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 March 31, 2010ORo
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 May 12, 2010:
4,649,644,922







Table of Contents





iVOICE, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


MARCH 31, 2010 AND 2009


TABLEOF CONTENTS





Page No.PART I. FINANCIAL INFORMATIONItem 1.
Condensed Consolidated Financial Statements (Unaudited)
2Condensed Consolidated Balance Sheets – March 31, 2010 and December 31, 2009
2Condensed Consolidated Statements of Operations - For the three months ended March 31, 2010 and 2009
4Condensed Consolidated Statement of Accumulated Other Comprehensive Loss – For the three months ended March 31, 2010
5Condensed Consolidated Statements of Cash Flows - For the three months ended March 31, 2010 and 2009
6Notes to Condensed Consolidated Financial Statements
7Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
17Item 4T.
Controls and Procedures
20PART II. OTHER INFORMATIONItem 5.
Other Information
21Item 6.
Exhibits
22








Table of Contents




ITEM1. - CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


iVOICE, INC. AND SUBSIDIARIES
 CONDENSEDCONSOLIDATED BALANCE SHEETS
 (UNAUDITED)
  March 31,


December 31,2010


2009ASSETSCURRENT ASSETSCash and cash equivalents

$
1,896,138


$
1,842,801Securities available for sale


14,337



9,681Accounts receivable, net of allowance for doubtful accounts $0


10,246



6,188Prepaid expenses and other current assets


41,876



45,075Total current assets


1,962,597



1,903,745PROPERTY AND EQUIPMENT, net of accumulated depreciation of $238,338 and $235,296, respectively


32,883



35,925OTHER ASSETSIntangible assets, net of accumulated amortization of $2,529 and and $2,345, respectively


171,785



171,969Deposits and other assets


6,666



6,666Total other assets


178,451



178,635TOTAL ASSETS

$
2,173,931


$
2,118,305LIABILITIES AND STOCKHOLDERS’ DEFICITCURRENT LIABILITIESAccounts payable and accrued expenses

$
1,067,959


$
927,105Due to related parties


570,372



580,703Class A common stock liability


29,508



29,508Deferred revenues


998



2,210Total current liabilities


1,668,837



1,539,526NON CURRENT LIABILITIESConvertible debentures payable, net of discounts of $144,087 and $159,128, respectively


527,513



512,472Derivative liability on convertible debentures


742,424



742,139Total current liabilities


1,269,937



1,254,611TOTAL LIABILITIES

$
2,938,774


$
2,794,137COMMITMENTS AND CONTINGENCIES See accompanying notes to condensed consolidated financial statements.
  2
 Table of Contents
  iVOICE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)
 (UNAUDITED)
   March 31,


December 31,2010


2009STOCKHOLDERS’ EQUITY (DEFICIT)Stockholders’ equity: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;2010 - 3,401,870,145 shares issued; 3,401,867,145 shares outstanding2009 - 3,401,870,145 shares issued; 3,401,867,145 shares outstanding


24,818,162



24,818,162Common stock, Class B, $0.01 par value; authorized 50,000,000 shares;no shares issued and outstanding


--



--Additional paid-in capital


719,702



719,702Accumulated other comprehensive income


9,326



4,658Accumulated deficit


(24,541,408
)


(24,146,624
)Treasury stock, 3,000 Class A shares, at cost


(28,800
)


(28,800
)Total iVoice, Inc. stockholders' equity


976,982



1,367,098Noncontrolling interest


(1,741,825
)


(2,042,930
)TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)


(764,843
)


(675,832
)TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

$
2,173,931


$
2,118,305
 See accompanying notes to condensed consolidated financial statements.
 
