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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

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

For the transition period from [    ] to
[    ]

Commission file number 000-27387

VOICE MOBILITY INTERNATIONAL,
INC.(Exact name of registrant as specified in its
charter)

|NEVADA                                                         | 33-0777819                          
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.)
|                                                               |                                     
|107  645 Fort Street                                          |                                     
|Victoria, British Columbia, Canada                             | V8W 1G2                             
|(Address of principal executive offices)                       | (Zip Code)                          

Registrants telephone number, including area code
(250)978-5050

Securities registered under Section 12(b) of the Act:

|Title of each class | Name of each exchange on which registered
|------------------- | -----------------------------------------
|Nil                 | Nil                                      

Securities registered pursuant to Section 12(g) of the Act:

Common Shares, par value $0.001(Title of class)

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ 
 ]    No [X]

Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ 
 ]    No [X]

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- 2 -

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

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such
shorter period that the registrant was required to submit and post such files).
(Not currently applicable to the registrant) Yes [ 
 ]    No [   ]

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not
contained herein, and will not 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-K or any amendment to this Form 10-K.
[   ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

|Large accelerated filer [   ] |                                                     | Accelerated
      filer                
       [   ]
|----------------------------- | --------------------------------------------------- | ----------------------------------------------------
|                              |                                                     |                                                     
|Non-accelerated filer   [   ] | (Do not check if
      a smaller reporting company) | Smaller reporting company [X]                       

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

State the aggregate market value of the voting and non-voting
common equity held by non-affiliates computed by reference to the price at which
the common equity was last sold, or the average bid and asked price of such
common equity, as of the last business day of the registrants most recently
completed second fiscal quarter. $13,622,632based on a price of $0.25
per share, being the average of the bid and asked price of the registrants
common stock as quoted on the OTC Bulletin Board on June 30, 2009.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities
under a plan confirmed by a court. Yes [   ]    No
[   ]

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

Indicate the number of shares outstanding of each of the
registrants classes of common stock, as of the latest practicable date.
67,271,845 common shares issued and outstanding as of July 5, 2010.

DOCUMENTS INCORPORATED BY REFERENCE

List hereunder the following documents if incorporated by
reference and the Part of the Form 10-K (e.g., Part I, Part II, etc.) into which
the document is incorporated: (1) Any annual report to security holders; (2) Any
proxy or information statement; and (3) Any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1933. The listed documents should be
clearly described for identification purposes (e.g., annual report to security
holders for fiscal year ended December 24, 1980). Not
Applicable

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VOICE MOBILITY INTERNATIONAL, INC.

TABLE OF CONTENTS

|         |            |                                                                                                                    | Page No.
|-------- | ---------- | ------------------------------------------------------------------------------------------------------------------ | --------
|         |            |                                                                                                                    |         
|Part I   |           
|         |            |                                                                                                                    |         
|         | Item 1     | Business                                                                                                           | 2       
|         | Item 1A    | Risk Factors                                                                                                       | 9       
|         | Item 1B    | Unresolved Staff Comments                                                                                          | 15      
|         | Item 2     | Properties                                                                                                         | 15      
|         | Item 3     | Legal Proceedings                                                                                                  | 15      
|         | Item 4     | (Removed and Reserved)                                                                                             | 15      
|         |            |                                                                                                                    |         
|Part II  |           
|         |            |                                                                                                                    |         
|         | Item 5     | Market for Registrants Common Equity, Related Stockholder
      Matters and Issuer Purchases of Equity Securities | 15      
|         | Item 6     | Selected Financial Data                                                                                            | 18      
|         | Item 7     | Management's Discussions and Analysis of Financial Conditions
      and Results of Operations                      | 18      
|         | Item 7A    | Quantitative and Qualitative Disclosures About Market Risk                                                         | 24      
|         | Item 8     | Financial Statements                                                                                               | 25      
|         | Item 9     | Changes in and Disagreements with Accountants on Accounting
      and Financial Disclosure                         | 26      
|         | Item 9A(T) | Controls and Procedures                                                                                            | 26      
|         | Item 9B    | Other Information                                                                                                  | 27      
|         |            |                                                                                                                    |         
|Part III |           
|         |            |                                                                                                                    |         
|         | Item 10    | Directors, Executive Officers and Corporate Governance                                                             | 28      
|         | Item 11    | Executive Compensation                                                                                             | 32      
|         | Item 12    | Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters               | 36      
|         | Item 13    | Certain Relationships and Related Transactions, and Director
      Independence                                    | 37      
|         | Item 14    | Principal Accounting Fees and Services                                                                             | 38      
|         | Item 15    | Exhibits, Financial Statement Schedules                                                                            | 39      
|         |            |                                                                                                                    |         
|         |            | Signatures                                                                                                         | 75      

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PART I

Item
1.           Business.

This annual report contains forward-looking statements which
are not purely historical and include any statements regarding beliefs, plans,
expectations, or intentions, including without limitation statements that relate
to future events or our future financial performance. In some cases, you can
identify forward-looking statements by terminology such as "may", "should",
"expects", "plans", "anticipates", "believes", "estimates", "predicts",
"potential" or "continue" or the negative of these terms or other comparable
terminology. These statements are only predictions and involve known and unknown
risks, uncertainties and other factors, including the risks in the section
entitled "Risk Factors", that may cause our or our industry's actual results,
levels of activity, performance or achievements to be materially different from
any future results, levels of activity, performance or achievements expressed or
implied by these forward-looking statements.

Although we believe that the expectations reflected in the
forward-looking statements are reasonable, we cannot guarantee future results,
levels of activity, performance or achievements. Except as required by
applicable law, including the securities laws of the United States, we do not
intend to update any of the forward-looking statements to conform these
statements to actual results.

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States generally accepted
accounting principles.

In this annual report, unless otherwise specified, all dollar
amounts are expressed in United States dollars. All references to "Cdn$" refer
to Canadian dollars and all references to "common shares" refer to the common
shares in our capital stock.

Corporate Overview

We were incorporated on October 2, 1997 in the State of Nevada
under the name "Equity Capital Group, Inc.", and we are the successor to the
voice service and related messaging business founded by Voice Mobility Inc. in
1993. On June 24, 1999, we changed our name to "Voice Mobility International,
Inc." We have four wholly-owned subsidiaries: Voice Mobility Inc., which is a
Canadian corporation incorporated on September 15, 1993; Voice Mobility (US)
Inc., which is a Nevada corporation incorporated on April 6, 2000; Voice
Mobility Canada Limited, which is a Canadian corporation incorporated on May 26,
1999; and VM Sub Limited, which is a Canadian corporation incorporated on May
26, 1999.

