UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   Form 10-KSB

[X]      ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
         OF 1934 For the fiscal year ended December 31, 2002

[ ]     TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
        ACT OF 1934

                                  iVoice, Inc.
                 (Name of small business issuer in its charter)

          Delaware                                   52-1750786
 (State or other jurisdiction              (I.R.S. Employer Identification No.)
of incorporation or organization)

    750 Highway 34, Matawan, NJ                                    07747
(Address of principal executive offices)                         (Zip Code)

Issuer's telephone number (732) 441-7700

Securities registered under Section 12(b) of the Exchange Act: None.
Securities registered under Section 12(g) of the Exchange Act: Class A Common
$.0001 Par Value


Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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. [X] Yes [ ] No

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure  will be contained,  to
the  best  of  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part III of this Form  10-KSB or any
amendment to this Form 10-KSB. [ ]

Issuer's  revenues for its most recent fiscal year.  $646,560

As of March 27, 2003, the Registrant had  856,599,459  shares of Class A, $.0001
par value common stock  outstanding.  The  aggregate  market value of the voting
stock held by  non-affiliates as of that date based upon the average bid and ask
prices on that date was $342,640.

As of March 27, 2003, the Registrant had 1,836,875 shares of Class B, no par
value common stock outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [   ]; No [X]


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                                                  PART I
<S>     <C>                                                                                                <C>
Item 1. Description of business                                                                             3
Item 2. Description of property                                                                            17
Item 3. Legal proceedings                                                                                  18
Item 4. Submission of matters to a vote of security holders                                                18

                                                   PART II
Item 5. Market for common equity and related stockholder matters.                                          18
Item 6. Management's discussion and analysis or plan of operations.                                        23
Item 7. Financial statements                                                                               28

                                                  PART III
Item 9. Directors, executive officers, promoters and control persons,
        compliance with Section 16(a) of the Exchange Act                                                  28
Item 10.Executive compensation.                                                                            29
Item 11.Security ownership of certain beneficial owners and management                                     31
Item 12.Certain relationships and related transactions                                                     33

                                                   PART IV
Item 13.Exhibits and reports on Form 8-K                                                                   34
Item 14.Controls and Procedures                                                                            38
</TABLE>


                                       2
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                                     PART I

Item 1. Description of Business.
Background

     Our current corporate configuration is the result of a number of separate
transactions over the past several years.

     On February 26, 1996, Select Resources, Inc., a publicly held Delaware
company, and three of its principal stockholders entered into a stock exchange
agreement with Visual Telephone of New Jersey, Inc., a privately held New Jersey
corporation, and its two stockholders pursuant to which Select Resources
acquired all of the outstanding shares of Visual Telephone and spun-off Select
Housing Associates, Inc., its wholly owned subsidiary. The aim of this agreement
was to provide for a more profitable business direction for Select Resources.
Pursuant to the agreement, Select Resources agreed to issue 5,611,000 shares of
its capital stock to one of the two stockholders of Visual Telephone and to
transfer one-half of the shares of Select Housing Associates to the other
stockholder of Visual Telephone, namely Joel Beagelman, in return for all of the
outstanding shares of Visual Telephone. In addition, Select Resources
transferred the other half of the shares of Select Housing Associates to Gary W.
Pomeroy and Brad W. Pomeroy, two of Select Resources' three principal
stockholders, in return for the cancellation of 1,111,000 shares of common stock
of Select Resources owned by them. At the time of the stock exchange agreement,
Mr. Beagelman, Gary W. Pomeroy and Brad W. Pomeroy were directors of Select
Resources. On February 26, 1996, the stock exchange agreement was approved by
the consent of stockholders a majority of the outstanding shares of common stock
of Select Resources. Visual Telephone then merged into Select Resources, which
changed its name to that of the subsidiary.

     In July 1996, Visual Telephone acquired 100% of the outstanding common
shares of Communications Research Inc., or "CRI," for $50,000 in cash, $150,000
in notes and 1,000,000 shares of Visual Telephone. CRI designs, develops, sells,
and supports PC-based communication systems that transmit data, voice and
full-motion video.

     On May 21, 1999, International Voice Technologies, Corp., a Delaware
corporation, merged with and into Visual Telephone (which in the interim had
changed its name to Visual Telephone International, Inc.), with Visual Telephone
surviving. Simultaneous with the merger, Visual Telephone changed its name to
iVoice.com, Inc., and it was planned that Visual Telephone would spin off CRI
prior to the merger with International Voice Technologies. Our current business
is essentially that of International Voice Technologies, and this merger was
aimed at giving that business better access to the capital markets by merging it
into a public company. In addition, we changed our OTC Bulletin Board trading
symbol to "IVOC."

     In consideration for the merger with International Voice Technologies,
Jerome R. Mahoney, the sole stockholder of International Voice Technologies,
received 10,000,000 shares of our Class A common stock and 700,000 shares of our
Class B common stock. In addition, the two controlling stockholders of Visual
Telephone sold 300,000 shares of Class B common stock to Mr. Mahoney and
concurrently canceled a total of 2,000,000 shares of their Class A common stock.
The consulting firm of Toby Investments was awarded 2,000,000 shares of common
stock for consulting services on the transaction. The agreement also provided
that certain of the assets of Visual Telephone would be transferred to Visual
Telephone's wholly owned subsidiary, CRI. The merger was accounted for in its
financial statements as a public shell merger. In a public shell merger the
stockholders of the operating company, in this case International Voice
Technologies, become the majority owners of the shell company, in this case
Visual Telephone, and the stockholders of Visual Telephone, the public shell
company, become minority stockholders in International Voice Technologies, the
operating company.


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<PAGE>

     As for the CRI spin-off, on September 18, 2000 CRI filed a registration
statement to provide for the distribution of its shares to Visual Telephone's
stockholders as of May 21, 1999. Visual Telephone's stockholders are to receive
one CRI share for every four shares owned in Visual Telephone. The principal
stockholders, officers and directors of Visual Telephone were Carl Ceragno and
Joel Beagelman. Mr. Ceragno remained with CRI as its President and Mr. Beagelman
entered into a consulting agreement with us.

     On April 24, 2000, we entered into an agreement and plan of reorganization
with all the stockholders ThirdCAI, another shell company that was a reporting
company under the Securities Exchange Act of 1934. In this transaction, which
took place by means of a short-form merger, with ThirdCAI's name being changed
to iVoice, we acquired all the issued and outstanding shares of ThirdCAI in
exchange for $150,000, and a finder's fee paid to Corporate Architect, Inc.,
consisting of 50,000 shares of our Class A voting common stock. The purpose of
this transaction was to enable our business to be conducted by a reporting
company, as pursuant to the "eligibility rule" adopted by the National
Association of Securities Dealers, Inc., or "NASD," as only reporting companies
may continue to have stock quoted on the OTC Bulletin Board.

     Our principal offices and facilities are located at 750 Highway 34,
Matawan, NJ 07747 and our telephone number is (732) 441-7700. Our common stock
is quoted on the OTC Bulleting Board under the trading symbol "IVOC."

Our Business

     We design, manufacture, and market innovative voice and computer telephony
communications systems for businesses and corporate departments with as many as
20,000 telephones. Our speech recognition software products enable users to
communicate more efficiently and effectively by integrating their traditional
office telephone systems with automated attendant, voice mail, unified
messaging, and interactive voice response, or "IVR," functions. Our products are
designed to be "people oriented," with features that can be readily used without
special training or manuals. Our products include, Speech Enabled Auto
Attendant, Unified Messaging, and iVoice IVR, incorporate this philosophy. We
also sell a Speech Software Developers Kit ("SDK"). Our Speech SDK is a unique
tool that allows software application developers to incorporate our speech
recognition engine into different applications other than those we have
developed internally. The SDK can convert common command and control functions
to speech commands. iVoice markets, promotes and sells its speech-enabled
products through primarily through telephony reseller channels and telephone
equipment manufacturer distributor networks. Management believes it can leverage
those resellers' existing customer bases and obtain a wider distribution network
for its products through already established channels. The Company also sells
direct to end users in geographic locations where an authorized reseller does
not exist. On direct sales orders, the Company is able to achieve greater profit
margins through higher direct selling prices


                                       4
<PAGE>

Products and Services

     Our products use standard open-architecture PC platforms and Microsoft
Windows 2000 operating systems, thereby facilitating the rapid adoption of new
PC-based technologies while reducing overall product costs. We concentrate our
product development efforts on software rather than hardware because we believe
that the most efficient way to create product value is to emphasize software
solutions that meet customers' needs. We have recently adapted our applications
to integrate with different manufacturer telephone switches through the use of
Telephony Application Program Interface or "TAPI". The use of TAPI, allows
iVoice to integrate our applications into different telephone manufacturers
Private Branch Exchange systems or "PBX's", eliminating the need for costly
additional external hardware. We have traditionally used standard PC-related
hardware components in our products, in part, to limit our need to manufacture
components. Our manufacturing operations consist only of the installation of our
proprietary software and, if required, a voiceboard, into a fully assembled PC
system which we obtain from several different vendors. The Company obtains
system components such as PCs, circuit boards, application cards, faxboards, and
voiceboards from various suppliers.

     Our principal products include the iVoice Speech Enabled Auto Attendant and
iVoice IVR. The Speech Enabled Auto Attendant allows businesses and
organizations to incorporate speech recognition into their existing telephone
systems without duplicating their current voicemail applications. The Speech
Enabled Auto Attendant uses a customized dictionary of names and extension
numbers that enables callers to contact their party using their spoken voice.

     iVoice IVR (Interactive Voice Response) is an application generator that
allows full connectivity to the most popular databases, including Microsoft
Access, Microsoft Excel, Microsoft Fox Pro, DBase, Btrieve, and Paradox, or to
standard text files. iVoice IVR can be used to read or write information to and
from electronic databases. iVoice IVR incorporates over 40 different
customizable commands. Properties can be set up for each command, as if the
commands were being executed manually. iVoice IVR can link a phone system to a
database to provide customers with 24-hour immediate access to account
information, via telephone. With iVoice IVR, polished and professional
applications are quick and easy to install. No knowledge of computer programming
and minimal database knowledge is needed. Using speech activation, or
traditional DTMF (touch-tone telephones) allows callers to interact with the
system. Advanced database technology permits reading, writing, appending and
searching database information. A user can record product inventory, set up
games, keep a record of patients or customers, and perform limitless other
applications. The advanced, innovative technology, backed by a simple,
easy-to-use drag-and-drop interface, makes writing applications simple.

                                       5
<PAGE>

     The iVoice IVR also incorporates an Internet access tool, which can be
either connected to the IVR system or run as a standalone. This IVR system also
has a graphical user interface and provides for Internet access to the system.
Once logged onto the Internet, a user can gain access to the IVR system by
clicking on a hypertext link for the user's browser. Upon entering the IVR
system, the response prompts are in text form rather than voice form. The user
can enter selections and get information by clicking on icons or choosing items
from menus. Some of the Internet applications available are order processing and
transactions, database integration, questions and queries, account status,
delivery information, funds transfer, and claims information.

     The following is a list of Speech-enabled applications, which the Company
has developed, and are available for sale

          Speech Enabled Auto Attendant. Any business can improve customer
     service and streamline the call handling process by allowing callers to
     reach their intended party by simply saying the appropriate name. Our
     speech recognition system is extremely accurate and reliable. The Speech
     Enabled Auto Attendant can significantly reduce or eliminate cumbersome
     dial by name or extension number menus and can be implemented without
     duplcating an organizations existing voicemail application.

          iVoice IVR (Interactive Voice Response). Enables a caller to obtain
     requested information in voice form from a local or non-local database.
     Examples of IVR range from simply selecting announcements from a list of
     options stored in the computer (also know as Audio Text) to more complex
     interactive exchanges such as querying a database for information. ).
     iVoice IVR allows information in PC databases to be accessed from a
     standard touch-tone telephone using a telephone keypad or voice commands.
     iVoice IVR is sold as a customized turnkey system or as an Application
     Generator giving the end user the ability to develop their own customized
     IVR application.

          Unified Messaging. This is a unified inbox application that combines
     voicemail functions, fax and email capabilities into one central location
     for easy retrieval from any communication source. With Unified Messaging,
     e-mail, voice mail and faxes can be handled through a desktop PC or the
     telephone. All messages can be viewed and acted upon in order of importance
     via Microsoft Outlook or a Web Browser. E-mail can be retrieved and heard
     over the telephone, using text-to-speech software that converts text to a
     spoken voice. The email message can then be responded to with a voice
     message and forwarded to either another person's telephone extension, email
     address or be directed to a fax machine.

          iVoice Name Dialer is an automatic phone dialing system. The system
     imports the necessary contact information for dialing (names and phone
     numbers) from a variety of sources including, but not limited to, Microsoft
     Outlook, ACT, and Gold Mine. The imported names are then transcribed,
     through software, into a set of phonemes that are used for voice
     recognition. When the end user picks up the handset, the call is
     automatically transferred through the PBX, to the Name Dialer application
     running on a server machine. The user simply says the name of the person
     (whose name came from the contact list) and the Name Dialer places the
     call.


                                       6
<PAGE>

          iVoice Speech Directory allows employees to pick up their phone, say
     the name of a co-worker they wish to speak to, and the Speech Directory
     will transfer the call. Just by speaking the person's name, the Speech
     Directory can also return an internal pager number, cell numbers and email
     listings through a voice activated telephony directory.

          iVoice Speech Software Developers Kit (SDK) iVoice Speech SDK is a
     unique tool for software application developers which provides the ability
     to convert common command and control functions to speech commands. The SDK
     allows software developers to write applications that can treat a user's
     voice as an input device, such as mouse, keyboard, or joystick. In addition
     to telephony applications, the SDK can be used to incorporate speech
     recognition into games, handheld devices and even household appliances.


     We employ highly qualified software engineers who continually work to
improve and enhance our existing products with new features, improved speech
recognition accuracy and improved call handling times.

Marketing and Distribution

     iVoice markets, promotes and sells its speech-enabled products through
primarily through telephony reseller channels and telephone equipment
manufacturer distributor networks. Management believes it can leverage those
resellers' existing customer bases and obtain a wider distribution network for
its products through already established channels. The Company also sells direct
to end users in geographic locations where an authorized reseller does not
exist. On direct sales orders, the Company is able to achieve greater profit
margins through higher direct selling prices


                                       7
<PAGE>

     iVoice has focused its efforts on developing its dealer and reseller
channels. Management believes it can leverage already existing telephone
equipment manufacturer reseller channels by integrating its speech recognition
software directly into their established revenue producing product lines. We
estimate that each major telephony equipment manufacturer has an estimated
150-600 authorized dealers and resellers throughout North America. The
introduction of an entirely TAPI (Telephone Application Program Interface) based
Speech Enabled Auto Attendant and Name Dialer, allows integration into different
PBX systems (telephone switches) without the need for additional hardware
devices making for a more economical installation. Although concentration on
resellers is the predominate and preferred sales channel, the Company also sells
directly to end-users via its direct sales force providing management with
information on market trends and changing customer needs. The direct channel
also provides an avenue more suitable for iVoice IVR applications that often
require customized development, which is usually difficult to provide through
the reseller network.

     Our marketing strategy emphasizes our user-friendly PC-based processing
applications that offer integrated access to a broad range of communication
mediums with other people and information sources. Our strategy is built around
the following basic elements:

          Emphasize software, not hardware. We concentrate our development
     efforts on software that meets our clients' needs rather than on designing
     or modifying hardware. This allows us to create the most value from our
     products and results in significantly higher profit margins than systems
     and applications that require expensive hardware components.

          Use of standard, Microsoft Windows-based architecture, open systems
     and hardware. Our products use standard, open-architecture PC platforms and
     operating systems rather than proprietary computer hardware and operating
     systems. As a result, we can quickly adapt to new PC-based technologies,
     leveraging the substantial investments made by third parties in developing
     these new technologies for the PC environment. In addition, using readily
     available hardware components and software minimizes our manufacturing
     activity and thereby reduces the overall cost of our products.

          Focus on businesses and corporate departments having as many as 20,000
     telephones. Our products are designed for use by businesses and corporate
     departments having as many 20,000 telephones in a wide range of markets,
     including manufacturing, retail, service, healthcare, and government. Our
     products offer features offered by large proprietary call processing
     systems, but at a more affordable price.

          Develop user-friendly products. We aim to make our products as easy as
     possible to install, maintain, and use. We accomplish this by incorporating
     product features that can be used without special training or manuals. Our
     products use a familiar graphical user interface that makes system
     administration and maintenance possible for almost any common PC user.

          Minimize distribution overhead. We are able to achieve broad market
     coverage in the U.S. via a nationwide network of independent telephone
     system dealers, and original-equipment-manufacturers, or "OEMs." This
     structure both minimizes our selling overhead and maximizes our product
     exposure, and allows us to focus our resources on product development.

New Products

     In February 2003, we introduced a significant enhancement to our speech
recognition technology that essentially adapts to an end-users calling
environment. Our speech recognition engine continuously analyzes incoming speech
input transforming the existing speech model to customized speaker models. The
models produced by the technique, compensate for speaker accents, telephone line
quality, and background noise at the customer site thereby boosting recognition
accuracy. As the model aligns itself to the customer environment, speed of
recognition per channel is greatly increased. The entire process is automated
and the models generated load themselves into the system without any user
interaction. The adaptation process can be performed any number of times to
re-train the system if the above conditions change. Over a period of time, the
trained model results in much faster and exceptional speech recognition accuracy
at the customer end.


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Competition

     The voice-recognition industry is highly competitive, and we believe that
as increased customer acceptance and improvements in the underlying technology
improves, the competition will intensify. The segment of the industry that
supplies call-processing systems to businesses is also extremely competitive.
Many of our competitors have longer operating histories, significantly greater
financial, technical, product development, and marketing resources, greater name
recognition or larger client bases than we do.

     For example, industry analysts recognize Nuance Communications, Inc., and
SpeechWorks International, Inc. as the market leaders in voice recognition
software. Customers of Nuance include American Airlines, Bell Atlantic, Charles
Schwab, Sears and UPS. Nuance offers products through industry partners,
platform providers, and value-added resellers around the world. Corporate
investors in Nuance include Cisco Systems, Intel, Motorola, SAIC, Siebel
Systems, SRI International, Sun Microsystems, and Visa International.
SpeechWorks customers include America Online, First Union National Bank,
Microsoft, Thrifty Car Rental and United Airlines.

     There are also a significant number of integrators who license the speech
recognition engines of Nuance, SpeechWorks and others, to develop and sell
applications of their own to the same customer profile that we market to. While
these solutions may offer similar features to our products, they are often more
expensive to the end user due to the required licensing fees paid by these
integrators to the speech engine manufacturers. iVoice pays no such licensing
fees for its speech recognition capabilities.

     On a more directly competitive scale, other companies that produce
computerized telephony systems that incorporate speech recognition into their
products such as the iVoice Speech Enabled Auto Attendant include companies like
Locus Dialogue, Phonetic Systems and Sound Advantage. Management believes that
the iVoice Speech Enabled Auto Attendant has competitive advantages based upon
product features, the accuracy of the speech recognition and product pricing.

Suppliers

     Our suppliers include Dialogic Corporation (an Intel company) that
distributes through a network of resellers for voiceboards, and iTox, Inc.,
Amer.com, Inc. and other computer component resellers for other components used
in our turnkey applications. Since our products are based and run on standard,
readily available PC architecture, we do not rely on any one specific supplier
for system components. We have not experienced any supply shortages with respect
to the components used in turnkey systems or developed applications.

Customers

     Direct customers are comprised of businesses, organizations and corporate
departments that use telephones as a principal means of communications.
Specifically, the end users of our products seek to automate the call handling
process for incoming callers to improve customer service and increase worker
productivity. The iVoice Speech Enabled Auto Attendant and iVoice IVR are our
primary products that seek to fulfill these customer needs. Customers who seek
to automate the call process for outbound calling are primary targets for the
iVoice Name Dialer and iVoice Patient Reminder.