 3
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 iVOICE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (UNAUDITED)
   For the three monthsEnded March 31,2010


2009SALES

$
42,400


$
15,030COST OF SALES


25,412



9,221GROSS PROFIT


16,988



5,809OPERATING EXPENSESSelling, general and administrative expenses


323,837



322,105Depreciation and amortization


3,226



3,396Total operating expenses


327,063



325,501LOSS FROM OPERATIONS


(310,075
)


(319,692
)OTHER INCOME (EXPENSE)Other income


234,676



12,190Loss on revaluation of derivatives


(285
)


(1,778
)Amortization of discount on debt


(15,041
)


(34,733
)Interest expense


(2,954
)


(4,413
)Total other income (expense)


216,396



(28,734
)LOSS FROM OPERATIONS BEFOREPROVISION FOR INCOME TAXES


(93,679
)


(348,426
)PROVISION FOR INCOME TAXES


--



--NET LOSS


(93,679
)


(348,426
)Net income (loss) attributable to noncontrolling interest


96,812



(114,002
)NET LOSS APPLICABLE TO COMMONSHARES

$
(190,491
)

$
(234,424
)NET LOSS PER COMMON SHAREBasic and diluted

$
(0.00
)

$
( 0.00
)WEIGHTED AVERAGE SHARES OUTSTANDINGBasic and diluted


3,401,867,145



2,602,170,527
  See accompanying notes to condensed consolidated financial statements.
  4
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  iVOICE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF
 ACCUMULATED OTHER COMPREHENSIVE INCOME (UNAUDITED)
 FOR THE THREE MONTHS ENDED MARCH 31,
 2010


2009Balance at beginning of the period

$
4,658


$
1,785Unrealized gain on securities available for sale:Unrealized gain arising during the period


4,668



206Less: reclassification adjustment and losses included in net loss


--



(522
)Net change for the period


4,668



(316
)Balance at end of the period

$
9,326


$
1,469
 
 
 See accompanying notes to condensed consolidated financial statements.
  5
 Table of Contents
 
 iVOICE, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 FOR THE THREE MONTHS ENDED MARCH 31,


2010


2009CASH FLOWS FROM OPERATING ACTIVITIES:Net loss

$
(93,679
)

$
(348,426
)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Depreciation of fixed assets and amortization of intangibles


3,226



3,396Amortization of discount on debt conversion


15,041



34,733Gain on sales of securities available for sale


--



(1,196
)Loss on revaluation of derivatives


285



1,778Stock issue to noncontrolling shareholders for services


--



14,218Changes in certain assets and liabilities:(Increase) in accounts receivable


(4,058
)


(1,151
)Decrease in inventory


--



797(Increase) decrease in prepaid expenses and other assets


3,211



(137,746
)Increase (decrease) in accounts payable and accrued liabilities


140,854



(175,696
)Increase (decrease) in deferred revenues


(1,212
)


3,564(Decrease) in related party liabilities


(10,331
)


(143,129
)Total cash provided by (used in) operating activities


53,337



(748,858
)CASH FLOWS FROM INVESTING ACTIVITIES:Costs of trademarks and other intangibles


--



(1,284
)Net proceeds from sales of securities available for sale


--



7,337Total cash provided by investing activities


--



6,053NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


53,337



(742,805
)CASH AND CASH EQUIVALENTS – BEGINNING OF PERIOD


1,842,801



3,442,590CASH AND CASH EQUIVALENTS – END OF PERIOD

$
1,896,138


$
2,699,785CASH PAID DURING THE PERIOD FOR:Interest expense

$
-


$
-Income taxes

$
-


$
-
 
  SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:





For the three months ended March 31, 2009:





a)
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.




See accompanying notes to condensed consolidated financial statements.





6
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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009
 
 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES




Basis of Presentation


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 Article 10 of Regulation S-X.  Accordingly, they do not include all of the information and disclosures 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, 2009 audited financial statements and the accompanying notes thereto.





Principles of Consolidation


The accompanying condensed consolidated financial statements include the accounts of the Company, its wholly owned subsidiary, iVoice Innovations, Inc. and its Variable Interest Entity, B Green Innovations. All significant intra/inter-company transactions and balances have been eliminated in consolidation.





B Green Innovations is considered a Variable Interest Entity by the Company because iVoice, Inc. is the primary beneficiary of B Green Innovations, as such, according to provisions of FASB Accounting Standards Codification (“ASC”) Topic 810 “Consolidation”, iVoice, Inc. continued  to consolidate the results of operations of B Green Innovations with those of iVoice and its other subsidiary. 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.