Unless otherwise indicated, all references to "we", "us", "our"
and "Voice Mobility" means Voice Mobility International, Inc., its predecessor
company, Voice Mobility Inc. and its other subsidiaries.

Our head office is located at 107  645 Fort Street, Victoria,
British Columbia, Canada.

History

Our subsidiary, Voice Mobility Inc., was incorporated in 1993
under the name "WGT Teleserve Inc.", and was originally focused on providing
enhanced telecommunications services such as voice mail, fax handling and
internet access to specific vertical markets. In the spring of 1997, we decided
to shift focus and began developing a comprehensive enhanced messaging product.
Early versions of our messaging products were subsequently released in 1998,
1999 and 2000.

In June 1999, the shareholders of Voice Mobility Inc. completed
a reverse acquisition whereby Voice Mobility Inc. became a wholly owned
subsidiary of our company. At that point, we effectively commenced operations as
a United States company and our common stock was quoted on the OTC Bulletin
Board under the symbol VMII. In April 2001, we completed an equity financing and
subsequently began trading on the Toronto Stock Exchange in July under the
symbol VMY.

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Business Overview

We are engaged in the enhanced and multimedia messaging area of
the telecommunications market. We market and deploy next generation messaging
solutions that provide enhanced messaging features and functionality while
ensuring integration with or replacement of existing first generation voicemail
messaging systems. Our enhanced messaging software suite:

- allows telecommunications companies to replace their aging legacy
  voicemail systems and incorporate incremental offerings such as real time call
  connect, voicemail to email, fax to email and unified mailbox services;
- can serve as a first generation voice-mail and messaging system for
  telecommunications companies that do not have an existing voice-mail system,
  with the added capability of providing incremental offerings such as real time
  call connect, voicemail to email, fax to email and unified mailbox services;
  and
- is an ideal solution for telecommunication companies or enterprise
  customers that have both a large central location and many secondary locations
  of varied size but wish to put them all under a single umbrella for voice and
  unified communications. Whether the remote locations have their own telephone
  legacy systems or utilize voice over internet protocol (commonly referred to
  as VOIP) technology, the software solution can ensure that company-wide
  deployment of voice and unified messaging is uniform, consistent and
  integrated.

Legacy voicemail systems use technology that is 15 to 20 years
old and are incapable of being upgraded, or economically upgraded, to offer
enhanced messaging services, like real time call connect, voicemail to email,
fax to email services and unified mailbox services. Our focus is on the
development of technology that takes advantage of the market known as the VOIP
market. VOIP is a general term for technologies that use internet protocol for
transmission of packets of data which include voice, video, text, fax, and other
forms of information that have traditionally been carried over the dedicated
circuit-switched connections of the public switched telephone network. General
industry and analyst consensus shows that the VOIP market is being adopted by
the public and growing at a considerable rate.

Our family of products are based upon open systems hardware and
software to create a solution that has low "per subscriber" fixed costs. The
solution is designed to be delivered as a messaging software solution only, or
as a complete turnkey solution including complete hosting, hardware, system
configuration, migration, operating support system integration and billing
support system integration. In addition, customers may license one or more of
the incremental services or choose to license our entire enhanced messaging
software suite.

With the increased use of personal communication devices, such
as cell phones and laptops, it has become a considerable challenge to manage the
information retrieval process from these various devices. Users of these
multiple communication devices are increasingly demanding a means of easily
managing these devices in a time saving manner. In addition, users are
increasingly demanding instant access to voicemails, faxes and emails regardless
of which communication device is available to them or their physical location at
any point in time.

Voice Mobilitys UCN 250 is a highly scalable Linux based,
voicemail and unified messaging solution built for carrier, mid to large size
enterprise, government and education environments. It provides a robust seamless
migration path from Octel and other legacy systems on a platform that can grow
along with our customers needs.

The UCN 250 is purchased by our customers for the following key
characteristics:

- Seamless replacement of legacy Caller Applications vital to our business
  customers;
- Minimize end user disruption with the UCN 250s Octel Aria telephone
  interface;
- Access to voice and fax messages via any phone, smart phone, web browser
  or email;
- Enhanced messaging with real-time call control features like single number
  reach, find me follow me, call announce and call screening;
- An open Web Services API that is standards based and can be used to create
  custom integrations to meet unique requirements; and
- Scalable and partitionable from 1000s to 1,000,000s mailboxes per system.

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Octel Migration and Enhancement

The UCN 250 allows customers to migrate and replace aging
voicemail platforms such as Octel Aria and Sierra. Customers get all the
functionality and usability of their old systems with the added benefit of many
new unified messaging applications and features such as find me follow me, and
voice messages and fax to email. New locations can be added or entire
organizations can be migrated with our unique migration tools.

Google Apps

Google Apps integration is built into the UCN 250. Gmail
integration for voice and fax delivery to email, as well as Google Gadget APIs
let businesses and end users increase productivity and maximize collaboration
between their phone system and their Google Apps applications.

Open API Philosophy

Voice Mobility has always subscribed to a best in class
philosophy. We specialize in messaging solutions and partner with technology
partners that specialize in applications similar to CRM, speech technologies and
billing systems. This mind set has allowed us to increase speed to market with
new applications and functionality.

Mobile Platform Support

The UCN 250 supports mobile devices and smart phones like
iPhone, Blackberry and Android. Messaging and real time call management is
integrated with mobile devices to allow users to manage all their messaging and
communications while mobile.

The UCN 250 Unified Messaging Platform

The UCN 250 platform is designed for installations where high
availability, reliability and scalable deployments are important, or where a
full carrier-grade platform is required. High availability is supported both
from the hardware and software perspectives. The UCN 250 platform is highly
flexible and easily configures to meet our customers specific needs.

The UCN 250 platform has the following key advantages:

- Supports any combination of TDM and SIP trunks, with unlimited trunk
  groups and outbound SIP proxies;
- Industry leading Multi-Tenancy support with unlimited tenants,
  communities, and custom branding;
- Highly flexible deployment and capacity options allows our customers to
  cost effectively support anywhere from 1,000 to over 1 million subscribers;
- Fully configurable redundancy  any, or all, components are deployable in
  a redundant manner, ensuring budget and specific needs are met;
- No single-point-of-failure, capable of 99.999% uptime;
- Supports deployments requiring a geographic disaster recovery solution;
- No client side software to deploy or support; and
- Carrier-grade reliability brought to the enterprise.

UCN 250 On Premise

The UCN 250 platform is designed for installations where high
reliability and scalable deployments are important, or where a full
carrier-grade platform is required. Customers can buy and deploy the UCN 250 on
their own premises. This option appeals to customers who prefer to have their
own telecom and/or IT staff manage their voicemail, IT and telecom
infrastructure.

