SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                   FORM 10-QSB

|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

                For the quarterly period ended September 30, 2001

                                       OR

|_|   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
                              EXCHANGE ACT OF 1934

For the transition period from ____________________ to _____________________

Commission file number 000-229341

                                  iVoice, Inc.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)

Delaware                                                         52-1750786
--------------------------------------------------------------------------------
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                               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

Securities registered under Section 12(b) of the Exchange Act: None.

Securities registered under Section 12(g) of the Exchange Act: Class A common,
par value $.001 per share

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 |_|

Number of shares of Class A, common stock, $.001 par value, outstanding as of:
   November 5, 2001                                                148,808,854
<PAGE>

                                  IVOICE, INC.
                              FINANCIAL STATEMENTS
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

                                TABLE OF CONTENTS

                                                                        Page No.
                                                                        --------

PART I. FINANCIAL INFORMATION

        Item 1. Financial Statements

                Balance Sheets - September 30, 2001 (Unaudited)             1

                Statements of Operation -
                For the three months ended September 30, 2001 and 2000
                and nine months ended September 30, 2001 and 2000           2

                Statements of Cash Flows -
                For the nine months ended September 30, 2001 and 2000     3 - 5

                Notes to the financial statements                         6 - 13

        Item 2. Management's Discussion and Analysis of
                Financial Conditionand Results of Operations             14 - 16

PART II. OTHER INFORMATION

        Item 1. Legal Proceedings                                          17

        Item 3. Defaults upon Senior Securities                            18

        Item 4. Submission of Matters to a Vote of Security Holders        18

        Item 6. Exhibits and Reports on Form 8-K                           18
<PAGE>

                                  IVOICE, INC.
                                 BALANCE SHEETS
                               SEPTEMBER 30, 2001
                                   (Unaudited)

<TABLE>
<S>                                                                        <C>
     ASSETS
CURRENT ASSETS
   Cash and cash equivalents                                               $     13,177
   Accounts receivable, net of allowance for doubtful accounts of $2,500         36,811
   Inventory                                                                     19,691
   Prepaid expenses and other current assets                                    545,353
                                                                           ------------
     Total current assets                                                       615,032

PROPERTY AND EQUIPMENT, net of accumulated depreciation of $76,628              113,519

OTHER ASSETS
   Other Receivable                                                              67,650
   Software license costs, net of accumulated amortization of $244,800          299,200
   Financing costs, net of accumulated amortization of $4,167                   137,950
   Intangible assets, net of accumulated amortization of $17,760                274,881
   Deposits and other assets                                                     13,900
                                                                           ------------
     Total other assets                                                         793,581
                                                                           ------------

     TOTAL ASSETS                                                          $  1,522,132
                                                                           ============

     LIABILITIES AND STOCKHOLDERS' DEFICIENCY
CURRENT LIABILITIES
   Accounts payable and accrued expenses                                   $  1,218,036
   Obligations under capital leases - current                                    33,213
   Billings in excess of estimated costs on uncompleted jobs                     51,306
   Due to related parties                                                       836,419
   12% Convertible debentures                                                   194,800
   8% Convertible debentures                                                    275,000
                                                                           ------------
     Total current liabilities                                                2,608,774
                                                                           ------------

LONG-TERM DEBT
   Obligation under Capital leases - non-current                                 23,389
                                                                           ------------
 Total liabilities                                                            2,632,163
                                                                           ------------

COMMITMENTS AND CONTINGENCIES                                                        --

STOCKHOLDERS' DEFICIENCY
   Preferred stock, par value $1.00; authorized 1,000,000
    shares, no shares issued or outstanding                                          --
   Common stock, Class A - par value $.001; authorized
    600,000,000 shares, 142,810,525 issued and outstanding                    1,163,966
   Common stock, Class B - no par value; authorized 3,000,000
    shares; 700,000 shares issued; 364,000 shares outstanding                        37
   Subscriptions receivable                                                    (990,000)
   Additional paid in capital                                                10,242,307
   Accumulated deficit                                                      (11,526,341)
                                                                           ------------
     Total stockholders' deficiency                                          (1,110,031)
                                                                           ------------

     TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                        $  1,522,132
                                                                           ============
</TABLE>

    The accompanying notes are an integral part of the financial statement.


                                     - 1 -
<PAGE>

                                  IVOICE, INC.
                      STATEMENTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
                                                       For the Three Months Ended       For the Nine Months Ended
                                                             September 30,                     September 30,
                                                       --------------------------      ----------------------------
                                                          2001            2000             2001             2000
                                                       ---------      -----------      -----------      -----------
<S>                                                    <C>            <C>              <C>              <C>
SALES, net                                             $  87,043      $   175,343      $   303,948      $   677,062

COST OF SALES                                             31,161           70,663          130,279          232,465
                                                       ---------      -----------      -----------      -----------

GROSS PROFIT                                              55,882          104,680          173,669          444,597
                                                       ---------      -----------      -----------      -----------

