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, 2009o
                                          TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d)
      OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission
File No. 333-120490
  iVOICE TECHNOLOGY,
INC.
 (Exact
name of the Registrant as specified in Charter)
 
  New Jersey
                        
                        20-1862731(State
      of Incorporation)
                        
                        (I.R.S.
      Employer ID Number)750 Highway 34, Matawan,New
Jersey
                        
                        07747(Address
      of Principal Executive Offices)
                        
                        (Zip
      Code)
  Registrant’s
Telephone No. including Area Code: 732-441-7700
 Securities
registered under 12(b) of the Exchange Act:  None


Securities
registered under Section 12(g) of the Exchange Act: None
 
 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 checkmark whether the registrant is a shell company (as defined in Rule 12b-2
of the Securities Act).  Yes o   No
x
  Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) 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 filer, 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. (Check
one):




Large
      accelerated filer       ̈
              Accelerated
      filer 
                         
       ̈Non-accelerated
      filer         ̈
              Smaller
      reporting company   x(Do
      not check if a smaller reporting
      company)
  Indicate
the number of shares outstanding of the issuer's common stock, as of the latest
practical date: 526,309,870 shares of Class A Common stock, no par value as of
May 13, 2009.





Table of Contents








iVOICE TECHNOLOGY,
INC


TABLE OF
CONTENTS




PAGEPart
      I – Financial InformationItem
      1.
                                          Condensed Consolidated Financial Statements
      (Unaudited):Condensed Consolidated Balance Sheets – March 31, 2009 and
      December 31, 2008
                                          1Condensed Consolidated Statements of Operations -Three Months
      Ended March 31, 2009 and 2008
                                          2Condensed Consolidated Statements of Cash Flows -Three Months
      Ended March 31, 2009 and 2008
                                          3-4Notes to Condensed Consolidated Financial
      Statements
                                          5-15Item
      2.
                                          Management’s Discussion and Analysis of Financial Condition
      and Result of Operations
                                          16-20Item
      4T.
                                          Controls and Procedures
                                          20Part
      II – Other InformationItem
      5.
                                          Other Information
                                          21Item
      6.
                                          Exhibits
                                          21Signatures
                                          22Index of Exhibits
                                          23









Table of Contents


iVOICE TECHNOLOGY, INC.
 CONDENSED
CONSOLIDATED BALANCE SHEETS




March
      31,
                                                                      
                                                                      
                                                                      December
      31,2008
                                                                      
                                                                      
                                                                      2009ASSETSCurrent
      assets:Cash
      and cash equivalents
                                                                      
                                                                      $
                                                                      402,086
                                                                      
                                                                      
                                                                      
                                                                      460,869Accounts
      receivable, net of allowance for doubtful accounts of $8,250 at March 31,
      2009 and December 31, 2008
                                                                      
                                                                      
                                                                      1,151
                                                                      
                                                                      
                                                                      
                                                                      -Inventories
                                                                      
                                                                      
                                                                      5,449
                                                                      
                                                                      
                                                                      
                                                                      6,246Note
      receivable, net of allowance of $25,017 at March 31, 2009 and December 31,
      2008
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -Prepaid
      expenses and other current assets
                                                                      
                                                                      
                                                                      6,292
                                                                      
                                                                      
                                                                      
                                                                      6,615Total
      current assets
                                                                      
                                                                      
                                                                      414,978
                                                                      
                                                                      
                                                                      
                                                                      473,730Property,
      Plant and Equipment, net
                                                                      
                                                                      
                                                                      15,191
                                                                      
                                                                      
                                                                      
                                                                      17,313Other
      assets
                                                                      
                                                                      
                                                                      55,825
                                                                      
                                                                      
                                                                      
                                                                      54,540Total
      assets
                                                                      
                                                                      $
                                                                      485,994
                                                                      
                                                                      
                                                                      $
                                                                      545,583LIABILITIES
      & STOCKHOLDERS’ DEFICITCurrent
      liabilities:Accounts
      payable and accrued expenses
                                                                      
                                                                      $
                                                                      570,126
                                                                      
                                                                      
                                                                      $
                                                                      543,215Accrued
      dividends
                                                                      
                                                                      
                                                                      153,673
                                                                      
                                                                      
                                                                      
                                                                      117,562Due
      to related parties
                                                                      
                                                                      
                                                                      274,605
                                                                      
                                                                      
                                                                      
                                                                      263,704Deferred
      maintenance contracts
                                                                      
                                                                      
                                                                      12,971
                                                                      
                                                                      
                                                                      
                                                                      9,407Notes
      payable to related parties
                                                                      
                                                                      
                                                                      141,708
                                                                      
                                                                      
                                                                      
                                                                      141,708Convertible
      promissory note, net of unamortized debt discount of $102,498 at March 31,
      2009 and $91,869 at December 31, 2008
                                                                      
                                                                      
                                                                      24,634
                                                                      
                                                                      
                                                                      
                                                                      15,953Derivative
      liabilities
                                                                      
                                                                      
                                                                      824,752
                                                                      
                                                                      
                                                                      
                                                                      133,212Total
      current liabilities
                                                                      
                                                                      
                                                                      2,002,469
                                                                      
                                                                      
                                                                      
                                                                      1,224,761Stockholders'
      deficit:Preferred
      stock, $1.00 par value; authorized 1,000,000 shares; 10,000
                                                                        shares
      designated as follows; 990,000 available for further
      designationSeries
      A 10% Secured Preferred Stock; $1,000 stated value; authorized 10,000
      shares;
                                                                        1,444.44
      shares issue and outstanding
                                                                      
                                                                      
                                                                      1,444,444
                                                                      
                                                                      
                                                                      
                                                                      1,444,444Common
      stock:Class
      A – no par value; authorized 10,000,000,000 shares; 526,309,870 shares
      issued and 525,115,387
                                                                        outstanding
      and 1,194,483 in escrow at March 31, 2009; 486,835,870 shares issued and
      485,641,387
                                                                        outstanding,
      and 1,194,483 in escrow at December 31, 2008;
                                                                      
                                                                      
                                                                      939,837
                                                                      
                                                                      
                                                                      
                                                                      915,166Class
      B - $.01 par value; authorized 50,000,000 shares; no shares issued and
      outstanding
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -Class
      C - $.01 par value; authorized 20,000,000 shares; no shares issued and
      outstanding
                                                                      
                                                                      
                                                                      -
                                                                      
                                                                      
                                                                      
                                                                      -Additional
      paid-in capital
                                                                      
                                                                      
                                                                      6,899,510
                                                                      
                                                                      
                                                                      
                                                                      6,899,510Additional
      paid-in capital – beneficial conversion
                                                                      
                                                                      
                                                                      1,444,444
                                                                      
                                                                      
                                                                      
                                                                      1,444,444Accumulated
      deficit
                                                                      
                                                                      
                                                                      (12,244,710
                                                                      )
                                                                      
                                                                      
                                                                      (11,382,742
                                                                      )Total
      stockholders' deficit
                                                                      
                                                                      
                                                                      (1,516,475
                                                                      )
                                                                      
                                                                      
                                                                      (679,178
                                                                      )Total
      liabilities and stockholders' deficit
                                                                      
                                                                      $
                                                                      485,994
                                                                      
                                                                      
                                                                      $
                                                                      545,583
 See
accompanying notes to condensed consolidated financial
statements






1
 Table of Contents




IVOICETECHNOLOGY, INC.
 CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
 (Unaudited)


Three Months EndedMarch 31, 2009
                    
                    
                    March 31, 2008Net
      sales
                    
                    $
                    15,030
                    
                    
                    $
                    13,073Cost
      of sales
                    
                    
                    9,221
                    
                    
                    
                    -Gross
      profit
                    
                    
                    5,809
                    
                    
                    
                    13,073Operating
      expenses:General
      and administrative expenses
                    
                    
                    141,123
                    
                    
                    
                    94,357Total
      operating expenses
                    
                    
                    141,123
                    
                    
                    
                    94,357Loss
      from operations
                    
                    
                    (135,314
                    )
                    
                    
                    (81,284
                    )Other
      income (expense):Interest
      income
                    
                    
                    1,023
                    
                    
                    
                    2,020Interest
      expense
                    
                    
                    (10,656
                    )
                    
                    
                    (130,634
                    )Amortization
      of debt discount
                    
                    
                    (14,033
                    )
                    
                    
                    (522,599
                    )Redemption
      premium
                    
                    
                    -
                    
                    
                    
                    (85,922
                    )Gain
      (loss) on valuation of derivative
                    
                    
                    (666,877
                    )
                    
                    
                    872,915Total
      other income (expense)
                    
                    
                    (690,543
                    )
                    
                    
                    135,780Income
      (loss) from operations before income taxes
                    
                    
                    (825,857
                    )
                    
                    
                    54,496Provision
      for income taxes
                    
                    
                    -
                    
                    
                    
                    -Net
      income (loss)
                    
                    
                    (825,857
                    )
                    
                    
                    54,496Preferred
      stock accretion
                    
                    
                    -
                    
                    
                    
                    1,444,444Preferred
      stock dividends
                    
                    
                    36,111
                    
                    
                    
                    7,632Net
      loss attributable to common shareholders
                    
                    $
                    (861,968
                    )
                    
                    $
                    (1,397,580
                    )Basic
      and diluted loss to per common share
                    
                    $
                    0.00
                    
                    
                    $
                    0.00Weighted
      average shares outstanding -
                      Basic
      and diluted
                    
                    
                    509,325,787
                    
                    
                    
                    317,050,738See
      accompanying notes to condensed consolidated financial
      statements




2
 Table of Contents


IVOICE TECHNOLOGY, INC.
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)




Three Months EndedMarch 31,
                      2009
                    
                    
                    March 31,
                      2008Cash
      flows from operating activities:Net
      income (loss)
                    
                    $
                    (825,857
                    )
                    
                    $
                    54,496Adjustments
      to reconcile net income (loss) to netcash
      used in operating activities:Depreciation
                    
                    
                    2,122
                    
                    
                    
                    117(Gain)
      loss on valuation of derivative
                    
                    
                    666,877
                    
                    
                    
                    (872,915
                    )Amortization
      of discount on debt
                    
                    
                    14,033
                    
                    
                    
                    522,599Issuance
      of common stock for services
                    
                    
                    14,219
                    
                    
                    
                    -Beneficial
      conversion incurred in debt reduction
                    
                    
                    -
                    
                    
                    
                    62,470Beneficial
      conversion incurred in conversion of debenture
                    
                    
                    -
                    
                    
                    
                    21,783Beneficial
      conversion incurred in conversion ofpromissory
      note
                    
                    
                    5,100
                    
                    
                    
                    32,280Changes
      in assets and liabilities:Decrease
      (increase) in accounts receivable
                    
                    
                    (1,151
                    )
                    