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UCN 250 Managed Service

Customers can buy and deploy the UCN 250 on their own premises,
but have the complete solution managed by a trusted Voice Mobility VAR or
Systems Integrator.

This option often appeals to larger customers who:

- May have existing relationships for telecommunications and/or IT
  management with third parties;
- Wish to engage a third party for this purpose; and
- Want their data secured in their own data center.

UCN 250 UMaaS / On Demand

The UCN 250 platform operates in both TDM and IP telephony
environments, is hosted in a secure and redundant data center, and is managed
24/7 by trained messaging engineers. Depending on the level of managed care the
customer requests, we and our certified partners provide the following benefits
to UMaaS / On Demand messaging systems:

- Data centers can be designed as fully redundant call processing nodes;
- Five-nines reliable NEBS-compliant architectures are available;
- 24/7 support for Hosted solutions;
- Dedicated administrators to manage mailbox moves adds and changes are
  available to add to security of the customers critical data;
- All network leased lines are handled by Voice Mobility and its certified
  partners and can be incorporated into billing;
- Clients can receive a monthly turnkey mailbox;
- Attractive monthly mailbox fees per user are available through our
  partners;
- All systems are upgraded to the latest release;
- Mailboxes are fully unified with voice and fax delivery to any email user;
  and
- Systems are manufactured and supported by us and our certified partners.

Professional Services

Voice Mobility can provide professional services to customize
our solutions to meet our customers unique communications requirements. Our
team can customize the UCN 250 solution to allow customers to:

- Maximize total investment in voicemail, unified messaging and
  telecommunications infrastructure;
- Reduce demands on IT staff to quickly address and resolve technological
  issues;
- Implement a path to unified communications the customers way; and
- Solves unique business communications issues.

Pricing of Our Enhanced Messaging Software

We have customized pricing structures in place for strategic
partners, system integrators and original equipment manufacturer (OEM)
distributors that resell our enhanced messaging software to telecommunication
companies.

Target Market for Our Enhanced Messaging Software

We target hosted service providers, mid to large size
enterprises, governments and education markets. A horizontal market for us is
Google Apps: customers looking for a collaborative unified messaging application
to add to their cloud based Google Applications. These markets are interested in
a number of ways to deploy the UCN 250. Thus the deployment methods have evolved
to customer premise, managed services and UMaaS or hosted.

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Marketing and Distribution Methods

The complexity of the current voicemail systems used by hosted
service providers and business customers requires not only a sound understanding
of the voicemail system capabilities but also a thorough understanding of where
and how these systems can interconnect with other systems.

There are very few companies that have earned the trust of our
target market. These companies include large hosted service providers and large
system integrators and consultants. We recognize this reality and understand
that these relationships have been forged over an extended period of time. We
also know that, because of these long standing relationships, businesses will
purchase their technology directly from these "trusted" companies.

We are dedicated to building and fostering strategic
relationships with these companies. Our target market will purchase our unified
messaging software directly from our partners. Our channel partner will assist
in installation, maintenance and support of our enhanced messaging software. We
will play a supporting role to these partners. We intend to limit the number of
relationships we enter into with such companies and systems integrators,
distribution partners and original equipment manufacturer distributors. The key
in this area of the business is the quality of the partner, not the quantity of
partners.

We also target original equipment manufacturer distributors who
wish to include our unified messaging software as a component for the
application they manufacture and distribute. The original equipment manufacturer
distributors will be responsible for all selling, distribution, support and
maintenance of our unified messaging software.

There are some target markets where our company has no specific
representation through strategic partners, system integrators and original
equipment manufacturer distributors. In these markets, we intend to sell
directly to the customer or will introduce our partners to the customer where
appropriate.

Key Strategic Partners

NMS Communications provides us with communication boards,
software interfaces for their hardware solutions, and access to a broad range of
resources for sales, marketing and development.

Service providers now have the ability to operate our software
on Intel processor based hardware made and distributed by
commercial-off-the-shelf computer hardware vendors such as IBM, DELL, HP and
others. This provides our strategic partners and system integrators (many have
strategic relationships with certain computer hardware vendors) and
telecommunication companies with the comfort that they can choose their
preferred computer hardware to operate our enhanced messaging software.

Competition

Well-established suppliers such as Avaya, Cisco, Microsoft,
AVST, Lucent and Comverse currently dominate the business and service provider
market segments. These competitors have provided voice mail services to both
wired and wireless telecommunication companies since the early 1980's. In
evaluating the competitive landscape, we believe our closest competitors are
companies offering large scale, Octel replacement business unified
communications applications.

Lucent and Comverse have continued to target the Tier 1 service
providers including wireless and wireline providers since this is where their
relationships and expertise are.

Avaya, Cisco, Microsoft and AVST all have solutions that
address the business verticals that Voice Mobility is targeting, however they
lack the ability to scale or migrate Octel populations with little impact to the
user and integrate across multiple switch platforms.

All of our primary competitors and some of our other
competitors have significantly greater financial, technical, manufacturing,
sales, marketing and other resources than us and have achieved greater name
recognition for their existing products and technologies than we have.

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- 7 -

Our success largely depends upon our strategic partnerships
with hosted service providers and leading system integrators. No assurance can
be given that our competitors will not develop new technologies or enhancements
to existing products or introduce new products that will offer superior price or
performance features. We expect our competitors to offer new and existing
products at prices necessary to gain or retain market share.

Competitive Advantages

We compete on the basis of price and product
completeness/performance. We believe that the following are some of our
competitive advantages over our competitors:

- Our business and pricing models are designed to set a new expectation in
  the market for price and flexibility;
- Our unified messaging software provides the same features and functionality
  as current voicemail solutions but offers additional value-added messaging
  features;
- Our application provides a lower cost of ownership to our customers as they
  no longer have to make a substantial investment in maintaining, upgrading or
  replacing their legacy voicemail systems;
- We have developed a series of migration options designed to migrate large
  blocks of mailboxes from legacy voicemail systems while ensuring that our
  software can also emulate features and interfaces of the legacy voicemail
  systems;
- Our solutions have the unique ability to be deployed as customer premise
  solutions, managed services and UMaaS or hosted at the service providers
  datacenter or central office;
- We have developed a highly available, scalable, hosted solution that can be
  separated to provide functionality for multiple end user segments such as
  residential, wireless, enterprise and broadband; and
- Our unified messaging software platform is designed to accommodate and
  support more users while also satisfying the stringent availability
  requirements of telecom and business environments.

Our enhanced messaging software provides all of the following
features:

- legacy voicemail replacement;
- one number;
- voicemail to email;
- fax to email;
- a single unified mailbox;
- find-me and follow-me / real-time call connect;
- call announcement and call screening;
- message notification;
- voice short messaging service (SMS);
- storage of messages; and

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- 8 -

- speech recognition integration.