SELLING, GENERAL AND
 ADMINISTRATIVE EXPENSES
    Selling expenses                                      31,171           69,960          138,470          323,734
    General and administrative expenses                  349,489          407,501        1,653,307        1,305,976
    Research and development                              90,389          152,011          320,475          260,620
    Bad debt expense                                          --           16,652           23,308           39,152
    Depreciation and amortization                         40,539           39,999          120,718          106,113
                                                       ---------      -----------      -----------      -----------
Total selling, general and administrative expenses       511,588          686,123        2,256,278        2,035,595
                                                       ---------      -----------      -----------      -----------

LOSS FROM OPERATIONS                                   (455,706)         (581,443)      (2,082,609)      (1,590,998)

OTHER EXPENSE
    Non-recurring expense                                     --               --          352,706               --
    Interest expense                                      36,782          170,767          107,591          491,986
                                                       ---------      -----------      -----------      -----------
Total other expenses                                      36,782          170,767          460,297          491,986
                                                       ---------      -----------      -----------      -----------

LOSS BEFORE INCOME TAXES                                (492,488)        (752,210)      (2,542,906)      (2,082,984)

PROVISION FOR INCOME TAXES                                    --               --               --               --
                                                       ---------      -----------      -----------      -----------

NET LOSS                                               $(492,488)     $  (752,210)     $(2,542,906)     $(2,082,984)
                                                       =========      ===========      ===========      ===========

NET LOSS PER COMMON SHARE
    Basic                                              $   (0.00)     $     (0.01)     $     (0.02)     $     (0.03)
                                                       =========      ===========      ===========      ===========
    Diluted                                            $   (0.00)     $     (0.01)     $     (0.02)     $     (0.03)
                                                       =========      ===========      ===========      ===========
</TABLE>

    The accompanying notes are an integral part of the financial statement.


                                     - 2 -
<PAGE>

                                  IVOICE, INC.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)

<TABLE>
<CAPTION>
                                                               For the Nine Months Ended
                                                                     September 30,
                                                             ----------------------------
                                                                 2001            2000
                                                             -----------      -----------
<S>                                                          <C>               <C>
CASH FLOW FROM OPERATING ACTIVITIES
   Net loss                                                  $(2,542,906)      (2,082,984)
   Adjustments to reconcile net loss to net
    cash used in operating activities
   Depreciation and amortization                                 120,717          106,113
   Bad debt expense                                               23,308           39,152
   Amortization of debt issue costs                              157,697          432,750
   Common stock issued for consulting services                   300,138          382,619
   Common stock issued for compensation                          224,000           69,938
   Common stock issued for settlements                           211,080               --
   Common stock issued for interest                                6,559               --
   Changes in certain assets and liabilities:
      Accounts receivable                                         17,560         (243,674)
      Inventory                                                      537           (8,735)
      Accounts payable and accrued liabilities                   680,199          200,538
      Legal settlement payable                                        --         (300,000)
      Deferred revenue                                            28,294               --
      Other assets                                                87,658          (66,986)
                                                             -----------      -----------
Total cash used in operating activities                         (685,159)      (1,471,269)
                                                             -----------      -----------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                             (1,872)        (112,801)
   Purchase of goodwill and other intangibles                     (3,390)        (152,355)
                                                             -----------      -----------
Total cash used in investing activities                           (5,262)        (265,156)
                                                             -----------      -----------

CASH FLOWS FROM FINANCING ACTIVITIES
   Issuance of common stock                                      129,931          746,000
   Proceeds from exercise of options on common stock                  --          319,166
   Proceeds from officer loans                                   264,000          396,798
   Prepaid offering and debt issue costs                              --          (31,500)
   Increase in borrowing under capital lease obligations              --           92,895
   Repayment of capital lease obligations                        (20,682)
   Repayment of notes payable                                         --           (9,414)
   Sale of convertible debentures                                275,000          150,000
                                                             -----------      -----------
Total cash provided by financing activities                      648,249        1,663,945
                                                             -----------      -----------

NET DECREASE IN CASH AND CASH EQUIVALENTS                        (42,172)         (72,480)

CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD                   55,349          195,861
                                                             -----------      -----------
CASH AND CASH EQUIVALENTS - END OF PERIOD                    $    13,177      $   123,381
                                                             -----------      -----------

CASH PAID DURING THE PERIOD FOR:
   Interest expense                                          $    10,976      $     7,590
                                                             ===========      ===========
   Income taxes                                              $        --      $        --
                                                             ===========      ===========
</TABLE>

     The accompanying notes are an integral part of the financial statement.


