remaining debentures at September 30, 2009 and
December 31, 2008 is $1,155,500 and $1,166,900, respectively. This amount is
shown on the balance sheet net of the unamortized portion of the discount on
conversion of $66,607 and $170,808, respectively. This discount is being
amortized over the life of the debenture and is being amortized as debt discount
on the statement of operations.





See Note
9, “Subsequent Events”, for discussions of current negotiations with YA
Global.





NOTE
5 - DERIVATIVE LIABILITY
 
 In
accordance with ASC 815, "Derivatives and Hedging", the conversion feature
associated with the YA Global Secured Convertible Debentures represents embedded
derivatives. As such, the Company had recognized embedded derivatives in the
amount of $6,908,078 as a derivative liability in the accompanying condensed
consolidated balance sheet, and it is now measured at its estimated fair value
of $1,635,549.
 
 The
estimated fair value of the embedded derivative has been calculated based on a
Black-Scholes pricing model using the following assumptions:


At Issue
                      
                      At 9/30/09Fair
      market value of stock
                      $0.096
      - $0.125
                      
                      $
      0.00010Exercise
      price
                      $0.086
      - $0.113
                      
                      $
      0.00007Dividend
      yield
                      0.00%
                      
                      0.00%Risk
      free interest rate
                      5.47%
                      
                      3.2%Expected
      volatility
                      195.36%
      - 196.54%
                      
                      219.62%Expected
      life
                      2.00
      years
                      
                      3.00
      years
  11
 Table of Contents
  iVOICE, INC. AND SUBSIDIARIES
 NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
  Changes
in the fair value of the embedded derivatives are calculated at each reporting
period and recorded in gain on revaluation of derivatives in the condensed
consolidated statements of operations. During the nine months ended September
30, 2009, there was a change in the fair value of the embedded derivatives,
which resulted in a gain of $24,442.
 
 In
accordance with ASC 820, the fair market value of the derivatives and warrants
are bifurcated from the convertible debentures as a debt
discount.  The debt discount of is being amortized over the life of
the convertible debentures. Amortization expense on the debt discount on the
convertible debentures for the nine months ended September 30, 2009 was
$104,201.
 
 NOTE
6 - RELATED PARTY ACCOUNTS
 
 From time
to time, the Company has entered into various loan agreements and employment
agreements with Jerome R. Mahoney, President and Chief Executive Officer of the
Company. In March 2009, the Company repaid $2,295 on the balance of the loan and
$185,600 of deferred compensation to Mr. Mahoney. In September 2009, the Company
issued 280,000,000 shares of Class A Common Stock for repayment of $12,600 of
deferred compensation. As of September 30, 2009, the balances due to Mr. Mahoney
were: a) accrued interest of $5,285 and b) deferred compensation is $208,716.
Balances due to Mr. Mahoney are convertible into either (i) one Class B common
stock share of iVoice, Inc., $.01 par value, for each dollar owed, or (ii) the
number of Class A common stock shares of iVoice, Inc. calculated by dividing (x)
the sum of the principal and interest that the Note holder has decided to prepay
by (y) fifty percent (50%) of the lowest issue price of Series A common stock
since the first advance of funds under his Note, whichever the Note holder
chooses, or (iii) payment of the principal of the Note, before any repayment of
interest.  The Board of Directors of the Company maintains control
over the issuance of shares and may decline the request for conversion of the
repayment into shares of the Company.
 
 In August
2005, iVoice Technology had assumed an outstanding promissory demand note in the
amount of $190,000 payable to Jerome Mahoney, then, the Non-Executive Chairman
of the Board of iVoice Technology.  The note bears interest at the
rate of prime plus 2.0% per annum (5.25% at September 30, 2009) on the unpaid
balance until paid.  Under the terms of the Promissory Note, at the
option of the Note holder, principal and interest can be converted into either
(i) one share of Class B Common Stock of iVoice Technology, Inc., par value
$.01, for each dollar owed, (ii) the number of shares of Class A Common Stock of
iVoice Technology, Inc. calculated by dividing (x) the sum of the principal and
interest that the Note holder has requested to have prepaid by (y) eighty
percent (80%) of the lowest issue price of Class A Common Stock since the first
advance of funds under this Note, or (iii) payment of the principal of this
Note, before any repayment of interest. The Board of Directors of iVoice
Technology maintains control over the issuance of shares and may decline the
request for conversion of the repayment into shares of the iVoice Technology. As
of September 30, 2009, the outstanding balance was $127,308, plus accrued
interest of $98,359.  On May 8, 2007, iVoice Technology executed a
Security Agreement providing Jerome Mahoney, President and Chief Executive
Officer of iVoice Technology, with a security interest in all of the assets of
iVoice Technology to secure the promissory note dated August 5, 2005 and all
future advances including, but not limited to, additional cash advances,
deferred compensation, deferred expense reimbursement, deferred commissions and
income tax reimbursement for the recognition of income upon the sale of common
stock for the purpose of the holder advancing additional funds to iVoice
Technology.
 