We are not aware of any competitor that has developed a
messaging solution that provides all of these features, that incorporates the
ability to emulate existing voicemail technology, provides advanced unified
communications features and capabilities and provides migration options from
legacy voicemail systems at a lower total cost of ownership.

Industry Description

The telecommunication industry is slowly realizing that it is
currently utilizing aging technology to provide voice-messaging services. This
technology dates back to older voicemail systems developed in the 1980s and is
in need of replacement. We believe that the telecommunications companies realize
that these older systems require replacement and are currently looking for next
generation messaging platforms and solutions that will allow them to bring to
market new product offerings that are being demanded by the marketplace. In
particular, Tier 1 telecommunications companies, the incumbent telephone
companies, are starting to think about the replacement of their legacy voice
mail systems; partly because of the current and expected demands of businesses
and individuals to better manage their various communications devices. Market
drivers include subscriber demand for new services, telecommunications companies
demand for lower priced technology and manufacturer discontinuances of existing
voice messaging technology.

Currently, the market is being serviced by legacy voicemail
systems, and with a small number of carriers offering enhanced messaging
features and functionality. These telecommunications companies who are offering
these features are having limited success in deployment and penetration. There
are very few telecommunications companies offering new features to date despite
all such companies expressing interest in offering such enhanced features. The
largest barrier is the migration of voicemail subscribers from the aging legacy
voicemail technology to new enhanced messaging technology. Being able to
complete this migration in a cost effective and non-disruptive manner to
existing customers is of top priority for the entire telecommunications
industry.

Operating telecommunications companies are extremely protective
of their current revenue streams. They are also reluctant to move to newer
technology until the value of doing so has been proven. While newer technologies
have proven to be less costly from an operations perspective, companies will be
reluctant to upgrade their legacy voicemail systems until:

- it is abundantly clear that new features have considerable end user demand;
- it has been proven that the new features can command an attractive price
  point;
- vendors can demonstrate that they can build platforms which allow access to
  new revenue without disrupting current revenue; and
- it is clear that IP based initiatives such as VOIP will require equipment
  changes.

All of these prerequisites are in place now in many
telecommunications companies to some degree. The overall expenditures for voice
messaging systems in the next several years are expected to increase. This
expected increase in spending is partly due to the lack of investment over the
last several years and partly due to the fact that many telecommunications
companies are evolving their networks to VOIP and other relevant next generation
technology infrastructure.

Significant Customers

Sales for the fiscal year ended December 31, 2009 were from
hardware and software product sales and training and installation services
provided to Verizon and The Generations Network and product license sales,
hardware and software product sales and training and installation services to
five resellers. Sales for the fiscal year ended December 31, 2008 were from
technical training and support services provided to Avaya and product license
sales, hardware and software product sales and training and installation
services to eight resellers. Sales to Verizon and The Generations Network comprised 12% of revenue for the fiscal
year ended December 31, 2009. Sales to Avaya comprised 88% of revenue for the
fiscal year ended December 31, 2008.

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- 9 -

Research and Development

Our research and development team is located in Victoria,
British Columbia, Canada. Our research and development team designs, develops,
tests, documents, and localizes our enhanced messaging product. The research and
development team's feature and release direction is governed by all strategic
product stakeholders. Each feature is detailed in written business requirements
created by our business requirements team. Releases are coordinated with our
marketing, sales, and system integration/partner support departments to ensure
timely delivery of the grouped features to our partners, clients, and ultimately
our target market. Appropriate technology is chosen for all work after
performing a technical analysis of each requested feature and also ensuring a
match for that release's system requirements. All development work is carried
out with reviews and decision gates as part of an overall product development
process. The research and development team follows industry best practices for
software engineering and encourages continuous process improvement. Research and
development expenses for the years ended December 31, 2009 and 2008 were
$320,760 and $632,043 respectively.

Intellectual Property

We rely on trade secrets to protect our intellectual property.
We do not have any registered patents, trademarks, or copyrights. We execute
confidentiality and non-disclosure agreements with our employees and limit
access to and distribution of our proprietary information. We do not have and do
not intend to apply for patents on our products. Management believes that the
patent application process in many countries in which we intend to sell products
would be time-consuming and expensive and any patent protection may be out of
date by the time the patent is granted.

The departure of any of our management or significant technical
personnel, the breach of their confidentiality and non-disclosure obligations,
or the failure to achieve our intellectual property objectives may have a
material adverse effect on our business, financial condition and results of
operations. We believe our success depends upon the knowledge and experience of
our management and technical personnel and our ability to market our existing
products and to develop new products. We do not have non-compete agreements with
our employees who are employed on an "at-will" basis. While we believe that we
have adequately protected our proprietary technology, and we will take all
appropriate and reasonable legal measures to protect it, the use of our
processes by a competitor could have a material adverse effect on our business,
financial condition and results of operations.

Employees

As of July 5, 2010 we had no employees.

Item 1A.        Risk
Factors

Much of the information included in this annual report includes
or is based upon estimates, projections or other forward-looking statements.
Such forward-looking statements include any projections or estimates made by us
and our management in connection with our business operations. While these
forward-looking statements, and any assumptions upon which they are based, are
made in good faith and reflect our current judgment regarding the direction of
our business, actual results will almost always vary, sometimes materially, from
any estimates, predictions, projections, assumptions, or other future
performance suggested herein. We undertake no obligation to update
forward-looking statements to reflect events or circumstances occurring after
the date of such statements.

Such estimates, projections or other forward-looking statements
involve various risks and uncertainties as outlined below. We caution readers of
this annual report that important factors in some cases have affected and, in
the future, could materially affect actual results and cause actual results to
differ materially from the results expressed in any such estimates, projections
or other forward-looking statements. In evaluating us, our business and any
investment in our business, readers should carefully consider the following
factors.

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- 10 -

As at June 8, 2010, our stock has been cease traded in
British Columbia, Ontario, and Quebec and we are non-compliant with FINRA Rule
6530 and, as a result, our company has been delisted from the OTC Bulletin Board
and cannot be traded on the Toronto Stock Exchange (the TSX).

Our common shares have been cease traded in British Columbia,
Ontario, and Quebec from April 30, 2010, May 17, 2010, and May 20, 2010
respectively for failure to file our annual financial statements, managements
discussion and analysis, and annual information form for the year ended December
31, 2009. As a result, trading in our common shares is prohibited in those
jurisdictions and our common shares cannot be traded on the TSX or the TSX
Venture Exchange until those cease trade orders have been rescinded. Further,
while, as at July 5, 2010, our common shares have not been cease traded in
Alberta and New Brunswick, it is likely that the security commissions in those
jurisdictions will issue similar orders unless the outstanding reports are
filed.