                                     - 3 -
<PAGE>

                                  IVOICE, INC.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES

SEPTEMBER 30, 2001:

a)    During the nine months ended September 30, 2001, the Company issued
      12,194,287 shares of its Class A common stock for services valued at
      $897,055. The company has registered for resale with the SEC, 10,600,000
      of these issued shares during this nine-month period.

b)    During the nine months ended September 30, 2001, the Company issued
      2,020,834 restricted shares of its Class A common stock as compensation
      valued at $224,000.

c)    During the nine months ended September 30, 2001, the Company issued
      828,000 registered shares and 850,000 restricted shares of its Class A
      common stock as payment for termination of the Swartz Financing Agreement
      valued at $154,830.

d)    During the nine months ended September 30, 2001, the Company issued
      450,000 restricted shares of its Class A common stock to a holder of its
      12% convertible debentures as settlement for failure to register shares
      under the registration rights agreement related to the 12% convertible
      debentures valued at $56,250.

e)    During the nine months ended September 30, 2001, the Company issued
      328,951 restricted shares of its Class A common stock as repayment of
      amounts owed to related parties valued at $75,659.

f)    During the nine months ended September 30, 2001, the Company issued
      2,892,628 restricted shares of its Class A common stock for the repayment
      of $142,200 in principal on its 12% Convertible Debentures.

g)    During the nine months ended September 30, 2001, the Company issued
      104,110 restricted shares of its Class A common stock for interest on its
      12% Convertible Debentures valued at $6,559.

h)    During the nine months ended September 30, 2001, the Company issued
      $275,000 of its 8% convertible debentures exercisable at an 80% conversion
      price. The 20% conversion discount totaling $68,750 was recorded as a
      prepaid debt issue cost and will be amortized over the life of the debt.

SEPTEMBER 30, 2000:

a)    During the nine months ended September 30, 2000, the Company converted a
      $4,500,000 legal settlement payable into 2,000,000 shares of its class A
      restricted common stock.

b)    During the nine months ended September 30, 2000, the Company issued
      $150,000 of its 12% convertible debentures exercisable at a 50% conversion
      price. The 50% conversion discount totaling $150,000 was recorded as a
      prepaid debt issue cost and will be amortized over the life of the debt.

    The accompanying notes are an integral part of the financial statement.


                                     - 4 -
<PAGE>

                                  IVOICE, INC.
                      STATEMENTS OF CASH FLOWS (UNAUDITED)
                  FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES

SEPTEMBER 30, 2000 (continued):

c)    During the nine months ended September 30, 2000, the Company issued
      578,820 shares of its restricted class A common stock for services valued
      at $415,972.

d)    During the nine months ended September 30, 2000, 179,898 of options were
      exercised at the strike price of $0.1035 per share. These shares were
      exercised for $18,619 of services performed by the option holder.

e)    During the nine months ended September 30, 2000, the Company issued 50,000
      shares of its restricted class A common stock to Corporate Architects,
      Inc. with a value of $46,875 for the purchase of ThirdCAI, Inc.

f)    During the nine months ended September 30, 2000, the Company issued 80,000
      shares of its restricted class A common stock as compensation valued at
      $69,938.

    The accompanying notes are an integral part of the financial statement.


                                     - 5 -
<PAGE>

                                  IVOICE, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 2001

NOTE 1 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

            Basis of Presentation

            The accompanying financial statements have been prepared in
            accordance with generally accepted accounting principles for interim
            financial information and with the instructions to Form 10-QSB and
            Regulation S-B. 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.

            For further information, refer to the financial statements and
            footnotes included in Form 10-KSB for the year ended December 31,
            2000.

            The result of operations for the nine-month periods ended September
            30, 2001 and 2000 are not necessarily indicative of the results to
            be expected for the full year.

            The accompanying financial statements have been prepared assuming
            that the Company will continue as a going concern, which
            contemplates the realization of assets and satisfaction of
            liabilities in the normal course of business. The Company has
            sustained significant net losses which have resulted in an
            accumulated deficit at September 30, 2001 of $11,526,341, and
            periodic cash flow difficulties, which raise substantial doubt of
            the Company's ability to continue as a going concern.

            The net loss for the year ended December 31, 2000 was $2,891,379 and
            the Company recorded a net loss of $2,542,906 for the nine months
            ended September 30, 2001. To date, the Company has funded its
            operations through the issuances of convertible debt, sales of its
            Class A common stock and loans from its principal stockholder, the
            proceeds of which are derived from sales of this principal
            stockholder's personal holdings of the Company's Class A common
            stock. The Company anticipates a net loss for the year ended
            December 31, 2001, and with a cash balance of $13,177 at September
            30, 2001 and expected cash requirements for the year, there is
            substantial doubt as to the Company's ability to continue
            operations.

            The Company believes that these conditions have resulted from the
            inherent risks associated with small technology companies. Such
            risks include, but are not limited to, the ability to: a) generate
            sales of its product at levels sufficient to cover its costs and
            provide a return for investors, b) attract additional capital in
            order to finance growth, c) further develop and successfully market
            commercial products and d) successfully compete with other
            technology companies having financial, production and marketing
            resources significantly greater than those of the Company.

            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.


                                     - 6 -
<PAGE>

                                  IVOICE, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 2001

NOTE 1 -    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (continued)

            The Company is attempting to improve these conditions by way of
            financial assistance through collaborative partnering agreements,
            issuances of additional equity, debt arrangements, and product
            sales. Management believes that appropriate funding will be
            generated and future product sales will result from these
            opportunities and that the Company will continue operations through
            the next fiscal year; however, no assurance can be given that sales
            will be generated or that the additional necessary funding will be
            raised.