                    
                    6,072Decrease
      in inventories
                    
                    
                    797
                    
                    
                    
                    -Decrease
      (increase) in prepaid expenses
                    
                    
                    323
                    
                    
                    
                    (22
                    )Increase
      in other assets
                    
                    
                    (1,285
                    )
                    
                    
                    (3,080
                    )Increase
      in accounts payable and accrued liabilities
                    
                    
                    51,574
                    
                    
                    
                    26,239Increase
      in amounts due to related parties
                    
                    
                    10,901
                    
                    
                    
                    8,107Increase
      in deferred maintenance contracts
                    
                    
                    3,564
                    
                    
                    
                    2,438Net
      cash (used in) operating activities
                    
                    
                    (58,783
                    )
                    
                    
                    (139,416
                    )Cash
      flows from financing activities:Issuance
      of common stock through equity financing
                    
                    
                    -
                    
                    
                    
                    89,183Net
      proceeds from sale of Series A Preferred Stock
                    
                    
                    -
                    
                    
                    
                    1,300,000Payment
      to potential merger partner
                    
                    
                    -
                    
                    
                    
                    (30,000
                    )Payment
      of convertible debenture
                    
                    
                    -
                    
                    
                    
                    (572,815
                    )Net
      cash provided by financing activities
                    
                    
                    -
                    
                    
                    
                    786,368Net
      increase (decrease) in cash and cash equivalents
                    
                    
                    (58,783
                    )
                    
                    
                    646,952Cash
      and cash equivalents at beginning of period
                    
                    
                    460,869
                    
                    
                    
                    182,577Cash
      and cash equivalents at end of period
                    
                    $
                    402,086
                    
                    
                    $
                    829,529Supplemental
      Disclosure of Cash Flow Information:During
      the period, cash was paid for the following:Taxes
      paid
                    
                    $
                    -
                    
                    
                    $
                    -Interest
      paid
                    
                    $
                    -
                    
                    
                    $
                    32,284Supplemental
      Cash Flow Information:Non-cash TransactionsAccounts payable converted into
      convertible promissory note
                    
                    $
                    24,663
                    
                    
                    $
                    50,652Accrued expenses converted to
      convertible promissory note
                    
                    $
                    -
                    
                    
                    $
                    186,557Convertible promissory note
      converted to common stock
                    
                    $
                    5,352
                    
                    
                    $
                    129,620Common stock issued for
      services
                    
                    $
                    14,219
                    
                    
                    $
                    -See
      accompanying notes to condensed consolidated financial
      statements




3
 Table of Contents




IVOICE
TECHNOLOGY, INC.
 CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Unaudited)




Supplemental
Schedule of Non-Cash Financing Activities:
 
 For the Three Months Ended
March 31, 2009:
 
 a) During
the three months ended March 31, 2009, the Company issued 16,724,000 shares of
Class A common stock with a fair value of $10,452 to reduce the convertible
promissory note in the amount of $5,352. The difference in the market value and
the convertible promissory note reduction was charged to beneficial interest in
the amount of $5,100.
 
 b) During
the three months ended March 31, 2009, the Company issued 22,750,000 shares of
Class A common stock with a fair value of  $14,219 for investor
relations services.
 
 c) During
the three months ended March 31, 2009, the Company converted accounts payable to
a convertible promissory note in the amount of $24,663.
 
 d) The
Company accrued $36,111 of preferred stock dividends.
 
 For the Three Months Ended
March 31, 2008:
 
 a) During
the three months ended March 31, 2008, the Company issued 46,500,000 shares of
Class A common stock with a fair value of $82,150 to an individual to reduce the
promissory note in the amount of $19,680. The difference in the market value and
the promissory note reduction was charged to beneficial interest in the amount
of $62,470.
 
 b) During
the three months ended March 31, 2008, the Company issued 87,653,565 shares of
Class A common stock with a fair value of $118,282 to reduce the convertible
debenture in the amount of $96,500. The difference in the market value and
the reduction in the convertible debenture was charged to beneficial interest in
the amount of $21,783.
 
 c) During
the three months ended March 31, 2008, the Company issued 89,039,944 shares of
Class A common stock pursuant to the Equity Line of Credit with YA Global
Investments (f/k/a/ Cornell Capital Partners) valued at $102,835. Issuance costs
of $13,652 were incurred and charged to additional paid-in capital for net
proceeds of $89,183.
 
 d) During
the three months ended March 31, 2008, the Company issued 42,000,000 shares of
Class A common stock with a fair value of $45,720 to reduce the convertible
promissory note in the amount of $13,440. The difference in the market value and
the convertible promissory note reduction was charged to beneficial interest in
the amount of $32,280.
 
 e) During
the three months ended March 31, 2008, the Company converted accounts payable to
a convertible promissory note in the amount of $50,652.
 
 f) During
the three months ended March 31, 2008, the Company converted accrued expenses
related to accrued interest due to YA Global to a convertible debenture in the
amount of $186,557.
 
 g)The
Company accrued $7,632 of preferred stock dividends.










4
 Table of Contents




iVOICE
TECHNOLOGY, INC.


NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS


March 31, 2009 and
2008







Note
1      Background





iVoice
Technology, Inc. (“iVoice Technology” or the “Company”) was incorporated under
the laws of New Jersey on November 10, 2004 as a wholly owned subsidiary of
iVoice, Inc. (“iVoice”).  The Company received by assignment all of
the interests in and rights and title to, and assumed all of the obligations of,
all of the agreements, contracts, understandings and other instruments of iVoice
Technology, Inc., a Nevada corporation and affiliate of the
Company.  When we refer to or describe any agreement, contract or
other written instrument of the Company in these notes, we are referring to an
agreement, contract or other written instrument that had been entered into by
iVoice Technology Nevada and assigned to the Company.





In May
2008, the Company formed B Green Innovations, Inc. (“B Green”), a wholly-owned
subsidiary, and has agreed to invest up to $500,000 in B Green, to commercialize
its “green” technology platforms. The Company has made investments by purchasing
160 shares of Series B Secured 10% Convertible Preferred Stock for net proceeds
of $144,000 to B Green.





As of
August 4, 2008 the Companyuses the alternative
name of “iGreen Innovations, Inc.”  The Company also plans to change
its trading symbol. The Company is a “green” technology company, focused on
acquiring and identifying promising technologies that address environmental
issues.





Note
2      Business
Operations





B Green
Innovations, Inc. (B Green) a Matawan, New Jersey-based corporation and wholly
owned subsidiary of iVoice Technology (OTC Bulletin Board: IVOT) is dedicated to
becoming a “green” technology company, focused on acquiring and identifying
promising technologies that address environmental issues.





The
Company has agreed to invest up to $500,000 in B Green to develop and
commercialize its “green” technology platforms. The Company believes that this
investment will allow B Green to further develop additional
technologies.





The first
technology will be used to create new products from recycled tire rubber. EcoPod
and VibeAwayTM address important environmental concerns and problems facing the
planet today. EcoPod and VibeAwayTM are 100% recycled rubber-based products that
can be utilized as support pads under any units that vibrate and make noise,
including washing machines, dryers, compressors, commercial condensers, and many
other units that advantageously benefit from sound and vibration control. In
addition, we announced that we had filed a new patent application for a process
it described as “Recycled Tire Pod with Appliance Recess
Guide.”


The
Company will also continue to service the Interactive Voice Response ("IVR"),
software which was developed by iVoice. The Company's Interactive Voice Response
line is designed to read information from and write information to, databases,
as well as to query databases and return information.





IVR is an
application generator that allows full connectivity to many databases, including
Microsoft Access, Microsoft Excel, Microsoft Fox Pro, and Paradox, or to
standard text files. The IVR software is sold as an application generator that
gives the end user the ability to develop its own customized IVR applications or
as a customized turnkey system. IVR performs over 40 different customizable
commands. Examples of IVR range from simply selecting announcements from a list
of options stored in the computer (also known as audio text) to more complex
interactive exchanges such as querying a database for
information.




In
conjunction with the Spin-off, iVoice Technology entered into a temporary
administrative service agreement with iVoice. iVoice presently continues to
provide administrative services to the Company on a month to month basis until
the Company is able to replace the services provided by iVoice.




Note
3      Going
Concern





The
accompanying condensed consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America, which contemplates continuation of the Company as a going concern. The
Company relies on iVoice, Inc. for administrative, management, research and
other services.




As
of March 31, 2009, the Company had a net loss, a negative cash flow from
operations, as well as negative working capital. These matters 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.




Management
plans on developing and selling products from its subsidiary, B Green
Innovations, Inc., and pursuing opportunities for its IVR technology to achieve
profitability and to generate a positive cash flow. However, these plans are
dependent upon obtaining additional capital. There can be no assurance that the
Company will be able to obtain the necessary capital, and achieve its growth
objectives. 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.





5
 Table of Contents





iVOICE TECHNOLOGY,
INC.
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)
 March 31, 2009 and
2008





Note
4      Summary of Significant
Accounting Policies





a)    Basis
of Presentation





The
accompanying condensed consolidated unaudited interim financial statements
included herein have been prepared, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission ("SEC"). The condensed
consolidated financial statements and notes are presented as permitted on Form
10-Q and do not contain information included in the Company's annual statements
and notes. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with accounting principles generally
accepted in the United States of America have been condensed or omitted pursuant
to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading. It is
suggested that these condensed consolidated financial statements be read in
conjunction with the December 31, 2008 audited consolidated financial statements
and the accompanying notes thereto. While management believes the procedures
followed in preparing these condensed consolidated financial statements are
reasonable, the accuracy of the amounts are in some respects dependent upon the
facts that will exist, and procedures that will be accomplished by the Company
later in the year. These results are not necessarily indicative of the results
to be expected for the full year.





These
condensed consolidated unaudited financial statements reflect all adjustments,
including normal recurring adjustments, which, in the opinion of management, are
necessary to present fairly the operations and cash flows for the periods
presented.





b)    Use
of Estimates





The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenue and expenses during
the reporting period. Actual results could differ from those
estimates.





c)    Revenue
Recognition





The
Company derives its revenues from the licensing of its software product and
optional customer support (maintenance) service. The Company's standard license
agreement provides for a one-time fee for use of the Company's product in
perpetuity for each computer or CPU in which the software will reside. The
Company's software application is fully functional upon delivery and
implementation and does not require any significant modification or alteration.
The Company also offers customers an optional annual software maintenance and
support agreement for the subsequent one-year periods. Such maintenance and
support services are free for the first year the product is licensed and is
considered the warranty period. The software maintenance and support agreement
provides free software updates, if any, and
technical support the customer may need in deploying or changing the
configuration of the software. Generally, the Company does not license its
software in multiple element arrangements whereby the customer purchases a
combination of software and maintenance. In a typical arrangement, software
maintenance services are sold separately from the software product; are not
considered essential to the functionality of the software and are purchased at
the customer's option upon the completion of the first year
licensed.