Companies trading on the OTC Bulletin Board generally must be
reporting issuers under Section 12 of the Securities Exchange Act of 1934, as
amended, and must be current in their reports under Section 13, in order to
maintain price quotation privileges on the OTC Bulletin Board. More
specifically, FINRA has enacted Rule 6530, which determines eligibility of
issuers quoted on the OTC Bulletin Board by requiring an issuer to be current in
its filings with the Securities and Exchange Commission (the SEC), subject to
a 30 day grace period. We failed to timely file this Annual Report on Form 10-K
with the SEC for the year ended December 31, 2009 which was due on March 31,
2010 and Interim Report on Form 10-Q for the three month period ended March 31,
2010 which was due on May 17, 2010. As a result, we are non-compliant with FINRA
Rule 6530 and the quotation of our securities on the OTC Bulletin Board is
prohibited. Until we are compliant with FINRA Rule 6530, the market liquidity
for our securities will be severely adversely affected by limiting the ability
of broker-dealers to sell our securities and the ability of stockholders to sell
their securities in the secondary market.

Pursuant to Rule 6530(e), if we file our reports late with the
SEC three times in a two-year period or our securities are removed from the OTC
Bulletin Board for failure to timely file twice in a two-year period, then we
will be ineligible for quotation on the OTC Bulletin Board. Pursuant to Rule
6530(e), if we are late in filing any of our reports for the two year period
after the date of filing this Annual Report, our securities will be ineligible
for quotation on the OTC Bulletin Board until two years after the date of filing
this Annual Report.

Our application to list on the TSX Venture Exchange may not
be successful, which would severely adversely affect our Canadian shareholders
ability to sell their securities in the secondary market.

On February 18, 2010, we received a letter from the TSX,
whereby the TSX informed us that it is reviewing the eligibility of the shares
of our common stock for listing on the TSX pursuant to Part VII of the TSX
Company Manual. As our management determined that we no longer meet the
requirements to be listed on the TSX, we are preparing an application to be listed on NEX. We cannot
guarantee that our application will be successful. If we are not able to list on
NEX and we are delisted from the TSX, there will be no
market for our securities in Canada.

We have had negative cash flows from operations and if we
are not able to obtain further financing our business operations may fail.

To date, we have had negative cash flows from operations and
have depended on sales of our equity securities and debt financing to meet our
cash requirements. We will need to raise additional funds to:

- support our planned growth and carry out our business plan;
- develop new or enhanced services and technologies;
- increase our marketing efforts;
- acquire complementary businesses or technologies;
- respond to regulatory requirements; and

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- 11 -

- respond to competitive pressures or unanticipated requirements.

We may not be able to obtain additional equity or debt
financing on acceptable terms when we need it. Even if financing is available it
may not be available on terms that are favourable to us or in sufficient amounts
to satisfy our requirements. If we require, but are unable to obtain, additional
financing in the future, we may be unable to withstand adverse operating results
and compete effectively. More importantly, if we are unable to raise further
financing when required, our continued operations may have to be scaled down or
even ceased and our ability to generate revenues would be negatively affected.

We have a history of losses and fluctuating operating
results, which raise substantial doubt about our ability to continue as a going
concern.

Since inception through December 31, 2009, we accumulated a
deficit of $49,783,268. We have incurred operating losses since inception. There
is no assurance that we will operate profitably or will generate positive cash
flow in the future. In addition, our operating results in the future may be
subject to significant fluctuations due to many factors not within our control,
such as the unpredictability of when customers will order products, the size of
customers' orders, the demand for our products, and the level of competition and
general economic conditions.

We expect to incur operating losses and negative cash flow
until our products gain market acceptance sufficient to generate a commercially
viable and sustainable level of sales, and/or additional products are developed
and commercially released and sales of such products made so that we are
operating in a profitable manner. These circumstances raise substantial doubt
about our ability to continue as a going concern, as described in the
explanatory paragraph in our independent registered public accounting firm's
report on the December 31, 2009 consolidated financial statements. Our audited
consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty.

We are currently operating with an interim Chief Executive
Officer and until our company is able to locate and appoint a qualified person
to fill these positions, our operations may be disrupted.

Our former Chief Executive Officer and acting Chief Financial
Officer resigned on October 13, 2009. William Krebs, a director and audit
committee member, has agreed to act on an interim basis to carry out the
functions as Chief Executive Officer of our company until a qualified person is
located and appointed to fill these positions. If our company is unable to
appoint a suitable person to these positions, our operations may be adversely
affected. In acting in such capacities, Mr. Krebs is longer recognized as an
independent director under applicable securities laws.

A decline in the price of our common stock could affect our
ability to raise further working capital and adversely impact our ability to
continue our normal operations.

A prolonged decline in the price of our common stock could
result in a reduction in the liquidity of our common stock and a reduction in
our ability to raise capital. Because a significant portion of our operations
have been financed through the sale of equity securities, a decline in the price
of our common stock could be especially detrimental to our liquidity and our
operations. Such reductions would force us to reallocate funds from other
planned uses and would have a significant negative effect on our business plans
and operations, including our ability to develop new products and continue our
current operations. If our stock price declines, there can be no assurance that
we can raise additional capital or generate funds from operations sufficient to
meet our obligations. If we are unable to raise sufficient capital in the
future, we may not be able to have the resources to continue our normal
operations.

We could lose our competitive advantages if we are not able
to protect any proprietary technology and intellectual property rights against
infringement, and any related litigation could be time-consuming and costly.

Our success and ability to compete depends to a significant
degree on our proprietary technology. If any of our competitors copies or
otherwise gains access to our proprietary technology or develops similar
software independently, we would not be able to compete as effectively. The
measures we take to protect our proprietary technology and other intellectual property rights may not be
adequate to prevent their unauthorized use. Further, the laws of foreign
countries may provide inadequate protection of such intellectual property
rights. We may need to bring legal claims to enforce or protect such
intellectual property rights. Any litigation, whether successful or
unsuccessful, could result in substantial costs and diversions of resources. In
addition, notwithstanding the rights we have secured in our intellectual
property, other persons may bring claims against us that we have infringed on
their intellectual property rights, including claims based upon the content we
license from third parties or claims that our intellectual property right
interests are not valid. Any claims against us, with or without merit, could be
time consuming and costly to defend or litigate, divert our attention and
resources, result in the loss of goodwill associated with our service marks or
require us to make changes to our technologies.

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- 12 -

We hold no patents on our proprietary technology and may not
be able to protect our proprietary technology.