 On August
1, 2004, iVoice Technology entered into a five-year employment agreement with
Jerome Mahoney to serve as Non-Executive Chairman of the Board of Directors of
iVoice Technology with a base salary of $85,000 for the first year with annual
increases based on the Consumer Price Index.  On March 9, 2009, the
term of the employment agreement between iVoice Technology and Mr. Mahoney, the
Company’s CEO, was extended to July 31, 2016.  A portion of Mr.
Mahoney’s compensation shall be deferred until such time that the Board of
Directors of iVoice Technology determines that it has sufficient financial
resources to pay his compensation in cash. As of September 30, 2009, iVoice
Technology has recorded $214,547 of deferred compensation due to Mr. Mahoney.
The Board of iVoice Technology has the option to pay Mr. Mahoney’s compensation
in the form of Class B Common Stock. Pursuant to the terms of the Class B Common
Stock, a holder of Class B Common Stock has the right to convert each share of
Class B Common Stock into the number of shares of Class A Common Stock
determined by dividing the number of Class B Common Stock being converted by a
20% discount of the lowest price for which the Company had ever issued its Class
A Common Stock. On August 30, 2006 Mr. Mahoney was elected to the position of
President and Chief Executive Officer of iVoice Technology and no longer serves
as Non-Executive Chairman of the Board of iVoice Technology.
 
 On March
5, 2008, the Company converted its outstanding accounts due from iVoice
Technology, Inc. for unpaid administrative services in the amount of $50,652
into a convertible promissory note at the rate of prime plus 1 percent per annum
(4.25% at September 30, 2009). During the nine months ended September 30, 2009
an additional $37,989 was added to this note based on any unpaid administrative
services, and will accrue interest at the above specified rate from date of
advance until paid. The principal and interest shall be due and payable as
follows: (a) interest shall accrue monthly on the unpaid balance and shall be
paid annually, and (b) principal shall be payable on demand. On February 9, 2009
the Company received 16,724,000 shares of iVoice Technology, Inc. Class A Common
Stock upon conversion of $5,352 of Promissory Notes Receivable. As of September
30, 2009, the balance of the note is $117,566 which includes accrued interest of
$5,508. This transaction is eliminated in consolidation.
 
 12
 Table of
Contents




iVOICE,
INC. AND SUBSIDIARIES


NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


SEPTEMBER
30, 2009 AND 2008




Common
Stock upon conversion of $5,352 of Promissory Notes Receivable. As of September
30, 2009, the balance of the note is $117,566 which includes accrued interest of
$5,508. This transaction is eliminated in consolidation.
 
 On March
11, 2008, the Company entered into a Stock Purchase Agreement with iVoice
Technology, Inc. for the purchase of 1,444.44 shares of iVoice Technology’s
Series A 10% Secured Convertible Preferred Stock valued at
$1,444,444.  The holders of the stock are entitled to receive
dividends at a rate 10% per annum and will have voting rights for each share of
Common Stock that the Series A Preferred Stock would be converted into using the
applicable conversion price. The holders of the Series A Preferred Stock shall
not have in the aggregate more than 70% of the total votes of all classes of
voting stock. The Company also received $144,444 in funding fees on the
transaction. This transaction is eliminated in consolidation.
 
 On March
11, 2008, the Company received a warrant to purchase common stock of iVoice
Technology, Inc. pursuant to the terms of the Stock Purchase Agreement. The
warrant provides that the Company can purchase shares of Class A common stock at
a price calculated by dividing $144,444 by the lowest price that iVoice
Technology has ever issued its Class A common stock, provided, that in no event
shall the holder be entitled to exercise this Warrant for a number of shares
which, upon giving effect to such exercise, would cause the aggregate number of
shares of Common Stock beneficially owned by the holder and its affiliates to
exceed 9.99% of the outstanding shares of the Common Stock following such
exercise.
 