Revenue and Cost 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 B Green Innovations which primarily 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 of return exists. B Green Innovation also derives revenues from the customer support (maintenance) service contracts for its IVR software product for one-year periods. Deferred revenues are recorded when the company receives payment and then revenues are recorded over the maintenance period.





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 March 31, 2010 and December 31, 2009 of $1,388,369 and $1,402,405, respectively.




7
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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009
  Fair Value of Financial Instruments


The Company estimates that the fair value of all financial instruments at March 31, 2010 and December 31, 2009, 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.





On November 12, 2009, the Company issued an Amended and Restated convertible debenture to YA Global Investments, which is due on May 25, 2014, and it yields no interest rate.  The Company imputed an effective interest rate of 5.25%.





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 three months ended March 31, 2010 and 2009 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:




Three months ended March 31,2010


2009Net (loss) applicable to common shares

$
(190,491
)

$
(234,424
)Weighted average shares outstanding - basic


3,401,867,145



2,602,170,527Weighted average shares outstanding - diluted


3,401,867,145



2,602,170,527Net (loss) per common share - basic

$
(0.00
)

$
(0.00
)Net (loss) per common share - diluted

$
(0.00
)

$
(0.00
)


As of March 31, 2010, the Company has common stock equivalents of 6,740,170,940 issuable upon conversion of the YA Global Convertible Debentures and an obligation to issue 655,728,382 shares of common stock outstanding. As of March 31, 2009, the Company had common stock equivalents of 16,700,000,000 issuable upon conversion of the YA Global Convertible Debentures and YA Global Warrants. The computation of diluted EPS in the periods ended March 31, 2010 and 2009 do not include the common stock equivalents because these would have an anti-dilutive effect on loss per share.




8
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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009


Accumulated Other Comprehensive Income


Comprehensive income (loss) includes net income (loss) and other revenues, expenses, gains and losses that are excluded from net income (loss) but are included as a component of total stockholders’ equity (deficit). Comprehensive income (loss) for the three months ended March 31, 2010 and 2009 was $4,668 and $(316), respectively. The difference between comprehensive income (loss) and net income (loss) results primarily from the effect of unrealized gains and losses determined in accordance with FASB ASC 320, “Investments – Debts and Equity Securities”.  As of March 31, 2010 and December 31, 2009, the accumulated balance of unrealized gains and losses excluded from net income (loss) was $9,326 and $4,658, respectively. These amounts are presented as “Accumulated other comprehensive income” in the balance sheet.





Reclassification of accounts


On January 1, 2009, the Company adopted provisions of ASC 810-10-55, disclosure for “Noncontrolling Interest in Consolidated Financial Statements.” Certain prior year amounts have been reclassified to conform to the adoption of these provisions. The reclassifications have had no effect on operations or cash flows for the three months ended March 31, 2009.




Recent Accounting Pronouncements


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.





In January 2010, the FASB issued Accounting Standards Update No. 2010-06, Fair Value Measurements and Disclosures (the “Update”), which provides amendments to Accounting Standards Codification 820-10 (Fair Value Measurements and Disclosures – Overall Subtopic) of the Codification.  The Update requires improved disclosures about fair value measurements.  Separate disclosures need to be made of the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements along with a description of the reasons for the transfers.  Also, disclosure of activity in Level 3 fair value measurements needs to be made on a gross basis rather than as one net number.  The Update also requires: (1) fair value measurement disclosures for each class of assets and liabilities, and (2) disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements, which are required for fair value measurements that fall in either Level 2 or Level 3.  The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the Level 3 activity disclosures, which are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years.  The enhanced disclosure requirements have not had a material impact on the Company’s financial reporting.




9
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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009


In April, 2010, the FASB issued ASU 2010-17, “Revenue Recognition – Milestone Method.” ASU 2010-17 amends ASC 605 “Revenue Recognition” to provide guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. A vendor can recognize consideration that is contingent upon achievement of a milestone in its entirety as revenue in the period in which the milestone is achieved only if the milestone meets all criteria to be considered substantive. The amendments in this Update are effective on a prospective basis for milestones achieved in fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted.  The Company does not expect the adoption of ASU 2010-17 to have an effect on the Company’s financial statements.