We do not have and do not intend to apply for patents on our
software products. Management believes that the patent application process in
many countries in which we intend to sell products would be time-consuming and
expensive and any patent protection might be out of date by the time the patent
were to be granted.

The departure of any of our management or significant technical
personnel, the breach of their confidentiality and non-disclosure obligations,
or the failure to achieve our intellectual property objectives may have a
material adverse effect on our business, financial condition and results of
operations. We believe our success depends upon the knowledge and experience of
our management and technical personnel and our ability to market our existing
products and to develop new products. Employees may and have left us to go to
work for a competitor. While we believe that we have adequately protected our
proprietary technology, and we will take all appropriate and reasonable legal
measures to protect it, the use of our processes by a competitor could have a
material adverse effect on our business, financial condition and results of
operations. Our ability to compete successfully and achieve future revenue
growth will depend, in part, on our ability to protect our proprietary
technology and operate without infringing upon the rights of others. We may not
be able to successfully protect our proprietary technology, and our proprietary
technology may otherwise become known or be independently developed by
competitors. Competitors' products may add features, increase performance or
sell at lower prices. We cannot predict whether our products will continue to
compete successfully with such existing rival architectures or whether new
architectures will establish or gain market acceptance or provide increased
competition with our products.

Substantially all of our assets, and all of our directors
and officers are outside the United States, with the result that it may be
difficult for investors to enforce within the United States any judgments
obtained against us or any of our directors or officers.

Substantially all of our assets are located outside the United
States and we do not currently maintain a permanent place of business within the
United States. In addition, all of our directors and officers are nationals or
residents of countries other than the United States, and all or a substantial
portion of such persons' assets are located outside the United States. As a
result, it may be difficult for investors to enforce within the United States
any judgments obtained against us or our officers or directors, including
judgments predicated upon the civil liability provisions of the securities laws
of the United States or any state thereof. Consequently, you may be effectively
prevented from pursuing remedies under U.S. federal securities laws against
them.

We are currently dependent on a small number of channel
partners for the sale of our products and if we are unable to expand our channel
partner relationships or if our channel partners are unable to generate
significant sales of our products, then our revenues may not increase
significantly.

We shifted our sales model from a direct sales model to a
channel partner model. A channel partner is a party who purchases our products
for resale to telecommunication companies. This fundamentally shifted the way
our company was structured. Instead of selling and supporting the customer
directly, we utilize the channel partner to conduct the sales and support
activities for our enhanced messaging software. Instead of being dependent on a
small number of customers for the sales of our products as we were in our
previous fiscal years, we are currently dependent on our channel partners for
sales of our products. If our channel partners are unable to generate
significant sales of our products or we are unable to expand the number of
channel partner relationships, our business, financial condition and results of
operations would be materially and adversely affected.

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- 13 -

We operate in a highly competitive industry and our failure
to compete effectively may adversely affect our ability to generate revenue.

The market for unified messaging software is highly competitive
and subject to frequent product introductions with improved price and/or
performance characteristics. Even if we are able to introduce products which
meet evolving customer requirements in a timely manner, there can be no
assurance that our new products will gain market acceptance. Many companies,
including Lucent, Comverse and IP Unity and others have greater financial,
technical, sales and marketing resources, better name recognition and a larger
customer base than ours. In addition, many of our large competitors may offer
customers a broader product line, which may provide a more comprehensive
solution than our current solutions. Increased competition in the unified
messaging industry could result in significant price competition, reduced profit
margins or loss of market share, any of which could have a material adverse
effect on our ability to generate revenues and successfully operate our
business.

Rapid technological changes in our industry could render our
products non-competitive or obsolete and consequently affect our ability to
generate revenues.

The telecommunications industry is characterized by rapidly
changing technology and evolving industry standards. We believe that our success
will depend on our ability to continuously develop our products, to enhance our
current products and to introduce them promptly into the market. We can make no
assurance that our technology or systems will not become obsolete due to the
introduction of alternative technologies. If we are unable to continue to
develop and introduce new products to meet technology changes and changes in
market demands, our business and operating results, including our ability to
generate revenues, could be adversely affected.

Our future growth and our ability to generate revenues may
be materially and adversely affected by continued reductions in spending on
telecommunications infrastructure by our potential customers.

Any slow down in capital spending by telecommunication service
providers may affect our future revenues more than we currently expect.
Moreover, the significant slowdown in capital spending by telecommunication
service providers has created uncertainty as to market demand for the type of
products we produce. As a result, revenues and operating results for a
particular period can be difficult to predict. In addition, there can be no
certainty as to the severity or duration of the current industry adjustment. As
a result of the recent changes in industry and market conditions, many of our
potential customers have reduced their capital spending on telecommunications
infrastructure. Our revenues and operating results are expected to continue to
be affected by the continued reductions in capital spending on
telecommunications infrastructure by our potential customers.

The global financial crisis may have impacts on our business
and financial condition that we currently cannot predict.

The continued credit crisis and related turmoil in the global
financial system, as well as the global economic recession, may have an impact
on our business and our financial condition, and we may face challenges if
conditions in the financial markets do not improve. The current economic
situation could have a material adverse impact on our customers causing them to
fail to meet their obligations to us. Additionally, the current economic
worldwide situation could lead to further reduced demand for our products and
services, which could have a material negative impact on our revenues, results
of operations and financial conditions.

Our Articles of Incorporation and Bylaws and Nevada law
contain provisions that could delay or prevent a change of control and could
limit the market price of our common stock.

Our authorized capital stock consists of 100,000,000 shares of
common stock and 21,000,000 shares of preferred stock. As at July 5, 2010, 1
share of Series A preferred stock has been designated and is issued and
outstanding, 666,667 shares of Series B preferred stock have been designated, of
which nil are issued and outstanding and 19,250,280 shares of Series C preferred
stock have been designated, of which 19,250,280 are issued and outstanding. Our
board of directors, without any action by stockholders, is authorized to
designate and issue shares of preferred stock in any class or series as it deems
appropriate and to establish the rights, preferences and privileges of these
shares, including dividends, liquidation and voting rights. The rights of
holders of shares of preferred stock that may be issued may be superior to the rights granted to the
holders of existing shares of our common stock. Further, the ability of our
board of directors to designate and issue such undesignated shares could impede
or deter an unsolicited tender offer or takeover proposal and the issuance of
additional shares having preferential rights could adversely affect the voting
power and other rights of holders of our common stock.

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- 14 -

Trading of our stock may be restricted by the SEC's penny
stock regulations, which may limit a stockholder's ability to buy and sell our
stock.