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<PAGE>

     Wholesale customers include value added resellers and distributors of
telephony equipment throughout North America.

     For the year ended December 31, 2002, no one customer represented more than
6% of our total revenues. iVoice does not rely on any one specific customer for
any significant portion of its revenue base.

     We generally require customers to pay 50% down on any purchased turnkey
applications, with the balance due when installation has been completed. Sales
of software only require COD or prepayment before shipping. Authorized dealers
and resellers, with prior credit approval are given 30 day payment terms. iVoice
accepts company checks or Visa/Mastercard.

     Approximately 95% of our revenues are derived from customers located in
North America. The remaining 5% of revenues are derived from various locations
outside of North America.

Patents and Trademarks

     The Company currently has ten (10) patent applications pending with the
United States Patent and Trademark Office for speech enabled applications that
it has developed internally. These applications include various versions of the
"iVoice Speech Enabled Name Dialer", the "Voice Activated Voice Operated
Copier", the "Voice Activated Voice Operational Universal Remote Control", and
the "Voice Activated, Voice Responsive Product Locator."

     In February 2002, the Company filed a Trademark application for its
`iVoice' logo and approval is pending.

     In February 2003, the Company received a notice of allowance for a patent
from the U.S Patent and Trademark Office for our Speech-Enabled Automatic
Telephone Dialer (iVoice Name Dialer) using a seamless interface with computer
based address book programs.

Government Regulation

     The Company is subject to all pertinent Federal, State, and Local laws
governing its business. The Company is subject to licensing and regulation by a
number of authorities in its State or municipality. These may include health,
safety, and fire regulations. The Company's operations are also subject to
Federal and State minimum wage laws governing such matters as working conditions
and overtime.

     The Company is not subject to any necessary government approval or license
requirement in order to market, distribute or sell its principal or related
products other than ordinary Federal, State, and Local laws which governs the
conduct of business in general. The Company is unaware of any pending or
probable government regulations that would have any material impact on the
conduct of business.


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Research and Development

     Our research and development efforts focus on the enhancement of our
existing technology and product line as well as the development of new products
that integrate with our existing applications. We continually seek to improve
our core speech recognition technology to improve the accuracy of its speech
recognition. iVoice employs qualified technical personnel to keep our product
line competitive. In 2002, research and development expenditures consisted of
$222,992 in salaries and wages to the Company's technical staff and $6,187 for
technical hardware supplies, software tool-kits and technical publications. In
the year 2001, the Company recoded $380,692 in technical salaries and wages and
$6,772 for related supplies, tools and publications. Reductions in amounts
expended were deemed necessary for the conservation of capital resources.

Licenses

     We have purchased a worldwide, non-exclusive, irrevocable, royalty-free,
fully paid license from Entropic, Inc., a Microsoft company, to incorporate
their speech engine into customized software applications for our customers.

Employees

     As of December 31, 2002, we employed 11 individuals, consisting of 9
full-time employees and 2 part-time employees. None of our employees are
represented by a labor organization and we are not a party to any collective
bargaining agreements.

     In addition to other information in this Annual Report on Form 10-KSB, the
following important factors should be carefully considered in evaluating the
Company and its business because such factors currently have a significant
impact on the Company's business, prospects, financial condition and results of
operations.


Forward Looking Statements - Cautionary Factors

     Certain statements in this report on Form 10-KSB contain "forward-looking
statements" within the meaning of the Private Securities Litigation Act of 1995.
These statements are typically identified by their inclusion of phrases such as
"the Company anticipates", or "the Company believes", or other phrases of
similar meaning. These forward-looking statements involve risks and
uncertainties and other factors that may cause the actual results, performance
or achievements to differ from any future results, performance or achievements
expressed or implied by such forward-looking statements. Except for the
historical information and statements contained in this Report, the matters and
items set forth in this Report are forward looking statements that involve
uncertainties and risks some of which are discussed at appropriate points in the
Report and are also summarized as follows:

We have a history of losses, expect to encounter future losses and may not
achieve or sustain profitability.

     To date, we have incurred significant losses. As of December 31, 2002, our
accumulated deficit was $14,490,329. We will incur operating losses in the
future until sales of our voice-recognition applications and systems exceed our
administrative, selling, and research-and-development costs. Accordingly, we may
experience significant liquidity and cash flow problems because our operations
are not profitable. No assurances can be given that we will be successful in
reaching or maintaining profitable operations.


                                       11
<PAGE>

We will need to raise additional capital to finance operations

     We have relied on significant external financing to fund our operations.
Such financing has historically come from a combination of borrowings and sale
of securities from third parties and funds provided by certain officers and
directors. We cannot assure you that financing, whether from external sources or
related parties, will be available if needed or on favorable terms. Our
inability to obtain adequate financing could result in the need to curtail
business operations. Any of these events would be materially harmful to our
business and may result in a lower stock price. We will need to raise additional
capital to fund our anticipated operating expenses and future expansion. Among
other things, external financing may be required to cover our operating costs.

We have a working capital deficit, which means that our current assets on
December 31, 2002 were not sufficient to satisfy our current liabilities on that
date.

     We had a working capital deficit of $719,170 at December 31, 2002, which
means that our current liabilities exceeded our current assets on December 31,
2002 by $719,170. Current assets are assets that are expected to be converted
into cash within one year and, therefore, may be used to pay current liabilities
as they become due. A working capital deficit means that our current assets on
December 31, 2002 were not sufficient to satisfy all of our current liabilities
on that date.

Our accountants have expressed substantial doubt about our ability to continue
as an operating concern.

     In connection with the reports on our consolidated financial statements for
the fiscal years ending December 31, 2002 and 2001, our independent certified
public accountants expressed substantial doubt about our ability to continue
operating as a going concern. Their doubt was based on our low levels of cash,
our negative working capital, and our failure to establish a source of revenues
sufficient to cover our operating costs.

                                 Our Operations

We have a limited operating history.

     We did not begin our voice-recognition business until December 1997.
Accordingly, we have a limited operating history on which to base an evaluation
of our business and prospects.

The voice-recognition business is in its infancy.

     Our prospects are subject to the difficulties frequently encountered by
companies in the early stage of development in new and evolving markets. These
difficulties include the following: o substantial delays and expenses related to
testing and developing of our new products; o marketing and distribution
problems encountered in connection with our new and existing products and
technologies; o competition from larger and more established companies; o delays
in reaching our marketing goals; o difficulty in recruiting qualified employees
for management and other positions; o lack of sufficient customers, revenues and
cash flow; and o limited financial resources.


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<PAGE>

     We may continue to face these and other difficulties in the future, some of
which may be beyond our control. If we are unable to successfully address these
problems, our business will suffer.

                    We cannot accurately forecast our future revenues and
                    operating results, which may fluctuate.

     Our short operating history and the rapidly changing nature of the markets
in which we compete make it difficult to accurately forecast our revenues and
operating results. Furthermore, we expect our revenues and operating results to
fluctuate in the future due to a number of factors, including the following:

-    the timing of sales of our products and services;
-    the timing of product implementation, particularly large design projects;
-    unexpected delays in introducing new products and services;
-    increased expenses, whether related to sales and marketing, product
     development, or administration;
-    deferral in the recognition of revenue in accordance with applicable
     accounting principles, due to the time required to complete projects;
-    the mix of product license and services revenue; and
-    costs related to possible acquisitions of technology or businesses.


We may fail to develop new products, or may incur unexpected expenses or delays.

     Although we currently have fully developed products available for sale, we
are also developing various new technologies, products and product features and
will rely on them to remain competitive. Due to the risks inherent in developing
new products and technologies--limited financing, competition, obsolescence,
loss of key personnel, and other factors--we may fail to develop these
technologies and products, or may experience lengthy and costly delays in doing
so. Although we are able to license some of our technologies in their current
stage of development, we cannot assure that we will be able to develop new
products or enhancements to our existing products in order to remain
competitive.


                                       13
<PAGE>

Our technologies and products could contain defects or otherwise not work as
expected. We may incur significant expenses in attempting to correct these
defects or in defending lawsuits over any such defects

     Voice-recognition products are not currently accurate in every instance,
and may never be. Furthermore, we could inadvertently release products and
technologies that contain defects. In addition, third-party technology that we
include in our products could contain defects. We may incur significant expenses
to correct such defects. Clients who are not satisfied with our products or
services could bring claims against us for substantial damages. Such claims
could cause us to incur significant legal expenses and, if successful, could
result in the plaintiffs being awarded significant damages.

Our success is highly dependent upon our ability to compete against competitors
that have significantly greater resources than we do.

     The call-processing and voice-recognition industries are highly
competitive, and we believe that this competition will intensify. The segment of
the industry that supplies call-processing systems to businesses is also
extremely competitive. Many of our competitors have longer operating histories,
significantly greater financial, technical, product development, and marketing
resources, greater name recognition or larger client bases than we do. For
example, industry analysts recognize Nuance Communications, Inc., and
SpeechWorks International, Inc. as the market leaders. Customers of Nuance
include American Airlines, Bell Atlantic, Charles Schwab, Sears and UPS. Nuance
offers products through industry partners, platform providers, and value-added
resellers around the world. Corporate investors in Nuance include Cisco Systems,
Intel, Motorola, SAIC, Siebel Systems, SRI International, Sun Microsystems, and
Visa International. SpeechWorks customers include America Online, First Union
National Bank, Microsoft, Thrifty Car Rental and United Airlines.

Our success is highly dependent upon our ability to protect our trademarks and
proprietary rights.

     To succeed, we will need to protect our intellectual property rights. To
date, we have filed ten patent applications for internally developed processes
and applications. No assurances can be given that these patent applications will
be approved. To maintain the confidentiality of our trade secrets, we require
our employees, consultants, and distributors to enter into confidentiality
agreements, but these agreements afford us only limited protection and can be
time-consuming and expensive to obtain and maintain. Monitoring for unauthorized
use of our intellectual property is difficult, and we cannot be certain that the
steps we have taken will be effective to prevent unauthorized use. We may have
to litigate to enforce our trade secrets. Such lawsuits, regardless of their
merits, would likely be time consuming and expensive and would divert
management's' time and attention away from our business.


                                       14
<PAGE>

We may unintentionally infringe on the proprietary rights of others.

     Many lawsuits currently are being brought in the software industry alleging
violation of intellectual property rights. In addition, a large number of
patents have been awarded in the voice-recognition area. Although we do not
believe that we are infringing on any patent rights, patent holders may claim
that we are doing so. Any such claim would likely be time-consuming and
expensive to defend, particularly if we are unsuccessful, and could prevent us
from selling our products or services. In addition, we may also be forced to
enter into costly and burdensome royalty and licensing agreements.

We may be unable to attract and retain qualified employees, and we depend upon
key employees.

     Our future success depends on our finding, hiring, training, motivating,
and retaining highly qualified technical, managerial, and other personnel, but
we may not be able to meet our needs in this regard, given the considerable
competition for qualified employees. If we lose the services of any of our
executive officers or other key employees, our business could suffer.

Our sole director controls a significant percentage of stock

     As of March 1, 2003, Jerome R. Mahoney, our President, Chief Executive
Officer and sole director, owned approximately 91.9% of our outstanding shares
of our Class A common stock (assuming the conversion of outstanding shares of
Class B common stock and debt that is convertible into shares of Class B common
stock which is subsequently convertible into Class A common stock the number of
which is calculated by dividing the number of Class B Common Stock Shares being
converted by fifty percent (50%) of the lowest price that the Company had
previously issued its Class A Common Stock since the Class B Common Stock Shares
were issued). Mr. Mahoney is able to influence all matters requiring stockholder
approval, including the election of directors and approval of significant
corporate transactions. This concentration of ownership, which is not subject to
any voting restrictions, could limit the price that investors might be willing
to pay for our Class A common stock. In addition, Mr. Mahoney is in a position
to impede transactions that may be desirable for other stockholders. He could,
for example, make it more difficult for anyone to take control of us.

                                 Our Securities

We do not expect to pay dividends in the foreseeable future.

     We intend to retain any future earnings to finance the growth and
development of our business. Therefore, we do not expect to pay any cash
dividends in the foreseeable future. Any future dividends will depend on our
earnings, if any, and our financial requirements.

The price of our stock may be affected by a limited trading volume and may
fluctuate significantly

     There has been a limited public market for our Class A common stock and
there can be no assurance that an active trading market for our stock will
continue. An absence of an active trading market could adversely affect our
stockholders' ability to sell our Class A common stock in short time periods, or
possibly at all. Our Class A common stock has experienced, and is likely to
experience in the future, significant price and volume fluctuations which could
adversely affect the market price of our stock without regard to our operating
performance. In addition, we believe that factors such as quarterly fluctuations
in our financial results and changes in the overall economy or the condition of
the financial markets could cause the price of our Class A common stock to
fluctuate substantially.


                                       15
<PAGE>

     Our class A common stock is deemed to be "penny stock," which may make it
more difficult for investors to sell their shares due to suitability
requirements

     Our Class A common stock is deemed to be "penny stock" as that term is
defined in Rule 3a51-1 promulgated under the Securities Exchange Act of 1934.
These requirements may reduce the potential market for our Class A common stock
by reducing the number of potential investors. This may make it more difficult
for investors in our Class A common stock to sell shares to third parties or to
otherwise dispose of them. This could cause our stock price to decline. Penny
stocks are stock: o With a price of less than $5.00 per share o That are not
traded on a "recognized" national exchange; o Whose prices are not quoted on the
Nasdaq automated quotation system (Nasdaq listed stock must still have a price
of not less than $5.00 per share); or o In issuers with net tangible assets less
than $2.0 million (if the issuer has been in continuous operation for at least
three years) or $5.0 million (if in continuous operation for less than three
years), or with average revenues of less than $6.0 million for the last three
years.

     Broker/dealers dealing in penny stocks are required to provide potential
investors with a document disclosing the risks of penny stocks. Moreover,
broker/dealers are required to determine whether an investment in a penny stock
is a suitable investment for a prospective investor.

Future sales of our Class A common stock could cause our stock price to decline.

     The sale of a large number of our shares, or the perception that such a
sale may occur, could lower our stock price. Such sales could make it more
difficult for us to sell equity securities in the future at a time and price
that we consider appropriate. As of December 31, 2002, approximately 29,876,264
shares of our Class A common stock could be considered "restricted securities"
and saleable only upon registration under the Securities Act of 1933, upon
compliance with Rule 144 of the Securities Act, or pursuant to another exemption
from registration. Many of these shares will be eligible for sale in the public
market in 2003.

Issuance of our reserved shares of Class A common stock may significantly dilute
the equity interest of existing stockholders.

     We have reserved for issuance, shares of our Class A common stock upon
exercise or conversion of stock options, warrants, or other convertible
securities that are presently outstanding. Issuance of these shares will have
the effect of diluting the equity interest of our existing stockholders and
could have an adverse effect on the market price for our Class A common stock.
As of December 31, 2002, we had approximately 5,123,466,715 shares of Class A
common stock reserved for possible future issuance.


                                       16
<PAGE>

We are in breach of obligations relating to our 12% senior convertible
debentures.

     Holders of our 12% senior convertible debentures have told us that we have
breached a number of the terms of the debentures and the related registration
rights agreement and security agreement. Breach of the terms of the debentures
could result in the following: (1) a 20% increase in the principal amount of the
debentures; (2) an increase in the debentures' annual interest rate to 15%
commencing seven days after the date of default through the date that the
debentures are converted or repaid; and (3) the debentures immediately becoming
due in full. Additionally, we have not registered the shares issuable upon
conversion of the debentures. This could result in our being required to pay
liquidated damages of 2.5% per month of the principal amount of the debentures
from November 7, 1999, the date on which we were required to register the
shares. These increased interest amounts and liquidating damages have not been
accrued and do not appear on our financial statements. We anticipate having to
issue additional shares to settle the debenture holders, claims arising from our
default on the 12% senior convertible debentures.

     We have settled with one previous holder of debentures regarding the
interest and penalties demanded by this former holder. As part of this
settlement, we issued 450,000 shares of our Class A common stock to this former
holder in full satisfaction of its claims.

     We endeavor to settle with the remaining debenture holders attempting to
resolve the default issues in a mutually favorable manner. If we are unable to
do so, we may be forced to pay the debenture holders amounts substantially in
excess of our original obligations under the debentures.

Reports to Security Holders

     The Company is a "reporting company" and it files reports with the
Securities and Exchange Commission. In this regard, the Company files quarterly
reports on Form 10-QSB, annual reports on Form 10-KSB and as required, files
reports on Form 8-K.

     The public may read and copy any materials the Company files with the
Securities and Exchange Commission at the Commission's Public Reference Room at
450 Fifth Street, N.W., Washington, D.C. 20549. The public may obtain
information on the operation of the Public Reference Room by call the Commission
at 1-800-SEC-0330. The Commission maintains an Internet site that contains
reports, proxy and information statements, and other information regarding
issuers that file electronically with the Commission. The Internet address of
the Commission's site is (http://www.sec.gov).

 Item 2. Description of Property.

     iVoice does not own any real property for use in its operations or
otherwise.


                                       17
<PAGE>

     The Company leases its approximately 4,200 square feet of space for its
headquarters located at 750 Highway 34, Matawan, New Jersey. The lease is
presently a month-to-month obligation of $8,000 per month. iVoice maintains a
good relationship with its landlord and believes that its current facilities
will be adequate for the foreseeable future.

Item 3. Legal Proceedings.

     The Company is subject to litigation from time to time arising from its
normal course of operations. Currently, there are no open litigation matters
relating to the Company's products, product installations or techincal services
provided. Management does not believe that any such litigation and claims that
have arisen will have a material effect on the Company's financial position or
results of operations.

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

     On October 15, 2003, certain shareholders of iVoice, Inc. (hereinafter
referred to as the "Company"), having more than fifty percent (50%) of the total
voting shares of the Company, provided their written consent to cover the
following shareholder actions: o Amend the Certificate of Incorporation to
increase in the Authorized Class A Common Stock Shares to a total of ten billion
(10,000,000,000) shares. o Amend the Certificate of Incorporation to change the
stated par value of the Class A Common Stock Shares from the present $.001 to
$.0001 per share. o Amend the Certificate of Incorporation to increase in the
Authorized Class B Common Stock Shares to a total of fifty million (50,000,000)
shares. o Amend the Certificate of Incorporation to revise the conversion ratio
and voting rights of Class B Common Stock Shares. o Amend the Certificate of
Incorporation to permit Class B Common Stock Shares to receive dividends upon
the declaration of a dividend to Class A Common Stock shareholders. o Authorize
the merger of the Company into a newly formed corporation in the State of New
Jersey for the sole purpose of changing the domicile of the Company from the
State of Delaware to the State of New Jersey.

Out of a total of 440,424,510 eligible votes on October 15, 2003, 224,685,030
shares or 51.02% were cast in favor of the all of the above shareholder actions.



                                     PART II


Item 5. Market for Common Equity and Related Stockholder Matters.


                                       18
<PAGE>

Market Information

         Our common stock is quoted on the OTC Bulletin Board under the symbol
"IVOC." The following table shows the high and low closing prices for the
periods indicated.
<TABLE>
<CAPTION>

        2001                            High                                   Low
       <S>                               <C>                                    <C>
        First Quarter                   $0.4000                                $0.0950
        Second Quarter                  $0.1700                                $0.0500
        Third Quarter                   $0.0820                                $0.0430
        Fourth Quarter                  $0.0900                                $0.0400

        2002

        First Quarter                   $0.0590                                $0.0270
        Second Quarter                  $0.0380                                $0.0120
        Third Quarter                   $0.0017                                $0.0013
        Fourth Quarter                  $0.0031                                $0.0009
</TABLE>

Holders of Common Equity.