 On
September 30, 2008, the Company converted its outstanding accounts due from B
Green Innovations, Inc. for unpaid administrative services in the amount of
$4,000 into a convertible promissory note at the rate of prime plus 1 percent
per annum (4.25% at September 30, 2009). During the nine months ended September
30, 2009 an additional $35,475 was added to this note based on any unpaid
administrative services, and will accrue interest at the above specified rate
from date of advance until paid. The principal and interest shall be due and
payable as follows: (a) interest shall accrue monthly on the unpaid balance and
shall be paid annually, and (b) principal shall be payable on demand. As of
September 30, 2009, the balance of the note is $65,665 which includes accrued
interest of $1,790. This transaction is eliminated in
consolidation.
 
 Effective
on May 1, 2008, Mr. Mahoney entered into a consulting agreement with B Green
Innovations for annual compensation of $24,000 and upon every annual anniversary
thereafter, his base salary will increase at the rate based on the increase in
the Consumer Price Index for All Urban Consumers (New York-Northern N.J.-Long
Island). Mr. Mahoney agreed to accept compensation pursuant to this Consulting
Agreement in the form of Class B Common Stock, par value $.01 per share, in lieu
of cash, for as long as the Board of Directors decides in its sole discretion
that the Company does not have the financial resources to pay the Consultant in
cash.  The number of Class B Common Stock shares to be issued to the
Consultant pursuant to this Paragraph 2 shall be equal to one share of Class B
common stock for every dollar of compensation due and owing the Consultant. As
of September 30, 2009, Mr. Mahoney is due $32,000, and no shares have been
issued.


NOTE
7 - COMMON STOCK
 
 Pursuant
to the Company’s certificate of incorporation, as amended, iVoice, Inc. is
authorized to issue 1,000,000 shares of preferred stock, par value of $1.00 per
share, 10,000,000,000 shares of Class A common stock, no par value per share,
and 50,000,000 shares of Class B common stock, par value $.01 per
share.
 
 a)
              Preferred
      Stock
 Preferred
Stock consists of 1,000,000 shares of authorized preferred stock with $1.00 par
value.  As of September 30, 2009, no shares were issued or
outstanding.
 
 b)
              Class A Common
      Stock
 Class A
common stock consists of 10,000,000,000 shares of authorized common stock with
no par value. As of September 30, 2009, 3,268,536,812 shares were issued and
3,268,533,812 shares were outstanding.
 
 Each
holder of Class A common stock is entitled to one vote for each share held of
record.  Holders of our Class A common stock have no preemptive,
subscription, conversion, or redemption rights.  Upon liquidation,
dissolution or winding-up, the holders of Class A common stock are entitled to
receive our net assets pro rata.  Each holder of Class A common stock
is entitled to receive ratably any dividends declared by our board of directors
out of funds legally available for the payment of dividends.  The
Company has not paid any dividends on its common stock and management does not
contemplate doing so in the foreseeable future.  The Company
anticipates that any earnings generated from operations will be used to finance
growth.
 
 13
 Table of Contents
 
 iVOICE, INC. AND SUBSIDIARIES
 NOTES
TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 SEPTEMBER
30, 2009 AND 2008
  For the
nine months ended September 30, 2009:
 
 ·
              The
      Company issued 280,000,000 shares of Class A common stock to an Officer of
      the Company for payment of $12,600 of deferred compensation. The stock was
      valued at $28,000 and $15,400 was charged to beneficial interest
      expense.
 
 ·
              The
      Company issued 129,848,309 shares of Class A common stock to a Director of
      the Company for payment of $5,843 of deferred compensation. The stock was
      valued at $25,970 and $20,127 was charged to beneficial interest
      expense.
 
 ·
              The
      Company issued 128,848,309 shares of Class A common stock to Meritz and
      Muenz, LLP for payment of $5,843 for previously incurred legal services.
      The stock was valued at $25,970 and $20,127 was charged to beneficial
      interest expense.
 