The
Company does not offer any special payment terms or significant discount
pricing. Normal and customary payment terms require payment for the software
license fees when the product is shipped. Payment for software maintenance is
due prior to the commencement of the maintenance period. It is also the
Company's policy to not provide customers the right to refund any portion of its
license fees. With respect to the sale of software license fees, the Company
recognizes revenue in accordance with Statement of Position 97-2, software
Revenue Recognition (SOP 97-2), as amended, and generally recognizes revenue
when all of the following criteria are met: (1) persuasive evidence of an
arrangement exists generally evidenced by a signed, written purchase order from
the customer, (2) delivery of the software product on Compact Disk (CD) or other
means to the customer has occurred, (3) the perpetual license fee is fixed or
determinable and (4) collectability, which is assessed on a customer-by-customer
basis, is probable.





With
respect to customer support services, upon the completion of one year from the
date of sale, considered to be the warranty period, the Company offers customers
an optional annual software maintenance and support agreement for subsequent
one-year periods. Sales of purchased maintenance and support agreements are
recorded as deferred revenue and recognized over the respective terms of the
agreements.





For B
Green Innovations, Inc. revenues are recognized at the time of shipment to, or
acceptance by customer, provided title and risk of loss is transferred to the
customer. Provisions, when appropriate, are made where the right to return
exists.





d)    Product
Warranties





The
Company estimates its warranty costs based on historical warranty claims
experience in estimating potential warranty claims. Due to the limited sales of
the Company's products, management has determined that warranty costs are
immaterial and has not included an accrual for potential warranty claims.
Presently, costs related to warranty coverage are expensed as incurred. Warranty
claims are reviewed quarterly to verify that warranty liabilities properly
reflect any remaining obligation based on the anticipated expenditures over the
balance of the obligation period.





6
 Table of Contents




iVOICE TECHNOLOGY,
INC.
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)
 March 31, 2009 and
2008




Note
4      Summary of Significant
Accounting Policies (continued)





e)    Research
and Development Costs





Research
and development costs are charged to expense as incurred.





f)    Advertising
Costs





Advertising
costs are expensed as incurred and are included in selling expenses. For the
three months ended March 31, 2009 and 2008, the Company incurred $3,501 and
$-0-, respectively.





g)    Cash
and Cash Equivalents





The
Company considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents. There were no cash
equivalents at March 31, 2009 and December 31, 2008.





The
Company maintains cash and cash equivalent balances at a financial institution
that is insured by the Federal Deposit Insurance Corporation up to $250,000. The
uninsured cash balances at March 31, 2009 and December 31, 2008 were $133,941
and $204,808, respectively.





h)    Property
and Equipment





Property
and equipment is stated at cost. Depreciation is computed using the
straight-line method based upon the estimated useful lives of the assets,
generally five to seven years. Maintenance and repairs are charged to expense as
incurred.





i)    Income
Taxes





The
Company accounts for income taxes under the Financial Accounting Standards Board
("FASB") of Financial Accounting Standards ("SFAS") No. 109, "Accounting for
Income Taxes" ("Statement 109"). Under Statement 109, deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Under Statement 109, the effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that
includes the enactment date.





j)    Derivative
Liabilities





The
Company accounts for its embedded conversion features in its convertible
debentures in accordance with SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which requires a periodic valuation of
their fair value and a corresponding recognition of liabilities associated with
such derivatives, and EITF 00-19, “Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. The
recognition of derivative liabilities related to the issuance of convertible
debt is applied first to the proceeds of such issuance as a debt discount, at
the date of issuance, and the excess of derivative liabilities over the proceeds
is recognized as “Loss on Valuation of Derivative” in other expense in the
accompanying financial statements. Any subsequent increase or decrease in the
fair value of the derivative liabilities is recognized as “Other expense” or
“Other income”, respectively.





k)    Reclassifications





Certain
prior year amounts have been reclassified to conform to the current year
presentation. The reclassifications have had no effect on the results of
operations or cash flows for the period ended March 31, 2008.





l)    Fair
Value of Instruments





The
carrying amount reported in the condensed consolidated balance sheet for cash
and cash equivalents, deposits, prepaid expenses, accounts payable, and accrued
expenses approximate fair value because of the immediate or short-term maturity
of these financial instruments. The carrying amount reported for notes payable
is estimated at $1,093,582 based on the future cash flows associated with each
note discounted using the Company’s current borrowing rate for similar
debt.


7
 Table of Contents




iVOICE TECHNOLOGY,
INC.
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)
 March 31, 2009 and
2008




Note 5     
Earnings (Loss) 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
Company’s basic loss per common share is based on net loss for the relevant
period, divided by the weighted average number of common shares outstanding
during the period.  Diluted loss per common share is based on net
loss, divided by the weighted average number of common shares outstanding during
the period, including common share equivalents, such as outstanding stock
options.  Diluted loss per share does not include common stock
equivalents, as these shares would have no effect. The computation of diluted
loss per share also does not assume conversion, exercise or contingent exercise
of securities due to the beneficial conversion of related party accounts, as
this would be anti-dilutive.





Three Months Ended
                  
                  
                  Three Months EndedMarch 31, 2009
                  
                  
                  March 31, 2008Basic
      net loss per share computation:Net
      loss attributable to common stockholders
                  
                  $
                  (861,968
                  )
                  
                  $
                  (1,397,580
                  )Weighted-average
      common shares outstanding
                  
                  
                  509,325,787
                  
                  
                  
                  317,050,738Basic
      net loss per share attributable to common stockholders
                  
                  $
                  0.00
                  
                  
                  $
                  0.00Diluted
      net loss per share computationNet
      loss attributable to common stockholders
                  
                  $
                  (861,968
                  )
                  
                  $
                  (1,397,580
                  )Weighted-average
      common shares outstanding
                  
                  
                  509,325,787
                  
                  
                  
                  317,050,738Incremental
      shares attributable to the assumed conversion of
                    convertible
      debenture and convertible promissory note
                  
                  
                  -
                  
                  
                  
                  -Total
      adjusted weighted-average shares
                  
                  
                  509,325,787
                  
                  
                  
                  317,050,738Diluted
      net loss per share attributable to common stockholders
                  
                  $
                  0.00
                  
                  
                  $
                  0.00





Note
6      Related Party
Transactions





In
conjunction with the spin-off, iVoice Technology has entered into a temporary
administrative services agreement with iVoice. The administrative services
agreement will continue on a month-to-month basis until iVoice Technology has
found replacement services for those services being provided by iVoice or can
provide these services for itself.




B Green
Innovations, Inc., a subsidiary of iVoice Technology, has entered into a
temporary administrative services agreement with iVoice. The administrative
services agreement continues on a month-to-month basis until B Green
Innovations, Inc. has found replacement services for those services being
provided by iVoice or can provide these services for itself.




The
Company has assumed an outstanding promissory demand note in the amount of
$190,000 payable to Jerry Mahoney, President and Chief Executive Officer of
iVoice and Non-Executive Chairman of the Board of iVoice
Technology.  This amount is related to funds loaned to iVoice and is
unrelated to the operations of iVoice Technology.  The note will bear
interest at the rate of prime plus 2.0% per annum (5.25% at March 31, 2009) on the
unpaid balance until paid.  Interest payments are due and payable
annually. Under the terms of the Promissory Note, at the option of the Note
holder, principal and interest can be converted into either (i) one share of
Class B Common Stock of iVoice Technology, Inc., par value $.01, for each dollar
owed, (ii) the number of shares of Class A Common Stock of iVoice Technology,
Inc. calculated by dividing (x) the sum of the principal and interest that the
Note holder has requested to have prepaid by (y) eighty percent (80%) of the
lowest issue price of Class A Common Stock since the first advance of funds
under this Note, or (iii) payment of the principal of this Note, before any
repayment of interest. The Board of Directors of the Company maintains control
over the issuance of shares and may decline the request for conversion of the
repayment into shares of the Company. As of March 31, 2009, the outstanding
balance was $141,708, plus accrued interest of $89,309.  On May 8,
2007, the Company executed a Security Agreement providing Jerome Mahoney,
President and Chief Executive Officer of the Company, with a security interest
in all of the assets of the Company to secure the promissory note dated August
5, 2005 and all future advances including, but not limited to, additional cash
advances: deferred compensation, deferred expense reimbursement, deferred
commissions and income tax reimbursement for the recognition of income upon the
sale of common stock for the purpose of the holder advancing additional funds to
the Company.





The
Company entered into a five-year employment agreement with Jerome Mahoney to
serve as Non-Executive Chairman of the Board of Directors, effective August 1,
2004. On March 9, 2009,  the term of the employment agreement between
the Company and Mr. Mahoney, the Company’s CEO, was extended to July 31,
2016.  The Company will compensate Mr. Mahoney with a base salary of
$85,000 for the first year with annual increases based on the Consumer Price
Index.  A portion of Mr. Mahoney’s compensation shall be deferred
until such time that the Board of Directors determines that the Company has
sufficient financial resources to pay his compensation in cash. As of March 31,
2009, the Company has recorded $200,745 of deferred compensation due to Mr.
Mahoney.




8
 Table of Contents
  iVOICE TECHNOLOGY,
INC.
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)
 March 31, 2009 and
2008
 Note
6      Related Party Transactions
(continued)


The Board
has the option to pay Mr. Mahoney’s compensation in the form of Class B Common
Stock. Mr. Mahoney will also be entitled to certain bonuses based on mergers and
acquisitions completed by the Company. Pursuant to the terms of the Class B
Common Stock, a holder of Class B Common Stock has the right to convert each
share of Class B Common Stock into the number of shares of Class A Common Stock
determined by dividing the number of Class B Common Stock being converted by a
20% discount of the lowest price for which the Company had ever issued its Class
A Common Stock.





On August
29, 2005, the Company entered into an employment agreement with Mark
Meller.  Mr. Meller served as the Company’s President, Chief Executive
Officer and Chief Financial Officer until August 29, 2006.  As
compensation, the Company paid Mr. Meller a base salary of $85,000 the first
year with an annual increase based on the Consumer Price Index every year
thereafter.  Mr. Meller has agreed to defer all but $20,000 of his
compensation until such time that the Board of Directors determines, in its sole
discretion, that the Company has sufficient financial resources to pay his
compensation.  The Board of Directors may also elect to pay Mr. Meller
the balance of his compensation in the form of Company Class A or Class B Common
Stock.  As of March 31, 2009, total deferred compensation due to Mr.
Meller was $53,860.