NOTE 2 – CONSOLIDATED FINANCIAL STATEMENTS AND NON-CONTROLLING INTEREST





On March 12, 2008, the Company acquired 1,444.44 shares of B Green Innovations, Inc. (f/k/a iVoice Technology, Inc.) Series A 3% 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 B Green Innovations. On March 6, 2009, B Green Innovations 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 B Green Innovations. On February 23, 2010, the Company acquired 1,219 shares of B Green Innovations, Inc.’s Series A 3% Convertible Preferred Stock for $1,218,766 of cash and convertible debt. In addition, on February 23, 2010, B Green Innovations reinstated the conversion rights on their Series A Convertible Preferred Stock. iVoice may, with the consent of B Green Innovation, convert an amount of the Series A Preferred Stock into Class A common stock calculated by dividing the Series A Initial Value by the closing bid price of the Class A common stock on the last trading day immediately prior to the date of the Notice of Conversion and which limits the conversion to Class A common stock to 9.99% of the outstanding shares of B Green Innovations. iVoice will receive no discount to the closing bid price on the conversion. The Company is the primary beneficiary of B Green Innovations, and as such, according to ASC 810, “Consolidation”, iVoice, Inc. continued to consolidate the results of operations of B Green Innovations with those of iVoice, Inc. and its other subsidiary.





For the period ended March 31, 2010, the stockholders’ equity for non-controlling interest and net income attributable to non-controlling interest reflects 90% of the non-controlling interest’s portion of B Green Innovations operations, after giving effect of elimination of intra-company transactions. For the period ended March 31, 2009, the non-controlling interest reflects 100% of the non-controlling interest’s portion of B Green Innovations operations, after giving effect of elimination of intra-company transactions.




10
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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009


Since 2004, iVoice has provided administrative services to B Green Innovations and its subsidiary through various agreements. In 2008, the accumulated unpaid receivables were exchanged for Convertible Promissory Notes payable to iVoice by B Green Innovations and its subsidiary. In November 2009, iVoice and B Green Innovations mutually agreed to terminate and extinguish the following agreements:




a.
The Administrative Services Agreement dated March 1, 2007 by and between B Green Innovations, Inc.(subsidiary) and iVoice, Inc.


b.
The Convertible Promissory Note dated May 5, 2008 issued by B Green Innovations, Inc. (subsidiary) payable to iVoice, Inc.


c.
The Security Agreement dated May 5, 2008 by and between B Green Innovations, Inc. (subsidiary) and iVoice, Inc.





On February 10, 2010, the remaining Administrative Services Agreement with B Green Innovations was terminated, and the Company entered into an Exchange Agreement to exchange the B Green Innovations Convertible Promissory Note, having a principal and accrued interest of approximately $119,000, for 119 shares of the B Green Innovations 3% Convertible Preferred Stock.





On February 10, 2010, and as subsequently amended (see below), the Company entered into an administrative services agreement with B Green Innovations to provide iVoice with administrative and financial services and office space. This agreement will continue on a month-to-month basis unless terminated by either party by providing 30 days written notice. In consideration of the services, iVoice will pay B Green $5,000 per month. For the three months ended March 31, 2010 the companies recorded administrative fees of $15,000.