 ·
              The
      Company issued 126,666,667 shares of Class A common stock to YA Global
      Investments, LP as repayment of $11,400 of principal on outstanding
      convertible debentures. The stock was valued at $38,000 and $26,600 was
      charged to beneficial interest
expense.





c)
              Class B Common
      Stock


Class B
Common Stock consists of 50,000,000 shares of authorized common stock with $.01
par value. Each share of Class B common stock is convertible into Class A common
stock calculated by dividing the number of Class B shares being converted by
fifty percent (50%) of the lowest price that the Company had previously issued
its Class A common stock since the Class B shares were issued.  Each
holder of Class B common stock has voting rights equal to the number of Class A
shares that would be issued upon the conversion of the Class B shares, had all
of the outstanding Class B shares been converted on the record date used for
purposes of determining which shareholders would vote.  Holders of
Class B common stock are entitled to receive dividends in the same proportion as
the Class B common stock conversion and voting rights have to Class A common
stock.  Jerome R. Mahoney is the sole owner of the Class B common
stock and on March 11, 2009, Mr. Mahoney, the holder of the Class B Common
Shares, elected for the Company to redeem the remaining balance of shares
outstanding.  As of September 30, 2009, there are 2,204,875 shares
issued and no shares outstanding.
  d)
                Treasury
      Stock
 
 On
February 11, 2002, the Company repurchased 600,000 shares of Class A common
stock from a previous employee for $28,800. Following the reverse stock split on
April 27, 2006, the shares were converted into 3,000 shares of Class A common
stock.
 
 NOTE
8 - GOING CONCERN
 
 The
Company has incurred substantial accumulated deficits, has an obligation to
deliver an indeterminable amount of common stock due on derivative liabilities
and has completed the process of spinning out the five operating subsidiaries.
These issues raise substantial doubt about the Company’s ability to continue as
a going concern. Therefore, recoverability of a major portion of the recorded
asset amounts shown in the accompanying balance sheets is dependent upon
continued operations of the Company, which in turn, is dependent upon the
Company’s ability to raise capital and/or generate positive cash flow from
operations.
 
 Since the
spinoff of the three operating subsidiaries in 2005, the Company has
transitioned itself into a company focused on the development and licensing of
proprietary technologies. Following the sales of patents to Lamson Holdings LLC,
the Company has 9 remaining patent applications, which have been awarded or are
pending.  These applications include various versions of the
“Wirelessly Loaded Speaking Medicine Container”, which is also filed
internationally, the “Voice Activated Voice Operated Copier”, the “Voice
Activated Voice Operational Universal Remote Control”, “Wireless Methodology for
Talking Consumer
Products” which is also filed internationally,“Product Identifier
and Receive Spoken Instructions” and “Traffic Signal System with Countdown
Signaling with Advertising and/or News Message”.
  The
Company also continues to search for potential merger candidates with or without
compatible technology and products, which management feels may make financing
more appealing to potential investors.


The
financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the Company
cannot continue in existence.
 
 NOTE
9 - SUBSEQUENT EVENTS
 
 On
October 10, 2009. the Company issued 133,333,33 shares of Class A common stock
to YA Global Investments, LP as repayment of $12,000 of principal on outstanding
convertible debentures.
 
 On
December 1, 2008, the Company notified YA Global that there was a dispute
regarding the final balance of principal and accrued interest for Convertible
Debentures with YA Global. This dispute dates back to written commitments and
verbal reconfirmations made to the Company by YA Global in respect to the
Company’s unreimbursed losses on the investment in Corporate Strategies. The
Company and YA Global reached a settlement agreement on November 12, 2009
whereby the Company made a cash payment of $500,000 and issued an Amended and
Restated convertible debenture for the sum of $671,600 and interest free. This
debenture is secured with a $370,000 secured convertible debenture dated January
6, 2006 held by the Company and issued by Thomas Pharmaceuticals,
Ltd.  Additionally, under the terms of the Settlement Agreement, YA
Global released its security interest on the other assets of the Company,
terminated the outstanding warrants previously issued by the Company in favor of
YA Global and both parties executed releases fully releasing each other from any
and all claims through the date of the Settlement Agreement.
  14
 Table of Contents





ITEM2 - MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
 
 Some
information included in this Quarterly Report on Form 10-Q and other materials
filed by us with the Securities and Exchange Commission, or the SEC, contains
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such
forward-looking information involves important risks and uncertainties that
could significantly affect anticipated results in the future and, accordingly,
such results may differ materially from those expressed in any forward-looking
statements made by or on behalf of us. For a discussion of material risks and
uncertainties that the Company faces, see the discussion in the Form 10−K for
the fiscal year ended December 31, 2008 entitled “Risk Factors”.  This
discussion and analysis of financial condition and plan of operations should be
read in conjunction with our Condensed Consolidated Financial Statements
included herein.
 