     As of December 31, 2002, the number of record holders of our common shares
was approximately 559.

Dividend Information.

     To date, the Company has never paid a dividend. We have no plans to pay any
dividends in the near future. We intend to retain all earnings, if any, for the
foreseeable future, for use in our business operations.

Sales of Unregistered Securities.

     In the year ending December 31, 2002, the Company issued the following
unregistered securities pursuant to various exemptions from registration under
the Securities Act of 1933:

-    We issued 10,000 shares of its Class A Common Stock for partial payment of
     leasehold improvements valued at $540.

-    We issued 2,250,000 shares of Class A Common Stock for legal services
     valued at $45,000.

-    We issued 26,000,000 shares of Class A Common Stock for consulting services
     valued at $29,380.

-    We issued 505,921 shares of Class A Common Stock for the conversion of
     $15,000 in debenture principal and 84,766 shares for $2,594 in accrued
     interest on its 8% Convertible Debentures.


                                       19
<PAGE>

-    We issued 22,229,230 shares of Class A Common Stock for the conversion of
     $79,000 in debenture principal and 4,279,750 shares of Class A Common Stock
     for the conversion of $93,085 in accrued interest on its outstanding 12%
     Convertible Debentures.

-    We issued 6,200,000 shares of Class A common stock for fees and services
     associated with the financing agreement with Cornell Capital, LP, valued at
     $117,800.

-    We issued 125,729,915 shares of Class A common stock for the conversion of
     $185,000 in debenture principal and 3,915,218 shares of Class A Common
     Stock for the conversion of $4,725 in accrued interest on our 5%
     Convertible Debentures.

-    We issued 173,362,846 shares of Class A common stock with a total value of
     $253,665. Of this amount, $235,333 was for repayment of principal on
     $470,000 of notes payable, issued as advances on the equity line financing
     with Cornell Capital Partners, LP. The balance of $18,332 was market
     discount charged to expense.

     We relied upon the exemption provided in Section 4(2) of the Securities Act
and/or Rule 506 thereunder, which cover "transactions by an issuer not involving
any public offering," to issue securities discussed above without registration
under the Securities Act of 1933. The Company made a determination in each case
that the person to whom the securities were issued did not need the protections
that registration would afford. The certificates representing the securities
issued displayed a restrictive legend to prevent transfer except in compliance
with applicable laws, and our transfer agent was instructed not to permit
transfers unless directed to do so by our Company, after approval by our legal
counsel. The Company believes that the investors to whom securities were issued
had such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of the prospective investment. The
Company also believes that the investors had access to the same type of
information as would be contained in a registration statement.

Description of Securities

     Pursuant to our certificate of incorporation, as amended on January 15,
2003, we are authorized to issue:

-    10,000,000,000 shares of Class A common stock, par value $0.0001 per share,

-    50,000,000 shares of Class B common stock, no par value and

-    1,000,000 shares of preferred stock, par value of $1.00 per share.

Class A Common Stock

     Each holder of our Class A common stock is entitled to one vote for each
share held of record. Holders of our Class A common stock have no preemptive,
subscription, conversion, or redemption rights. Upon liquidation, dissolution or
winding-up, the holders of our Class A common stock are entitled to receive our
net assets pro rata. Each holder of Class A common stock is entitled to receive
ratably any dividends declared by our board of directors out of funds legally
available for the payment of dividends. We have not paid any dividends on our
common stock and do not contemplate doing so in the foreseeable future. We
anticipate that any earnings generated from operations will be used to finance
our growth.

     A total of 703,255,106 shares of our Class A common stock were issued and
702,655,106 shares were outstanding as of March 1, 2003.

Class B Common Stock

     Each share of Class B Common Stock is convertible into Class A Common Stock
Shares calculated by dividing the number of Class B Common Stock Shares being
converted by fifty percent (50%) of the lowest price that the Company had
previously issued its Class A Common Stock since the Class B Common Stock Shares
were issued. Each holder of Class B common stock has voting rights equal to the
number of Class A Common Stock Shares that would be issued upon the conversion
of the Class B Common Stock Shares, had all of the outstanding Class B Common
Stock Shares been converted on the record date used for purposes of determining
which shareholders would vote. Holders of Class B common stock are entitled to
receive dividends in the same proportion as the Class B Common Stock conversion
and voting rights have to Class A common stock. Jerome R. Mahoney is the sole
owner of the Class B common stock. Effective with an amendment to our
certificate of incorporation on January 15, 2003, there are 50,000,000 shares
authorized and 2,204,875 shares issued and 1,836,875 shares outstanding as of
March 1, 2003.


                                       20
<PAGE>

     Pursuant to the conversion terms of the Class B Common stock, on March 1,
2003, the 1,836,875 outstanding shares of Class B common stock are convertible
into 5,332,002,902 shares of Class A common stock.

Preferred Stock

     We are authorized to issue 1,000,000 shares of preferred stock, par value
$1.00 per share. As of March 1, 2003, we have not issued any shares of preferred
stock.

     Our board of directors is authorized (by resolution and by filing an
amendment to our certificate of incorporation and subject to limitations
prescribed by the General Corporation Law of the State of Delaware) to issue,
from to time, shares of preferred stock in one or more series, to establish from
time to time the number of shares to be included in each series, and to fix the
designation, powers, preferences and other rights of the shares of each such
series and to fix the qualifications, limitations and restrictions thereon,
including, but without limiting the generality of the foregoing, the following:

-    the number of shares constituting that series and the distinctive
     designation of that series;

-    the dividend rate on the shares of that series, whether dividends are
     cumulative, and, if so, from which date or dates, and the relative rights
     of priority, if any, of payment of dividends on shares of that series;

-    whether that series has voting rights, in addition to voting rights
     provided by law, and, if so, the terms of those voting rights;


                                       21
<PAGE>

-    whether that series has conversion privileges, and, if so, the terms and
     conditions of conversion, including provisions for adjusting the conversion
     rate in such events as our board of directors determines;

-    whether or not the shares of that series are redeemable, and, if so, the
     terms and conditions of redemption, including the dates upon or after which
     they are redeemable, and the amount per share payable in case of
     redemption, which amount may vary under different conditions and at
     different redemption dates;

-    whether that series has a sinking fund for the redemption or purchase of
     shares of that series, and, if so, the terms and amount of that sinking
     fund;

-    the rights of the shares of that series in the event of voluntary or
     involuntary liquidation, dissolution or winding up of iVoice, and the
     relative rights of priority, if any, of payment of shares of that series;
     and

-    any other relative powers, preferences and rights of that series, and
     qualifications, limitations or restrictions on that series.

     If we liquidate, dissolve or wind up our affairs, whether voluntarily or
involuntarily, the holders of preferred stock of each series will be entitled to
receive only that amount or those amounts as are fixed by the certificate of
designations or by resolution of the board of directors providing for the
issuance of that series.

Options and Warrants

     As of December 31, 2002, our employees held options to purchase 6,891,083
shares of our Class A common stock. These options were granted to our employees
under our 1999 Stock Option Plan. The exercise prices ranged from $0.009 to
$3.75 per share. All options issued to employees vest at 25% per year and expire
5 years form the date of issue. As of December 31, 2002, 705,333 of the options
were exercisable at a weighted average exercise price of $0.576 per share.

     As of December 31, 2002, we had outstanding, to persons other than
employees, warrants to purchase 6,558,260 shares of our Class A common stock.
These warrants have exercise prices ranging from $0.047 per share to $2.00 per
share, with a weighted average exercise price of $0.135 per share. These
warrants will expire at various times until May 1, 2006.

     Debt

     As of December 31, 2002, we had outstanding convertible debentures that are
convertible into iVoice's Class A common stock at the option of the holder.

     Our 12% debentures are convertible into shares of the Company's Class A
Common Stock at the option of the holder by dividing the outstanding principal
and interest by the conversion price which shall equal 50% of the average bid
price during the 20 trading days before the conversion date. As of December 31,
2002, $384,200 in principal and $99,644 in accrued interest had been converted
into 30,463,005 shares of the Company's Class A Common Stock. Total outstanding
principal balance of the 12% convertible debentures at December 31, 2002 was
$115,800 plus accrued interest of $23,519.


                                       22
<PAGE>

     In August and November 2002, iVoice borrowed a total of $470,000 from
Cornell Capital Partners, and are evidenced by two promissory notes. One note
was issued in August 2002 in the principal amount of $250,000. This note is due
120 days after issuance. This note bears interest at 8% per year if not paid by
the maturity date. The second note was issued in November 2002 in the principal
amount of $220,000. This note is due 150 days after issuance. This note bears
interest at 12% per year if not paid by the maturity date. As of December 31,
2002, iVoice owed Cornell Capital Partners an aggregate of $234,667 under these
two promissory notes. The proceeds under these notes represent advances under
the Equity Line of Credit that will be repaid through the issuance of Class A
common stock pursuant the terms of the Equity Line of Credit agreement with
Cornell.

Item 6. Management's Discussion and Analysis or Plan of Operation.

     This discussion and analysis of our financial condition and results of
operations includes "forward-looking" statements that reflect our current views
with respect to future events and financial performance. We use words such as we
"expect," "anticipate," "believe," and "intend" and similar expressions to
identify forward-looking statements. You should be aware that actual results may
differ materially from our expressed expectations because of risks and
uncertainties inherent in future events and you should not rely unduly on these
forward looking statements. We will not necessarily update the information in
this discussion if any forward-looking statement later turns out to be
inaccurate.

     This discussion and analysis of financial condition and results of
operations should be read in conjunction with our Financial Statements included
in this filing.

Plan of Operation.

     To date, iVoice has incurred substantial losses, does not produce enough
cash from operations to cover its operating cash requirements and will require
additional financing in the next twelve months. This financing may include the
issuance of common stock or instruments that are convertible into common stock,
which have a dilutive effect on current shareholders. We are unsure whether we
will be able to secure sufficient financing to meet our current operating
requirements.

     Our desired distribution channel is through Original Equipment
Manufacturers (OEMs) and Value Added Resellers (VARs). iVoice is currently
focused on developing its dealer and reseller channels to increase market share.
Management believes it can leverage already existing equipment manufacturer's
reseller channels by integrating its speech recognition software directly into
their established revenue producing product lines. The TAPI interface allows for
rapid and economical deployment to new and existing end users operating on a
TAPI platform. Management is cognizant of the opportunities that exist in
obtaining an OEM agreement with manufacturers whereby iVoice software can be
shipped within the manufacturers PBX system and deployed directly upon system
installation. We distribute our software products through a network of
authorized dealers and distributors throughout North America and also sell
direct to end users in geographic locations where an existing dealer
relationship does not exist. We provide thorough installation and training to
dealers allowing them to provide end customer support.


                                       23
<PAGE>

     We continue to search for potential merger candidates with or without
compatible technology and products, which Management feels may make financing
more appealing to potential investors. In November 2002, we announced signing a
Letter of Intent to purchase substantially all of the assets of a leading food
equipment maintenance contractor located in New Jersey. Subsequently, the
parties terminated the Letter of Intent and released each other from any
obligations arising under the Letter of Intent.

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

     The Company's Research & Development efforts have produced greater product
reliability and have added features to existing products already available that
we believe make our products highly competitive in the marketplace. We recently
announced a new training adaptation system to our speech recognition engine that
dramatically enhances recognition accuracy.

     Provided sufficient funding is obtained, the Company intends to hire
additional personnel in the next twelve months particularly in the sales
department.

December 31, 2002 compared to December 31, 2001

     Sales for the year ended December 31, 2002 were $646,560, an increase of
$220,612 or 51.8% as compared to sales of $425,948 for the year ended December
31, 2001. The increase was largely attributable to an increase in sales of its
Speech Enabled Auto Attendant application. For the years ended December 31, 2002
and 2001, total turnkey and software only sales of our Speech Enabled Auto
Attendant, amounted to $239,921 and $99,536 respectively, an increase of
$140,385 or 141.0%. IVR sales totaled $264,282 for the year ending December 31,
2002 as compared to $205,485 for the year ending December 31, 2001 an increase
of $58,795 or 28.6%. Other revenues from the sale of other software and related
hardware products as well as maintenance, installation and support fees totaled
$142,357 and $120,926 for the years ended December 31, 2002 and 2001
respectively, an increase of $21,431 or 17.7%

     For the three months ending December 31, 2002, the Company recorded sales
of $188,207 as compared to $122,000 for the three months ending December 31,
2001, an increase of $66,207 or 54.3%.

     The Company's gross profit for the year ended December 31, 2002 was
$462,254, an increase of $203,535 or 78.7% compared to $258,719 for the year
ending December 31, 2001. The Company's gross margin percentage for the twelve
months ended December 31, 2002 was 71.5% versus 60.7% for the prior year. This
represents a 10.8% increase over the gross profit percentage recorded for the
same prior year period. The gross margin is dependent, in part, on product mix,
which fluctuates from time to time; complexity of a communication system
installation which determines necessary hardware requirements and may not have a
proportionate relationship with the system selling price; and the ability of
Company technology personnel to efficiently configure and install the Company's
communications products. The dollar amount of gross profit has increased as a
result of increased revenues for the comparative periods. The increase in gross
margin percentages year over year is a result of a more favorable product mix.


                                       24
<PAGE>

     Operating expenses decreased from $3,035,992 for the year ended December
31, 2001 to $2,262,627 for the year ended December 31, 2002 a decrease of
$773,365 or 25.5%. Material changes in specific classifications of operating
expenses include a decrease in total payroll and benefit costs of $952,558.
While the current year reflects an income tax reimbursement charge of $45,605
for income tax incurred by Jerome R. Mahoney for sales of Class A common stock
which he sold in order to provide working capital to the Company, the prior year
included a similar tax reimbursement accrual amounting to $95,100 as well as
accruals for reimbursement to Mr. Mahoney for a charitable donation of his
personal holdings of iVoice Class A common stock valued at $350,000. This
reduction in reimbursements to the Company president was the most significant
decrease in operating expenses year over year. Also contributing to the decrease
in operating expense was a reduction in professional fees of $151,634; a
reduction in rent expense of $60,900 and a reduction in advertising and
promotion of $22,753. Offsetting the decreases in the specific operating expense
items described above were an increase in charges for the reduction of strike
prices on previously issued warrants, a charge of $175,833 related to the
write-down of goodwill and an increase to bad debt expense of $45,751.

     The net loss from operations for the year ending December 31, 2002 was
$1,800,373 compared to $2,777,273 for the year ended December 31, 2001. This
decrease of $976,900 was a result of the increase in net revenues and gross
profit from year to year combined with lower operating expenses in current year
as described above.

     Other income for the year ended December 31, 2002, included amounts
received for participation in the New Jersey Technology Tax Certificate Transfer
Program for the sale of the Company's unused State net-operating-loss carry
forwards. After related commissions and expenses related to application
submission the Company received cash proceeds of $152,473. Also included in
other income was income from forfeited employee stock compensation totaling
$28,800. None of these items were incurred in the year ending December 31, 2001.

     Other expense for the year ended December 31 2002 and 2001 was comprised of
interest expense. Total other expense decreased $229,801 to $440,360 in the year
ended December 31, 2002 compared to $670,161 in 2001. Interest expense reflects
interest on the Company's outstanding convertible debentures and promissory
notes, interest on related party and capital lease obligations as well as
discounts charged to expense for the beneficial conversion features related to
the Company's convertible debt obligations.


                                       25
<PAGE>

     Net Loss decreased $1,387,974 to $2,059,460 for the year ended December 31,
2002 compared to $3,447,434 for the year ended December 31, 2001 as a result of
the factors discussed above.

Liquidity and Capital Resources

     During the year ended December 31, 2002 and 2001, the Company generated
sales of $646,560 and $425,948, incurred net losses of $2,059,460 and $3,447,434
and had cash flow deficiencies from operating activities of $351,840 and
$872,481, respectively. Additionally, iVoice had a cash balance of $566,345, a
working capital deficit of $719,170 and an accumulated deficit of $14,490,329 at
December 31, 2002. These matters raise substantial doubt about iVoice's ability
to continue as a going concern.

     The primary source of financing for iVoice has been through the issuance of
common stock and debt that is convertible into common stock of the Company. On
December 31, 2002, iVoice had total liabilities of $1,363,916, consisting of
accounts payable and accrued expenses of $360,106, obligations under capital
leases of $13,928, notes payable of $234,667, deferred revenue of $24,156,
convertible debentures of $115,800 and amounts due to related parties of
$615,259. During the year ended December 31, 2002, $1,504,875 of the amounts due
to related parties was converted into 1,504,875 shares of Class B common stock.
It is anticipated that the remaining balance due on our outstanding convertible
debentures and notes payable will be satisfied by the issuance of shares of
Class A common stock. Other current obligations consisting primarily of trade
accounts payable and accrued liabilities requiring payment in cash within the
first six months of 2003 total $374,038. At December 31, 2002, the Company had
cash balances on hand of $566,345.

     iVoice's primary need for cash is to fund its ongoing operations until such
time that the sale of products generates enough revenue to fund operations.
There can be no assurance as to the receipt or timing of revenues from
operations. iVoice anticipates that its operations will require at least $82,000
per month. These monthly expenses are anticipated to consist of the following:
payroll and benefits of $50,000, occupancy costs of $8,700, sales and marketing
expenses of $5,200, professional fees of $6,000, insurance of $1,500, and
miscellaneous administrative obligations and expenses of $10,600. We expect to
fund these monthly obligations from the proceeds anticipated to be received from
the Equity Line of Credit, from current operations or otherwise from the sale of
equity or debt securities. In addition, the Company's need for cash includes
satisfying total current liabilities of $374,038 as described in the preceding
paragraph. iVoice believes that it has sufficient funds on-hand to fund its
operations for at least six months. Thereafter, iVoice will need to raise
additional capital from the sale of equity under the financing agreement
currently in place with Cornell Capital Partners, LP.

     During the year ended December 31, 2002, iVoice had a net increase in cash
of $480,802. iVoice's principal sources and uses of funds in the year ended
December 31, 2002, were as follows:

     Cash used by operating activities. iVoice used $351,840 in cash for
operating activities in the year ended December 31, 2002 a decrease of $510,641
compared to $872,481 in cash used for operating activities in the year ending
December 31, 2001. This reduction is primarily due to a reduction in the
Company's overall operating budget that included substantial reductions in staff
and rent. These operating cuts have reduced the Company's operating expenses in
the current year by $773,367.


                                       26
<PAGE>

     Cash used in financing activities. Financing activities in the year ended
December 31, 2002 provided a total of $838,311 in cash. This total consisted
primarily of the issuance of common stock of $253,662, collections of stock
subscriptions of $317,000; the sale of convertible debentures of $255,000 and
advances under the Equity Line of Credit with Cornell Capital of $470,000. These
amounts were partially offset by the repayment of related party obligations of
$117,000, repayment of notes payable and convertible debentures of $305,333 and
repayment of capital leases totaling $35,018.

     Below is a description of iVoice's principal sources of funding since June
2002:

     In June 2002, we entered into an Equity Line of Credit with Cornell Capital
Partners, L.P. Pursuant to the Equity Line of Credit, we may, at our discretion,
periodically sell to Cornell Capital Partners shares of Class A common stock for
a total purchase price of up to $5.0 million. For each share of Class A common
stock purchased under the Equity Line of Credit, Cornell Capital Partners will
pay 91% of the lowest closing bid price on the Over-the-Counter Bulletin Board
or other principal market on which our common stock is traded for the 5 days
immediately following the notice date. Cornell Capital Partners is a private
limited partnership whose business operations are conducted through its general
partner, Yorkville Advisors, LLC. Further, Cornell Capital Partners will retain
5% of each advance under the Equity Line of Credit. In addition, iVoice engaged
Westrock Advisors, Inc., a registered broker-dealer, to advise it in connection
with the Equity Line of Credit. For its services, Westrock Advisors received
500,000 shares of iVoice's Class A common stock. On August 14, 2002, iVoice
registered 399,500,000 shares of Class A common stock to be issued under the
Equity Line of Credit.