On April 29, 2010, the Administrative Services Agreement between the Company and B Green Innovations was amended as follows:




a.
The agreement will commence effective January 1, 2010.


b.
The monthly fee will increase to $5,000 per month and will be evidenced by a Convertible Promissory Note, the terms of which are as follows:


i.
Interest will accrue in the unpaid balance at the rate of prime plus 1 percent per annum.


ii.
Additional advances to include Fees accrued pursuant to the Administrative Services Agreement will be added to the principal of this note and will accrue interest at the above specified rate.


iii.
The interest shall accrue monthly and be paid annually.


iv.
The principal is payable on demand.


v.
The holder may elect payment of the principal and/or interest at the Holder’s sole discretion, owed pursuant to this Note by requiring the Maker to issue to the Holder, or his assigns either: (i) one Class B common stock share of the Maker, no par value per share, for each dollar owed, (ii) the number of Class A common stock shares of the Maker calculated by dividing (x) the sum of the principal and interest that the Holder has decided to have paid by (y) fifty percent (50%) of the lowest issue price of Class A common stock, or (iii) exchange the iVoice Market Value of the number of Class A Common Stock shares calculated, but not issued, in subsection (ii) above, equal to the number of B Green Series A 3% Preferred Stock shares calculated by dividing the iVoice Market value by the Series A Initial Value, as defined in the Company’s Certificate of Incorporation. The Holder may elect payment of the principal of this Note, before any repayment of interest.


vi.
This note may be prepaid in full or in part at any time without penalty.


vii.
In the event of (a) default in payment of any installment of principal or interest hereof as the same becomes due and such default is not cured within ten (10) days from the due date, or (b) default under the terms of any instrument securing this Note, and such default is not cured within fifteen (15) days after written notice to maker, then in either such event the Holder may, without further notice, declare the remainder of the principal sum, together with all interest accrued thereon, and the prepayment premium, if any, at once due and payable. Failure to exercise this option shall not constitute a waiver of the right to exercise the same at any other time. The unpaid principal of this Note and any part thereof, accrued interest and all other sums due under this Note shall bear interest at the rate of prime plus 2 percent per annum after default until paid.




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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009
  NOTE 3 – GOING CONCERN





The Company has negative cash flows from operations, negative working capital and recurring losses from operations. 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 4 – FAIR VALUE MEASUREMENTS





ASC 820, “Fair Value Measurements and Disclosures”, defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. 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).




12
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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009


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 March 31, 2010 and December 31, 2009. 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.




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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009


March 31, 2010


Assets

Level I


Level II


Level III


TotalSecurites available for sale

$
14,337


$
-


$
-


$
14,337Total Assets

$
14,337


$
-


$
-


$
14,337Derivative liabilities

$
-


$
742,424


$
-


$
742,424Total Liabilities

$
-


$
742,424


$
-


$
742,424









December 31, 2009




Assets

Level I


Level II


Level III


TotalSecurites available for sale

$
9,681


$
-


$
-


$
9,681Total Assets

$
9,681


$
-


$
-


$
9,681Derivative liabilities

$
-


$
742,139


$
-


$
742,139Total Liabilities

$
-


$
742,139


$
-


$
742,139







Valuation methods:





The Company’s securities available for sale are valued using quoted stock prices based on the OTC BB quotation system for the periods ending in the tables above.





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 6 for more discussion on derivatives.





NOTE 5  - CONVERTIBLE DEBENTURES PAYABLE





On November 12, 2009, the Company issued an Amended and Restated convertible debenture for the principal amount of $671,600 due on May 25, 2014. This debenture is secured with a $370,000 secured convertible debenture dated January 6, 2006 held by the Company, which has been fully reserved, 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. This debenture has no interest rate and the Company imputed an effective interest rate of 5.25% and recorded imputed interest of $141,043 which is being amortized over the term of the debenture. The Company amortized $7,836 of this interest during the three months ended March 31, 2010. The Company can redeem a portion or all amounts outstanding under the YA Global Debentures at any time upon three business days advanced written notice.  The Company shall pay 20% redemption premium on the principal amount being redeemed. YA Global may, at its discretion, convert the outstanding principal and accrued interest, in whole or in part, into a number of shares of our Class A Common Stock equal to the quotient obtained by dividing (x) the outstanding amount of the YA Global Debentures to be converted by (y) 90% of the lowest closing bid price of our shares of Class A Common Stock during the three (3) trading days immediately preceding the conversion date.