Mr.
Mahoney has a consulting agreement with B Green Innovations for annual
compensation of $24,000 and upon every annual anniversary thereafter, at the
rate based on the increase in the Consumer Price Index for All Urban Consumers
(New York-Northern N.J.-Long Island). Mr. Mahoney agreed to accept compensation
pursuant to this Consulting Agreement in the form of Class B Common Stock, par
value $.01 per share, in lieu of cash, for as long as the Board of Directors
decides in its sole discretion that the Company does not have the financial
resources to pay the Consultant in cash.  The number of Class B Common
Stock shares to be issued to the Consultant pursuant to this Paragraph 2 shall
be equal to one share of Class B common stock for every dollar of compensation
due and owing the Consultant. As of March 31, 2009, Mr. Mahoney is due $20,000,
and no shares have been issued.





Note
7      Convertible Promissory Note
and Derivative Liability





iVoice
Technology has entered into a temporary administrative services agreement with
iVoice. The administrative services agreement will continue on a month-to-month
basis until iVoice Technology has found replacement services for those services
being provided by iVoice or can provide these services for itself. In March
2008, the administrative services agreement was amended to provide that accrued
and unpaid administrative services shall be aggregated and converted into a
Convertible Promissory Note. The principal and interest shall be due and payable
as follows: (a) interest shall accrue monthly on the unpaid balance and shall be
paid annually, and (b) principal shall be payable on demand.





On March
5, 2008, the Company converted its outstanding accounts payable to iVoice, Inc.
for unpaid administrative services in the amount of $50,652 into a convertible
promissory note at the rate of prime plus 1 percent per annum. Additional
amounts may be added to this note based on any unpaid administrative services,
and will accrue interest at the above specified rate from date of advance until
paid. The principal and interest shall be due and payable as follows: (a)
interest shall accrue monthly on the unpaid balance and shall be paid annually,
and (b) principal shall be payable on demand. For the three months ended March
31, 2009, unpaid administrative services in the amount of $12,663 were added to
the convertible promissory note.





iVoice,
Inc. may elect payment of the principal and/or interest, at the its sole
discretion, owed pursuant to this Note by requiring the Company to issue to
iVoice, or his assigns either: (i) one Class B common stock share of the Company
par value $.01 per share, for each dollar owed, (ii) the number of Class A
common stock shares of the Company calculated by dividing (x) the sum of the
principal and interest that the Note holder has decided to have paid 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.





Unless
otherwise provided, this Note may be prepaid in full or in part at any time
without penalty or premium. Partial prepayments shall be applied to installments
due in reverse order of their maturity.





During
the three months ended March 31, 2009, the Company issued 16,724,000 shares of
Class A common stock with a fair value of $10,453 to reduce the convertible
promissory note in the amount of $5,352. The difference in the market value and
the convertible promissory note reduction was charged to beneficial interest in
the amount of $5,100.





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.




9
 Table of Contents
 iVOICE TECHNOLOGY,
INC.
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)
 March 31, 2009 and
2008
 
 Note7     Convertible Promissory Note
and Derivative Liability (continued)


The
promissory note holders have a security interest in substantially all of the
assets of the Company.





As of
March 31, 2009, the outstanding balance on the Convertible Promissory Note was
$86,732.





In
accordance with Statement of Financial Accounting Standards No. 133, “Accounting
for Derivative Instruments and Hedging Activities”, (“FASB 133”), the Company
determined that the conversion feature of the Debenture met the criteria of an
embedded derivative, and therefore the conversion feature of this Debenture
needed to be bifurcated and accounted for as a derivative. The fair value of the
embedded conversion was estimated at the date of issuance using the
Black-Scholes model with the following assumptions: risk free interest rate:
2.25%; expected dividend yield: 0%: expected life: 5 years; and volatility:
321.58%. The accounting guidance instructs that the conversion options are a
derivative liability. As such, on March 5, 2008 the Company recorded the
conversion options as a liability, recorded a debt discount of $50,652, and
charged Other Expense - Loss on Valuation of Derivative for $16,366, resulting
primarily from calculation of the conversion price. For the period ended March
31, 2009, the Company recorded a Loss on Valuation of Derivative in the amount
of $451,890. For the period ended March 31, 2008, the Company recorded a Gain on
Valuation of Derivative in the amount of $2,875.





B Green
Innovations, Inc., a subsidiary of iVoice Technology, has entered into a
temporary administrative services agreement with iVoice. The administrative
services agreement continues on a month-to-month basis until B Green
Innovations, Inc. has found replacement services for those services being
provided by iVoice or can provide these services for itself. The administrative
services agreement provides that accrued and unpaid administrative services
shall be aggregated and converted into a Convertible Promissory Note. The
principal and interest shall be due and payable as follows: (a) interest shall
accrue monthly on the unpaid balance and shall be paid annually, and (b)
principal shall be payable on demand. The terms of this agreement are to similar
to the terms of the agreement between iVoice Technology, Inc. and iVoice, Inc.
as described above in this footnote.





On June
30, 2008, the Company converted its outstanding B Green accounts payable to
iVoice, Inc., for unpaid administrative services, in the amount of $8,000 into a
convertible promissory note at the rate of prime plus 1 percent per annum.
Additional amounts may be added to this note based on any unpaid administrative
services, and will accrue interest at the above specified rate from date of
advance until paid. For the three months ended March 31, 2009 total unpaid
administrative services in the amount of $12,000 was added to the convertible
promissory note. As of March 31, 2009, the outstanding balance on the B Green
Convertible Promissory Note was $40,400.




In
accordance with Statement of Financial Accounting Standards No. 133, “Accounting
for Derivative Instruments and Hedging Activities”, (“FASB 133”), the Company
determined that the conversion feature of the Debenture met the criteria of an
embedded derivative, and therefore the conversion feature of this Debenture
needed to be bifurcated and accounted for as a derivative. The fair value of the
embedded conversion was estimated at the date of issuance using the
Black-Scholes model with the following assumptions, the same as used for iVoice
Technology as B Green as there is no market for B Green’s stock: risk free
interest rate: 2.25%; expected dividend yield: 0%: expected life: 5 years; and
volatility: 226.33%. The accounting guidance instructs that the conversion
options are a derivative liability. At June 30, 2008 the Company recorded the
conversion options as a liability, recorded a debt discount of $8,000, and
charged Other Expense - Loss on Valuation of Derivative for $16,366, resulting
primarily from calculation of the conversion price. For the three months ended
March 31, 2009, the Company recorded a Loss on Valuation of Derivative in the
amount of $214,987. The fair value of the embedded conversion was estimated at
the December 31, 2008 using the Black-Scholes model with the following
assumptions: risk free interest rate: 2.25%; expected dividend yield: 0%:
expected life: 5 years; and volatility: 321.58%.





Note
8      Convertible Debenture and
Derivative Liability





On April
16, 2007, iVoice Technology, Inc. issued a Secured Convertible Debenture dated
March 30, 2007 (the "Debenture") to YA Global Investments (f/k/a/ Cornell
Capital Partners, LP) for the sum of $700,000 in exchange for a previously
issued note payable for the same amount. The Debenture has a term of three
years, and pays interest at the rate of 5% per annum. Cornell has the right to
convert a portion or the entire outstanding principal into the Company's Class A
Common Stock at a Conversion Price equal to eighty percent (80%) of the lowest
closing Bid Price of the Common Stock during the five (5) trading days
immediately preceding the Conversion Date. Cornell may not convert the Debenture
into shares of Class A Common Stock if such conversion would result in Cornell
beneficially owning in excess of 4.9% of the then issued and outstanding shares
of Class A Common Stock. The Conversion Price and number of shares of Class A
Common Stock issuable upon conversion of the Debenture are subject to certain
exceptions and adjustment for stock splits and combinations and other dilutive
events. Subject to the terms and conditions of the Debenture, the Company has
the right at any time provided that as of the date of the Holder's receipt of a
Redemption Notice (i) the Closing Bid Price of the of the Common Stock, as
reported by Bloomberg, LP, is less than the Conversion Price and (ii) no Event
of Default has occurred. The Company shall pay an amount equal to the principal
amount being redeemed plus a redemption premium ("Redemption Premium") equal to
twenty percent (15%) of the principal amount being redeemed, and accrued
interest, (collectively referred to as the "Redemption Amount"). During the time
that any portion of this Debenture is outstanding, if any Event of Default has
occurred, the full principal amount of this Debenture, together with interest
and other amounts owing in respect thereof, to the date of acceleration shall
become at the Holder's election, immediately due and payable in cash, provided
however, the Holder may request (but shall have no obligation to request)
payment of such amounts in Common Stock of the Company. Furthermore, in addition
to any other remedies, the Holder shall have the right (but not the obligation)
to convert this Debenture at any time after (x) an Event of Default or (y) the
Maturity Date at the Conversion Price then in-effect.




10
 Table of Contents
 iVOICE TECHNOLOGY,
INC.
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)
 March 31, 2009 and
2008
 
 Note
8      Convertible Debenture and
Derivative Liability (continued)




On March
14, 2008, the Company and YA Global Investments agreed that the Company would
redeem all amounts outstanding under the Debenture, except for the $186,557 of
the outstanding interest remaining on the original notes payable that were
originally exchanged for the Debenture. The amount redeemed was $691,021,
consisting of the remaining balance of the Debenture of $572,815, accrued
interest of $32,284, and a redemption premium of $85,922. The Debenture was
amended to change amount to $186,557 with a due date of March 14, 2009. The
Debenture shall accrue interest at the rate of 15% per annum, and shall be
convertible at a conversion price equal to 70% of the lowest closing bid price
of the Company’s common stock during the 30 trading days immediately proceeding
the conversion date. No conversions can be made prior to November 1,
2008.




On
November 21, 2008, the Company entered into an Amendment Agreement (the
"Agreement") between the Company and YA Global Investments LP, f/k/a Cornell
Capital Partners, LP. ("YA Global") which paid off in full the Secured
Convertible Debenture dated March 30, 2007 (the "Debenture"). Under the terms of
the Agreement, the Company paid the sum of One Hundred and Thirty-five Thousand
Dollars ($135,000) in full payment of the Debenture with a remaining principal
balance of $186,557, with accrued interest of $17,788. The difference of $69,355
was included in other income in the consolidated financial statements for the
year ended December 31, 2008. The security interest that YA Global held in the
assets of the Company was also terminated.




In
accordance with Statement of Financial Accounting Standards No. 133, “Accounting
for Derivative Instruments and Hedging Activities”, (“FASB 133”), the Company
determined that the conversion feature of the Debenture met the criteria of an
embedded derivative, and therefore the conversion feature of this Debenture
needed to be bifurcated and accounted for as a derivative. The fair value of the
embedded conversion was estimated at the date of issuance using the
Black-Scholes model with the following assumptions: risk free interest rate:
5.6%; expected dividend yield: 0%: expected life: 3 years; and volatility:
383.29%. The conversion feature of the debenture was recorded as a derivative
liability. As such, in March 2007 the Company recorded the conversion options as
a liability, recorded a debt discount of $700,000, and charged Other Expense -
Loss on Valuation of Derivative for $492,403, resulting primarily from
calculation of the conversion price.