     In August and November 2002, iVoice borrowed a total of $470,000 from
Cornell Capital partners, evidenced by two promissory notes. One note was issued
in August 2002 in the principal amount of $250,000. This note is due 120 days
after issuance. This note bears interest at 8% per year if not paid by the
maturity date. The second note was issued in November 2002 in the principal
amount of $220,000. This note is due 150 days after issuance. This note bears
interest at 12% per year if not paid by the maturity date. As of January 15,
2003, iVoice owed Cornell Capital Partners an aggregate of $179,671 under these
two promissory notes. The proceeds under these notes represent advances under
the Equity Line of Credit that we anticipate will be repaid through the issuance
of Class A common stock pursuant the terms of the Equity Line of Credit
agreement.

     Through December 31, 2002, iVoice has issued a total of 173,362,846 shares
of Class A common stock for repayment of $235,333 in principal on the $470,000
of notes payable issued for advances on the equity line financing with Cornell
Capital Partners, LP.

     In June 2002, We also raised $255,000 from the sale of convertible
debentures. These debentures are convertible into shares of Class A common stock
at a price equal to either (a) an amount equal to one hundred twenty percent
(120%) of the closing bid price of the common stock as of the closing date or
(b) an amount equal to eighty percent (80%) of the average closing bid price of
the common stock for the four trading days immediately preceding the conversion
date. These convertible debentures accrue interest at a rate of 5% per year and
are convertible at the holder's option. These convertible debentures have a term
of two years. As of December 31, 2002, all amounts outstanding under these
convertible debentures have been redeemed. iVoice repaid $70,000 in cash and
issued 129,645,133 shares of Class A common stock upon conversion of $185,000 in
principal and $4,725 in interest, due under these debentures.


                                       27
<PAGE>

     In February 2003, we amended the Equity Line Credit agreement with Cornell
Capital Partners, LP. The principal terms of this new agreement are
substantially identical to the terms pursuant to the Equity Line of Credit
Agreement entered into in June 2002 with Cornell. Under this new agreement, the
Company registered for resale with the Securities and Exchange Administration a
total of 5,000,000,000 Class A common shares for a maximum commitment of
$5,000,000.

     Other than the Equity Line of Credit, no other financing agreement is
currently available to us. In light of this, it should be noted that there is no
assurance that the Equity Line of Credit will enable us to raise the requisite
capital needed to implement our long-term growth strategy or that alternative
forms of financing will be available. Current economic and market conditions
have made it very difficult to raise required capital for iVoice to implement
its business plan.

     In relation to iVoice's outstanding 12% Convertible Debentures which are
currently in default, iVoice has reached settlement terms with one previous
holder of debentures regarding the interest and penalties demanded by this
former holder whereby iVoice has issued 450,000 shares to this former holder in
full settlement of the former debenture holder's claim. iVoice continues its
discussions with the remaining debenture holders attempting to resolve the
default issues in a mutually favorable manner. However, it is uncertain whether
iVoice will be able to reach an agreement under terms favorable to iVoice.

Item 7. Financial Statements.

     The financial statements and notes thereto, together with the report
thereon of Mendlowitz Weitsen, LLP. (the Company's accountants) dated February
27, 2003, included elsewhere in this report, are incorporated by reference in
answer to this Item 7 and the Financial Statements and Financial Statement
Schedules Indexes to financial statements appear after the signature page to
this Form 10-KSB.


                                    Part III

Item 9. Directors, Executive Officers, Promoters and Control Persons; Compliance
        With Section 16(a) of the Exchange Act.

The Company has one director who is also one of the Company's two principal
officers. He has served in the position shown since May 1999, and is expected to
continue to serve until the next annual meeting of shareholders.

                                       28
<PAGE>


                                                             Period Served as
Name                    Age        Position                  Officer\Director
------------------      ---        --------                  -----------------
Jerome R. Mahoney       42         President, CEO, Director  5-21-99 to present

Kevin Whalen            39         CFO                       5-16-00 to present

     There are no agreements or understandings for the officers or director to
resign at the request of another person and the above-named officers and
director is not acting on behalf of nor will act at the direction of any other
person.

     Jerome Mahoney sold shares of the Company's Class A common stock in the
open market to loan the Company monies pursuant to the Promissory Note and
Security Agreement executed by Mr. Mahoney and iVoice, Inc. on March 20, 2001.
Due to an oversight, although these sales were made under Rule 144 of the
regulations promulgated by the Securities and Exchange Commission under the
Securities Act of 1933, he failed to file the requisite Form 4. The proper forms
will be filed with the SEC within the next ten days.

Business Experience

     Jerome R. Mahoney. Mr. Mahoney has been our Chief Executive Officer and our
sole director since May 21, 1999. Mr. Mahoney started at Executone Information
Systems, a telephone systems manufacturer, and was Director of National Accounts
from 1988 to 1989. In 1989, Mr. Mahoney founded Voice Express, Inc., a New York
company that sold voicemail systems and telephone system service contracts and
installed these systems. Mr. Mahoney sold Voice Express Systems in 1993. From
1993 to 1997, Mr. Mahoney was President of IVS Corp., and on December 17, 1997,
he established International Voice Technologies, which we merged with on May 21,
1999. Mr. Mahoney received a B.A. in finance and marketing from Fairleigh
Dickinson University, Rutherford, N.J. in 1983.

     Kevin Whalen. Mr. Whalen has been a Certified Public Accountant since 1988
and has over 10 years experience in public accounting and 7 years experience in
industry. From 1996 to 2000, he served as the Corporate Controller for Willcox
and Gibbs, Inc., a $160 million international sales and distribution company. He
was responsible for preparing consolidated analytical statements and SEC filings
and managing the company's independent audits, and assisted in the registration
of an $85 million public bond offering. From 1986 to 1996, Mr. Whalen was the
Tax Supervisor for Curchin and Company, P.A., where he was responsible for
compilation and review engagements as well as developing tax-planning strategies
for business and individual clientele. Mr. Whalen received a B.S. in Commerce
from Rider College, Lawrenceville, N.J. in 1986 and is a member of the American
Institute of Certified Public Accountants.

Item 10. Executive Compensation.

     The following table sets forth compensation information for services
rendered by certain of our executive officers in all capacities during the last
three completed fiscal years. The following information includes the dollar
value of base salaries, bonus awards, the number of stock options granted, and
certain other compensation, if any, whether paid or deferred.


                                       29
<PAGE>
<TABLE>
<CAPTION>

                           Summary Compensation Table

                                                                                          Securities
                                                             Other Annual   Restricted    Underlying      All Other
                                                             Compensation      Stock        Options      Compensation
Name and Position(s)          Year     Salary($)   Bonus
<S>                            <C>    <C>          <C>        <C>               <C>          <C>             <C>
Jerome R. Mahoney
   Chief Executive Officer     2002    $232,320      0       $45,605 (3)         0             0           $4,729 (7)
   and President
                               2001    $211,200   $75,000    $95,100 (3)         0             0         $354,416 (7)
                               2000    $192,000      0       $34,000 (4)         0             0           $4,416 (7)


Kevin Whalen (2)               2002    $100,000      0            0              0             0              0
   Chief Financial Officer     2001     $93,333   $34,000         0          $115,000(5)    1,200,000(6)      0

                               2000     $53,333      0            0           $20,950(5)      200,000(6)      0

Joel G. Beagelman (1)          2002       N\A       N\A          N\A            N\A           N\A            N\A
   Former CFO, Secretary       2001        0         0            0              0             0              0
   And Treasurer               2000      $39,000     0            0              0             0              0

</TABLE>


(1)  Effective May 16, 2000, Mr. Beagelman resigned as our Chief Financial
     Officer, Secretary, and Treasurer.

(2)  Effective May 16, 2000, Mr. Whalen was promoted to Chief Financial Officer
     and is not subject to any employment contract with iVoice, Inc.

(3)  Represents amounts accrued for reimbursement of income taxes paid by Mr.
     Mahoney on sales of personal holdings of iVoice Class A common shares, the
     proceeds of which have been loaned to iVoice.

(4)  Represents accrued and unpaid sales commissions due to Mr. Mahoney.

(5)  Represents 1,000,000 Class A common shares granted on March 20, 2001and
     50,000 Class A common shares granted on September 20, 2000 and 5,000 Class
     A common shares granted on June 30, 2000. All shares granted vest with Mr.
     Whalen three years from the date granted. Total restricted shares held by
     Mr. Whalen total 1,055,000 valued at $1,909 as of December 31, 2002.

(6)  Represents options to purchase 1,000,000 Class A common shares at $.06
     granted on June 27, 2001; options to purchase 200,000 Class A common shares
     at $.10 granted on March 12, 2001, options to purchase 100,000 Class A
     common shares at $.50 granted on June 30, 2000, options to purchase 50,000
     Class A common shares at $.60 granted on May 17, 2000, and options to
     purchase 50,000 Class A common shares at $.75 granted on May 2, 2000. All
     options vest 25% per year and expire 5 years from the date of issue. To
     date, none of these options have been exercised.


(7)  Represents $4,729 in life insurance premiums paid on behalf of Mr. Mahoney
     for the year ending December 31, 2002; $350,000 as reimbursement for the
     donation of personal holdings of iVoice Class A Common shares donated to
     charity and $4,416 in life insurance premiums paid on behalf of Mr. Mahoney
     for the year ending December 31, 2001 and $4,416 in life insurance premiums
     paid on behalf of Mr. Mahoney for the year ending December 31, 2000.



                                       30
<PAGE>

<TABLE>
<CAPTION>

               Aggregate Option/SAR Exercises in Last Fiscal Year
                          and FY-End Option/SAR Values


                                                          Number of Securities         Value of Unexercised
                                                         Underlying Unexercised            In-the-Money
                       Shares Acquired     Value         Options/SARs at FY-End       Options/SARs at FY-End
                         on Exercise      Realized                 (#)                         ($)
                       ----------------  ----------      -----------------------      -------------------------
                           <S>             <C>                    <C>                          <C>
       Name                 (#)             ($)         Exercisable/Unexercisable     Exercisable/Unexercisable

 Kevin Whalen, CFO           0                0            400,000 / 1,000,000                 0 / 0

</TABLE>

Employment Contracts


     On May 1, 1999, the Company entered into a five-year employment agreement
with its majority stockholder (the "Executive"). He will serve as the Company's
Chairman of the Board and Chief Executive Officer for a term of five years. As
consideration, the Company agrees to pay the Executive a sum of $180,000 the
first year with a 10% increase every year thereafter. The employment agreement
with Mr. Mahoney provides for a severance payment to him of three hundred
percent (300%), less $100, of his gross income for services rendered to the
Company in each of the five prior calendar years (or shorter period during which
the Executive shall have been employed by the Company) should his employment be
terminated following a Change in Control, as defined in the agreement.


Item 11. Security Ownership of Certain Beneficial Owners and Management.


     The following table sets forth certain information known to us with respect
to the beneficial ownership of our common stock on March 1, 2003, by (1) all
persons who are beneficial owners of 5% or more of our common stock, (2) each
director and nominee, (3) the executive officers named in the "Summary
Compensation Table," and (4) all directors and executive officers as a group.

     The number of shares beneficially owned is determined under rules
promulgated by the SEC, and the information is not necessarily indicative of
beneficial ownership for any other purpose. Under those rules, beneficial
ownership includes any shares as to which the individual has sole or shared
voting power or investment power and also any shares which the individual has
the right to acquire within 60 days of March 1, 2003, through the exercise or
conversion of any stock option, convertible security, warrant or other right.
Including those shares in the tables does not, however, constitute an admission
that the named stockholder is a direct or indirect beneficial owner of those
shares. Unless otherwise indicated, each person or entity named in the table has
sole voting power and investment power (or shares that power with that person's
spouse) with respect to all shares of capital stock listed as owned by that
person or entity. The shares of our Class A common stock represented here
includes the shares of our Class A common stock that the beneficial holders
would directly possess if they converted all shares of our Class B common stock
held by them.

                                       31
<PAGE>


<TABLE>

     Name and Address of                                         Amount and Nature of            Percentage of
       Beneficial Owner                Title of Class              Beneficial Owner                Class (1)
       ----------------                --------------              ----------------                ---------
<S>                              <C>                                 <C>                              <C>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Joel Beagelman                  Class A common stock                 3,862,000  (2)                    *
750 Highway 34
Matawan, NJ 07747

SECURITY OWNERSHIP OF MANAGEMENT

Jerome R. Mahoney               Class A common stock               7,087,325,041  (3)                91.9%
c/o iVoice, Inc.                Class B common stock                   2,414,404  (4)(5)              100%
750 Highway 34
Matawan, New Jersey 07747

Kevin Whalen                    Class A common stock                    1,055,000                      *
c/o iVoice, Inc.
750 Highway 34
Matawan, New Jersey 07747
</TABLE>

* Represents less than 1% of the outstanding class

(1)  Based on 702,655,106 outstanding shares of our Class A common stock;
     1,836,875 shares of our Class B common stock that are convertible into
     5,332,002,902 shares of Class A common stock and the total balance owed to
     Mr. Mahoney equaling $577,530 representing 577,530 Class B common shares
     and subsequently convertible into 1,676,429,608 Class A common shares.

(2)  Includes 600,000 shares held by Mr. Beagelman's three children.

(3)  Includes 450,000 shares of our Class A common stock held by Mr. Mahoney's
     minor children; 1,836,875 shares of Class B common stock held by Mr.
     Mahoney that have the voting power of, and may be converted into
     5,332,002,902 shares of Class A common stock and the total balance owed to
     Mr. Mahoney equaling $577,530 representing 577,530 Class B common shares
     and subsequently convertible into 1,676,429,608 Class A common shares.

(4)  The shares of Class B common stock held by Mr. Mahoney have the voting
     power of, and may be converted into 5,332,002,902 shares of Class A common
     stock.

(5)  Pursuant to the Promissory Note and Security Agreement executed by Mr.
     Mahoney and iVoice, Inc. on March 20, 2001 and amended on August 13, 2002,
     Mr. Mahoney may at his option convert amounts owed to him for monies loaned
     to the Company from the proceeds of stock sales, unpaid compensation,
     income taxes incurred from the sale of stock unreimbursed expenses and
     interest on the unpaid balance into either (i) one Class B common stock
     share of iVoice, Inc., no par value, for each dollar owed, or (ii) the
     number of Class A common stock shares of iVoice, Inc. calculated by
     dividing (x) the sum of the principal and interest that the Note holder has
     decided to prepay by (y) fifty percent (50%) of the lowest issue price of
     Series A common stock since the first advance of funds under the Promissory
     Note, whichever the note holder chooses, or (iii) payment of the principal
     of the note, before any repayment of interest. At March 1 2003, the total
     balance owed to Mr. Mahoney equaled $577,530 representing 577,530 Class B
     common shares and subsequently convertible into 1,676,429,608 Class A
     common shares.

SECURITIES AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS

     The following table sets forth information as of December 31, 2002 with
respect to compensation plans (including individual compensation arrangements)
under which our common shares are authorized for issuance, aggregated as
follows:

All compensation plans previously approved by security holders; and All
compensation plans not previously approved by security holders.


                                       32
<PAGE>
<TABLE>
<CAPTION>


                               Number of securities to be   Weighted average exercise
                                 issued upon exercise of       price of outstanding        Number of securities
                                  outstanding options,        options, warrants and       remaining available for
        Plan category              warrants and rights                rights                  future issuance
                                          (a)                         (b)                          (c)
<S>                                   <C>                          <C>                            <C>
Equity compensation plans
approved by security holders
(1)                                     6,891,083                    $0.0770                     4,108,917
Equity compensation plans
not approved by security                6,558,260                    $0.1350                         0
holders (2)
Total                                  13,449,343                    $0.1053                     4,108,917
</TABLE>


(1)  Consists of options issued under the 1999 Employee Stock Option Plan
     described further in Note 13 to the consolidated financial statements.
     Certain employment arrangements of the Company, which have not individually
     been approved by shareholders, and which are described in response to Item
     11 hereof, call for the issuance of options to purchase common stock under
     the 1999 Stock Option Plan, which has been approved by shareholders. All of
     such options have been issued and are exercisable.

(2)  Consists of warrants issued to unrelated third parties for contractual
     services and fees related to previous financing transactions of the
     Company.

Item 12. Certain Relationships and Related Transactions.

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

     On October 14, 2002, $1,504,875 of the amount owed to Mr. Mahoney was
satisfied by the issuance of 1,504,875 shares of Class B common stock.

     As of December 31, 2002, the outstanding amounts owed which included monies
loaned from the proceeds of stock sales, unpaid compensation, income taxes
incurred from the sale of stock unreimbursed expenses and interest on the unpaid
balance at 9.5%, totaled $547,926.

     On August 13, 2002, the board of directors approved amendments to the
Promissory Note payable to Jerome Mahoney, iVoice President and Chief Executive
Officer, for monies loaned to iVoice from the proceeds of stock sales of
personal holdings of iVoice Class A common stock, unpaid compensation, income
taxes incurred from the sale of Company stock and unreimbursed expenses. The
change allows for the conversion of amounts due under the Promissory Note into
either (i) one Class B common stock share of iVoice, Inc., no par value, for
each dollar owed, (ii) the number of Class A common stock shares of iVoice, Inc.
calculated by dividing (x) the sum of the principal and interest that the Note
holder has decided to prepay by (y) fifty percent (50%) of the lowest issue
price of Series A common stock since the first advance of funds under this Note
or (iii) payment of the principal of this Note, before any repayment of
interest.


                                       33
<PAGE>

Item 13. Exhibits and Reports on Form 8-K.

(a)      Exhibits

         No.      Description


3.1  Certificate of incorporation of Del Enterprises, Inc., filed October 20,
     1989 (incorporated herein by reference to Exhibit 3.1 of the registration
     statement on Form SB-2, filed with the SEC on November 17, 2000).

3.2  Certificate of amendment to the certificate of incorporation of Del
     Enterprises, Inc., filed March 14, 2000 (incorporated herein by reference
     to Exhibit 3.2 of the registration statement on Form SB-2, filed with the
     SEC on November 17, 2000).

3.3  Certificate of merger of International Voice Technologies, Inc. into Visual
     Telephone International, Inc., filed May 21, 1999 (incorporated herein by
     reference to Exhibit 3.3 of the registration statement on Form SB-2, filed
     with the SEC on November 17, 2000).

3.4  Certificate of amendment to the certificate of incorporation of iVoice.com,
     Inc., filed April 27, 2000 (incorporated herein by reference to Exhibit 3.4
     of the registration statement on Form SB-2, filed with the SEC on November
     17, 2000).

3.5  Certificate of amendment to the certificate of incorporation of iVoice.com,
     Inc., filed August 24, 2001 (incorporated herein by reference to Exhibit
     3.5 of the registration statement on Form SB-2, filed with the SEC on
     September 7, 2001).

3.6  Bylaws of Del Enterprises, Inc (incorporated herein by reference to Exhibit
     3.5 of the registration statement on Form SB-2, filed with the SEC on
     November 17, 2000).

4.1  Debenture No issued by iVoice.com, Inc. for $50,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to AJW Partners, LLC on October
     29, 1999 (incorporated herein by reference to Exhibit 4.1 of the
     registration statement on Form SB-2, filed with the SEC on November 17,
     2000).

4.2  Debenture No. 2 issued by iVoice.com, Inc. for $50,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to New Millennium Capital
     Partners, LLC on October 29, 1999 (incorporated herein by reference to
     Exhibit 4.2 of the registration statement on Form SB-2, filed with the SEC
     on November 17, 2000).