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iVOICE, INC. AND SUBSIDIARIES


NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)


MARCH 31, 2010 AND 2009




The aggregate principal value of the remaining debentures at March 31, 2010 and December 31, 2009 is $671,600. These amounts are shown on the balance sheet net of the unamortized portion of the discount on conversion of $16,104 and $23,309, respectively, and imputed interest of $127,983 and $135,819, respectively. This discount is being amortized over the life of the debenture and is being amortized as debt discount on the statement of operations.





NOTE 6 - DERIVATIVE LIABILITY





In accordance with ASC 815, "Derivatives and Hedging", the conversion feature associated with the YA Global Secured Convertible Debentures represents embedded derivatives. In May 2006, the Company had initially recognized embedded derivatives in the amount of $6,908,078 as a derivative liability in the accompanying condensed consolidated balance sheet, and at March 31, 2010 is measured at its estimated fair value of $742,424.





The estimated fair value of the embedded derivative has been calculated based on a Black-Scholes pricing model using the following assumptions:




At 3/31/10Fair market value of stock

$
0.00013Exercise price

$
0.00012Dividend yield


0.00
%Risk free interest rate


3.2
%Expected volatility


270.67
%Expected life

4.17 years


Changes in the fair value of the embedded derivatives are calculated at each reporting period and recorded in gain (loss) on revaluation of derivatives in the condensed consolidated statements of operations. During the three months ended March 31, 2010, there was a change in the fair value of the embedded derivatives, which resulted in a loss of $285.





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. The consolidated amortization expense on the debt discount on the convertible debentures for the three months ended March 31, 2010 and 2009 was $15,041 and $34,733, respectively.




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iVOICE, INC. AND SUBSIDIARIES
 NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
 MARCH 31, 2010 AND 2009
  NOTE 7 – DUE TO RELATED PARTIES





From time to time, iVoice, Inc. has entered into various loan agreements and employment agreements with Jerome R. Mahoney, President and Chief Executive Officer of the Company. As of March 31, 2010, the balances due to Mr. Mahoney were: a) accrued interest of $5,285 and b) deferred compensation of $294,735. During the year ended December 31, 2009, the loan balance from 2008 of $2,295 was paid off. Other amounts 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 this 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, B Green Innovations 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 B Green Innovations.  The note bears interest at the rate of prime plus 2.0% per annum (5.25% at March 31, 2010 and December 31, 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 B Green Innovations, Inc., par value $.01, for each dollar owed, (ii) the number of shares of Class A Common Stock of B Green Innovations, 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 B Green Innovations maintains control over the issuance of shares and may decline the request for conversion of the repayment into shares of the B Green Innovations. During the years ended December 31, 2009 and 2008, Mr. Mahoney received shares of Class A common stock and Class B common stock as partial repayment of this loan. As of March 31, 2010 and December 31, 2009, the outstanding balances were $3,003, plus accrued interest $103,646 and $100,692, respectively.





On August 1, 2004, B Green Innovations entered into a five-year employment agreement with Jerome Mahoney to serve as Non-Executive Chairman of the Board of Directors of B Green Innovations with a base salary of $85,000 for the first year with annual increases based on the Consumer Price Index.  On August 30, 2006 Mr. Mahoney was elected to the position of President and Chief Executive Officer of B Green Innovations and no longer serves as Non-Executive Chairman of the Board of B Green Innovations. On March 9, 2009, the term of the employment agreement between B Green Innovations and Mr. Mahoney, the Company’s CEO, was extended to July 31, 2016.  On March 1, 2010, the consulting agreement between Mr. Mahoney and B Green Innovations wholly owned subsidiary was terminated and his compensation on that agreement was added to his current employment agreement. A portion of Mr. Mahoney’s compensation shall be deferred until such time that the Board of Directors of B Green Innovations determines that it has sufficient financial resources to pay his compensation in cash. As of March 31, 2010 and December 31, 2009, total deferred compensation due to Mr. Mahoney was $267,349 and $260,248, respectively. The Board of Directors of B Green Innovations 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.





NOTE 8 -  SUBSEQUENT EVENTS





In April 2010, the Company issued an aggregate of 917,777,777 shares of Class A common stock to YA Global Investments, LP as repayment of $82,600 of principal on outstanding convertible debentures.