The Securities and Exchange Commission has adopted regulations
which generally define "penny stock" to be any equity security that has a market
price (as defined) less than $5.00 per share or an exercise price of less than
$5.00 per share, subject to certain exceptions. Our securities are covered by
the penny stock rules, which impose additional sales practice requirements on
broker-dealers who sell to persons other than established customers and
"accredited investors". The term "accredited investor" refers generally to
institutions with assets in excess of $5,000,000 or individuals with a net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse. The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document in a form prepared by the SEC, which
provides information about penny stocks and the nature and level of risks in the
penny stock market. The broker-dealer also must provide the customer with
current bid and offer quotations for the penny stock, the compensation of the
broker-dealer and its salesperson in the transaction and monthly account
statements showing the market value of each penny stock held in the customer's
account. The bid and offer quotations, and the broker-dealer and salesperson
compensation information, must be given to the customer orally or in writing
prior to effecting the transaction and must be given to the customer in writing
before or with the customer's confirmation. In addition, the penny stock rules
require that prior to a transaction in a penny stock not otherwise exempt from
these rules, the broker-dealer must make a special written determination that
the penny stock is a suitable investment for the purchaser and receive the
purchaser's written agreement to the transaction. These disclosure requirements
may have the effect of reducing the level of trading activity in the secondary
market for the stock that is subject to these penny stock rules. Consequently,
these penny stock rules may affect the ability of broker-dealers to trade our
securities. We believe that the penny stock rules discourage investor interest
in and limit the marketability of our common stock.

Financial Industry Regulatory Authority (FINRA) sales
practice requirements may also limit a stockholder's ability to buy and sell our
stock.

In addition to the "penny stock" rules described above, the
FINRA has adopted rules that require that in recommending an investment to a
customer, a broker-dealer must have reasonable grounds for believing that the
investment is suitable for that customer. Prior to recommending speculative low
priced securities to their non-institutional customers, broker-dealers must make
reasonable efforts to obtain information about the customer's financial status,
tax status, investment objectives and other information. Under interpretations
of these rules, the FINRA believes that there is a high probability that
speculative low priced securities will not be suitable for at least some
customers. The FINRA requirements make it more difficult for broker-dealers to
recommend that their customers buy our common stock, which may limit your
ability to buy and sell our stock and have an adverse effect on the market for
our shares.

Our common stock is illiquid and the price of our common
stock may be negatively impacted by factors which are unrelated to our
operations.

As a result of our failure to file our disclosure documents, as
more particularly described under the heading Market for Registrants Common
Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.,
our common shares cannot be traded on the OTC Bulletin Board and the TSX. If we
are successful in our efforts to resume trading on either the OTC Bulletin Board, NEX,
or the TSX Venture Exchange, the market price of our common stock could
fluctuate substantially due to a variety of factors, including market perception
of our ability to achieve our planned growth, quarterly operating results of
other telecommunication companies, trading volume in our common stock, changes
in general conditions in the economy and the financial markets or other
developments affecting our competitors or us. In addition, the stock market is
subject to extreme price and volume fluctuations. This volatility has had a
significant effect on the market price of securities issued by many companies
for reasons unrelated to their operating performance and could have the same
effect on our common stock.

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- 15 -

Item
1B.        Unresolved Staff Comments

Not Applicable.

Item
2.           Properties.

Our principal office is located at 107  645 Fort Street,
Victoria, British Columbia, Canada, V8W 1G2. We lease the office facility, which
is approximately 1,300 square feet in size, and is leased at a basic rate of
$16,719 (Cdn$17,572) per year plus expenses. This lease expires on January 31,
2011.

We believe that our existing facilities are adequate for our
needs. Should we require additional space, at any time, we believe that such
space can be secured on commercially reasonable terms.

Item
3.           Legal
Proceedings.

Other than described below, we know of no material existing or
pending legal proceedings against our company, nor are we involved as a
plaintiff in any material proceeding or pending litigation. There are no
proceedings in which any of our directors, officers or affiliates, or any
registered or beneficial shareholder, is an adverse party or has a material
interest adverse to our interest.

We have received a letter dated April 27, 2010 from the British
Columbia Employment Standards Branch (the ESB) of the Ministry of Labour
addressed to Voice Mobility Inc., Voice Mobility International Inc. and Voice
Mobility (US) Inc.. In the letter, the ESB requests all payroll records relating
to Duncan Johnson, Peter Volchek, Todd Johnson, Patrick OConnell, and Glen
Buckamer (the Employees). The payroll records requested include a detailed
breakdown of outstanding wages owed to each employee by Voice Mobility Inc. The
Employees have filed complaints alleging that regular wages are owing for hours
worked during the month of March, 2010. As well, certain of the Employees are
alleging that they may be entitled to compensation pay for length of service.
The Employees allege they are owed, collectively, $68,724.79.

We have received a letter dated April 1, 2010 from Randy Buchamer,
  which states that the letter serves as formal notice under the loan agreement
  dated November 2, 2009 (the Agreement) that we are in default of
  our obligation to make the March 31, 2010 payment of $62,500 plus interest to
  Mr. Buchamer. Mr. Buchamer further states that, as per the Agreement, unless
  he receives payment in full by April 10, 2010, he will exercise whatever rights
  and remedies he has under the law to enforce such payment, including institution
  of legal proceedings. As of June 14, 2010, to our knowledge Mr. Buchamer has
  not commence any lawsuit against us.

Item
4.           (Removed and
Reserved)

PART II

Item
5.           Market for
Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.

Our common shares have been cease traded in British Columbia,
Ontario, and Quebec from April 30, 2010, May 17, 2010, and May 20, 2010
respectively for failure to file our annual financial statements, managements
discussion and analysis, and annual information form. As a result, trading in
our common shares is prohibited in those jurisdictions and our common shares
cannot be traded on the Toronto Stock Exchange (the TSX). Further, while our
common shares have not been cease traded in Alberta and New Brunswick, it is
likely that the security commissions in those jurisdictions will issue similar
orders unless the outstanding reports are filed.

Companies trading on the OTC Bulletin Board, such as us,
generally must be reporting issuers under Section 12 of the Securities Exchange
Act of 1934, as amended, and must be current in their reports under Section 13,
in order to maintain price quotation privileges on the OTC Bulletin Board. More
specifically, FINRA has enacted Rule 6530, which determines eligibility of
issuers quoted on the OTC Bulletin Board by requiring an issuer to be current in
its filings with the Commission, subject to a 30 day grace period. We failed to
timely file this Annual Report on Form 10-K for the year ended December 31, 2009 with the Securities
and Exchange Commission, which was due on March 31, 2010 and Interim Report on
Form 10-Q for the three month period ended March 31, 2010 which was due on May
17, 2010. As a result, we are non-compliant with FINRA Rule 6530 and the
quotation of our securities on the OTC Bulletin Board is prohibited. Until we
are compliant with FINRA Rule 6530, the market liquidity for our securities will
be severely adversely affected by limiting the ability of broker-dealers to sell
our securities and the ability of stockholders to sell their securities in the
secondary market.