4.3  Debenture No. 3 issued by iVoice.com, Inc. for $50,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to AJW Partners, LLC on October
     29, 1999 (incorporated herein by reference to Exhibit 4.3 of the
     registration statement on Form SB-2, filed with the SEC on November 17,
     2000).

                                       34
<PAGE>

4.4  Debenture No. 4 issued by iVoice.com, Inc. for $50,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to AJW Partners, LLC on October
     29, 1999 (incorporated herein by reference to Exhibit 4.4 of the
     registration statement on Form SB-2, filed with the SEC on November 17,
     2000).

4.5  Debenture No. 5 issued by iVoice.com, Inc. for $50,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to Bank Insinger de Beaufort,
     N.V. on October 29, 1999 (incorporated herein by reference to Exhibit 4.5
     of the registration statement on Form SB-2, filed with the SEC on November
     17, 2000).

4.6  Debenture No. 6 issued by iVoice.com, Inc. for $100,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to New Millennium Capital
     Partners, LLC on October 29, 1999 (incorporated herein by reference to
     Exhibit 4.6 of the registration statement on Form SB-2, filed with the SEC
     on November 17, 2000).

4.7  Debenture No. 7 issued by iVoice.com, Inc. for $50,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to New Millennium Capital
     Partners II, LLC on October 29, 1999 (incorporated herein by reference to
     Exhibit 4.7 of the registration statement on Form SB-2, filed with the SEC
     on November 17, 2000).

4.8  Debenture No. 8 issued by iVoice.com, Inc. for $50,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to AJW Partners, LLC on October
     29, 1999 (incorporated herein by reference to Exhibit 4.8 of the
     registration statement on Form SB-2, filed with the SEC on November 17,
     2000).

4.9  Debenture No. 9 issued by iVoice.com, Inc. for $25,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to New Millennium Capital
     Partners II, LLC on October 29, 1999 (incorporated herein by reference to
     Exhibit 4.9 of the registration statement on Form SB-2, filed with the SEC
     on November 17, 2000).

4.10 Debenture No. 10 issued by iVoice.com, Inc. for $25,000 in 12% Secured
     Convertible Debenture Due December 1, 2000 to AJW Partners, LLC, on October
     29, 1999 (incorporated herein by reference to Exhibit 4.10 of the
     registration statement on Form SB-2, filed with the SEC on November 17,
     2000).

4.11 Form 8% Convertible Debentures issued by iVoice.com, Inc. for $150,000 due
     April 30, 2006 to the purchasers thereof on April 30, 2001(incorporated
     herein by reference to Exhibit 4.11 of the registration statement on Form
     SB-2, filed with the SEC on September 7, 2001).

4.12 Form 8% Convertible Debentures issued by iVoice.com, Inc. to certain
     purchasers thereof for an aggregate of $125,000 (incorporated herein by
     reference to Exhibit 4.12 of the registration statement on Form SB-2, filed
     with the SEC on September 7, 2001).

4.13 Form 8% Convertible Debentures to be issued by iVoice.com, Inc. to Beacon
     Capital, LLC in the amount of $150,000. (incorporated herein by reference
     to Exhibit 4.12 of the registration statement on Form SB-2, filed with the
     SEC on December 21, 2001).


                                       35
<PAGE>

10.1 iVoice.com, Inc. 1999 Option Stock Plan (incorporated herein by reference
     to Exhibit 10.1 of the registration statement on Form SB-2, filed with the
     SEC on November 17, 2000).

10.2 Investment agreement dated August 17, 2000, between iVoice.com, Inc. and
     Swartz Private Equity, LLC with exhibits (incorporated herein by reference
     to Exhibit 10.2 of the registration statement on Form SB-2, filed with the
     SEC on November 17, 2000).

10.3 Registration rights agreement dated August 17, 2000, between iVoice.com,
     Inc. and Swartz Private Equity, LLC (incorporated herein by reference to
     Exhibit 10.3 of the registration statement on Form SB-2, filed with the SEC
     on November 17, 2000).

10.4 Registration rights agreement by and among iVoice.com, Inc. and the
     investors' signatories thereto dated as of October 28, 1999 (incorporated
     herein by reference to Exhibit 10.4 of the registration statement on Form
     SB-2, filed with the SEC on November 17, 2000).

10.5 Warrant to purchase 5,490,000 shares of iVoice.com, Inc. issued to Swartz
     Private Equity, LLC, dated August 17, 2000 (incorporated herein by
     reference to Exhibit 10.5 of the registration statement on Form SB-2, filed
     with the SEC on November 17, 2000).

10.6 Subscription agreement between iVoice.com, Inc. and Beacon Capital, LLC,
     November 20, 2001, for the purchase of an aggregate of $150,000 of 8%
     Convertible Debentures. (incorporated herein by reference to Exhibit 4.12
     of the registration statement on Form SB-2, filed with the SEC on December
     21, 2001).

10.7 Registration rights agreement between iVoice.com, Inc. and Beacon Capital,
     LLC, dated as of November 20, 2001. (incorporated herein by reference to
     Exhibit 4.12 of the registration statement on Form SB-2, filed with the SEC
     on December 21, 2001).

10.8 Form of warrant to purchase 250,000 shares of iVoice.com, Inc. to be issued
     to Beacon Capital, LLC (incorporated herein by reference to Exhibit 4.12 of
     the registration statement on Form SB-2, filed with the SEC on December 21,
     2001).

10.9 Subscription agreement between iVoice.com, Inc. and the purchaser
     signatories thereof, dated April 30, 2001, for the purchase of an aggregate
     of $275,000 of 8% Convertible Debentures due April 30, 2001 (incorporated
     herein by reference to Exhibit 10.9 of the registration statement on Form
     SB-2, filed with the SEC on September 7, 2001).

10.10 Registration rights agreement by and among iVoice.com, Inc. and the
      investor signatories thereto dated as of April 30, 2001 (incorporated
      herein by reference to Exhibit 10.10 of the registration statement on Form
      SB-2, filed with the SEC on September 7, 2001).


                                       36
<PAGE>

10.11 Warrant to purchase 171,875 shares of iVoice.com, Inc. issued to Michael
      Jacobs of The May Davis Group, Inc., dated April 30, 2001 (incorporated
      herein by reference to Exhibit 10.11 of the registration statement on Form
      SB-2, filed with the SEC on September 7, 2001).

10.12 Warrant to purchase 171,875 shares of iVoice.com, Inc. issued to Owen May
      of The May Davis Group, Inc., dated April 30, 2001 (incorporated herein by
      reference to Exhibit 10.12 of the registration statement on Form SB-2,
      filed with the SEC on September 7, 2001).

10.13 Consulting agreement entered into on March 15, 2001 by and between
      iVoice.com, Inc. and Finnigan USA (incorporated herein by reference to
      Exhibit 10.13 of the registration statement on Form SB-2, filed with the
      SEC on September 7, 2001).

10.14 Real Property Lease Agreement dated December 5, 2001 between iVoice.com,
      Inc. and B&R Holding Company (incorporated herein by reference to Exhibit
      10.14 to the Form 10-KSB for the year ended December 31, 2001 filed with
      the SEC on March 27, 2002).

10.15 Equity Line of Credit Agreement dated as of June 2002 between iVoice, Inc.
      and Cornell Capital Partners, L.P. (incorporated herein by reference to
      Exhibit 10.15 to the Registration Statement on Form SB-2 filed on July 2,
      2002).

10.16 Registration Rights Agreement dated as of June 2002 between iVoice, Inc.
      and Cornell Capital Partners, L.P. (incorporated herein by reference to
      Exhibit 10.16 to the Registration Statement on Form SB-2 filed on July 2,
      2002).

10.17 Escrow Agreement dated as of June 2002 among iVoice, Inc., Cornell Capital
      Partners, L.P., Butler Gonzalez LLP and Wachovia, N.A. (incorporated
     herein by reference to Exhibit 10.17 to the Registration Statement on Form
     SB-2 filed on July 2, 2002).

10.18 Placement Agent Agreement dated June 2002 between iVoice, Inc. and
      Westrock Advisors, Inc. (incorporated herein by reference to Exhibit 10.18
      to the Registration Statement on Form SB-2 filed on July 2, 2002).

10.19 Securities Purchase Agreement dated June 2002 between iVoice, Inc. and the
      buyers identified therein (incorporated herein by reference to Exhibit
      10.19 to the Registration Statement on Form SB-2 filed on July 2, 2002).

10.20 Registration Rights Agreement dated June 2002 between iVoice, Inc. and the
      buyers identified therein (incorporated herein by reference to Exhibit
      10.20 to the Registration Statement on Form SB-2 filed on July 2, 2002).

10.21 Form of Debenture (incorporated herein by reference to Exhibit 10.21 to
      the Registration Statement on Form SB-2 filed on July 2, 2002).

10.22 Escrow Agreement dated June 2002 between iVoice, Inc., the buyers
      identified therein and Wachovia, N.A. (incorporated herein by reference to
      Exhibit 10.22 to the Registration Statement on Form SB-2 filed on July 2,
      2002).


                                       37
<PAGE>


10.23 Transfer Agent Instructions dated June 2002 between iVoice, Inc., Cornell
      Capital Partners, L.P. and Fidelity Transfer Co. (incorporated herein by
      reference to Exhibit 10.23 to the Registration Statement on Form SB-2
      filed on July 2, 2002).

10.24 Letter Agreement dated June 28, 2002 (incorporated herein by reference to
      Exhibit 10.24 to the Registration Statement on Form SB-2 filed on July 2,
      2002).

10.25 Promissory Note dated as of August 16, 2002 given by iVoice, Inc. to
      Cornell Capital Partners, L.P. (incorporated herein by reference to
      Exhibit 10.24 to the Registration Statement on Form SB-2 filed on January
      25, 2003 ).

10.26 Promissory Note dated as of November 27, 2002 given by iVoice, Inc. to
      Cornell Capital Partners, L.P. (incorporated herein by reference to
      Exhibit 10.26 to the Registration Statement on Form SB-2 filed on January
      25, 2003).

10.27 Letter Agreement dated January 24, 2003 between iVoice, Inc. and Mr.
      Jerome Mahoney. (incorporated herein by reference to Exhibit 10.27 to the
      Registration Statement on Form SB-2 filed on January 25, 2003 ).

13.1 Form 10-SB12G (incorporated by reference and previously filed on February
     4, 2000 with the Commission).


         *  Filed herewith

(b)      Reports on Form 8-K

     No reports on Form 8-K were filed during the last quarter of the period
covered by this report.

ITEM 14.    Controls and Procedures

(a)  Evaluation of Disclosure Controls and Procedures.

     The Company's Chief Executive Officer and its Chief Financial Officer,
after evaluating the effectiveness of the Company's disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c)
and 15d-14(c), as of a date within 90 days of the filing date of this annual
report on Form 10-K (the "Evaluation Date")), have concluded that as of the
Evaluation Date, the Company's disclosure controls and procedures were adequate
and effective to ensure that material information relating to the Company and
its consolidated subsidiaries is recorded, processed, summarized and reported by
management of the Company on a timely basis in order to comply with the
Company's disclosure obligations under the Securities Exchange Act of 1934 and
the SEC rules thereunder.

(b) Changes in Internal Controls.

     There were no significant changes in the Company's internal controls or in
other factors that could significantly affect the Company's disclosure controls
and procedures subsequent to the Evaluation Date, nor any significant
deficiencies or material weaknesses in such disclosure controls and procedures
requiring corrective actions.


                                       38
<PAGE>

Signatures

     In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
caused this report on Form 10-KSB to be signed on its behalf by the undersigned,
thereunto duly authorized.

         Dated:            March 28, 2003


                                iVoice, Inc..

                                By:/s/  JEROME R MAHONEY
                                -----------------------------------------------
                                Jerome R. Mahoney
                                President, Chief Executive Officer and Director



     In accordance with the Exchange Act, this report has been signed below by
the following persons on behalf of the Registrant, and in the capacities and on
the dates indicated.



By: /s/ KEVIN WHALEN        Chief Financial Officer  Dated: March 28, 2003
--------------------
        Kevin Whalen



                                       39
<PAGE>






<PAGE>



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
              PURSUANT TO REGULATION ss.240.15D-14 AS PROMULAGATED
                    BY THE SECURITIES AND EXCHANGE COMMISSION

In connection with the Annual Report of iVoice, Inc. (the "Company") on Form
10-KSB for the period ended December 31, 2002, as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Jerome Mahoney,
President, Secretary and Chief Executive Officer of the Company, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002 pursuant to Regulation ss.240.15d-14 as promulgated
by the Securities and Exchange Commission, that:

1)   I have reviewed the Report being filed;

2)   Based on my knowledge, the Report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by the Report;

3)   Based on my knowledge, the financial statements, and other financial
     information included in the Report, fairly present in all material respects
     the financial condition, results of operations and cash flows of the issuer
     as of, and for, the periods presented in the Report;

4)   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (as
     such term is defined in paragraph (c) of this section) for the issuer and
     have:

     a)   Designed such disclosure controls and procedures to ensure that
          material information relating to the issuer, including its
          consolidated subsidiaries, is made known to them by others within
          those entities, particularly during the period in which the periodic
          Reports are being prepared;

     b)   Evaluated the effectiveness of the issuer's disclosure controls and
          procedures as of a date within 90 days prior to the filing date of the
          Report ("Evaluation Date"); and

     c)   Presented in the Report their conclusions about the effectiveness of
          the disclosure controls and procedures based on their evaluation as of
          the Evaluation Date;

5)   I and the other certifying officers have disclosed, based on their most
     recent evaluation, to the issuer's auditors and the audit committee of the
     board of directors (or persons fulfilling the equivalent function):

     a)   All significant deficiencies in the design or operation of internal
          controls which could adversely affect the issuer's ability to record,
          process, summarize and Report financial data and have identified for
          the issuer's auditors any material weaknesses in internal controls;
          and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the issuer's internal
          controls; and


                                       40
<PAGE>

6)   The registrant's other certifying officers and I have indicated in the
     Report whether or not there were significant changes in internal controls
     or in other factors that could significantly affect internal controls
     subsequent to the date of their most recent evaluation, including any
     corrective actions with regard to significant deficiencies and material
     weaknesses.

                                                     By /s/ Jerome Mahoney
                                                     --------------------------
                                                     Jerome Mahoney
                                                     President, Secretary and
                                                     Chief Executive Officer



                                       41
<PAGE>



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
              PURSUANT TO REGULATION ss.240.15D-14 AS PROMULAGATED
                    BY THE SECURITIES AND EXCHANGE COMMISSION

In connection with the Annual Report of iVoice, Inc. (the "Company") on Form
10-KSB for the period ended December 31, 2002, as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Kevin Whalen, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 pursuant to
Regulation ss.240.15d-14 as promulgated by the Securities and Exchange
Commission, that:

1)   I have reviewed the Report being filed;

2)   Based on my knowledge, the Report does not contain any untrue statement of
     a material fact or omit to state a material fact necessary to make the
     statements made, in light of the circumstances under which such statements
     were made, not misleading with respect to the period covered by the Report;

3)   Based on my knowledge, the financial statements, and other financial
     information included in the Report, fairly present in all material respects
     the financial condition, results of operations and cash flows of the issuer
     as of, and for, the periods presented in the Report;

4)   The registrant's other certifying officers and I are responsible for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: (as
     such term is defined in paragraph (c) of this section) for the issuer and
     have:

     a)   Designed such disclosure controls and procedures to ensure that
          material information relating to the issuer, including its
          consolidated subsidiaries, is made known to them by others within
          those entities, particularly during the period in which the periodic
          Reports are being prepared;

     b)   Evaluated the effectiveness of the issuer's disclosure controls and
          procedures as of a date within 90 days prior to the filing date of the
          Report ("Evaluation Date"); and

     c)   Presented in the Report their conclusions about the effectiveness of
          the disclosure controls and procedures based on their evaluation as of
          the Evaluation Date;

5)   I and the other certifying officers have disclosed, based on their most
     recent evaluation, to the issuer's auditors and the audit committee of the
     board of directors (or persons fulfilling the equivalent function):

     a)   All significant deficiencies in the design or operation of internal
          controls which could adversely affect the issuer's ability to record,
          process, summarize and Report financial data and have identified for
          the issuer's auditors any material weaknesses in internal controls;
          and

     b)   Any fraud, whether or not material, that involves management or other
          employees who have a significant role in the issuer's internal
          controls; and


                                       42
<PAGE>

6)   The registrant's other certifying officers and I have indicated in the
     Report whether or not there were significant changes in internal controls
     or in other factors that could significantly affect internal controls
     subsequent to the date of their most recent evaluation, including any
     corrective actions with regard to significant deficiencies and material
     weaknesses.

                                        By /s/ Kevin Whalen
                                        -------------------------------------
                                        Kevin Whalen
                                        Chief Financial Officer





                                       43
<PAGE>


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Annual Report of iVoice, Inc. (the "Company") on Form
10-KSB for the period ending December 31, 2002 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Jerome R. Mahoney,
Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
that:

1.   The Report fully complies with the requirements of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material
     respects, the financial condition and result of operations of the Company.

                                               /s/ Jerome R. Mahoney
                                               --------------------------------
                                               Jerome R. Mahoney
                                               Chief Executive Officer
                                               March 28, 2003





                                       44
<PAGE>



                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Annual Report of iVoice, Inc. (the "Company") on Form
10-KSB for the period ending December 31, 2002 as filed with the Securities and
Exchange Commission on the date hereof (the "Report"), I, Kevin Whalen, Chief
Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1.   The Report fully complies with the requirements of section 13(a) or 15(d)
     of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material
     respects, the financial condition and result of operations of the Company.


                                 /s/ Kevin Whalen
                                 -------------------------------------
                                 Kevin Whalen
                                 Chief Financial Officer
                                 March 28, 2003



                                       45
<PAGE>


                                  iVOICE, INC.

                              FINANCIAL STATEMENTS

                                DECEMBER 31, 2002

<PAGE>



                                  iVOICE, INC.