On April 16, 2010, the Company issued 330,000,000 shares of Class A common stock to Mr. Mahoney as repayment of $14,850 of deferred compensation.




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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, 2009 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.




In 2008 and 2010, the iVoice has acquired an aggregate of 2,663 shares of B Green Innovations Series A 3% Convertible Preferred Stock for a total investment of $2,663,210.  These shares are convertible by iVoice into B Green Innovations Class A common stock only with the consent of B Green Innovations. iVoice is limited to holding up to 9.99% of the outstanding shares of B Green Innovations. iVoice is the primary beneficiary of B Green Innovations, and as such, according to ASC 810 “Consolidation”, iVoice continued to consolidate the results of operations of B Green Innovations with those of iVoice and its other subsidiary.




Results of Operations





Three months ended March 31, 2010 compared to three months ended march 31, 2009





Total sales for the three months ended March 31, 2010 and 2009 were $42,400 and $15,030, respectively. The increase in sales of $27,370 is primarily due to the increase in product sales of green products offset by a small decrease in IVR maintenance revenues. 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 March 31, 2010 and 2009 were $25,412 and $9,221, respectively. The cost or sales represent the direct material and labor costs for the anti-vibration products produced by B Green Innovations’ out-sourced manufacturer.




Total operating expenses for the three months ended March 31, 2010 and 2009, were $327,063 and $325,501, respectively, for a increase of $1,562.  The increase is primarily attributable to the expenses of B Green for the staffing and roll-out of the new “green” products offset by small decreases in insurance and other overhead and office expenses.




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Total other income (expense) for the three months ended March 31, 2010 was an income of $216,396. This total was comprised of $232,491 gain on sale of tax losses in the NJEDA program, $2,185 of interest income and other income. These amounts were offset by $2,954 of accrued interest expense on the other debt, $15,041 amortization of the discount on debt and a $285 loss on revaluation of the derivatives. Total other income (expense) for the three months ended March 31, 2009 was an expense of $28,734. This total was comprised of $34,733 amortization of the discount on debt, $4,413 of accrued interest expense on the YA Global notes and other debt and $1,778 loss on revaluation of the derivatives. These amounts are offset by $12,190 of interest income on the cash accounts and other income.




Net loss for the three months ending March 31, 2010 and 2009 were $93,679 and $348,426, respectively. The decrease in net loss of $254,747 was primarily due to the gain on sale of tax losses, increase gross profit on higher sales and decreases in amortization of the discount on debt.  These were offset by the small increases in operating expenses and accrued interest expenses as discussed above.





The net income (loss) attributable to non-controlling interest of $96,812 and $(114,002) reflects the non-controlling interest’s portion of the operating income (loss) recorded by B Green Innovations, after effect of elimination of intra-company transactions, which is included in our consolidation for the three months ended March 31, 2010 and 2009, respectively.





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 three months ended March 31, 2010 and the year ended December 31, 2009, we had incurred consolidated losses from operations of $310,075 and $1,310,096, respectively, and had cumulative cash flow deficiencies from operations of $1,098,661 and $1,141,998, respectively.  These matters raise substantial 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.  We anticipate that our operations of the iVoice parent will require at least $500,000 for the next 12 months.  These expenses are anticipated to consist of the following: payroll and benefits of $200,000, 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 11 months.





During the three months ended March 31, 2010, the Company had a net increase in cash of $53,337. The Company’s principal sources and uses of funds in the three months ended March 31, 2010 were as follows:




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Cash flows from operating activities.  The Company provided $53,337 in cash from operations in the three months ended March 31, 2010, a decrease of $802,195 compared to $748,858 in cash used in operations in the three months ending March 31, 2009.  This decrease was primarily attributed to the lower cash loss from operations, the increase of current liabilities and related party accounts and an decrease in prepaid and other assets.





Cash flows from investing activities.  The Company did not have any investing activities in the three months ended March 31, 2010. The Company had a net increase in funds from investing activities of $6,053 for the three months ended March 31, 2009. This was primarily due to net proceeds from the sales of securities of $7,337 offset by spending for trademarks and other intangibles.