 Overview
 
 Since
2005, the Company has transitioned itself into a company focused on the
development and licensing of proprietary technologies. As an example, in March
2006 we sold four of our voice activated product and item locator patents to
Lamson Holdings LLC for net proceeds of $136,000 and on December 6, 2007 we were
issued Patent 7,305,344 for a patent for Methodology for Talking Consumer
Products with Voice Instructions via Wireless Technology. On January 8, 2008,
the Company entered into a Technology Transfer Agreement with GlynnTech to
market its recently issued patent. The Company also continues to search for
potential merger candidates with or without compatible technology and products,
which management feels may make financing more appealing to potential
investors.
  On March
12, 2008, the Company acquired 1,444.44 shares of iVoice Technology, Inc.’s
Series A 10% Convertible Preferred Stock for $1,444,444.  At the time
that the Company acquired these shares, the holder of each share of Series A
Preferred Stock had the right to one vote for each share of Common Stock into
which such Series A Preferred Stock could then be converted, and the holders of
the Series A Preferred Stock shall not have in the aggregate more than seventy
percent (70%) of the total votes of all classes of voting stock of the
Corporation that would vote at a meeting of shareholders. On March 6, 2009,
iVoice Technology amended their Certificate of Incorporation to remove the
voting and conversion rights of the Series A Convertible Preferred Stock. Based
on this change, the Company no longer has any voting rights in the stock of
iVoice Technology. The Company and iVoice Technology continue to share common
management and as such, according to ASC 810 “Consolidation”, iVoice, Inc.
is required to consolidate the results of operations of iVoice Technology with
those of iVoice and its other subsidiary.
  Results of
Operations


Nine
months ended September 30, 2009 compared to nine months ended September 30,
2008
 
 Total
sales for the nine months ended September 30, 2009 and 2008 were $73,969 and
$125,152, respectively. The decrease in sales of $51,183 is primarily due to the
decrease in administrative service fees and IVR maintenance revenues offset by
new product sales of B Green Innovations (“B Green”) green products. The Company
no longer provides administrative services for several of our joint tenants.
Declines in the IVR maintenance revenues are due to the general decline in the
economies of our customers. Sales of the new “green” products are through
distributors and by direct sales to the B Green customers.
  Total
cost of sales for the nine months ended September 30, 2009 and 2008 were $34,473
and $0, respectively. IVR Maintenance and administrative services revenues carry
no direct costs. The cost of sales for the “green” products includes purchases
of certain packaging materials that were charged directly to cost of
sales.
  Total
operating expenses for the nine months ended September 30, 2009 and 2008, were
$960,351 and $1,101,663, respectively, for a decrease of
$141,312.  The decreases consist of amortization of finance costs of
$72,396, investor relations of $68,087, professional fees of $50,814 and
overhead and office expenses of $26,320. These decreases were offset by
increases of $69,448 attributable to the expenses of B Green for the staffing
and roll-out of the new “green” products company and increases in depreciation
expenses of $6,857 on new equipment.
  Total
other income (expense) for the nine months ended September 30, 2009 was an
expense of $242,089. This total was comprised of $130,028 of accrued interest
expense on the YA Global notes and other debt, $135,353 beneficial interest on
debt conversion and $104,201 amortization of the discount on debt. These amounts
were offset by $65,000 recapture of previously written off debt, $12,408 gain on
sales of securities, $25,643 of interest income and other income and a $24,442
gain on revaluation of the derivatives. Total other income (expense) for the
nine months ended September 30, 2008 was an income of $1,485,776. This total was
comprised of $3,690,731 gain on liquidation and revaluation of the derivatives,
$461,320 of interest income on the cash accounts and promissory notes receivable
and other income. These are offset by $1,840,677 amortization of the discount on
debt and $825,598 of accrued interest expense on the YA Global notes and other
debt.
  Loss from
operations for the nine months ending September 30, 2009 was $1,162,944 and
income from operations for the nine months ended September 30, 2008 was
$509,265. The increase in net loss of $1,672,209 was primarily due to the
reduction in the gain on revaluation of derivatives of $3.7 million and the
reduction of interest income offset by the reduction in amortization of the
discount on debt of $1.7 million, decreases in operating expenses and decreases
in interest expenses on lower debt as the result of the factors discussed
above.
  15
 Table of Contents
 