                              FINANCIAL STATEMENTS

                                    CONTENTS




                                                                 Page
                                                                 ----
INDEPENDENT AUDITOR'S REPORT                                      1

FINANCIAL STATEMENTS


         Balance Sheets                                           2 -3

         Statements of Operations                                 4

         Statements of Stockholders' Deficiency                   5 - 8

         Statements of Cash Flows                                 9 - 12

NOTES TO FINANCIAL STATEMENTS                                     13 - 30


<PAGE>





                          Mendlowitz Weitsen, LLP, CPAs
               K2 Brier Hill Court, East Brunswick, NJ 08816-3341
            Tel: 732.613.9700 Fax: 732.613.9705 E-mail: mw@MWLLP.com
                                  www.mwllp.com


                          INDEPENDENT AUDITOR'S REPORT


TO THE BOARD OF DIRECTORS AND STOCKHOLDERS' OF
iVOICE, INC.
Matawan, New Jersey

We have audited the accompanying consolidated balance sheets of iVoice, Inc. as
of December 31, 2002 and 2001, and the related consolidated statements of
operations, stockholders' deficiency and cash flows for the years then ended.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinions.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of iVoice, Inc. as of
December 31, 2002 and 2001, and the results of its operations and its cash flows
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 2, the
Company had net losses and negative cash flows from operations for the years
ended December 31, 2002 and 2001, and as of those dates had negative working
capital, which raises substantial doubt about its ability to continue as a going
concern. Management's plans in regard to these matters are also discussed in
Note 2. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

                                                       MENDLOWITZ WEITSEN, LLP
East Brunswick, New Jersey
February 27, 2003


                                       1
<PAGE>


<TABLE>
<CAPTION>

                                  iVOICE, INC.
                           CONSOLIDATED BALANCE SHEETS

                                     ASSETS

                                                                                                        December 31,

                                                                                                    2002            2001
                                                                                              --------------   --------------
<S>                                                                                            <C>               <C>
CURRENT ASSETS
  Cash and cash equivalents                                                                   $    566,345      $    85,543
  Accounts receivable, net of allowance for
   doubtful accounts of $2,700 and $4,000                                                           15,187           37,284
  Inventory                                                                                         31,878           20,586
  Costs in excess of billings on uncompleted jobs                                                   23,778                -
  Prepaid expenses and other current assets                                                          7,558          331,361
                                                                                               -----------      -----------
      Total current assets                                                                         644,746          474,774
                                                                                                ----------      -----------

PROPERTY AND EQUIPMENT, net                                                                         70,186          106,585
                                                                                                ----------      -----------

OTHER ASSETS
  Other receivable                                                                                       -           67,650
  Software license costs, net of accumulated amortization of $380,800 and $272,000                 163,200          272,000
  Financing costs                                                                                        -           35,427
  Intangible assets, net of accumulated amortization of $0 and $21,041                              97,486          271,299
  Deposits and other assets                                                                          7,000           13,900
                                                                                             -------------     ------------

      Total other assets                                                                           267,686          660,276
                                                                                               -----------      -----------

TOTAL ASSETS                                                                                   $   982,618      $ 1,241,635
                                                                                               ===========      ===========
</TABLE>


                                       2
<PAGE>

<TABLE>
<CAPTION>


                                  iVOICE, INC.
                    CONSOLIDATED BALANCE SHEETS - (Continued)

                    LIABILITIES AND STOCKHOLDERS' DEFICIENCY


                                                                                                    2002             2001
                                                                                                ------------      ------------
<S>                                                                                              <C>               <C>
CURRENT LIABILITIES
    Obligations under capital leases - current                                               $      13,928     $     35,018
    Accounts payable and accrued expenses                                                          360,106          391,531
    Notes Payable                                                                                  234,667                -
    Due to related parties                                                                         615,259        1,868,943
    Convertible debentures                                                                         115,800          359,800
    Deferred maintenance contracts                                                                  24,156           17,214
    Billings in excess of costs and estimated earnings                                                   -           26,403
                                                                                                ----------       ----------

    Total current liabilities                                                                    1,363,916        2,698,909

LONG-TERM DEBT
    Obligations under capital leases - non-current                                                       -           13,928
                                                                                               -----------       -----------

       Total liabilities                                                                         1,363,916        2,712,837
                                                                                               -----------       -----------
COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' DEFICIENCY
    Preferred stock, $1 par value; Authorized shares - 1,000,000;
       Issued and outstanding shares - none                                                              -                -
    Common stock, Class A - par value $.001, Authorized shares - 600,000,000;
       2002 - 518,691,163 shares issued, 518,091,163 shares outstanding
       2001- 154,123,517 shares issued and outstanding                                             518,091        1,175,278
    Common stock, Class B - no par value, Authorized shares - 3,000,000
       2002  - 2,204,875 shares issued, 1,858,875 shares outstanding,
       2001 - 700, 000 shares issued, 354,000 shares outstanding.                                      186               36
    Subscription receivable                                                                              -         (783,750)
    Additional paid in capital                                                                  13,619,554       10,568,103
    Accumulated deficit                                                                        (14,490,329)     (12,430,869)
    Treasury stock, 2002 - 600,000 Class A shares, at cost; 2001- none                             (28,800)               -
                                                                                            --------------      ------------


       Total stockholders' deficiency                                                             (381,298)      (1,471,202)
                                                                                            --------------       ----------

TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                              $      982,618     $  1,241,635
                                                                                            ==============     ============
</TABLE>


                                       3
<PAGE>

<TABLE>
<CAPTION>


                                  iVOICE, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                                                                   For the Years Ended
                                                                                                      December 31,
                                                                                                   2002             2001
                                                                                             ---------------- -------------
<S>                                                                                              <C>              <C>
SALES, net                                                                                      $  646,560        $ 425,948

COST OF SALES                                                                                      184,306          167,229
                                                                                                ----------       ----------

GROSS PROFIT                                                                                       462,254          258,719
                                                                                                ----------       ----------

SELLING, GENERAL AND
  ADMINISTRATIVE EXPENSES
    Selling expenses                                                                               129,988          165,617
    General and administrative expenses                                                          1,507,681        2,297,015
    Research and development                                                                       229,179          387,463
    Bad debt expense                                                                                70,558           24,808
    Write-off of goodwill                                                                          175,833                -
    Depreciation and amortization                                                                  149,388          161,089
                                                                                                ----------       ----------

       Total selling, general and administrative expenses                                        2,262,627        3,035,992
                                                                                                ----------       ----------

LOSS FROM OPERATIONS                                                                            (1,800,373)      (2,777,273)

OTHER INCOME \ (EXPENSE)
    Other income                                                                                   181,273                -
    Interest expense                                                                              (440,360)       (670,161)
                                                                                                ----------       ----------
       Total other expense                                                                        (259,087)        (670,161)
                                                                                                ----------       ----------

LOSS BEFORE INCOME TAXES                                                                        (2,059,460)      (3,447,434)

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

NET LOSS                                                                                      $ (2,059,460)    $ (3,447,434)
                                                                                               ============    ============

NET LOSS PER COMMON SHARE
    Basic                                                                                         $   (.02)          $ (.03)
                                                                                                  ========           ======
    Diluted                                                                                        $  (.02)          $ (.03)
                                                                                                  ========           ======
</TABLE>



                                       4
<PAGE>

<TABLE>
<CAPTION>


                                  iVOICE, INC.
               CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001



                                                               Common Stock Class A        Common Stock Class B

                                                               Shares         Amount       Shares       Amount
      <S>                                                   <C>            <C>            <C>              <C>
      Balance at January 1, 2002                            154,123,517    $1,175,278      354,000        $  36

      Collection of stock subscriptions                               -             -            -            -

      Issuance of common stock for services                  34,460,000        34,460            -            -

      Purchase of treasury stock                                      -             -            -            -

      Issuance of common stock for cash                     173,362,846       173,363            -            -

      Issuance of common stock for compensation                       -             -            -            -

      Issuance of convertible debentures                              -             -            -            -

      Issuance of stock on conversion of Class B shares               -             -    1,504,875          150

      Issuance of stock on debenture conversion             148,465,066       148,465            -            -

      Issuance of stock on interest conversion                8,279,734         8,280            -            -

      Adjustment for change in par value                              -    (1,021,755)           -            -



      Net loss for the year ended December 31, 2002                   -              -           -            -
                                                            -------------- ------------- ------------  ---------

      Balance at December 31, 2002                          518,091,163     $ 518,091    1,858,875        $ 186
                                                            ===========     =========    =========    =   =====
</TABLE>



                                       5
<PAGE>


<TABLE>
<CAPTION>


                                  iVOICE, INC.
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (Continued)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001


                                                      Stock                        Additional                           Total
                                                  Subscriptions     Treasury        Paid in          Accumulated    Stockholders'
                                                    Receivable       Stock          Capital            Deficit       Deficiency
                                                  --------------     --------       -----------    --------------  -------------
<S>                                                 <C>               <C>           <C>                <C>           <C>
Balance at January 1, 2002                        $   (783,750)     $      -        $10,568,103      $ (12,430,869)  $(1,471,202)

Collection of stock subscriptions                      783,750             -                 -                   -       783,750

Issuance of common stock for services                        -             -           158,260                   -       192,720

Purchase of treasury stock                                   -      (28,800)                 -                          (28,800)

Issuance of common stock for cash                            -             -            80,302                   -       253,665

Issuance of common stock for compensation                    -             -                 -                   -             -

Issuance of convertible debentures                           -             -            63,750                   -        63,750

Issuance of stock on conversion of Class B                   -             -
shares                                                                               1,504,725                   -     1,504,875

Issuance of stock on debenture conversion                    -             -           130,535                   -       279,000

Issuance of stock on interest conversion                     -             -            92,124                   -       100,404

Adjustment for change in par value                           -             -         1,021,755                   -             -


Net loss for the year ended December 31, 2002                -             -                 -         (2,059,460)   (2,059,460)
                                                             -             -                 -         ===========   ===========

Balance at December 31, 2002                           $     -     $(28,800)       $13,619,554       $(14,490,329)   $ (381,298)
                                                       =======     =========       ===========       =============   ===========
</TABLE>


                                       6
<PAGE>




                                  iVOICE, INC.
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (Continued)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

<TABLE>
<CAPTION>


                                                               Common Stock Class A       Common Stock Class B

                                                                Shares       Amount       Shares       Amount
      <S>                                                    <C>           <C>           <C>            <C>
      Balance at January 1, 2001                             103,969,715   $1,039,697     364,000        $  37

      Issuance of common stock for settlements                2,128,000       21,280            -            -

      Issuance of common stock for services                  15,194,287       32,693            -            -

      Issuance of common stock for exercise
       of stock options                                      18,000,000       18,000            -            -

      Subscriptions received                                          -            -            -            -

      Issuance of common stock for cash                       1,172,000       11,720            -            -

      Issuance of common stock for compensation               2,183,834       20,371            -            -

      Issuance of convertible debentures                              -            -            -            -

      Issuance of stock on conversion of Class B shares       1,000,000        1,000     (10,000)          (1)

      Issuance of stock for repayment of amounts
        due to related parties                                  328,951        3,290            -            -

      Issuance of stock on debenture conversion               9,829,204       25,972            -            -

      Issuance of stock on interest conversion                  317,526        1,255            -            -



      Net loss for the year ended December 31, 2001                   -            -            -            -
                                                             ------------- ------------ ------------  ----------


      Balance at December 31, 2001                           154,123,517  $ 1,175,278    354,000         $  36
                                                             ===========  ===========    =======      ==========

</TABLE>


                                       7
<PAGE>


<TABLE>
<CAPTION>

                                  iVOICE, INC.
         CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIENCY (Continued)
                 FOR THE YEARS ENDED DECEMBER 31, 2002 AND 2001

                                                            Stock               Additional                           Total
                                                            Subscriptions       Paid in         Accumulated          Stockholders'
                                                            Receivable          Capital         Deficit              Deficiency
   <S>                                                        <C>               <C>              <C>                 <C>
    Balance at January 1, 2001                                $      -          $7,586,182      $ (8,983,435)        $(357,519)

    Issuance of common stock for settlements                         -             189,800                  -           211,080

    Issuance of common stock for services                            -             886,212                  -           918,905

    Issuance of common stock for exercise
     of stock options                                         (990,000)            972,000                  -                 -

    Subscriptions received                                     206,250                   -                              206,250

    Issuance of common stock for cash                                -             153,370                  -           165,090

    Issuance of common stock for compensation                        -             214,060                  -           234,431

    Issuance of convertible debentures                               -             106,250                  -           106,250

    Issuance of stock on conversion of Class B                       -
    shares                                                                           (999)                  -                 -

    Issuance of stock for repayment of amounts
      due to related parties                                         -              72,369                               75,659

    Issuance of stock on debenture conversion                        -             376,229                  -           402,201

    Issuance of stock on interest conversion                         -              12,630                  -            13,885


    Net loss for the year ended December 31, 2001                    -                   -         (3,447,434)      (3,447,434)
                                                                     -                   -         -----------      -----------

    Balance at December 31, 2001                            $(783,750)         $10,568,103       $(12,430,869)    $ (1,471,202)
                                                            ==========         ===========       =============    =============
</TABLE>



                                       8
<PAGE>
<TABLE>
<CAPTION>

                                  iVOICE, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                    For the Years Ended
                                                                                                        December 31,
                                                                                                   2002             2001
                                                                                              -------------    -------------
<S>                                                                                          <C>                <C>
CASH FLOW FROM OPERATING ACTIVITIES
   Net loss                                                                                   $ (2,059,460)    $ (3,447,434)
   Adjustments to reconcile net loss to net
    cash (used in) provided by operating activities
   Depreciation and amortization                                                                    40,588           39,164
   Amortization of prepaid expense                                                                 326,667                -
   Amortization of intangibles                                                                           -           13,125
   Amortization of software licenses                                                               108,800          108,800
   Bad debt expense                                                                                 70,558           24,808
   Write-off of goodwill                                                                           175,833                -
   Forfeited employee stock compensation                                                           (28,800)               -
   Stock option discounts                                                                          316,750           56,250
   Debt issue costs                                                                                216,977          259,780
   Common stock issued for services                                                                 74,380          536,989
   Common stock issued for compensation                                                                  -          234,431
   Common stock issued for settlements                                                                   -          211,080
   Common stock issued for interest                                                                 15,460           13,883
      Changes in certain assets and liabilities:
      Accounts receivable                                                                           19,189           15,587
      Inventory                                                                                    (11,292)            (358)
      Other assets                                                                                   4,036          124,589
      Accounts payable and accrued expenses                                                        421,713          916,220
      Deferred revenue                                                                             (43,239)          20,605
                                                                                             --------------     -----------

   Total cash used in operating activities                                                        (351,840)        (872,481)
                                                                                              ------------       ----------
</TABLE>


                                       9
<PAGE>


<TABLE>
<CAPTION>

                                  iVOICE, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001
                                                                                                   <S>              <C>
CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of property and equipment                                                               (3,649)          (4,828)
   Purchase of intangibles                                                                          (2,020)          (3,090)
                                                                                             -------------     ------------

   Total cash used in investing activities                                                          (5,669)          (7,918)
                                                                                            --------------    -------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Issuance of common stock                                                                        253,662          129,931
   Proceeds from related party loans                                                                 3,000          354,000
   Repayments of related party loans                                                              (120,000)        (120,000)
   Collections of stock subscriptions                                                              317,000          150,000
   Proceeds from notes payable                                                                     470,000                -
   Repayment of notes payable                                                                     (235,333)               -
   Repayment of capital leases payable                                                             (35,018)         (28,338)
   Repayment of convertible debentures                                                             (70,000)               -
   Sale of convertible debentures                                                                  255,000          425,000
                                                                                              ------------      -----------

   Total cash provided by financing activities                                                     838,311          910,593
                                                                                              ------------      -----------

NET INCREASE IN CASH AND CASH EQUIVALENTS                                                          480,802           30,194

CASH AND CASH EQUIVALENTS - beginning                                                               85,543           55,349
                                                                                               -----------     ------------
CASH AND CASH EQUIVALENTS - end                                                                $   566,345     $     85,543
                                                                                               ===========     ============

CASH PAID DURING THE YEAR FOR:
   Interest expense                                                                            $     7,196     $     13,872
                                                                                               ===========     ============
   Income taxes                                                                                $        -      $         -
                                                                                               ===========     ============
</TABLE>



                                       10
<PAGE>



                                  iVOICE, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES

     For the Year Ended December 31, 2002

a)   During the year ended December 31, 2002, the Company issued 10,000 shares
     of Class A common stock as partial payment for leasehold improvements
     valued at $540.

b)   During the year ended December 31, 2002, the Company issued 2,250,000
     shares of Class A common stock for legal services valued at $45,000.

c)   During the year ended December 31, 2002, the Company issued 26,000,000
     shares of Class A common stock for consulting services valued at $29,380.

d)   During the year ended December 31, 2002, the Company issued 6,200,000
     shares of its Class A common stock for fees and services associated with
     the financing agreement with Cornell Capital, LP, valued at $117,800.

e)   During the year ended December 31, 2002, the Company retained 600,000
     shares of Class A common stock previously issued to an employee as
     compensation. These shares were deemed as not having been vested with the
     terminated employee and were recorded as treasury stock at a value of
     $28,800.

f)   During the year ended December 31, 2002, the Company issued 22,229,230
     shares of Class A common stock for the conversion of $79,000 in debenture
     principal and 4,279,750 shares of Class A Common Stock for the conversion
     of $93,085 in accrued interest on its outstanding 12% Convertible
     Debentures.

g)   During the year ended December 31, 2002, the Company issued 505,921 shares
     of its Class A common stock for the repayment of $15,000 in principal and
     84,766 shares of Class A Common Stock for the conversion of $2,594 in
     accrued interest on its 8% Convertible Debentures.

h)   During the year ended December 31, 2002, the Company issued 173,362,846
     shares of Class A common stock with a total value of $253,665. Of this
     amount, $235,333 was for repayment of principal on $470,000 of notes
     payable, issued as advances on the equity line financing with Cornell
     Capital Partners, LP. The balance of $18,332 was market discount charged to
     expense.

i)   During the year ended December 31, 2002, the Company issued 129,645,133
     shares of Class A common stock upon conversion of $185,000 in principal and
     3,915,218 shares of Class A Common Stock for the conversion of $4,725 in
     accrued interest on its 5% Convertible Debentures.



                                       11
<PAGE>

                                  iVOICE, INC.
                CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING ACTIVITIES - Continued

j)   During the year ended December 31, 2002, the Company issued 1,504,875
     shares of Class B common stock upon conversion of $1,504,875 in amounts due
     to related parties.

For the Year Ended December 31, 2001

a)   The Company issued 15,194,287 shares of its Class A Common Stock for
     services valued at $1,062,055. Of these shares, the company has registered
     for resale with the U.S. Securities and Exchange Commission, 10,600,000
     shares during the year ended December 31, 2001.

b)   The Company issued 2,183,834 restricted shares of its Class A Common Stock
     as compensation to Company employees valued at $234,431.

c)   The Company issued 828,000 registered shares and 850,000 restricted shares
     of its Class A Common Stock as payment for termination of the Swartz
     Financing Agreement valued at $154,830.

d)   The Company issued 450,000 restricted shares of its Class A Common Stock to
     a holder of its 12% convertible debentures as settlement for failure to
     register shares under the registration rights agreement related to the 12%
     Convertible Debentures valued at $56,250.

e)   The Company issued 328,951 restricted shares of its Class A Common Stock as
     repayment of amounts owed to related parties valued at $75,659.

f)   The Company issued 2,892,628 shares of its Class A Common Stock for the
     repayment of $142,200 in principal on its 12% Convertible Debentures.

g)   The Company issued 6,936,576 shares of its Class A Common Stock for the
     repayment of $260,000 in principal on its 8% Convertible Debentures

h)   The Company issued 317,526 shares of its Class A Common Stock for interest
     on its 8% and 12% Convertible Debentures valued at $13,883.

i)   The Company issued $425,000 of its 8% Convertible Debentures exercisable at
     an 80% conversion price. The 20% conversion discount totaling $106,250 was
     recorded as interest expense.



                                       12
<PAGE>


                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001



NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a)   Basis of Presentation
     The accompanying consolidated financial statements include the accounts of
     iVoice, Inc. (the "Company" or "iVoice"), and its wholly owned
     subsidiaries. iVoice, Inc. formerly known as Visual Telephone
     International, Inc. ("Visual") was incorporated under the laws of Utah on
     December 2, 1995, subsequently changed to Delaware.

     On May 21, 1999, the Company executed a Reorganization Agreement (the
     "Agreement") that provided that the Company and International Voice
     Technologies, Corp. ("IVT") would be merged and the Company would be the
     surviving entity. On May 25, 1999, a certificate of merger was filed with
     the State of Delaware and the name of the Company was changed to
     iVoice.com, Inc.

     On April 24, 2000, the Company entered into an agreement and plan of
     reorganization with all the stockholders of ThirdCAI, another shell company
     that was a reporting company under the Securities Exchange Act of 1934. In
     this transaction, which took place by means of a short-form merger, with
     ThirdCAI's name being changed to iVoice.com, Inc. The purpose of this
     transaction was to enable the Company's business to be conducted by a
     reporting company, as pursuant to the "eligibility rule" adopted by the
     National Association of Securities Dealers, Inc., or "NASD," as only
     reporting companies may continue to have stock quoted on the OTC Bulletin
     Board.