            On August 24, 2001, the Company amended its certificate of
            incorporation to a) change its name to iVoice Inc.; b) to increase
            the number of shares it is authorized to issue of its Class A common
            stock to 600,000,000 shares; c) to increase the number of shares it
            is authorized to issue of its Class B common stock to 3,000,000
            shares; d) to change the par value of its Class A common stock to
            $.001 per share; and e) to give the board of directors the authority
            to issue up to 1,000,000 shares of preferred stock with $1.00 par
            value.

            Earnings Per Share

            SFAS No. 128, "Earnings Per Share" requires presentation of basic
            earnings per share ("Basic EPS") and diluted earnings per share
            ("Diluted EPS").

            The computation of basic earnings per share 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
            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:

<TABLE>
<CAPTION>
                                       Three Months Ended            Nine Months Ended
                                         September 30,                 September 30,
                                  --------------------------     --------------------------
                                       2001          2000           2001            2000
                                  -----------     ----------     -----------     ----------
            <S>                   <C>             <C>            <C>             <C>
            Basic and Diluted     132,577,874     99,719,095     117,196,212     81,831,436
</TABLE>


                                     - 7 -
<PAGE>

                                  IVOICE, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 2001

NOTE 2 -    CONVERTIBLE DEBENTURES

            The Company has previously issued two series of convertible
            debentures consisting of ten notes payable totaling $500,000 bearing
            interest at 12% per annum and payable on December 1, 2000 and
            fourteen notes payable totaling $275,000 bearing interest at 8% and
            maturing 5 years from the date of issue.

            The 12% debentures are convertible into shares of the Company's
            Class A Common Stock at the option of the holder by dividing the
            outstanding principal and interest by the conversion price which
            shall equal 50% of the average bid price during the 20 trading days
            before the conversion date. As of September 30, 2001, $305,200 in
            principal of the 12% debentures and $6,559 in accrued interest had
            been converted into 2,996,738 shares of the Company's Class A common
            stock. Total outstanding principal balance of the 12% convertible
            debentures at September 30, 2001 was $194,800 plus accrued interest
            of $76,670.

            The 8% debentures are convertible into Class A common shares at the
            lesser of (i) 140% of the closing bid price for the Common Stock on
            the Closing Date, or (ii) 80% of the average of the three lowest
            closing bid for the 22 trading days immediately preceding the date
            of conversion. Total outstanding principal balance of the 8%
            convertible debentures at September 30, 2001 was $275,000 plus
            accrued interest of $5,995.

            The Company has been advised by the holders of the 12% debentures
            that the Company has breached the following terms of the debentures:
            (a) Failure to register, on a timely basis, under the Securities Act
            of 1933, the shares issuable upon the conversion of the debentures,
            (b) Registering additional shares other than the shares issuable
            upon the conversion of the debentures, and (c) Failure to provide
            the debenture holders a perfected security interest in certain
            assets of the Company pursuant to a Security Agreement that was part
            of the debenture documentation. The Company has reached settlement
            terms with one previous holder of the 12% debentures regarding the
            interest and penalties demanded under default by this former holder
            whereby the Company has issued 450,000 shares to this former holder
            in full settlement of their claim. The Company has not accrued any
            amounts with respect to the Company's default on the 12% debentures
            that may be due to the remaining holders. The Company anticipates
            issuing additional shares to settle the debenture holders, claims
            arising from our default the amount of which is undeterminable at
            this time.


                                     - 8 -
<PAGE>

                                  IVOICE, INC.
                   NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 2001

NOTE 3 -    DUE TO RELATED PARTY

            During the period from June 2000 to date, Jerome R. Mahoney,
            President and Chief Executive Officer of the Company has sold
            personal holdings of the Company's Class A common shares and has
            loaned the proceeds of these sales to the Company to fund its
            working capital requirements. The Company has executed a promissory
            note and Security Agreement in favor of Mr. Mahoney.

            As of September 30, 2001, the outstanding loan balance including
            monies loaned from the proceeds of stock sales, unpaid compensation,
            income taxes incurred from the sale of stock and unreimbursed
            expenses, totaled $1,700,678, of this amount, $864,259 is reflected
            in accrued expenses.

            Under the terms of the loan agreements, the note holder may elect
            prepayment of the principal and interest owed pursuant to this note
            by issuing Jerome Mahoney, or his assigns, one Class B common share
            of iVoice, Inc., no par value, for each dollar owed.

NOTE 4 -    COMMITMENTS AND CONTINGENCIES

            In April 2000, the Company entered into a two-year lease agreement
            for their office currently utilized as the corporate headquarters.
            Monthly lease payments total $11,000.

            In May 1999, the Company entered into a five-year employment
            agreement with its majority stockholder (the "Executive"). He will
            serve as the Company's Chairman of the Board and Chief Executive
            Officer for a term of five years. As consideration, the Company
            agrees to pay the Executive a sum of $180,000 the first year with a
            10% increase every year thereafter.