 Three
months ended September 30, 2009 compared to three months ended September 30,
2008
 
 Total
sales for the three months ended September 30, 2009 and 2008 were $28,721 and
$46,448, respectively. The decrease in sales of $17,727 is primarily due to the
decrease in administrative service fees and IVR maintenance revenues offset by
new product sales of B Green Innovations (“B Green”) green products. The Company
no longer provides administrative services for several of our joint tenants.
Declines in the IVR maintenance revenues are due to the general decline in the
economies of our customers. Sales of the new “green” products are through
distributors and by direct sales to the B Green customers.


Total
cost of sales for the three months ended September 30, 2009 and 2008 were
$13,934 and $0, respectively. IVR Maintenance and administrative services
revenues carry no direct costs. The cost of sales for the “green” products
includes purchases of certain packaging materials that were charged directly to
cost of sales.
  Total
operating expenses for the three months ended September 30, 2009 and 2008, were
$303,248 and $325,601, respectively, for a decrease of $22,353.  The
decreases consist of investor relations of $16,624 and  professional
fees of $9,146. These decreases were offset by increases of $352 attributable to
the expenses of B Green for the staffing and roll-out of the new “green”
products company, increases in depreciation expenses of $2,614 on new equipment
and an increase overhead and office expenses of $451.
  Total
other income (expense) for the three months ended September 30, 2009 was an
expense of $169,960. This total was comprised of $43,774 of accrued interest
expense on the YA Global notes and other debt, $135,353 beneficial interest on
debt conversion and $34,734 amortization of the discount on debt. These amounts
were offset by $19,892 of interest income and other income and a $24,009 gain on
revaluation of the derivatives. Total other income (expense) for the three
months ended September 30, 2008 was an expense of $16,983. This total was
comprised of $81,757 amortization of the discount on debt and $117,618 of
accrued interest expense on the YA Global notes and other debt. These amounts
are offset by $65,927 gain on liquidation and revaluation of the derivatives and
$116,465 of interest income on the cash accounts and promissory notes receivable
and other income.
  Loss from
operations for the three months ending September 30, 2009 and 2008 were $458,421
and $296,136, respectively. The increase in net loss of $162,285 was primarily
due to the reduction in interest income, increased beneficial interest on debt
conversion and reduction in the gain on revaluation of
derivatives.  These were offset by reduced amortization of the
discount on debt and decreases in operating expenses as the result of the
factors discussed above.
 
 Liquidity and Capital
Resources
 
 We are
currently seeking additional operating income opportunities through potential
acquisitions or investments. Such acquisitions or investments may consume cash
reserves or require additional cash or equity. Our working capital and
additional funding requirements will depend upon numerous factors, including:
(i) strategic acquisitions or investments; (ii) an increase to current Company
personnel; (iii) the level of resources that we devote to sales and marketing
capabilities; (iv) technological advances; and (v) the activities of
competitors.
 
 During
the year ended December 31, 2008, we had incurred net losses from operations of
$2,565,001 and we used $203,554 is cash for operations.  These matters
raise doubt about our ability to generate cash flows internally through our
current operating activities sufficient enough that its existence can be
sustained without the need for external financing. Our primary need for cash is
to fund our ongoing operations until such time that we can identify sales
opportunities for new products or identify strategic acquisitions that generate
enough revenue to fund operations.  There can be no assurance as to
the receipt or timing of revenues from operations.  These expenses are
anticipated to consist of the following: payroll and benefits of $400,000,
occupancy costs of $60,000, professional fees of $100,000, business insurance of
$70,000 and miscellaneous administrative expenses of $70,000.  We
expect to fund these obligations from cash on hand or otherwise from the sale of
equity or debt securities.  We believe that we have sufficient funds
on-hand to fund our operations for at least 12 months.