     On August 24, 2001, the Company amended its certificate of incorporation to
     change its name to iVoice, Inc. from iVoice.com, Inc.

     The Company is publicly traded and is currently traded on the Over The
     Counter Bulletin Board ("OTCBB") under the symbol "IVOC".

b)   Principles of Consolidation
     The accompanying consolidated financial statements include the accounts of
     the Company and its inactive subsidiaries iVoice Acquisition 1, Inc. and
     iVoice Acquisition 2, Inc. All significant intercompany transactions and
     balances have been eliminated in consolidation.

c)   Line of Business
     The Company is a communication company primarily engaged in the
     development, manufacturing and marketing of voice recognition and
     computerized telephony systems for small-to-medium sized businesses and
     corporate departments. The Company's technology allows businesses to
     communicate more efficiently and effectively by integrating speech
     recognition into their traditional office telephone systems with voicemail,
     automated attendant and Interactive Voice Response ("IVR") functions. IVR
     products allow information in PC databases to be accessed from a standard
     touch-tone telephone system. The Company sells its products directly to
     business customers and through Dealer and Reseller channels throughout the
     United States.


                                       13
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001


d)   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.

e)   Revenue Recognition
     The Company obtains its income primarily from the sale of its voice
     recognition and computer technology communication systems. Revenue for
     systems that require customization to meet a customer's specific needs or
     technical requirements is recognized by the contract method of accounting,
     using percentage of completion. Progress toward completion is measured by
     costs incurred to date as a percentage of total estimated costs for each
     contract. Under the percentage of completion method, the asset, "Costs and
     estimated earnings in excess of billings" represents revenue recognized in
     excess of the amount billed. The liability, "Billings in excess of costs
     and estimated earnings" represents billings in excess of revenues
     recognized. The completed contract method is used for systems, which do not
     require customization or installation. The Company recognizes revenue from
     support services at the time the service is performed or over the period of
     the contract for maintenance or support.

f)   Advertising Costs
     Advertising costs are expensed as incurred and are included in selling
     expenses. For the years ended December 31, 2002 and 2001, advertising
     expense amounted to $19,254 and $42,006, 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.

h)   Concentration of Credit Risk
     The Company places its cash in what it believes to be credit-worthy
     financial institutions. However, cash balances exceeded FDIC insured levels
     at various times during the year.

i)   Inventory
     Inventory, consisting primarily of system components such as computer
     components, voice cards, and monitors, is valued at the lower of cost or
     market. Cost is determined on a first-in, first-out basis.


                                       14
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

j)   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.

k)   Software License Cost
     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 patented by Parwan Electronics, Corp. ("Parwan"), 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", and are being amortized
     using the straight-line method over a period of five years. As described
     later in Note 1, 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 un-discounted cash flow
     benefit related to the asset falls below the unamortizated cost. No
     impairment loss was recognized as of December 31, 2002.

l)   Income Taxes
     Income taxes are provided for based on the liability method of accounting
     pursuant to SFAS No. 109, "Accounting for Income Taxes." The liability
     method requires the recognition of deferred tax assets and liabilities for
     the expected future tax consequences of temporary differences between the
     reported amount of assets and liabilities and their tax basis.

m)   Financing Costs
     Financing costs consist primarily of professional fees and various paid
     commissions relating to the issuance of the Company's convertible
     debentures and equity credit lines. These costs are expensed as incurred.

n)   Debt Issue Costs
     Debt issue costs represent the estimated cost of the conversion discount
     feature relating to the issuance of the Company's convertible debentures.
     In previous years, these costs were amortized and charged to interest
     expense over the life of the debt. During the year ended December 31, 2001,
     the Company charged to expense the fair value of the beneficial conversion
     features of the convertible debt as measured at the date of issuance in
     accordance with Emerging Issues Task Force (EITF) Issue 98-5. The switch to
     this method of accounting did not have a material affect on the Company's
     financial statements.

o)   Fair Value of Financial Instruments
     The carrying value of cash and cash equivalents, accounts receivable,
     inventory, accounts payable, accrued expenses and deferred revenue
     approximates fair value due to the relatively short maturity of these
     instruments.


                                       15
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

p)   Long-Lived Assets
     SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for
     Long-Lived Assets to be Disposed of," requires that long-lived assets and
     certain identifiable intangibles to be held and used or disposed of by an
     entity be reviewed for impairment whenever events or changes in
     circumstances indicate that the carrying amount of an asset may not be
     recoverable. The Company has adopted this statement and determined that an
     impairment loss should not be recognized for applicable assets of
     continuing operations.

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

     The computation of basic EPS is computed by dividing income available to
     common stockholders by the weighted average number of outstanding Common
     shares during the period. Diluted earnings per share gives effect to all
     dilutive potential Common shares outstanding during the period. The
     computation of diluted EPS does not assume conversion, exercise or
     contingent exercise of securities that would have an anti-dilutive effect
     on earnings. The shares used in the computations are as follows:

                                                  As of December 31,
                                                2002               2001
                                                ----               ----
Basic and Diluted EPS Purposes               238,826,772       125,732,776
                                             ===========       ===========


r)   Comprehensive Income
     SFAS No. 130, "Reporting Comprehensive Income", establishes standards for
     the reporting and display of comprehensive income and its components in the
     financial statements. The items of other comprehensive income that are
     typically required to be displayed are foreign currency items, minimum
     pension liability adjustments, and unrealized gains and losses on certain
     investments in debt and equity securities. As of December 31, 2002 and
     2001, the Company has no items that represent comprehensive income, and
     thus, has not included a statement of comprehensive income.

s)   Recent Accounting Pronouncements
     SFAS No. 131, "Disclosure About Segments of an Enterprise and Related
     Information" requires that a public company report financial and
     descriptive information about its reportable operating segments. It also
     requires that an enterprise report certain information about its products
     and services, the geographic areas in which they operate and their major
     customers. In determining the requirements of this pronouncement,
     Management believes that there is no materially reportable segment
     information with respect to the Company's operations and does not provide
     any segment information regarding products and services, major customers,
     and the material countries in which the Company holds assets and reports
     revenue.


                                       16
<PAGE>
                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

     SFAS No. 133, "Accounting for Derivative Instruments and for Hedging
     Activities" requires that certain derivative instruments be recognized in
     balance sheets at fair value and for changes in fair value to be recognized
     in operations. Additional guidance is also provided to determine when hedge
     accounting treatment is appropriate whereby hedging gains and losses are
     offset by losses and gains related directly to the hedged item. While the
     standard, as amended, must be adopted in the fiscal year beginning after
     June 15, 2000, its impact on the Company's financial statements is not
     expected to be material as the Company has not historically used derivative
     and hedge instruments.

     SFAS No. 142, "Goodwill and Other Intangible Assets" requires goodwill to
     be tested for impairment under certain circumstances, and written off when
     impaired, rather than being amortized as previous standards require. In
     accordance with the requirements of this pronouncement, the Company has
     assessed the value of the intangible assets reflected as goodwill on its
     books and has determined that no future benefit for these assets exists.
     Accordingly, management has expensed a total of $175,833 in the year ending
     December 31, 2002, related to the carrying value of its goodwill and is
     separately stated in the Consolidated Statement of Operations.

     Statement of Position ("SOP") No. 98-1 specifies the appropriate accounting
     for costs incurred to develop or obtain computer software for internal use.
     The new pronouncement provides guidance on which costs should be
     capitalized, and over what period such costs should be amortized and what
     disclosures should be made regarding such costs. This pronouncement is
     effective for fiscal years beginning after December 15, 1998, but earlier
     application is acceptable. Previously capitalized costs will not be
     adjusted. The Company believes that it is already in substantial compliance
     with the accounting requirements as set forth in this pronouncement and
     therefore believes that adoption will not have a material effect on
     financial condition or operating results.

     SOP No. 98-5 requires that companies write-off defined previously
     capitalized start-up costs including organization costs and expense future
     start-up costs as incurred. The Company believes that it is already in
     substantial compliance with the accounting requirements as set forth in
     this pronouncement and therefore believes that adoption will not have a
     material effect on financial condition or operating results.

     SFAS No. 145 - "Rescission of FASB Statements No. 4, 44, and 64, Amendment
     of FASB Statement No. 13, and Technical Corrections." Under SFAS No. 4, all
     gains and losses from extinguishment of debt were required to be aggregated
     and, if material, classified as an extraordinary item, net of related
     income tax effect. This Statement eliminates SFAS No. 4 and, thus, the
     exception to applying APB No. 30 to all gains and losses related to
     extinguishments of debt. As a result, gains and losses from extinguishment
     of debt should be classified as extraordinary items only if they meet the
     criteria in APB No. 30. Applying the provisions of APB No. 30 will
     distinguish transactions that are part of an entity's recurring operations
     from those that are unusual or infrequent or that meet the criteria for
     classification as an extraordinary item. The Company does not expect the
     adoption of SFAS No. 145 to have a material impact on its financial
     position or results of operations.


                                       17
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

     SFAS No. 146 - "Accounting for Costs Associated with Exit or Disposal
     Activities." This Statement addresses financial accounting and reporting
     for costs associated with exit or disposal activities and nullifies EITF
     Issue No. 94-3, "Liability Recognition for Certain Employee Termination
     Benefits and Other Costs to Exit an Activity (including Certain Costs
     Incurred in a Restructuring)." The principal difference between this
     Statement and EITF 94-3 relates to its requirements for recognition of a
     liability for a cost associated with an exit or disposal activity. This
     Statement requires that a liability for a cost associated with an exit or
     disposal activity be recognized when the liability is incurred. Under EITF
     94-3, a liability was recognized at the date of an entity's commitment to
     an exit plan. This Statement is effective for exit or disposal activities
     that are initiated after December 31, 2002. The Company does not expect the
     adoption of SFAS No. 146 to have a material impact on its financial
     position or results of operations.

     SFAS No. 147 - "Acquisitions of Certain Financial Institutions, an
     amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9,"
     which applies to the acquisition of all or part of a financial institution,
     except for a transaction between two or more mutual enterprises. SFAS No.
     147 removes the requirement in SFAS No. 72 and Interpretation 9 thereto, to
     recognize and amortize any excess of the fair value of liabilities assumed
     over the fair value of tangible and identifiable intangible assets acquired
     as an unidentifiable intangible asset. This statement requires that those
     transactions be accounted for in accordance with SFAS No. 141, "Business
     Combinations," and SFAS No. 142, "Goodwill and Other Intangible Assets." In
     addition, this statement amends SFAS No. 144, "Accounting for the
     Impairment or Disposal of Long-Lived Assets," to include certain financial
     institution-related intangible assets. This statement is effective for
     acquisitions for which the date of acquisition is on or after October 1,
     2002, and is not applicable to the Company.

     SFAS No. 148, "Accounting for Stock Based Compensation-Transition and
     Disclosure." This statement was issued to provide alternative methods of
     transition for a voluntary change to the fair value based method of
     accounting for stock-based employee compensation. In addition, this
     Statement amends the disclosure requirements of Statement 123 to require
     prominent disclosures in both annual and interim financial statements about
     the method of accounting for stock-based employee compensation and the
     effect of the method used on reported results. This statement is effective
     for financial statements for fiscal years ending after December 15, 2002.
     This statement does not have any impact on the Company because the Company
     does not plan to implement the fair value method.


                                       18
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001


NOTE 2 - GOING CONCERN

     The accompanying 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. As of December 31, 2002 and 2001, 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
     consolidated balance sheets is dependent upon continued operations of the
     Company, which in turn, is dependent upon the Company's ability to continue
     to raise capital and/or generate positive cash flows from operations.

     To date, the Company has funded its operations through the issuance of
     convertible debt, sales of its Class A Common Stock and loans from its
     principal stockholder, the proceeds of which are derived from sales of this
     principal stockholder's personal holdings of the Company's Class A Common
     Stock. The Company has incurred accumulated net losses totaling $14,490,329
     through the year ended December 31, 2002, and had a cash balance of
     $566,345 as of that date. Considering expected cash requirements for the up
     coming year, there is substantial doubt as to the Company's ability to
     continue operations.

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

     The financial statements do not include any adjustments relating to the
     recoverability and classification of recorded assets, or the amounts and
     classification of liabilities that might be necessary in the event the
     Company cannot continue in existence.

     In June 2002, the Company entered into financing agreement with Cornell
     Capital Partners, LP that will require the issuance of additional equity as
     described in Note 7 of these financial statements. Management believes that
     appropriate funding will be generated by the financing agreement with
     Cornell enabling the Company to continue operations through the current
     fiscal year. Management is also confident that future product sales will
     generate necessary cash flow, reducing the Company's need for additional
     financing. It should be noted however, that no assurance can be given that
     these future sales will materialize or that additional necessary funding
     can be raised.

     In an effort to reach profitability and become less dependent on its
     requirement to finance continuing operations, the Company is working to
     increase its revenue and profit margins through the establishment of its
     own dealer and reseller channel. Management has determined that addressing
     the following areas, as they relate to innovation, reliability and
     marketability of the Company's products, are crucial to reaching
     profitability:


                                       19
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

-    Accuracy of its core speech recognition technology.

-    Creating desired user features that distinguish the Company's products from
     the competition.

-    Obtaining an agreement with an Original Equipment Manufacturer (OEM) to
     include the Company's products in every unit the manufacturer ships.

     Management believes that leveraging already existing equipment
     manufacturers reseller channels will provide an avenue to distribute
     software only, providing greater profit margins than complete turnkey
     systems, which involve purchasing and sub-assembly of hardware components.
     Management has also introduced several new user features to its Speech
     Enabled Auto Attendant that sets this product apart from competition. The
     introduction of an entirely TAPI (Telephone Application Program Interface)
     based Speech-enabled Auto Attendant and Name Dialer, allows iVoice
     applications to integrate into different PBX systems without the need for
     additional hardware devices. These feature and integration changes should
     provide for greater appeal to telephony re-sellers allowing for more
     economical customer installations with no reduction in the prices iVoice
     charges for its own software.

     Furthermore, the Company intends to add sales personnel in the upcoming
     fiscal year to increase its efforts in establishing relationships with
     OEMs. Management considers good working relationships with manufacturers
     will assist in the promotion of iVoice products to the manufacturers
     authorized re-seller networks.

NOTE 3 - PROPERTY AND EQUIPMENT

           Property and equipment is summarized as follows:
<TABLE>
<CAPTION>

                                                                                               December 31,
                                                                                          2002                2001
                                                                                    --------------       ------------
                 <S>                                                                    <C>                 <C>
                  Equipment                                                            $   62,443          $   59,524
                  Leasehold improvements                                                   11,454              10,184
                  Furniture and fixtures                                                  123,394             123,394
                                                                                     ------------        ------------
                                                                                          197,291             193,102
                  Less:  Accumulated depreciation                                         127,105              86,517
                                                                                     ------------        ------------
                     Property and equipment, net                                    $      70,186        $    106,585
                                                                                    =============        ============

                  Depreciation expense for the years ended December 31, 2002 and
                  2001 was $40,588 and $39,164, respectively.
</TABLE>

                                       20
<PAGE>
                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001


NOTE 4 - GOODWILL AND INTANGIBLES

     During the year ended December 31, 2002, the Company has assessed the value
     of the intangible assets reflected as goodwill on its books and has
     determined that no future benefit for these assets exists in accordance
     with SFAS No. 142, "Goodwill and Other Intangible Assets". Under this
     pronouncement, goodwill and other intangible assets are tested for
     impairment under certain circumstances, and written off when impaired,
     rather than being amortized as previous standards require. Accordingly for
     the year ended December 31, 2002, management has expensed a total of
     $175,833, related to goodwill recorded in connection with the merger with
     ThirdCAI, Inc. Total remaining intangible assets, consisting of costs
     associated with the Company's patent applications amounted to $97,486. At
     December 31, 2001, intangible assets totaled $271,299 net of accumulated
     amortization of $21,024.

NOTE 5 - COSTS IN EXCESS OF BILLINGS/BILLINGS IN EXCESS OF COSTS

     Costs in excess of billings/(billings in excess of costs and estimated
     earnings) on uncompleted contracts as of December 31, 2002 and 2001
     consists of the following:
<TABLE>
<CAPTION>

                                                                                                December 31,
                                                                                          2002                2001
                                                                                    --------------       ------------
                    <S>                                                                   <C>                 <C>
                  Costs incurred on uncompleted contracts                            $     40,637        $     56,385
                  Estimated earnings                                                       87,030              53,763
                                                                                      -----------         -----------
                                                                                          127,667             110,148
                  Less billings to date                                                   103,889             136,551
                                                                                       ----------         -----------
                                                                                      $    23,778        $    (26,403)
                                                                                       ==========         ============
</TABLE>

NOTE 6 - INCOME TAXES

     The reconciliation of the effective income tax rate to the Federal
statutory rate is as follows:
<TABLE>
<CAPTION>
                        <S>                                                                      <C>
                     Federal Income Tax Rate                                                  (34.0)%
                     Deferred Tax Charge (Credit)                                                 -
                     Effect on Valuation Allowance                                             38.7 %
                     State Income Tax, Net of Federal Benefit                                  (4.1)%
                                                                                          ----------
                     Effective Income Tax Rate                                                  0.0 %
                                                                                         ===========
</TABLE>

     As of December 31, 2002 and 2001, the Company had net operating loss carry
     forwards of approximately $8,800,000 and $6,900,000, respectively that can
     be utilized to offset future taxable income for Federal income tax purposes
     through 2015. Utilization of these net loss carry forwards is subject to
     the limitations of Internal Revenue Code Section 382. Because of the
     current uncertainty of realizing the benefit of the tax carry forward, a
     valuation allowance equal to the tax benefit for deferred taxes has been
     established. The full realization of the tax benefit associated with the
     carry forward depends predominantly upon the Company's ability to generate
     taxable income during the carry forward period.


                                       21
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

     For state income taxes, the Company's net operating loss carry forwards
     have been reduced by $2,972,044. During the year ended 2002, the company
     participated in the Technology Tax Certificate Transfer Program sponsored
     by the New Jersey Economic Development Authority and the State of New
     Jersey. Under the program, eligible businesses may sell their unused
     net-operating-loss carry forwards and unused research and development
     tax-credit carry forwards to any corporate taxpayer in the State of New
     Jersey for at least 75% of the value of the tax benefits. After related
     commissions and expenses related to application submission the Company
     received cash proceeds of $152,474.

     Deferred tax assets and liabilities reflect the net tax effect of temporary
     differences between the carrying amount of assets and liabilities for
     financial reporting purposes and amounts used for income tax purposes.
     Significant components of the Company's deferred tax assets and liabilities
     are summarized as follows:
<TABLE>
<CAPTION>

                                                                                                 December 31
                                                                                          2002                2001
                                                                                    ---------------     -----------------
                        <S>                                                         <C>                  <C>
                     Net Operating Loss Carry forwards                              $   3,430,000      $    2,630,000
                     Less:  Valuation Allowance                                        (3,430,000)         (2,630,000)
                                                                                      -----------        ------------
                     Net Deferred Tax Assets                                        $           -      $            -
                                                                                    =============      ===============
</TABLE>

Net operating loss carry forwards expire starting in 2007 through 2017.

NOTE 7 - NOTE PAYABLE

     In August and November, 2002 the Company issued promissory notes payable to
     Cornell Capital Partners, LP totaling $470,000 for advances on the
     equity-line financing agreement entered into with Cornell in June, 2002.

     The note maturities range from 120 to 150 days from the date of issue with
     interest accruing at rates ranging from 8% to 12%per annum on any balance
     left unpaid after the maturity date. It is anticipated that the outstanding
     notes will be fully repaid with Class A common stock issuable under the
     equity-line financing agreement with Cornell Capital. At December 31, 2002,
     a total of $235,333 has been repaid through the issuance of 173,362,846
     Class A common shares leaving an unpaid balance of $234,667.