            The Company has been named a defendant in a lawsuit brought about by
            Communication Research, Inc., or "CRI." In this lawsuit, CRI makes
            claims against the Company of constructive eviction, trespass,
            breach of contract, conversion, interference with economic
            relations, and quantum merit. The Company believes that it will
            prevail in the case, and in any event does not believe that
            unfavorable the outcome will have a material adverse effect on its
            business

            The Company has been named defendant in a lawsuit brought by
            Lighthouse Technical Consulting, Inc. filed July 2, 2001. In this
            lawsuit, the plaintiff makes claim for non-payment of $15,000 for
            placement services performed by Lighthouse. The Company is in
            dispute of the amount owed and intends to vigorously defend itself
            in this suit.

            The Company has been named defendant in a lawsuit brought by
            Business Staffing, Inc. filed April 12, 2001. In this lawsuit, the
            plaintiff makes claim for non-payment of $37,250 for placement
            services performed by Business Staffing. The Company is in dispute
            of the amount owed and intends to vigorously defend itself in this
            suit.


                                     - 9 -
<PAGE>

                                  IVOICE, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 2001

NOTE 4 -    COMMITMENTS AND CONTINGENCIES - (Continued)

            The Company has been named defendant in a lawsuit brought by Lorelei
            Personnel, Inc. filed November 28, 2000. In this lawsuit, the
            plaintiff makes claim for non-payment of $6,000 for placement
            services performed by Lorelei Personnel, Inc. The Company disputes
            the amount owed and intends to vigorously defend itself in this
            suit. In an arbitration hearing held in July 2001, the arbitrator
            determined that no amount is due to Lorelei.

            The Company filed a Summons and Complaint in U.S. District Court
            against PanAm Wireless, doing business as Celpage, Inc. The
            Complaint alleges that Celpage breached the Software\Hardware
            Agreement between iVoice and Celpage by refusing to accept and pay
            for the balance of a system installation specified in the Agreement.
            The Company is seeking damages in the amount of $245,375 together
            with interest from January 17, 2001. The Company's balance sheet at
            September 30, 2001 reflects, in other assets, a receivable in the
            amount of $67,650 representing the $245,375 less deferred revenues
            of $147,225 and a reserve of $30,500.

NOTE 5 -    CAPITAL LEASE OBLIGATIONS

            During the year ended December 31, 2000, the Company incurred two
            capital lease obligations totaling $92,895 in connection with the
            acquisition of computers and office furniture.

            The future minimum lease payments due under the capital leases at
            September 30, 2001 are follows:

                Lease payable for computer equipment, payable
                at $1,367 per month, including interest at 22.31%
                Final payment is due June 2003                         $  23,586

                Lease payable for furniture, payable at $2,151 per
                month, including interest at 20.79%. Final payment
                due April 2003                                            33,015
                                                                       ---------
                Present value of net minimum lease payments            $  56,601
                                                                       =========

                The future minimum lease payments                      $  67,414
                Less amount representing interest                         10,813
                                                                       ---------
                Present value of net minimum lease payments               56,601
                Less current portion                                      33,213
                                                                       ---------
                Long term capital lease obligations                    $  23,388
                                                                       =========


                                     - 10 -
<PAGE>

                                  IVOICE, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 2001

NOTE 6 -    COMMON STOCK

            In August 2001, the Company amended its Certificate of Incorporation
            to change the par value of its Class A common stock from $.01 to
            $.001 and to increase the number of shares the Company is authorized
            to issue of its Class A common stock from 150,000,000 to 600,000,000
            and its Class B common stock from 700,000 to 3,000,000. The
            amendment also granted the board of directors the rights to
            prescribe and authorize the issuance of 1,000,000 preferred shares,
            $1.00 par value.

            a)    Class A Common Stock

                  Class A common stock consists of the following as of September
                  30, 2001: 600,000,000 shares of authorized common stock with a
                  par value of $.001. Class A stock has voting rights of 1:1 and
                  as of September 30, 2001, 142,810,525 shares were issued and
                  outstanding.

                  Each holder of Class A Common stock is entitled to receive
                  ratably dividends, if any, as may be declared by the Board of
                  Directors out of funds legally available for the payment of
                  dividends. The Company has never paid any dividends on its
                  Common Stock.

                  For the nine months ended September 30, 2001, the Company had
                  the following transactions:

                        1.    The Company issued 12,194,287 shares of its Class
                              A common stock for services rendered valued at
                              $897,055.

                        2.    The Company issued 2,020,834 shares of its Class A
                              common stock for compensation valued at $224,000.

                        3.    The Company issued 1,172,000 shares of its Class A
                              common to Swartz Private Equity, LLC under the
                              terms of their financing agreement with Swartz for
                              net proceeds of $129,931

                        4.    The Company issued 328,951 shares of its Class A
                              common stock as repayment of loans to related
                              parties for a total value of $75,659.

                        5.    The Company issued 2,996,738 shares of Class A
                              common stock for the conversion of $142,200 in
                              debenture principal and $6,559 in accrued
                              interest.

                        6.    The Company issued 2,128,000 shares of its Class A
                              common stock valued at $211,080, to settle
                              disputes arising from financing agreements entered
                              into by the Company.