For the
three months ended March 31, 2008, the Company recorded a Gain on Valuation of
Derivative in the amount of $868,623 and amortized the debt discount for a
charge of $508,629. For the three months ended March 31, 2009, the Company did
not record any Gain or Loss on Valuation of Derivative or amortization of debt
discount as the convertible debenture has been paid in full.





Note
9      Income
taxes





Deferred
income taxes will be determined using the liability method for the temporary
differences between the financial reporting basis and income tax basis of the
Company's assets and liabilities. Deferred income taxes will be measured based
on the tax rates expected to be in effect when the temporary differences are
included in the Company's tax return. Deferred tax assets and liabilities are
recognized based on anticipated future tax consequences attributable to
differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases. At March 31, 2009 and December 31,
2008 deferred tax assets consist of the following:





March 31,
                    2009
                  
                  
                  December 31, 2008Net
      operating loss carry forwards
                  
                  $
                  714,000
                  
                  
                  $
                  663,000Deferred
      compensation
                  
                  
                  110,000
                  
                  
                  
                  105,000Deferred
      tax asset
                  
                  
                  824,000
                  
                  
                  
                  768,000Less:
      valuation allowance
                  
                  
                  (824,000
                  )
                  
                  
                  (768,000
                  )Deferred
      tax asset, net
                  
                  $
                  -0-
                  
                  
                  $
                  -0-





At March
31, 2009 and December 31, 2008, the Company had a federal net operating loss
carry forward in the approximate amounts of $1,787,000 and $1,658,000,
respectively, available to offset future taxable income.  The Company
established valuation allowances equal to the full amount of the deferred tax
assets due to the uncertainty of the utilization of the operating losses in
future periods.




11
 Table of Contents
  iVOICE TECHNOLOGY,
INC.
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)
 March 31, 2009 and
2008


Note
10    Capital
Stock





Pursuant
to iVoice Technology’s certificate of incorporation, as amended, the Company is
authorized to issue 1,000,000 shares of Preferred Stock, par value of $1.00 per
share, 10,000,000,000 shares of Class A Common Stock, no par value per share,
50,000,000 shares of Class B Common Stock, par value $0.01 per share, and
20,000,000 shares of Class C Common Stock, par value $0.01 per share. Below is a
description of iVoice Technology’s outstanding securities, including Preferred
Stock, Class A Common Stock, Class B Common Stock and Class C Common
Stock.




a)
            Preferred
      Stock




iVoice
Technology is authorized to issue 1,000,000 shares of Preferred Stock, par value
$1.00 per share.




Of the
1,000,000 shares of Preferred Stock, 10,000 shares are designated Series A 10%
Preferred Stock, par value $1.00 per share, with a stated value of $1,000 (the
“Series A Preferred Stock”). The stated value is used for calculation of
dividends and liquidation preferences. On March 12, 2008, the Company sold
1,444.44 shares of Series A 10% Preferred Stock to iVoice, Inc. for
$1,444,444.  With consent of the holders of the Series A Preferred
Stock, on March 6, 2009, the Company amended its Certificate of Incorporation
and amended the rights of the Series A Preferred by: (i) eliminating all voting
rights for the Series A Preferred Stock and (ii) eliminating the conversion
feature of the Series A Preferred Stock




As of
March 31, 2009, 1,444.44 shares of Series A 10% Convertible Preferred Stock are
issued and outstanding.




The fair
value of the embedded conversion was estimated at the date of issuance using the
Black-Scholes model with the following assumptions: risk free interest rate:
5.47%; expected dividend yield: 0%: expected life: 5 years; and volatility:
265.44%. Prior to amendment, the stock had a feature that grants holders the
right to convert the stock into common shares based upon 80% of the lowest price
the Company has ever issued its Class A Common Stock. Due to this conversion
feature the entire investment is deemed a dividend. For the year ended
December 31, 2008, $1,444,444 of preferred stock accretion was recognized
in the consolidated statements of operations. As noted above, an amendment was
made which eliminated the conversion feature.





b)           Class
A Common Stock





As of
March 31, 2009, there are 10,000,000,000 shares of Class A Common Stock
authorized, no par value, and 526,309,870 shares were issued, and 525,115,387
shares were outstanding, and 1,194,483 shares were issued pending conversion by
YA Global Investments.




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
payment of dividends.  The Company has never paid any dividends on its
common stock and does not contemplate doing so in the foreseeable
future.




The
Company anticipates that any earnings generated from operations will be used to
finance its growth objectives.




c)           Class
B Common Stock





As of
March 31, 2009, there are 50,000,000 shares of Class B Common Stock authorized,
par value $.01 per share.  Each holder of Class B Common Stock has
voting rights equal to 100 shares of Class A 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
that iVoice Technology, Inc. had ever issued its Class A Common Stock. Upon our
liquidation, dissolution, or winding-up, holders of Class B Common Stock will be
entitled to receive distributions. As of March 31, 2009, no shares were issued
or outstanding.





d)           Class
C Common Stock





As of
March 31, 2009, there are 20,000,000 shares of Class C Common Stock authorized,
par value $.01 per share.  Each holder of Class C Common Stock is
entitled to 1,000 votes for each share held of record. Shares of Class C Common
Stock are not convertible into Class A Common Stock. Upon liquidation,
dissolution or wind-up, the holders of Class C Common Stock are not entitled to
receive our net assets pro rata. As of March 31, 2009, no shares were issued or
outstanding.







12
 Table of Contents








iVOICE TECHNOLOGY,
INC.


NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)


March 31, 2009 and
2008







Note
11    Stock
Options





During
2005, the Company adopted the 2005 Stock Incentive Plan and the 2005 Directors’
and Officers’ Stock Incentive Plan (“Plan”) in order to attract and retain
qualified personnel.  Under the Plan, the Board of Directors, in its
discretion may grant stock options (either incentive or non-qualified stock
options) to officers, directors and employees.  The Company has not
issued any stock options as of March 31, 2009.





Note
12    New Accounting
Pronouncements





InDecember 2007, the FASB issued SFAS No. 160, Non-controlling
Interests in Consolidated Financial Statements — an amendment of ARB No. 51
(“SFAS 160”).  SFAS 160 requires that ownership interests in
subsidiaries held by parties other than the parent, and the amount of
consolidated net income, be clearly identified, labeled, and presented in the
consolidated financial statements within equity, but separate from the parent’s
equity. It also requires once a subsidiary is deconsolidated, any retained
non-controlling equity investment in the former subsidiary be initially measured
at fair value. Sufficient disclosures are required to clearly identify and
distinguish between the interests of the parent and the interests of the
non-controlling owners. SFAS 160 will be effective beginning January 1,
2009. The adoption of SFAS 160 did not have a material impact on the Company’s
condensed consolidated financial statements.





In
December 2007, the FASB issued SFAC No 141(R), “Business
Combinations.”  This statement provides new accounting guidance and
disclosure requirements for business combinations.  SFAS No 141(R) is
effective for business combinations which occur in the first fiscal year
beginning on or after December 15, 2008. The adoption of SFAS 141(R) did not
have a significant impact on the Company’s condensed consolidated financial
statements or financial position, but the nature and magnitude of the specific
effects will depend upon the nature, terms and size of the acquisitions the
Company consummates after the effective date.





In
December 2007, the FASB finalized the provisions of the Emerging Issues Task
Force (EITF) Issue No. 07-1, “Accounting for Collaborative
Arrangements.”  This EITF Issue provides guidance and requires
financial statement disclosures for collaborative arrangements.  EITF
Issue No. 07-1 is effect for financial statements issued for fiscal years
beginning after December15, 2008.  The adoption of EITF Issue No. 07-1
did not have a material impact on the Company’s condensed consolidated financial
statements.





In March
2008, the Financial Accounting Standards Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 161, “Disclosures about Derivative
Instruments and Hedging Activities – an amendment of FASB Statement No. 133”
(“SFAS 161”), which modifies and expands the disclosure requirements for
derivative instruments and hedging activities.  SFAS 161 requires that
objectives for using derivative instruments be disclosed in terms of underlying
risk and accounting designation and requires quantitative disclosures about fair
value amounts and gains and losses on derivative instruments.  It also
requires disclosures about credit-related contingent features in derivative
agreements. SFAS 161 is effective for financial statements issued for fiscal
years and interim periods beginning after November 15, 2008, with early
application encouraged.  SFAS 161 encourages, but does not require,
comparative disclosures for earlier periods at initial adoption.  The
Company adopted this standard effective January 1, 2009. The implementation of
this standard did not have a material impact on the Company’s condensed
consolidated financial statements.


In April
2008, the FASB issued FSP No. 142-3, Determination of the Useful Life of
Intangible Assets.





FSP 142-3
amends the factors an entity should consider in developing renewal or extension
assumptions used in determining the useful life of recognized intangible assets
under SFAS 142, Goodwill and Other Intangible Assets, and adds certain
disclosures for an entity’s accounting policy of the treatment of the costs,
period of extension, and total costs incurred.  FSP 143-3 must be
applied prospectively to intangible assets acquired after January 1,
2009.  The Company’s adoption of FSP FAS 142-3 did not have a material
impact on the Company’s condensed consolidated financial
statements.





In May
2008, the Financial Accounting Standards Board (the “FASB”) issued FAS No. 162,
“The Hierarchy of Generally Accepted Accounting Principles” (“FAS 162”). This
statement identifies the sources of accounting principles and the framework for
selecting the principles used in the preparation of financial statements of
nongovernmental entities that are presented in accordance with GAAP. With the
issuance of this statement, the FASB concluded that the GAAP hierarchy should be
directed toward the entity and not its auditor, and reside in the accounting
literature established by the FASB as opposed to the American Institute of
Certified Public Accountants (AICPA) Statement on Auditing Standards No. 69,
“The Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” This statement is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board amendments to AU Section 411, “The
Meaning of Present Fairly in Conformity With Generally Accepted Accounting
Principles.” The Company’s adoption of SFAS 162 did not have a material impact
on the Compnay’s condensed consolidated financial statements.




In June
2008, the FASB ratified Emerging Issues Task Force (EITF) Issue No. 08-3,
Accounting for Lessees for Maintenance Deposits Under Lease Arrangements ("EITF
08-3"). EITF 08-3 provides guidance for accounting for nonrefundable maintenance
deposits. It also provides revenue recognition accounting guidance for the
lessor. EITF 08-3 is effective for fiscal years beginning after December 15,
2008. The Company’s adoption of EITF 08-3 did not have a material impact on the
Company’s condensed consolidated financial statements.