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, 2011 and to raise the interest rate to 15% per annum. On November 12, 2009, the Company and YA Global reached a settlement agreement whereby the Company made a cash payment of $500,000 and issued an Amended and Restated convertible debenture for the sum of $671,600.




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 was deposited into interest bearing savings account at our primary banking center.




We can redeem a portion or all amounts outstanding under the YA Global Debentures at any time upon three business days advanced written notice.  A 20% redemption premium on the principal amount being redeemed is required. YA Global may, at its discretion, convert the outstanding principal and accrued interest, in whole or in part, into a number of shares of our Class A Common Stock equal to the quotient obtained by dividing (x) the outstanding amount of the YA Global Debentures to be converted by (y) 90% of the lowest closing bid price of our shares of Class A Common Stock during the three (3) trading days immediately preceding the conversion date.




We cannot predict the actual number of shares of Class A Common Stock that will be issued pursuant to the YA Global Debentures, in part, because the conversion price of the YA Global Debentures will fluctuate based on prevailing market prices.  If we are unable to issue enough shares to meet our obligations, then YA Global could request cash payments, which could have a material impact on our long-term growth strategy.




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.




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Off Balance Sheet Arrangements





During the three months ended March 31, 2010, 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.





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.





Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of March 31, 2010, based on the criteria set forth in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under the criteria set forth in Internal Control — Integrated Framework, our management concluded that our internal control over financial reporting was 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.




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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.





PART II – OTHER INFORMATION





ITEM5 - OTHER INFORMATION





(a)





Section 1 - Registrant's Business and Operations


Item 1.01 Entry into a Material Definitive Agreement.





On March 1, 2010, the Company entered into an Administrative Services Agreement (the “Agreement”) with B Green Innovations, Inc. (“B Green”) for B Green to provide, effective February 1, 2010, certain administrative services as set forth in the Agreement for a fee of Four Thousand Dollars ($4,000) per month.  This Agreement shall continue until either party terminates with thirty (30) advance written notice.  This Agreement is filed as Exhibit 10.2 herein.





Item 1.02 Termination of a Material Definitive Agreement.





On February 10, 2010, the Company and B Green Innovations, Inc. entered into the Termination of Administrative Services Agreement effective November 17, 2009 that terminated and extinguished any all obligations between the parties pursuant to the following agreements:





a. The Administrative Services Agreement dated March 1, 2007 by and between B Green Innovations, Inc. and iVoice, Inc.


b. The Convertible Promissory Note dated May 5, 2008 issued by B Green Innovations, Inc. payable to iVoice, Inc.


c. The Security Agreement dated May 5, 2008 by and between B Green Innovations, Inc. and iVoice, Inc.





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At the time that the parties entered into this Administrative Services Agreement dated March 1, 2007, B Green Innovations, Inc. was a wholly subsidiary of iVoice Technology, Inc.  On November 17, 2009, B Green Innovations, Inc. merged into iVoice Technology, Inc. and thereafter, on November 20, 2009, iVoice Technology, Inc. changed its name to B Green Innovations, Inc.








(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





10.1
Termination of Administrative Services Agreement dated February 10, 2010 by and between B Green Innovations, Inc. and iVoice, Inc., filed herein.10.2
Administrative Services Agreement dated March 1, 2010 by and between B Green Innovations, Inc. and iVoice, Inc., filed herein.




31.1
Certification of the Chief Executive Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.







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SIGNATURES





Pursuant to the requirements 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: May 17, 2010
By:
/s/ Jerome R. MahoneyJerome R. MahoneyPresident, Chief Executive Officer and

Principal Financial Officer





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Index of Exhibits




10.1
Termination of Administrative Services Agreement dated February 10, 2010 by and between B Green Innovations, Inc. and iVoice, Inc., filed herein.10.2
Administrative Services Agreement dated March 1, 2010 by and between B Green Innovations, Inc. and iVoice, Inc., filed herein.
  31.1
Certification of the Chief Executive Officer and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.1
Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.






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