                                     - 11 -
<PAGE>

                                  IVOICE, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 2001

NOTE 6 -    COMMON STOCK - (Continued)

            a)    Class A Common Stock - (continued)

                        7.    The Company issued 18,000,000 shares of its Class
                              A common stock for the exercise of a warrant
                              issued to EMCO\Hanover Group, Inc. issued pursuant
                              to a consulting agreement with them.

            b)    Class B Common Stock

                  Class B Common Stock consists of 3,000,000 shares of
                  authorized common stock with no par value. Class B stock has
                  voting rights of 100 to 1 with respect to Class A Common
                  Stock. As of September 30, 2001, 700,000 shares were issued;
                  and 364,000 shares were outstanding. Class B common
                  stockholders are not entitled to receive dividends.

            c)    Preferred Stock

                  Preferred Stock consists of 1,000,000 shares of authorized
                  preferred stock with $1.00 par value. As of September 30,
                  2001, no shares were issued or outstanding.

NOTE 7 -    OPTIONS & WARRANTS

                  For the nine-month period ending September 30, 2001, the
                  Company issued various options as follows:

                  a)    Warrants to purchase 404,510 shares of iVoice Class A
                        common stock with an average exercise price of $.1220,
                        to Swartz Private Equity, LLC as drawdown fees under the
                        financing agreement with them. The warrants expire five
                        years from the date of issue.

                  b)    Warrants to purchase 343,750 shares of iVoice Class A
                        common stock with an exercise price of $.1323 to Owen
                        May and Michael Jacobs of the May Davis Group as a fee
                        for the placement of the Company's 8% convertible
                        debentures, pursuant to a subscription agreement with
                        them. The warrants expire five years from the date of
                        issue.

                  c)    Warrants to purchase 18,000,000 shares of iVoice Class A
                        common stock with an exercise price of $.055 to the
                        EMCO\Hanover Group, Inc. pursuant to a consulting
                        agreement with them. The warrants were exercised and are
                        reflected as a subscription receivable. See Note 6
                        regarding shares issued for exercise of this warrant.


                                     - 12 -
<PAGE>

                                  IVOICE, INC.
                    NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
                               SEPTEMBER 30, 2001

NOTE 7 -    OPTIONS & WARRANTS - (continued)

                  d)    Options to purchase 1,540,000 shares of iVoice Class A
                        common stock with an average exercise price of $.074 to
                        company employees pursuant to the iVoice Employee Stock
                        Option Plan. Options generally vest over four years and
                        have a maximum term of five years.

            The Company has adopted only the disclosure provisions of SFAS No.
            123. It applies Accounting Principles Bulletin ("APB") Opinion No.
            25, "Accounting for Stock Issued to Employees", and its related
            interpretations in accounting for its plan. It does not recognize
            compensation expense for its stock-based compensation plan other
            than for restricted stock and options/warrants issued to outside
            third parties.


                                     - 13 -
<PAGE>

ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

         Management's discussion and analysis of financial condition and results
         of operations ("MD&A") should be read in conjunction with our Financial
         Statements included herein.

Recent Developments

Through November 2, 2001 holders of the Company's 8% convertible debentures
converted $122,300 in principal and $878 in interest into 2,998,329 shares of
the Company's Class A common stock.

On July 18, 2001, the Company entered into a subscription agreement with
Meridian Equities International Inc. to purchase up to a maximum of $150,000 of
convertible debentures, which shall pay cumulative interest at rate of 8% per
annum. Pursuant to that subscription agreement, the Company has filed a
registration statement with the U.S. Securities & Exchange Commission to
register for resale, a number of shares into which the debentures are
convertible. On September 20, 2001, the Securities & Exchange Commission
declared the Company's registration statement effective, the Company
simultaneously requested funding of the $150,000 convertible debenture and was
denied funding by Meridian Equities. Subsequently, on October 11, 2001 the
Company resubmitted its request for funding and was again denied by Meridian
citing iVoice's failure to meet all of the conditions precedent to funding as
indicated in the subscription agreement.

The Company has, in its opinion, met all of the conditions precedent to funding
as described in the subscription agreement between iVoice and Meridian.
Specifically, a daily average trading volume of its common stock, multiplied by
the volume weighted average closing price ("VWAP") for the thirty (30) trading
days preceding funding, exceeding a minimum of $25,000. The Company has
consulted counsel regarding Meridian's breach of the Subscription agreement and
may seek legal remedies to enforce Meridian's obligation under the agreement and
recover damages sustained by iVoice.

September 30, 2001 compared to September 30, 2000

Revenues are derived primarily from the sale of voice and computer technology
communication systems for small-to-medium sized businesses and corporate
departments. Total revenues for the three and nine months ended September 30,
2001 were $87,043 and $303,948, respectively, as compared to $175,343 and
$677,062 for the three and nine months ended September 30, 2000, an decrease of
$88,300 or 50.4% and $373,114 or 55.1%, respectively. The decrease in sales for
the three and nine month period are largely attributable to weak economic
conditions resulting in weak demand for the Company's products, coupled with the
Company's lack of sufficient capital resources to effectively develop a
successful sales campaign.