NOTE 8 - DUE TO RELATED PARTIES

     Due to related parties consisted of amounts due to the officers of the
     company as follows:

     During the period from June 2000 to date, Jerome R. Mahoney, President and
     Chief Executive Officer of the Company has sold personal holdings of the
     Company's Class A common shares and has loaned the proceeds of these sales
     to the Company to fund its working capital requirements. The Company has
     executed a promissory note and Security Agreement in favor of Mr. Mahoney,
     which accrues interest at 9.5% per year on the unpaid balance.


                                       22
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

     On August 13, 2002, the board of directors approved amendments to the
     Promissory Note payable to Mr. Mahoney for monies loaned to the Company
     from the proceeds of stock sales of personal holdings of iVoice Class A
     common stock, unpaid compensation, income taxes incurred from the sale of
     Company stock and unreimbursed expenses. The change allows for the
     conversion of amounts due under the Promissory Note into either (i) one
     Class B common stock share of iVoice, Inc., no par value, for each dollar
     owed, or (ii) the number of Class A common stock shares of iVoice, Inc.
     calculated by dividing (x) the sum of the principal and interest that the
     Note holder has decided to prepay by (y) fifty percent (50%) of the lowest
     issue price of Series A common stock since the first advance of funds under
     this Note, whichever the Note holder chooses, or (iii) payment of the
     principal of this Note, before any repayment of interest.

     On October 14, 2002, Mr. Mahoney converted $1,504,875 of the amounts owed
     to him into 1,504,875 shares of Class B common stock. As of December 31,
     2002 and 2001, the remaining outstanding balance owed to Mr. Mahoney
     amounted to $547,926 and $1,821,610.

     Also included in amounts due to related parties was unpaid compensation to
     Kevin Whalen, the Company's Chief Financial Officer. Effective May 1, 2001,
     Mr. Whalen was granted a salary increase of $20,000. To date, this annual
     salary increase, as well as a bonus of $34,000 for the year-end December
     31, 2001, has been accrued, with the repayment terms as to be mutually
     agreed upon between the Company and Mr. Whalen. At December 31, 2002 and
     2001, total amounts due to Mr. Whalen totaled $67,333 and $47,333
     respectively.


NOTE 9 - CONVERTIBLE DEBENTURES

     The Company has previously issued three series of convertible debentures as
     follows:

     In October 1999, the Company's issued convertible debentures totaling
     $500,000 bearing interest at 12% per annum and payable on December 1, 2000.
     The debentures are convertible into shares of the Company's Class A Common
     Stock at the option of the holder by dividing the outstanding principal and
     interest by the conversion price which shall equal 50% of the average bid
     price during the 20 trading days before the conversion date. As of December
     31, 2002, $384,200 in principal and $99,644 in accrued interest had been
     converted into 30,463,005 shares of the Company's Class A Common Stock.
     Total outstanding principal balance of the 12% convertible debentures at
     December 31, 2002 and 2001 respectively was $115,800 and $194,800 plus
     accrued interest of $23,519 and $82,514.


                                       23
<PAGE>
                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

     In 2001, the Company issued convertible debentures totaling $425,000
     bearing interest at 8% and maturing 5 years from the date of issue. The 8%
     debentures are convertible into Class A common shares at the lesser of (i)
     140% of the closing bid price for the Common Stock on the Closing Date, or
     (ii) 80% of the average of the three lowest closing bid for the 22 trading
     days immediately preceding the date of conversion. As of December 31, 2002,
     all outstanding principal of the 8% debentures and $9,918 in accrued
     interest had been converted into 7,740,679 shares of the Company's Class A
     Common Stock. Total outstanding principal balance of the 8% convertible
     debentures at December 31, 2001 was $165,000 plus accrued interest of
     $3,936.

     On June 11, 2002, the Company entered into a subscription agreement with
     certain purchasers to issue $255,000 in convertible debentures, with
     interest payable at 5% per annum. The notes are convertible into the
     Company's Class A common stock at a price equal to either (a) an amount
     equal to one hundred twenty percent (120%) of the closing bid price for the
     Common Stock on the Closing Date, or (b) an amount equal to eighty percent
     (80%) of the average of the four (4) lowest Closing Bid Prices of the
     Common Stock for the five (5) trading days immediately preceding the
     Conversion Date. As of December 31, 2002, the Company had issued
     129,645,133 shares of Class A common stock for the conversion of $185,000
     in debenture principal and $4,725 in accrued interest. The Company also
     repaid the remaining $70,000 in debenture principal with a 20% premium in
     cash, from proceeds of an advance on the equity line financing with Cornell
     Capital Partners, LP as discussed in Note 6.

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


                                       24
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

NOTE 10 - CAPITAL LEASE OBLIGATIONS

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

     The future minimum lease payments due under the capital leases at December
     31, 2002 are follows:
<TABLE>
<CAPTION>

                                                                                            2002              2001
                                                                                         -----------     ------------
                 <S>                                                                       <C>               <C>
                  Lease payable for computer equipment, payable at $1,367 per
                  month, including interest at 22.31%.
                  Final payment is due June 2003.                                    $      7,693          $  20,749

                  Lease payable for furniture, payable at $2,151 per
                  month, including interest at 20.79%. Final payment
                  due April 2003.                                                           6,235             28,197
                                                                                     ------------        -----------

                  Present value of net minimum lease payments                         $    13,928        $    48,946
                                                                                       ==========         ==========

                  The future minimum lease payments                                   $    14,653          $  56,864
                  Less amount representing interest                                           725              7,918
                                                                                     ------------         ----------
                  Present value of net minimum lease payments                              13,928             48,946
                  Less current portion                                                     13,928             35,108
                                                                                       ----------          ---------

                  Long term capital lease obligations                             $             -        $    13,928
                                                                                   ==============         ==========
</TABLE>

NOTE 11 - COMMITMENTS AND CONTINGENCIES

     a)   The Company leases its headquarters located at 750 Highway 34,
          Matawan, New Jersey. In April 2000, the Company entered into a
          two-year lease agreement for their office currently utilized as the
          corporate headquarters. Monthly lease payments total $11,000. On
          December 5, 2001, the Company renegotiated this lease into an
          eight-month term requiring monthly payments of $7,000 and reduced the
          space it occupies. Effective September 15, 2002, the lease became a
          month-to-month obligation of $8,000 per month. The Company maintains a
          good relationship with its landlord and believes that its current
          facilities will be adequate for the foreseeable future.

     Rent expense under operating leases for the year ended December 31, 2002
     and 2001 was $96,868 and $176,560, respectively.

     The Company's future net minimum annual aggregate rental payments required
     under operating leases that have initial or remaining non-cancelable lease
     terms in excess of one year are as follows:


                                       25
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

                           December 31, 2003            $        -
                                                        ==========

     b)   On May 1, 1999, the Company entered into a five-year employment
          agreement with its majority stockholder (the "Executive"). He will
          serve as the Company's Chairman of the Board and Chief Executive
          Officer for a term of five years. As consideration, the Company agrees
          to pay the Executive a sum of $180,000 the first year with a 10%
          increase every year thereafter.

     c)   The Company filed suit against PanAm Wireless, Inc., the parent
          company of Celpage, Inc., for the installation of a 196-port IVR
          System to recover the balance of a system installation contract. PanAm
          Wireless, Inc. subsequently filed a counterclaim against iVoice
          alleging iVoice's failure to supply PanAm with the required equipment
          and that the system did not provide the services as specified in the
          purchase order. The case has presently been dismissed in court and the
          parties are preparing to enter into mutual releases from any further
          obligations of performance under the original contract. As a result,
          in the year ended December 31, 2002, the Company has expensed $67,650
          previously reflected in other receivables related to this transaction.

     d)   In June 2002, the Company entered into an Equity Line of Credit with
          Cornell Capital Partners, L.P. Pursuant to the Equity Line of Credit,
          the Company may, at its discretion, periodically sell to Cornell
          Capital Partners shares of Class A common stock for a total purchase
          price of up to $5.0 million to raise capital to fund our working
          capital needs. For each share of Class A common stock purchased under
          the Equity Line of Credit, Cornell Capital Partners will pay 91% of
          the 5 lowest closing bid prices on the Over-the-Counter Bulletin Board
          or other principal market on which our common stock is traded for the
          5 days immediately following the notice date. Pursuant to the
          agreement with Cornell Capital Partners, LP, we registered for resale
          on Form SB-2, shares of Class A common stock with the Securities and
          Exchange Commission which was filed on July 2, 2002 and later amended
          on August 8, 2002. On August 14, 2002, the Securities and Exchange
          Commission declared the Form SB-2 filed effective. The offering will
          terminate 24 months after the Securities and Exchange Commission
          declares the registration statement effective. Through December 31,
          2002, we issued $470,000 in promissory notes for advances on the
          equity-line of credit with Cornell as described in Note 6 of these
          financial statements.

     e)   The Company's assets are subject to a Security Agreement with the
          majority stockholder. See Note 7.

NOTE 12 - COMMON STOCK

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


                                       26
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

     a)   Class A Common Stock
          Class A Common Stock consists of the following as of December 31,
          2002: 600,000,000 shares of authorized common stock with a par value
          of $.001, 518,691,163, shares were issued and 518,091,163 shares were
          outstanding.

     Each holder of Class A Common stock is entitled to receive ratably
     dividends, if any, as may be declared by the Board of Directors out of
     funds legally available for the payment of dividends. The Company has never
     paid any dividends on its Common Stock and does not contemplate doing so in
     the foreseeable future. The Company anticipates that any earnings generated
     from operations will be used to finance the growth objectives.

     For the year ended December 31, 2002, the Company had the following
     transactions in its Class A Common Stock:

          1.   The Company issued 10,000 shares of its Class A Common Stock for
               partial payment of leasehold improvements valued at $540.

          2.   The Company issued 2,250,000 shares of Class A Common Stock for
               legal services valued at $45,000.

          3.   The Company issued 26,000,000 shares of Class A Common Stock for
               consulting services valued at $29,380.

          4.   The Company issued 505,921 shares of Class A Common Stock for the
               conversion of $15,000 in debenture principal and 84,766 shares
               for $2,594 in accrued interest on its 8% Convertible Debentures.

          5.   The Company issued 22,229,230 shares of Class A Common Stock for
               the conversion of $79,000 in debenture principal and 4,279,750
               shares of Class A Common Stock for the conversion of $93,085 in
               accrued interest on its outstanding 12% Convertible Debentures.

          6.   The Company issued 6,200,000 shares of Class A common stock for
               fees and services associated with the financing agreement with
               Cornell Capital, LP, valued at $117,800.

          7.   The Company issued 125,729,915 shares of Class A common stock for
               the conversion of $185,000 in debenture principal and 3,915,218
               shares of Class A Common Stock for the conversion of $4,725 in
               accrued interest on its 5% Convertible Debentures.


                                       27
<PAGE>
                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

          8.   The Company issued 173,362,846 shares of Class A common stock for
               repayment of $235,333 in principal and $18,332 in discount on
               $470,000 of notes payable issued for advances on the equity line
               financing with Cornell Capital Partners, LP

     b)   Class B Common Stock
          Class B Common Stock consists of 3,000,000 shares of authorized common
          stock with no par value. Class B stock has voting rights of 100 to 1
          with respect to Class A Common Stock. As of December 31, 2002,
          2,204,875 shares were issued; and 1,858,875 shares were outstanding.
          Class B common stockholders are not entitled to receive dividends.

          For the year ended December 31, 2002, the Company had the following
          transactions in its Class B Common Stock:

          1.   The Company issued 1,504,875 shares of Class B common stock upon
               conversion of $1,504,875 in amounts due to related parties

     c)   Preferred Stock
          Preferred Stock consists of 1,000,000 shares of authorized preferred
          stock with $1.00 par value. As of December 31, 2002, no shares were
          issued or outstanding.

NOTE 13 - STOCK OPTIONS

     During 2002, the Company issued various options as follows:

     a)   On August 23, 2002, the Company issued to one of its employees,
          options to purchase 5,000,000 shares of iVoice Class A Common Stock at
          a price of $.009 per share. The options vest at 25% per year and
          expire five-years from the date of issue.

     During 2001, the Company issued various options as follows:

     a)   The Company issued to its employees, options to purchase 1,655,000
          shares of iVoice Class A Common Stock at an average price of $.076 per
          share. Of these options, 255,000 were cancelled due to employee
          terminations in 2001. The remaining options vest at 25% per year and
          have a five-year expiration from date of issue.

                                       28
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001


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

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

     d)   Warrants to purchase 18,000,000 shares of iVoice Class A Common Stock
          with an exercise price of $.055 to the EMCO\Hanover Group, Inc.
          pursuant to a consulting agreement with them. The warrants were
          exercised and are reflected as a subscription receivable. See Note 10
          regarding shares issued for exercise of this warrant.

     e)   On November 15, 2001, the Company issued warrants to purchase a total
          of 250,000 shares of iVoice Class A Common Stock at $.047 per share to
          Beacon Capital LLC in consideration for the placement of $150,000 of
          the Company's 8% convertible debentures pursuant to an subscription
          agreement with them. The warrants are exercisable at any time prior to
          their five (5) year expiration and carry a cash or cashless exercise
          at the option of the holders. a) Options outstanding, except options
          under employee stock option plan, are as follows as of December 31,
          2002:
<TABLE>
<CAPTION>
                      <S>                                <C>                 <C>
                     Expiration Date                    Exercise Price       Shares
                     ----------------                   --------------      -----------
                     December 22, 2003                     .1000               10,000
                     January 5, 2004                       .1200               10,000
                     January 21, 2004                      .1177               10,000
                     February 5, 2004                      .1430               10,000
                     March 17, 2004                        .0869               15,000
                     April 6, 2004                         .0583               15,000
                     August 17, 2005                       .1406            5,490,000
                     January 9, 2006                       .1045              200,000
                     February 27, 2006                     .1406               87,310
                     February 28, 2006                     .1458               78,000
                     March 13, 2006                        .1221               39,200
                     April 30, 2006                        .1323              343,750
                     November 14, 2006                     .0470              250,000
                                                                           ----------
                                                                            6,558,260
</TABLE>

          Employee Stock Option Plan
          During the year ended December 31, 1999, the Company adopted the
          Employee Stock Option Plan (the "Plan") in order to attract and retain
          qualified personnel. Under the Plan, the Board of Directors (the
          "Board"), in its discretion may grant stock options (either incentive
          or non-qualified stock options) to officers and employees to purchase
          the Company's common stock at no less than 85% of the market price on
          the date the option is granted. Options generally vest over four years
          and have a maximum term of five years. During 1999, 20,000,000 shares
          were reserved for future issuance under the plan. As of December 31,
          2002, 16,559,000 options to purchase shares were granted. A total of
          9,000,000 of these granted options were exercised. At December 31,
          2002, a total of 6,891,083 options to purchase Class A common shares
          were outstanding and held by company employees. The exercise prices
          range from $0.009 to $3.75 per share. All options issued to employees
          vest at 25% per year and expire in 5 years.


                                       29
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

                  The following employee options have been exercised to date:

  Optionee           Exercised      # Shares       Price
--------------       ----------    ----------    ---------
Joel Beagleman        03/20/00      9,000,000      0.033

          The Company has adopted only the disclosure provisions of SFAS No.
          123. It applies Accounting Principles Bulletin ("APB") Opinion No. 25,
          "Accounting for Stock Issued to Employees", and its related
          interpretations in accounting for its plan. It does not recognize
          compensation expense for its stock-based compensation plan other than
          for restricted stock and options/warrants issued to outside third
          parties. If the Company had elected to recognize compensation expense
          based upon the fair value at the grant date for awards under its plan
          consistent with the methodology prescribed by SFAS No. 123, the
          Company's net loss and loss per share would be increased to the
          proforma amounts indicated below:

                              For The Year Ended,
                                 December 31,
                             2002           2001
                         -------------  ------------
Net Loss
 As Reported             $(2,059,460)   $(3,447,434)
                         ===========    ===========
 Proforma                $(2,506,143)   $(3,848,540)

Basic Loss Per Share
 As Reported             $      (.02)   $      (.03)
                         ============   ===========
 Proforma                $      (.02)   $      (.03)
                         ============   ============

          The fair value of these options were estimated at the date of grant
          using the Black-Scholes option-pricing model with the following
          weighted-average assumptions for the years ended December 31, 2002 and
          2001: dividend yield of 0%; expected volatility of 320%; risk-free
          interest rates of 4.30% and 5.50% respectively; and expected life of
          4.21 and 4.05 years, respectively.


                                       30
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

          The Black-Scholes option valuation model was developed for use in
          estimating the fair value of traded options, which have no vesting
          restrictions and are fully transferable. In addition, option valuation
          models require the input of highly subjective assumptions including
          the expected stock price volatility. Because the Company's employee
          stock options have characteristics significantly different from those
          of traded options, and because changes in the subjective input
          assumptions can materially affect the fair value estimate, in
          management's opinion, the existing models do not necessarily provide a
          reliable single measure of the fair value of its employee stock
          options.


The following summarizes the stock option and warrant transactions:
<TABLE>
<CAPTION>

                                                                         Weighted          Other               Weighted
                                                       Employee           Average          Options             Average
                                                  Stock Options          Exercise           and                Exercise
                                                    Outstanding           Price            Warrants       Price
                                                    -----------        -----------      ------------   ----------------
        <S>                                           <C>               <C>              <C>                  <C>
         Balance, January 1, 2001                       764,000      $  .670               5,960,000        $     0.456
           Granted                                    1,795,000      $  .078              18,998,260        $     0.058
           Exercised                                         -       $  .000             (18,000,000)       $     0.040
           Canceled                                    (612,917)     $  .246                (400,000)       $     1.328
                                                    -------------    -------            -------------       -----------

            Balance, December 31, 2001                1,946,083      $  .257               6,558,260        $     0.135
           Granted                                    5,000,000      $  .009                      -         $     0.000
           Exercised                                         -       $  .000                      -         $     0.000
           Canceled                                     (55,000)     $  .023                     (-)        $     0.000
                                                   --------------    -------         ---------------        -----------

         Balance, December 31, 2002                   6,891,083      $  .077               6,558,260        $     0.135
                                                 ==============      =======              ==========        ===========


         Outstanding and Exercisable,
          December 31, 2001                             265,583     $   .576               6,558,260        $     0.135
                                                  =============     ========            ============        ===========

         Outstanding and Exercisable,
          December 31, 2002                             705,333     $   .369               6,558,260        $     0.135
                                                  =============     ========            ============        ===========

</TABLE>

       The weighted average remaining contractual lives of the employee stock
       options is 4.21 years at December 31, 2002.

NOTE 13 -  SUBSEQUENT EVENTS

          On January 13, 2003, the Company amended its certificate of
          incorporation in the state of Delaware to:


                                       31
<PAGE>

                                  iVOICE, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2002 AND 2001

     a)   Increase the number of Authorized Class A Common Stock Shares to a
          total of ten billion (10,000,000,000) shares.

     b)   Change the stated par value of the Class A Common Stock Shares from
          $.001 to $.0001 per share.

     c)   Increase the number of Authorized Class B Common Stock Shares to a
          total of fifty million (50,000,000) shares.

     d)   Revise the conversion ratio and voting rights of Class B Common Stock
          Shares whereby upon conversion, each share of Class B Common Stock is
          convertible into Class A Common Stock Shares calculated by dividing
          the number of Class B Common Stock Shares being converted by fifty
          percent (50%) of the lowest price that the Company had previously
          issued its Class A Common Stock since the Class B Common Stock Shares
          were issued.

     e)   Permit Class B Common Stock Shares to receive dividends upon the
          declaration of a dividend to Class A Common Stock shareholders.



                                       32
<PAGE>