During
the nine months ended September 30, 2009, the Company had a net decrease in cash
of $1,078,186. The Company’s principal sources and uses of funds in the nine
months ended September 30, 2009 were as follows:
  Cash flows from operating
activities.  The Company used $1,093,876 in cash from
operations in the nine months ended September 30, 2009, a decrease of $884,747
compared to $209,129 in cash used in operations in the nine months ending
September 30, 2008.  This decrease was primarily attributed to the
cash loss from operations, the pay-down of current liabilities and related party
accounts and an increase in prepaid and other assets.
 
 Cash flows from investing
activities.  The Company had a net increase in funds from
investing activities of $15,690 for the nine months ended September 30, 2009.
This was primarily due to net proceeds from the sales of securities of $21,083
offset by spending for trademarks and other intangibles. For the nine months
ended September 30, 2008, the Company had a net increase in funds of $4,226,140
in financing activities. This was primarily due to the net redemption of
marketable securities of $4,913,964. These proceeds are offset by the net effect
of the consolidation of iVoice Technology of $622,151. The Company had invested
$1.4 million in iVoice Technology’s Series A Convertible Preferred Stock and
iVoice Technology has used a portion of these proceeds to pay down a portion of
the YA Global Convertible Debentures and their investment in B Green
Innovations, a wholly owned subsidiary of iVoice Technology.
  16
 Table of Contents
 
 Cash flows from financing
activities. For the nine months ended September 30, 2008, The Company
used $883,478 in cash for financing activities in the nine months ended
September 30, 2008. The funds provided from the Smith Barney Credit Line of
$5,660,000 were used to pay down the YA Global convertible debentures of
$4,796,510. In addition, a portion of the proceeds of the sales of the auction
rate preferred shares was used to repay the Smith Barney Credit Line of
$1,746,968.
  Below
is a description of iVoice’s principal sources of funding:
 
 On May
11, 2006 we issued to YA Global a $5,544,110 secured convertible debenture due
on May 11, 2008 with an interest of 7.5%. This debenture replaced a promissory
note with a principal balance of $5,000,000 and $544,110 of accrued interest due
to YA Global from June 15, 2005. On May 12, 2008, the remaining principal
balance of $4,796,510 was repaid in cash from the proceeds of the Smith Barney
short term loans.
  On May
25, 2006, we issued to YA Global a $1,250,000 secured convertible debenture due
on May 25, 2008 with an interest of 7.5% per annum pursuant to a Securities
Purchase Agreement entered into between us and YA Global. On February 21, 2008,
this debenture was amended to extend the maturity date until May 25, 2010 and to
raise the interest rate to 15% per annum.
  On March
7, 2008 and May 8, 2008, the Company received proceeds from an Express
Creditline Loan from Smith Barney that were collateralized by the proceeds
available from the sales of the auction rate preferred shares. The interest rate
charged on the loan is tied to the dividend rates earned on the auction rate
preferred shares. When an auction rate preferred shares were sold in October
2008, a portion of the proceeds is applied to pay down the short term loan and
the balance is wired to the Company’s savings account.


There is
no assurance that the future funding, if any, offered by YA Global or from other
sources will enable us to raise the requisite capital needed to implement our
long-term growth strategy.  Current economic and market conditions
have made it very difficult to raise required capital for us to implement our
business plan.
  Off Balance Sheet
Arrangements
 
 During
the nine months ended September 30, 2009, we did not engage in any material
off-balance sheet activities nor have any relationships or arrangements with
unconsolidated entities established for the purpose of facilitating off-balance
sheet arrangements or other contractually narrow or limited purposes. Further,
we have not guaranteed any obligations of unconsolidated entities nor do we have
any commitment or intent to provide additional funding to any such
entities.
 
 Contractual
Obligations
 
 The
Company has no material changes in its contractual obligations during the nine
months ended September 30, 2009.
 
 Subsequent
Events
 
 On
December 1, 2008, the Company notified YA Global that there was a dispute
regarding the final balance of principal and accrued interest for Convertible
Debentures with YA Global. This dispute dates back to written commitments and
verbal reconfirmations made to the Company by YA Global in respect to the
Company’s unreimbursed losses on the investment in Corporate Strategies. The
Company and YA Global reached a settlement agreement on November 12, 2009
whereby the Company made a cash payment of $500,000 and issued an interest free
Amended and Restated Convertible Debenture for the sum of $671,600. This
debenture is secured with a $370,000 secured convertible debenture dated January
6, 2006 held by the Company and issued by Thomas Pharmaceuticals,
Ltd.  Additionally, under the terms of the Settlement Agreement, YA
Global released its security interest on the other assets of the Company,
terminated the outstanding warrants previously issued by the Company in favor of
YA Global and both parties executed releases fully releasing each other from any
and all claims through the date of the Settlement Agreement.
  17
 Table of Contents
 