                                     - 14 -
<PAGE>

iVoice will continue to market and promote its products to telephony reseller
networks in order to leverage those resellers' existing customer bases. On
October 30, 2001, the Company announced its participation in the 3Com(R) NBX
Solution Providers Program providing direct access to the fast-growing market of
networked telephony. Having demonstrated full integration with the NBX platform,
iVoice shall be designated a 3Com NBX Solution Provider whereby its speech
enabled applications will be promoted through joint marketing efforts to 3Com
NBX Authorized Resellers.

The Company also sells directly to end users in geographic locations where an
existing dealer relationship does not exist. On direct sales orders, the Company
is able to achieve greater profit margins through higher direct selling prices.
Furthermore, at the end of the quarter ending September 30, 2001, iVoice has
received follow-up orders for additional product installations at existing
customer locations totalling $65,000. Of this amount, only $12,504 is recorded
in sales as earned revenue in the current quarterly period. The remaining
$52,496 has been recorded as deferred revenue and it is anticipated that these
contracts will be fully recognized in the fourth quarter of 2001. It is
management's opinion that the events of September 11, delayed the receipt and
completion of these orders.

Unless special arrangements are made, the Company receives 50% of the contract
as a down payment on any product purchased with the balance due upon completion
of the installation. The Company recognizes its revenue using the percentage of
completion method. The Company determines the expected costs on a particular
installation by estimating the hardware costs and anticipated labor hours to
configure and install a system. Revenues are then recognized in proportion to
the amount of costs incurred as of the reporting date over the total estimated
costs anticipated. The Company accepts company checks or Visa/Mastercard.

Gross margin for the three and nine months ended September 30, 2001 was $55,882
and $173,669 or 64.2% and 57,1%, respectively, as compared to $104,680 and
$444,597 or 59.7% and 65.7% for the three and nine months ended September 30,
2000. The gross margin is dependent, in part, on product mix, which fluctuates
from time to time; complexity of a communication system installation which
determines necessary hardware requirements and may not have a proportionate
relationship with the system selling price; and the ability of Company
technology personnel to efficiently configure and install the Company's
communicaitons products. The dollar amount of gross profit has decreased due to
reduced revenues for the comparative periods however margin percentages are
consistent with prior periods with variances due only to product mix.

Total operating expenses decreased, from $686,123 for the three months ended
September 30, 2000 to $511,588 for the three months ended September 30, 2001 a
decrease of $174,535. In recent months, the Company has reduced its working
capital requirements to preserve its cash resources. Pursuant to this policy,
cash operating expenses for the three-month comparative period reflect a
reduction of $149,924 in payroll and related benefits, a reduction in travel
costs of $10,033 and telephone costs of $5,904. Offsetting these reductions was
an increase in consulting expenses of $105,691 for services provided by
EMCO\Hanover Group, Inc. paid for with Class A common stock. Although the
nine-month period ending September 30, 2001 reflects an increase in operating
expenses of $220,683 compared to the same nine-month period of 2000, the
increase is a result of higher payroll costs incurred in the first quarter of
2001 compared to the prior year.

As of September 30, 2001, the Company has reduced its staff to 10 full-time
employees and 3 part-time employees for a total of 13 individuals. The company
has reduced the number of employees in order to preserve its cash resources.


                                     - 15 -
<PAGE>

The loss from operations for the three and nine months ended September 30, 2001
was $455,706 and $2,082,609 compared to $581,443 and $1,590,998 for the three
and nine months ended September 30, 2000, a decrease of $125,737 in the three
month comparative period and an increase of $491,611 for the nine month
comparative period.

Interest expense of $36,782 and $107,591 was incurred for the three and
nine-month period ending September 30, 2001 as compared to $170,767 and $491,986
for the three and nine-month period ending September 30, 2000, respectively.
This decrease of $133,985 and $384,395 for the three and nine-month comparative
periods reflects a lower outstanding principal balance of the Company's 12%
debentures in 2001 as well as the absence of the amortized debt discount in the
current period recorded in the previous period ending September 30, 2000.

Other expenses for the nine-month period ending September 30, 2001 include
non-recurring charges of $352,706 recorded in the second quarter of 2001. This
amount represents a $141,626 write-off of capitalized financing costs incurred
in connection with the agreement with Swartz Private Equity and $154,830 in
charges related to the termination of the Swartz agreement, along with $56,250
in settlement charges incurred with respect to a former debenture holder's claim
for damages incurred in default of the Company's 12% convertible debentures.

Net loss for the three and nine month period ending September 30, 2001 was
$492,488 and $2,542,906 as compared to $752,210 and $2,082,984 for the three and
nine months of 2000. The respective changes in net loss for the comparative
periods were a result of the factors discussed above.

Liquidity and Capital Resources

We have incurred substantial losses, we have accumulated a deficit, and we
require additional financing. As of September 30, 2001 we had negative working
capital of $1,993,742 and a cash balance of $13,177. These matters raise
substantial doubt about our ability to continue as a going concern. We
anticipate that we will require additional financing on an ongoing basis for the
foreseeable future.