In
November 2008, the FASB issued EITF Issue No. 08-7, Accounting for
Defensive Intangible Assets” (EITF 08-7). EITF 08-7 addresses the
accounting for assets acquired in a business combination or asset acquisition
that an entity does not intend to actively use, otherwise referred to as a
‘defensive asset.’ EITF 08-7 requires defensive intangible assets to be
initially accounted for as a separate unit of accounting and not included as
part of the cost of the acquirer’s existing intangible asset(s) because it is
separately identifiable. EITF 08-7 also requires that defensive intangible
assets be assigned a useful life in accordance with paragraph 11 of
SFAS 142 and is effective for financial statements issued for fiscal years
beginning after December 15, 2008. The Company has adopted this standard
effective January 1, 2009 and the Company’s adoption of this EITF did not have a
material impact on the Company’s condensed consolidated financial
statements.






13
 Table of Contents




iVOICE TECHNOLOGY,
INC.
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)
 March 31, 2009 and
2008
  
 Note
12    New Accounting
Pronouncements (continued)


In April
2009, the FASB issued FSP FAS 115-2 and FAS 124-2, Recognition and Presentation
of Other-Than-Temporary Impairments. This FSP amends the other-than-temporary
impairment guidance for debt securities to make the guidance more operational
and to improve the presentation and disclosure of other- than-temporary
impairments in the financial statements. The most significant change the FSP
brings is a revision to the amount of other-than-temporary loss of a debt
security recorded in earnings. FSP FAS 115-2 and FAS 124-2 is effective for
interim and annual reporting periods ending after June 15, 2009. The Company
does not believe that the implementation of this standard will have a material
impact on the Company’s condensed consolidated financial
statements.





In April
2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the Volume and
Level of Activity for the Asset or Liability Have Significantly Decreased and
Identifying Transactions That Are Not Orderly. This FSP provides additional
guidance for estimating fair value in accordance with FASB Statement No. 157,
Fair Value Measurements, when the volume and level of activity for the asset or
liability have significantly decreased. This FSP also includes guidance on
identifying circumstances that indicate a transaction is not orderly. This FSP
emphasizes that even if there has been a significant decrease in the volume and
level of activity for the asset or liability and regardless of the valuation
technique(s) used, the objective of a fair value measurement remains the same.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction (that is, not a forced
liquidation or distressed sale) between market participants at the measurement
date under current market conditions. FSP FAS 157-4 is effective for interim and
annual reporting periods ending after June 15, 2009, and is applied
prospectively. The Company does not believe that the implementation of this
standard will have a material impact on the Company’s condensed consolidated
financial statements.




In April
2009, the FASB issued FSP FAS FAS 107-1 and APB 28-1, Interim Disclosures about
Fair Value of Financial Instruments. This FSP amends FASB Statement No. 107,
Disclosures about Fair Value of Financial Instruments, to require disclosures
about fair value of financial instruments for interim reporting periods of
publicly traded companies as well as in annual financial statements. This FSP
also amends APB Opinion No. 28, Interim Financial Reporting, to require those
disclosures in summarized financial information at interim reporting periods.
FSP FAS 107-1 and APB 28-1 is effective for interim and annual reporting periods
ending after June 15, 2009. The Company does not believe that the implementation
of this standard will have a material impact on the Company’s condensed
consolidated financial statements.





Note
13    Fair Value
Measurements





In
September 2006, the FASB issued SFAS 157, which defines fair value, establishes
a framework for measuring fair value, and expands disclosures about fair value
measurements. The provisions of SFAS 157 were effective January 1, 2008.
The FASB has also issued Staff Position (FSP) SFAS 157-2 (FSP No. 157-2),
which delays the effective date of SFAS 157 for nonfinancial assets and
liabilities, except for items that are recognized or disclosed at fair value in
the financial statements on a recurring basis (at least annually), until fiscal
years beginning after November 15, 2008.





As
defined in SFAS 157, 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. SFAS 157 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).





The three
levels of the fair value hierarchy defined by SFAS 157 are as
follows:





Level 1 –
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 –
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 –
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.







14
 Table of Contents




iVOICE TECHNOLOGY,
INC.


NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS (continued)


March 31, 2009 and
2008







Note
13           Fair Value Measurements
(continued)


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, 2009 and December 31, 2008. As required by SFAS 157,
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.


March 31,
2009


Level
      I
                        
                        
                        Level II
                        
                        
                        Level III
                        
                        
                        TotalTotal
      Assets
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -Convertible
      promissory notes
                        
                        $
                        -
                        
                        
                        $
                        24,634
                        
                        
                        $
                        -
                        
                        
                        $
                        24,634Note
      payable to related parties
                        
                        
                        -
                        
                        
                        
                        141,708
                        
                        
                        
                        -
                        
                        
                        
                        141,708Derivative
      liabilities
                        
                        
                        -
                        
                        
                        
                        824,752
                        
                        
                        
                        -
                        
                        
                        
                        824,752Total
      Liabilities
                        
                        $
                        -
                        
                        
                        $
                        991,094
                        
                        
                        $
                        -
                        
                        
                        $
                        991,094





December
31, 2008


Level
      I
                        
                        
                        Level II
                        
                        
                        Level III
                        
                        
                        TotalTotal
      Assets
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -
                        
                        
                        $
                        -Convertible
      promissory notes
                        
                        $
                        -
                        
                        
                        $
                        15,943
                        
                        
                        $
                        -
                        
                        
                        $
                        15,943Note
      payable to related parties
                        
                        
                        -
                        
                        
                        
                        141,708
                        
                        
                        
                        -
                        
                        
                        
                        141,708Derivative
      liabilities
                        
                        
                        -
                        
                        
                        
                        133,212
                        
                        
                        
                        -
                        
                        
                        
                        133,212Total
      Liabilities
                        
                        $
                        -
                        
                        
                        $
                        290,863
                        
                        
                        $
                        -
                        
                        
                        $
                        290,863




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 Notes 7 and 8 for more discussion on
derivatives.





The
Company did not hold financial assets and liabilities, which were recorded at
fair value in the Level 3 category as of March 31, 2009 and December 31,
2008.





15
 Table of Contents








Item2.
            Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations





Forward Looking
Statements





A number
of the statements made by the Company in this report may be regarded as
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995.





Forward-looking
statements include, among others, statements concerning the Company’s outlook,
pricing trends and forces within the industry, the completion dates of capital
projects, expected sales growth, cost reduction strategies and their results,
long-term goals of the Company and other statements of expectations, beliefs,
future plans and strategies, anticipated events or trends and similar
expressions concerning matters that are not historical facts.





All
predictions as to future results contain a measure of uncertainty and
accordingly, actual results could differ materially.  Among the
factors that could cause a difference are:  changes in the general
economy; changes in demand for the Company’s products or in the cost and
availability of its raw materials; the actions of its competitors; the success
of our customers; technological change; changes in employee relations;
government regulations; litigation, including its inherent uncertainty;
difficulties in plant operations and materials; transportation, environmental
matters; and other unforeseen circumstances.  For a discussion of
material risks and uncertainties that the Company faces, see the discussion in
the Form 10−K for the fiscal year ended December 31, 2008 entitled “Risk
Factors”.





Overview and Plan of
Operation




iVoice
Technology’s business was formed from the contribution by iVoice of certain
assets and related liabilities on August 5, 2005, and sought to leverage the
value of underutilized developed technology and believed that the transition to
an independent company will provide iVoice Technology with greater access to
capital.   In connection with this Spin-off by iVoice, iVoice
assigned and conveyed to iVoice Technology its IVR software business and related
liabilities, including all intellectual property of iVoice relating to the IVR
software business.  The board and management of iVoice elected not to
transfer any part of its working cash balance to iVoice
Technology.  Based upon the current intention of iVoice Technology not
to conduct any research and development or hire additional employees and instead
focus on the sale of the existing products, the board has determined that, on
balance, iVoice Technology has the ability to satisfy its working capital needs
as a whole.  The board and management has also determined that iVoice
Technology has the ability to obtain financing to satisfy any addition working
capital needs as a stand-alone company.




The
emerging nature of the interactive voice response industry, make it difficult to
assess the future growth of iVoice Technology. As such, iVoice Technology has
formed B Green Innovations, Inc., a wholly-owned subsidiary, and has agreed to
invest up to $500,000 to commercialize its “green” technology platforms. The new
subsidiary will contain the Company’s green technology and will pursue
associated developmental activities. The Company has made investments by
purchasing 160 shares of Series B Secured 10% Convertible Preferred Stock for
net proceeds of $144,000 to B Green.  The Company believes that this
investment will allow B Green to further develop additional
technologies.





The first
technology will be used to create new products from recycled tire rubber.
EcoPodTM and VibeAwayTM address important environmental concerns and problems
facing the planet today. EcoPodTM and VibeAwayTM are 100% recycled rubber-based
products that can be utilized as support pads under any units that vibrate and
make noise, including washing machines, dryers, compressors, commercial
condensers, and many other units that advantageously benefit from sound and
vibration control. In addition, we announced that we had filed a new patent
application for a process it described as “Recycled Tire Pod with Appliance
Recess Guide.”





The
Company will also continue to service the Interactive Voice Response ("IVR"),
software that was developed by iVoice. The Company's Interactive Voice Response
line is designed to read information from and write information to, databases,
as well as to query databases and return information.





IVR is an
application generator that allows full connectivity to many databases, including
Microsoft Access, Microsoft Excel, Microsoft Fox Pro, and Paradox, or to
standard text files. The IVR software is sold as an application generator that
gives the end user the ability to develop its own customized IVR applications or
as a customized turnkey system. IVR performs over 40 different customizable
commands. Examples of IVR range from simply selecting announcements from a list
of options stored in the computer (also known as audio text) to more complex
interactive exchanges such as querying a database for information.





The
Company has operated at a loss in the past for iVoice, and as an independent
company such losses continue.  Additionally, iVoice Technology’s
business has relied on iVoice for financial, administrative and managerial
expertise in conducting its operations.  Following the Spin-off,
iVoice Technology has developed and maintained its own credit and banking
relationships and performs its own financial and investor relations
functions.  However, iVoice Technology may not be able to successfully
maintain the financial, administrative and managerial structure necessary to
operate as an independent public company, and the development of such structure
will require a significant amount of management’s time and other
resources.




iVoice
Technology has received a going concern opinion from its
auditors.  Its continuation as a going concern is dependent upon
obtaining the financing necessary to operate its business. The financing of our
working capital needs was expected to be provided, in large part, from the sale
of Class A Common Stock to YA Global Investments (f/k/a/Cornell Capital
Partners) pursuant to the terms of the Standby Equity Distribution
Agreement.  The Standby Equity Distribution Agreement expired on
February 5, 2008. If the Company cannot find sources of additional financing to
fund its working capital needs, the Company will be unable to obtain sufficient
capital resources to operate our business. On March 12, 2008, the Company sold
1,444.44 shares of Series A 10% Convertible Preferred Stock to iVoice, Inc. for
net proceeds of $1,300,000. These funds were used to repay the YA Global
Convertible Debenture and to continue to fund operations and the new venture in
B Green discussed above.