 Forward Looking Statements -
Cautionary Factors
 
 Certain
information included in this Form 10-Q and other materials filed or to be filed
by us with the Securities and Exchange Commission (as well as information
included in oral or written statements made by us or on our behalf), may contain
forward-looking statements about our current and expected performance trends,
growth plans, business goals and other matters.  These statements may
be contained in our filings with the Securities and Exchange Commission, in our
press releases, in other written communications, and in oral statements made by
or with the approval of one of our authorized officers.  Information
set forth in this discussion and analysis contains various “forward-looking
statements” within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934.  The Private
Securities Litigation Reform Act of 1995 (the “Act”) provides certain “safe
harbor” provisions for forward-looking statements.  The reader is
cautioned that such forward-looking statements are based on information
available at the time and/or management’s good faith belief with respect to
future events, and are subject to risks and uncertainties that could cause
actual performance or results to differ materially from those expressed in the
statements.  Forward-looking statements speak only as of the date the
statement was made.  We assume no obligation to update forward-looking
information to reflect actual results, changes in assumptions or changes in
other factors affecting forward-looking information.  Forward-looking
statements are typically identified by the use of terms such as “anticipate,”
“believe,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,”
“predict,” “project,” “should,” “will,” and similar words, although some
forward-looking statements are expressed differently.  Although we
believe that the expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will prove to be
correct.


ITEM4T - CONTROLS AND PROCEDURES
 
 Management's
report on internal control over financial reporting.
 
 Management
of the Company has evaluated, with the participation of the Chief Executive
Officer and Chief Financial Officer of the Company, the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or
15d-15(e) promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this Quarterly Report on Form 10-Q. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer of the
Company had concluded that the Company's disclosure controls and procedures as
of the period covered by this Quarterly Report on Form 10-Q were not effective
for the following reasons:
 
 a)           The
deficiency was identified as the Company's limited segregation of duties amongst
the Company's employees with respect to the Company's control activities. This
deficiency is the result of the Company's limited number of employees. This
deficiency may affect management's ability to determine if errors or
inappropriate actions have taken place. Management is required to apply its
judgment in evaluating the cost-benefit relationship of possible changes in our
disclosure controls and procedures.
 
 b)           The
deficiency was identified in respect to the Company's Board of Directors. This
deficiency is the result of the Company's limited number of external board
members. This deficiency may give the impression to the investors that the board
is not independent from management. Management and the Board of Directors are
required to apply their judgment in evaluating the cost-benefit relationship of
possible changes in the organization of the Board of Directors.
 
 Changes
in internal control over financial reporting.
 
 Management
of the Company has also evaluated, with the participation of the Chief Executive
Officer of the Company, any change in the Company’s internal control over
financial reporting that occurred during the period covered by this Quarterly
Report on Form 10-Q and determined that there was no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.
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PART
II – OTHER INFORMATION
  ITEM5 - OTHER
INFORMATION
  (b)
              The
      Company does not have a standing nominating committee or a committee
      performing similar functions as the Company’s Board of Directors consists
      of only two members and therefore there would be no benefit in having a
      separate nominating committee that would consist of the same number of
      members as the full board of directors.  Both members of the
      Board of Directors participate in the consideration of director
      nominees.
 
 ITEM6 - EXHIBITS
  31.1
              Certification required under
      Section 302 of the Sarbanes-Oxley Act of
  2002.
 
 32.1
              Certification required under
      Section 906 of the Sarbanes-Oxley Act of
  2002.
    19
 SIGNATURES
 
 Pursuant
to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
  iVoice,
      Inc.Date:
      November
      16, 2009
                By:
                /s/ Jerome R. MahoneyJerome
      R. MahoneyChief
      Executive Officer and
                  Principal
      Financial Officer


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Index
of Exhibits
 
 31.1
              Certification required under
      Section 302 of the Sarbanes-Oxley Act of
  2002.
 
 32.1
              Certification required under
      Section 906 of the Sarbanes-Oxley Act of
  2002.




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