We have funded our operations principally from a) loans from our principal
stockholder; b) from the proceeds of the sale of convertible debentures; c) from
proceeds from the exercise of warrants and d) sales of our products. To date,
the Company has had difficulty in raising sufficient cash to effectively
implement its business plan. Management is unsure whether it can secure
sufficient financing to meet its current operating requirements. There can be no
assurances that the Company will be successful in procuring financing to meet
its current obligations or financing which is sufficient to enable the Company
to meet its business plan objectives, or that such financing will be available
on terms acceptable to the Company. It should be expected that any future debt
or equity financing arrangement may dilute the ownership of existing
shareholders.

In July 2001, the Company entered into a subscription agreement with Meridian
Equities International, Inc., whereby the Company would issue $150,000 in 8%
convertible debentures and a warrant to purchase 250,000 shares of Class A
common stock. Upon completing all of the conditions precedent to funding as
described in the subscription agreement between iVoice and Meridian, including
the filing and effective determination of a registration statement with the
Securities and Exchange Commission, Meridian has withheld funding of the
$150,000 for the purchase of the Company's 8% convertible debentures. The
absence of this working capital may cause the Company further difficulty in
meeting its short term operating obligations.


                                     - 16 -
<PAGE>

The Company is considering filing a post-effective amendment to the registration
statement filed on September 7, 2001, to effectively substitute Meridian
Equities International, Inc. with a new investor under the same investment
terms. Although there can be no assurance that a new investor will be obtained
or that the Securities and Exchange Commission will allow this amendment to the
registration statement.

The Company is actively searching for potential merger candidates with
synergistic technology and products, which Management feels may make financing
more appealing to potential investors, although the Company has not entered into
any agreements or letters of intent to, bind the Company.

SAFE HARBOR STATEMENT

Certain statements in this Form 10-QSB, including trends in or expectations
regarding the Company's operations, and/or the negotiations with respect to
securing financing "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements are based on
currently available operating, financial and competitive information, and are
subject to various and sometimes numerous risks and uncertainties. Actual future
results and trends may differ significantly.

PART II - OTHER INFORMATION

      ITEM 1. LEGAL PROCEEDINGS

              The Company filed a Summons and Complaint in U.S. District Court
              against PanAm Wireless, doing business as Celpage, Inc. The
              Complaint alleges that Celpage breached the Software\Hardware
              Agreement between iVoice and Celpage by refusing to accept and pay
              for the balance of a system installation specified in the
              Agreement. The Company is seeking damages in the amount of
              $245,375 together with interest from January 17, 2001. The
              Company's balance sheet at September 30, 2001 reflects, in other
              assets, a receivable in the amount of $67,650 representing the
              $245,375 less deferred revenues of $147,225 and a reserve of
              $30,500.


                                     - 17 -
<PAGE>

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

        As of September 30, 2000 convertible debentures consisted of ten notes
        payable totaling $500,000 bearing interest at 12% per annum payable on
        December 1, 2000. These debentures are convertible into shares of the
        Company's Class A Common Stock at the option of the holder by dividing
        the outstanding principal and interest by the conversion price which
        shall equal 50% of the average bid price during the 20 trading days
        before the conversion date. We have been advised by the holders of the
        debentures that we have breached the following terms of the debentures:
        (a) Failure to register, on a timely basis, under the Securities Act of
        1933, the shares issuable upon the conversion of the debentures, (b)
        Registering additional shares other than the shares issuable upon the
        conversion of the debentures, and (c) Failure to provide the debenture
        holders a perfected security interest in certain assets of the Company
        pursuant to a Security Agreement that was part of the debenuture
        documentation. The Company is in discussions with the debenture holders
        attempting to resolve these issues in a mutually favorable manner.
        However, it is uncertain whether the Company will be able to reach an
        agreement under terms favorable to iVoice.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        On July 18, 2001, one shareholder holding a majority of the outstanding
        voting shares of the company consented in writing to certain shareholder
        action to amend the certificate of incorporation to effect the following
        changes:

        o     to change the Company's name to iVoice, Inc.;

        o     to increase the authorized number of shares of the Company's
              Class A common stock to a total of 600,000,000 shares;

        o     to increase in the authorized number of shares Class B common
              stock to a total of 3,000,000 shares;

        o     to change the par value of the Class A common stock from $.01 to
              $.001 per share; and

        o     to authorize the Company to issue up to 1,000,000 shares of
              preferred stock with a par value of $1.00 per share.

        Prior to taking this action, an information statement was sent to all
        shareholders.

        On August 24, 2001, we filed to amend our certificate of incorporation
        with the Secretary of State of the State of Delaware to effect the
        changes voted upon by our shareholders on July 18, 2001.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

      (3)(i) AMENDED CERTIFICATE OF INCORPORATION


                                     - 18 -
<PAGE>

                                   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 therunto duly authorized.

                                 iVoice, Inc.


Date: November 13, 2001      By: s/Jerome R. Mahoney
                                 ----------------------------
                                 Jerome R. Mahoney, President


                                     - 19 -