16
 Table of Contents




We cannot
assure you that we will be able to access any financing in sufficient amounts or
at all when needed. Our inability to obtain sufficient working capital funding
will have an immediate material adverse effect upon our financial condition and
our business. See “Liquidity and Capital Resources.”




iVoice
Technology’s financial statements have been prepared in accordance with
accounting principles generally accepted in the United States, and reflect the
historical financial position, results of operations, and cash flows of the
business transferred to iVoice Technology by iVoice as part of the
Spin-off.  The financial information included in this report is not
necessarily indicative of its future performance as an independent
company.




iVoice
Technology also operates the IVR software business. It is unclear whether such
efforts will result in a reasonably successful operating business due to
iVoice’s previous lack of sales and marketing efforts on IVR, iVoice
Technology’s lack of operating history, the current economic environment and,
more specifically, the uncertainty of the telecommunications market. As of
August 5, 2005, iVoice assigned, contributed and conveyed to iVoice Technology
the iVoice corporate assets, liabilities and expenses related to the IVR
software business, including the IVR software and all intellectual property of
iVoice relating to the IVR software business and the assignment of iVoice’s
existing agreements and arrangements with dealers and resellers.  This
assignment, contribution and conveyance of assets, liabilities and expenses was
based on an estimate of the proportion of such amounts allocable to iVoice
Technology, utilizing such factors as total revenues, employee headcount and
other relevant factors.  iVoice Technology believes that these
allocations have been made on a reasonable basis.  iVoice Technology
believes that all costs allocated to iVoice Technology are a reasonable
representation of the costs that iVoice Technology would have incurred if iVoice
Technology had performed these functions as a stand-alone company.




In
conjunction with the separation of the IVR software business from iVoice, iVoice
Technology entered into an administrative services agreement with iVoice for the
provision of certain services by iVoice to iVoice Technology following the
Spin-off.  This agreement will continue on a month to month basis
until iVoice Technology has found replacement services for those services being
provided by iVoice or can provide these services itself.  Following
termination of the administrative services agreement, we expect that iVoice
Technology will operate on a completely stand-alone basis from iVoice and there
will be no business or operating relationship between iVoice and iVoice
Technology.  iVoice Technology has no current intention to terminate
the administrative services agreement, seek replacement services, or provide
services for itself in the near future.




Results of
Operations




Total
revenues increased $1,957 (15.0%) for the three months ended March 31, 2009 to
$15,030 as compared to $13,073 for the same period in the prior year.
Maintenance services on IVR products declined $3,287 (25.7%) as a result of
lower maintenance services, which has been a result of the reduction
installations. The low sales volume of the IVR business is attributable to the
minimal resources made available for the sales and marketing of the interactive
voice response software products. During the fourth quarter of the current
fiscal year, B Green Innovations, Inc. began shipping products to its customers.
There can be no assurance that sales of these products will increase or that the
Company will be able to achieve profitable operations. For the three months
ended March 31, 2009 sales of  “green” products from B Green
Innovations amounted to $5,244. The Company continues its efforts market and
sell its products through a distribution network. B Green has entered into
distribution agreements with reputable distributors that have proven themselves
within their territories and industry segments.




Gross
profit decreased $7,264 (55.6%) to $5,809 for the three months ended March 31,
2009 as compared to the same period in the prior year. Gross profit declined as
a result of lower sales associated with the IVR business and lower gross profit
for B Green Innovations, for which gross profit on product sales was offset by
purchases certain packaging materials that were charged directly to cost of
sales.




Total
operating expenses increased $46,766 (49.6%) to $141,123 for the three months
ended March 31, 2009 as compared to the three months ended March 31, 2008,
primarily as a result of expenses associated with the operations of B Green
Innovations, Inc.




Total
other expense was $690,543 for the three months ended March 31, 2009 as compared
to an income of $135,780 for the three months ended March 31, 2008, an increase
of $826,323. The increase in other expense is attributed to the loss on
valuation of derivative. For the three months ended March 31, 2008 the Company
reported a gain on the valuation of derivative, which was partially offset by
amortization of debt discount and higher interest expense.




Net loss
for the quarter ended March 31, 2009 was $825,857 as compared to income of
$54,496 for the quarter ended March 31, 2008.  The change of was the
result of the factors discussed above.




As of
March 31, 2009, iVoice Technology had one part-time employee.







17
 Table of Contents




Liquidity and Capital
Resources




To date,
iVoice Technology has incurred substantial losses, and will require financing
for working capital to meet its operating obligations.  We anticipate
that we will require financing on an ongoing basis for the foreseeable
future.




On March
30, 2007, iVoice Technology, Inc. issued a Secured Convertible Debenture (the
"Debenture") to YA Global Investments (f/k/a/ Cornell Capital Partners) for the
sum of $700,000 in exchange for the previously issued note payable for the same
amount (see Notes 8 and 9 to the Financial Statements). On March 14, 2008, the
Company and YA Global Investments agreed that the Company would redeem all
amounts outstanding under the Debenture, except for the $186,557 of the
outstanding interest remaining on the original notes payable that were
originally exchanged for the Debenture. The amount redeemed was $691,021,
consisting of the remaining balance of the Debenture of $572,815, accrued
interest of $32,284, and a redemption premium of $85,922. The Debenture was
amended to change the amount to $186,557 with a due date of March 14, 2009. The
Debenture shall accrue interest at the rate of 15% per annum, and shall be
convertible at a conversion price equal to 70% of the lowest closing bid price
of the Company’s common stock during the 30 trading days immediately proceeding
the conversion date. No conversions can be made prior to November 1,
2008.




On
November 21, 2008, the Company entered into an Amendment Agreement (the
"Agreement") between the Company and YA Global Investments LP, f/k/a Cornell
Capital Partners, LP. ("YA Global") which paid off in full the Secured
Convertible Debenture dated March 30, 2007 (the "Debenture"). Under the terms of
the Agreement, the Company paid the sum of One Hundred and Thirty-five Thousand
Dollars ($135,000) in full payment of the Debenture with a remaining principal
balance of $186,567, with accrued interest of $17,788. The security interest
that YA Global held in the assets of the Company was terminated.




On August
5, 2005, iVoice Technology assumed an aggregate of $190,000 in liabilities from
iVoice and iVoice assigned to iVoice Technology assets having an aggregate book
value of $10,000. iVoice Technology believes that the fair value of these assets
may be greater than the book value, although it has not undertaken an appraisal.
The assumed obligations are described below.




iVoice
Technology assumed from iVoice outstanding indebtedness in the amount of
$190,000 payable to Jerry Mahoney.  This amount is related to funds
that had been loaned to iVoice in July 2000 that were used to develop the IVR
software business.  The amount of $190,000 includes approximately
$32,110 for interest on the original loan from Jerry Mahoney to
iVoice.  Pursuant to the terms of the promissory note representing
such obligation, iVoice Technology, for value received, will pay to Mr. Mahoney
the principal sum of $190,000 that will bear interest at the prime rate plus 2%
per annum on the unpaid balance until paid or until default. Interest payments
will be due annually. All accrued interest becomes due on the date of any
payment of the promissory note. At the time of default (if any) the interest
rate shall increase to 20% until the principal balance has been paid. Under the
terms of the promissory note, at the option of the note holder, principal and
interest can be converted into either (i) one share of Class B Common Stock of
iVoice Technology, par value $0.01, for each dollar owed, (ii) the number of
shares of Class A Common Stock of iVoice Technology 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 the Company maintains control over the issuance of shares and
may decline the request for conversion of the repayment into shares of the
Company.




On
September 22, 2005, iVoice Technology entered into a Standby Equity Distribution
Agreement with YA Global Investments (f/k/a/ Cornell Capital Partners), pursuant
to which iVoice Technology may, from time to time, issue and sell to YA Global
Investments (f/k/a/ Cornell Capital Partners) our Class A Common Stock for a
total purchase price of up to $10 million. As of September 30, 2008, the Company
has sold in the aggregate 190,365,518 shares of Class A Common Stock to YA
Global for net proceeds of $324,520, which are net of fees and discounts of
$59,377, which was used to fund the operations of the Company. The Standby
Equity Distribution Agreement expired on February 5, 2008.




On March
12, 2008, the Company sold 1,444.44 shares of Series A 10% Preferred Stock to
iVoice, Inc. for net proceeds of $1,300,000. These funds were used to repay the
Convertible Debenture and to fund operations and the new venture in B Green
Technologies discussed above.




If the
Company cannot find sources of additional financing to fund its working capital
needs, the Company will be unable to obtain sufficient capital resources to
operate our business. We cannot assure you that we will be able to access any
financing in sufficient amounts or at all when needed. Our inability to obtain
sufficient working capital funding will have an immediate material adverse
effect upon our financial condition and our business.





The
Company currently has no other significant sources of working capital or cash
commitments. However, no assurance can be given that iVoice Technology will
raise sufficient funds from such financing arrangements, or that iVoice
Technology will ever produce sufficient revenues to sustain its operations, or
that a market will develop for its common stock for which a significant amount
of iVoice Technology’s financing is dependent upon.





For the
three months ended March 31, 2009, the Company had a net decrease in cash of
$58,783.  The Company’s principal sources and uses of funds were as
follows:




Cash used by operating
activities.   The Company used $58,783 in cash for
operating activities as compared to $139,419 in the prior year. The decrease in
cash used for operating activities is primarily attributed to the payment of
accrued interest and the redemption fees associated with the paydown of the
convertible debenture for the three months ended March 31, 2008, which did not
occur in 2009, offset partially by the increase in the operating loss for the
three months ended March 31, 2009.




Net Cash provided by financing
activities. There were no proceeds from financing activities for the
three months ended March 31, 2009.  The Company generated $786,368
from financing activities for the three months ended March 31, 2008 primarily as
a result of net proceeds from the sales of Series A Preferred Stock, partially
offset by the payment of the convertible debenture in the amount of
$572,815.





There was
no significant impact on the Company’s operations as a result of inflation for
the three months ended March 31, 2009.




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Critical Accounting
Policies





The
discussion and analysis of our financial condition and results of operations are
based on our financial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States of America (GAAP).
The preparation of these financial statements requires us to make estimates and
judgments that affect the reported amounts of assets, liabilities, revenues and
expenses, and related disclosure of contingent assets and liabilities. On an
on-going basis, we evaluate these estimates, including those related to bad
debts, inventory obsolescence, intangible assets, payroll tax obligations, and
litigation. We base our estimates on historical experience and on various other
assumptions that are believed to be reasonable under the circumstances, the
results of which form the basis for making judgments about the carrying values
of certain assets and liabilities. Actual results may differ from these
estimates under different assumptions or conditions.




We have
identified below the accounting policies, revenue recognition and software
costs, related to what we believe are most critical to our business operations
and are discussed throughout Management’s Discussion and Analysis of Financial
Condition or Plan of Operation where such policies affect our reported and
expected financial results.




Revenue
Recognition




With
respect to the sale of software license fees, the Company recognizes revenue in
accordance with Statement of Position 97-2, Software Revenue Recognition (SOP
97-2), as amended, and generally recognizes revenue when all of the following
criteria are met: (1) persuasive evidence of an arrangement exists generally
evidenced by a signed, written purchase order from the customer, (2) delivery of
the software product on Compact Disk (CD) or other means to the customer has
occurred, (3) the perpetual license fee is fixed or determinable and (4)
collectability, which is assessed on a customer-by-customer basis, is
probable.




With
respect to customer support services, upon the completion of one year from the
date of sale, the Company offers customers an optional annual software
maintenance and support agreement for subsequent one-year periods. Sales of
purchased maintenance and support agreements are recorded as deferred revenues
and recognized over the respective terms of the agreements.




The
Company derives its revenues from the licensing of its software product and
optional customer support (maintenance) services. Presently, 100% of the
revenues reported by the Company are derived from the licensing of the Company’s
IVR software. No revenues have been derived from the sale of optional customer
support services. The Company’s standard license agreement provides for a
one-time fee for use of the Company’s product in perpetuity for each computer or
CPU in which the software will reside. The Company’s software application is
fully functional upon delivery and implementation and does not require any
significant modification or alteration. The Company also offers customers an
optional annual software maintenance and support agreement for the subsequent
one-year periods. Such maintenance and support services are free for the first
year the product is licensed. The software maintenance and support agreement
provides free software updates, if any, and technical support the customer may
need in deploying or changing the configuration of the software. Generally, the
Company does not license its software in multiple element arrangements whereby
the customer purchases a combination of software and maintenance. In a typical
arrangement, software maintenance services are sold separately from the software
product; are not considered essential to the functionality of the software and
are purchased at the customer’s option upon the completion of the first year
licensed.




The
Company does not offer any special payment terms or significant discount
pricing. Normal and customary payment terms require payment for the software
license fees when the product is shipped. Payment for software maintenance is
due prior to the commencement of the maintenance period. It is also the
Company’s policy not to provide direct customers (as opposed to resellers and
dealers) the right to refund any portion of its license fees. The Company
accepts Visa and MasterCard as well as company checks.




Customers
may license the Company’s products through our telesales organization and
through promotions or reseller agreements with independent third
parties.  iVoice Technology only permits returns from authorized
dealers and resellers of unused inventory, subject to the consent of the Company
and a twenty-five percent restocking fee.  End users who purchaser
products directly from iVoice Technology may not return such products to iVoice
Technology under any circumstances.  Accordingly, the Company records
a provision for product returns and allowances against product revenue in the
same period the revenue is recorded. The estimates are based on historical sales
returns and other known data as well as market and economic
conditions.




Our
current products are not sold through retail distribution channels. Current
reseller agreements provide for a limited contractual right of return and do not
provide for future price concessions, minimum inventory commitments nor is
payment contingent upon the reseller’s future sales or our products. Revenues
generated from products licensed through marketing channels where the right of
return exists, explicitly or implicitly, is reduced by reserves for estimated
product returns. Such reserves are estimates based on returns history and
current economic and market trends.




Due to
the nature of the business and one-time contracts, it is unlikely that one
customer will impact revenues in future periods. All revenues for 2009 related
to the Company’s IVR operations were derived from annual maintenance and support
agreements.




For B
Green Innovations, Inc. revenues are recognized at the time of shipment to, or
acceptance by customer, provided title and risk of loss is transferred to the
customer. Provisions, when appropriate, are made where the right to return
exists.





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Software
Costs




Software
license costs are recorded at cost, which approximates fair market value as of
the date of purchase. These costs represent the purchase of various exploitation
rights to certain software, pre-developed codes and systems developed by a
non-related third party. These costs are capitalized pursuant to Statement of
Financial Accounting Standards (“SFAS”) 86, “Accounting for the Costs of
Computer Software to be Sold, Leased or Otherwise Marketed”. The Company has
adopted SFAS No. 121. The carrying value of software license costs are regularly
reviewed by the Company and a loss would be recognized if the value of the
estimated undiscounted cash flow benefit related to the asset falls below the
unamortized cost. The Company develops software for licensing to its customers
and capitalizes software development costs when technological feasibility has
been established. Software development costs not qualifying for capitalization
are expensed and classified as research and development expenses in the
statements of operations. Research and development expenses and the
capitalization rate will fluctuate from period to period depending upon the
number and status of software development projects that are in process and the
related number of people assigned to those projects.




Purchased
software and capitalized software development costs are amortized using the
greater of the revenue method or the straight-line method with useful lives
ranging from three to five years. Amortization expense is classified in costs of
revenue on the statements of operations. Our products operate on or with other
third party software and operating systems. When determining the useful life of
a product we consider factors such as the current state of the technology,
operating systems on which our products run, competitive products and the
potential use of our products by the end user. Technological advances in
software operating systems and other software technologies on which our products
rely may shorten the expected life cycle of our products. We make an assessment
of the useful lives of our products at each balance sheet date. If that
assessment determines that a shortened product life has occurred, we amortize
the remaining unamortized balances over the new estimated useful life of the
product and provide disclosure regarding a change in estimate in the notes to
the financial statements pursuant to Accounting Principles Board Opinion No. 20
“Accounting Changes.”




The
Company evaluates the estimated net realizable value of each software product at
each balance sheet date. The estimate is based on historical and forecasted net
revenue for each product. Net revenue is the product revenue reduced by the
estimated costs of revenue and, if in development, the estimated cost to
complete the development of the product. When the net book value exceeds the
estimate of net realizable value, the Company records a write-down to net
realizable value on each product affected. Management’s ability to achieve its
revenue forecast is subject to judgment, competitive pressures, market and
economic conditions and management’s ability to successfully license its
products to its customers. A change in one or more of these factors may
influence management’s estimates. Accordingly, currently estimated net
realizable values are subject to being reduced resulting in corresponding
charges for impairment in the future




Derivative
Liabilities




The
Company accounts for its embedded conversion features in its convertible
debentures in accordance with SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", which requires a periodic valuation of
their fair value and a corresponding recognition of liabilities associated with
such derivatives, and EITF 00-19, “Accounting for Derivative Financial
Instruments Indexed to, and Potentially Settled in, a Company’s Own Stock. The
recognition of derivative liabilities related to the issuance of convertible
debt is applied first to the proceeds of such issuance as a debt discount, at
the date of issuance, and the excess of derivative liabilities over the proceeds
is recognized as “Loss on Valuation of Derivative” in other expense in the
accompanying financial statements. Any subsequent increase or decrease in the
fair value of the derivative liabilities is recognized as other expense or other
income, respectively. The financial statements for the period include the
recognition of the derivative liability on the underlying securities issuable
upon conversion of the Convertible Debentures with YA Global Investments
(f/k/a/Cornell Capital Partners)


Item4T.
              Controls and
      Procedures


Management's report on internal control
over financial reporting.





Management
of the Company has evaluated, with the participation of the Chief Executive
Officer and Chief Financial Officer of the Company, the effectiveness of the
Company's disclosure controls and procedures (as defined in Rules 13a-15(e) or
15d-15(e) promulgated by the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end
of the period covered by this Quarterly Report on Form 10-Q. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer of the
Company had concluded that the Company's disclosure controls and procedures as
of the period covered by this Quarterly Report on Form 10-Q were not effective
for the following reasons:





a)           The
deficiency was identified as the Company's limited segregation of duties amongst
the Company's employees with respect to the Company's control activities. This
deficiency is the result of the Company's limited number of employees. This
deficiency may affect management's ability to determine if errors or
inappropriate actions have taken place. Management is required to apply its
judgment in evaluating the cost-benefit relationship of possible changes in our
disclosure controls and procedures.





b)           The
deficiency was identified in respect to the Company's Board of Directors. This
deficiency is the result of the Company's limited number of external board
members. This deficiency may give the impression to the investors that the board
is not independent from management. Management and the Board of Directors are
required to apply their judgment in evaluating the cost-benefit relationship of
possible changes in the organization of the Board of Directors.




Changes
in internal control over financial reporting.





Management
of the Company has also evaluated, with the participation of the Chief Executive
Officer of the Company, any change in the Company’s internal control over
financial reporting that occurred during the period covered by this Quarterly
Report on Form 10-Q and determined that there was no change in the Company’s
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.





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Part II.  Other
Information





Item5.
              Other
      Information


(b)
            The
      Company does not have a standing nominating committee or a committee
      performing similar functions as the Company’s Board of Directors consists
      of only two members and therefore there would be no benefit in having a
      separate nominating committee that would consist of the same number of
      members as the full board of directors.  Both members of the
      Board of Directors participate in the consideration of director
      nominees.




Item6.
              Exhibits


3.1
              Amendment
      to the Certificate of Incorporation dated March 6, 2009 filed as Exhibit
      3.1 to the Current Report on Form 8-K dated March 6, 2009 and incorporated
      herein by reference.10.1
              Amendment
      No. 7 to the Employment Agreement between iVoice Technology Inc. and
      Jerome Mahoney dated March 9, 2009 filed as Exhibit 10.1 to the Current
      Report on Form 8-K dated March 6, 2009 and incorporated herein by
      reference.31.1
              Certification required under Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
              Certification required under Section 906 of the
      Sarbanes-Oxley Act of 2002.






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SIGNATURES





In
accordance with the requirements of the Exchange Act, the Registrant caused this
report on Form 10-Q to
be signed on its behalf by the undersigned, thereunto duly
authorized.





iVOICE
      TECHNOLOGY, INC.Date:
      May 15, 2009
                By:
                /s/
      Jerome MahoneyJerome
      MahoneyPresident,
      Chief Executive Officer andChief
      Financial Officer








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INDEX OFEXHIBITS


3.1
                Amendment
      to the Certificate of Incorporation dated March 6, 2009 filed as Exhibit
      3.1 to the Current Report on Form 8-K dated March 6, 2009 and incorporated
      herein by reference.10.1
                Amendment
      No. 7 to the Employment Agreement between iVoice Technology Inc. and
      Jerome Mahoney dated March 9, 2009 filed as Exhibit 10.1 to the Current
      Report on Form 8-K dated March 6, 2009 and incorporated herein by
      reference.31.1
                Certification required under Section 302 of the
      Sarbanes-Oxley Act of 2002.32.1
                Certification required under Section 906 of the
      Sarbanes-Oxley Act of 2002.






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