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- 16 -

Pursuant to Rule 6530(e), if we file our reports late with the
Commission three times in a two-year period or our securities are removed from
the OTC Bulletin Board for failure to timely file twice in a two-year period,
then we will be ineligible for quotation on the OTC Bulletin Board. Pursuant to
Rule 6530(e), if we are late in filing any of our reports for the two year
period after the date of filing this Annual Report on Form 10-K, our securities
will be ineligible for quotation on the OTC Bulletin Board until two years after
the date of filing this Annual Report on Form 10-K.

On February 18, 2010, we received a letter from the TSX,
whereby the TSX informed us that it is reviewing the eligibility of the shares
of our common stock for listing on the TSX pursuant to Part VII of the TSX
Company Manual. As our management determined that we no longer meet the
requirements to be listed on the TSX, we are preparing an application to be listed on NEX. We cannot guarantee that our
application will be successful. If we are not able to list on NEX and we are delisted from the TSX, there will be no market for our
securities in Canada.

Our common stock was listed and commenced trading on the OTC
Bulletin Board on June 30, 1999 under the symbol "VMII". Because of our failure
to file our periodic reports under the Securities and Exchange Act of 1934, as
described above, FINRA appended our symbol with an E modifier to indicate its
belief that we are not in compliance with FINRAs eligibility requirements and
advised us that if we were to fail to file this Annual Report on Form 10-K
within the 30-day grace period provided by FINRA, we would become ineligible for
continued listing on the OTCBB. We failed to file this Annual Report within the
30-day grace period. Our common stock was listed and commenced trading on the
Toronto Stock Exchange on July 16, 2001 under the symbol "VMY". As discussed
above, trading of our stock on the Toronto Stock Exchange has been prohibited.
We are currently applying to be listed on NEX.

The following table sets forth, for the periods indicated, the
high and low sales prices for our common stock on the OTC Bulletin Board and the
Toronto Stock Exchange:

OTC Bulletin Board(1)
      Toronto Stock Exchange(2)Quarter Ended
      High
      Low
      Quarter Ended
      High (Cdn$)
      Low (Cdn$)December 31, 2009
      $0.23
      $0.06
      December 31, 2009
      $0.25
      $0.06September 30, 2009
      $0.26
      $0.17
      September 30, 2009
      $0.25
      $0.18June 30, 2009
      $0.32
      $0.06
      June 30, 2009
      $0.30
      $0.17March 31, 2009
      $0.12
      $0.04
      March 31, 2009
      $0.15
      $0.05December 31, 2008
      $0.18
      $0.03
      December 31, 2008
      $0.21
      $0.05September 30, 2008
      $0.25
      $0.17
      September 30, 2008
      $0.25
      $0.18June 30, 2008
      $0.36
      $0.17
      June 30, 2008
      $0.33
      $0.18March 31, 2008
      $0.42
      $0.23
      March 31, 2008
      $0.41
      $0.22


(1)
    These prices were taken from Bloomberg L.P. Such
      over-the-counter market quotations reflect inter-dealer prices, without
      retail mark-up, mark down or commission and may not necessarily represent
      actual transactions.(2)
    These prices were taken from Bloomberg
  L.P.


Our common shares are issued in registered form. Computershare
Trust Company of Canada, 401 - 510 Burrard Street, Vancouver, British Columbia,
Canada, V6C 3B9, (telephone: (604) 661-0271; facsimile (604) 685-3694) is the registrar and transfer agent for our common shares. As of
June 14, 2010, they have suspended services pending payment of account.

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- 17 -

As at July 5, 2010, the shareholders' list for our common
stock showed 156 registered stockholders and 67,271,845 shares issued and
outstanding. The closing sale price for our common stock on March 1, 2010, as
reported on the OTC Bulletin Board, was $0.08.

Dividend Policy

During the years ended December 31, 2009 and 2008, we did not
pay any cash dividends to any holders of our equity securities.

We have not paid any cash dividends on our common stock and
have no present intention of paying any dividends on the shares of our common
stock. Our current policy is to retain earnings, if any, for use in our
operations and in the development of our business. Our future dividend policy
will be determined from time to time by our board of directors.

Recent sales of unregistered securities

We did not sell or issue any securities during the year ended
December 31, 2009 without the registration of the securities under the
Securities Act of 1933 in reliance on exemptions from such registration
requirements that have not otherwise been disclosed in a quarterly report on
Form 10-Q or in a quarterly report on Form 8-K.

Equity Compensation Plan Information

We adopted our current stock option plan, entitled the Second
Amended and Restated Stock Option Plan on April 25, 2001 and the plan was
approved by our shareholders on June 14, 2001. The following table provides a
summary of the number of options granted under our stock option plan, the
weighted average exercise price and the number of options remaining available
for issuance all as at December 31, 2009.

|                                                                 | Number of securities to 
        be issued upon
      exercise of outstanding options, warrants and rights | Weighted-average 
        exercise price of
      outstanding options, warrants and rights | Number of securities 
        remaining available
      for future issuance under equity compensation
      plans(1)
|---------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------
|Equity compensation plans approved by
      security holders     | 4,588,891                                                                                                  | $0.52                                                                                      | 4,494,145                                                                                                           
|Equity compensation plans not approved by
      security holders | N/A                                                                                                        | N/A                                                                                        | N/A                                                                                                                 
|Total                                                            | 4,588,891                                                                                                  | $0.52                                                                                      | 4,494,145                                                                                                           

|(1) | The maximum number of options
  issuable under our stock option plan is 12,000,000, less 6,803,855 options that
  have been granted and exercised under the plan and less 500,000 options, which
  the Toronto Stock Exchange required that we remove from the plan in connection
  with a transaction with Aliant Inc. in December 2001.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Purchases of Equity Securities by the Issuer and Affiliated
Purchasers

We did not purchase any of our shares of common stock or other
securities during the year ended December 31, 2009.

---

- 18 -

Item
6.           Selected
Financial Data.

Not Applicable.

Item
7.           Management's
Discussions and Analysis of Financial Condition and Results of Operations.

Overview

You should read the following discussion of our financial
condition and results of operations together with the consolidated audited
financial statements and the notes to the consolidated audited financial
statements included elsewhere in this filing. This discussion contains
forward-looking statements that reflect our plans, estimates and beliefs. Our
actual results could differ materially from those anticipated in these
forward-looking statements due to a number of factors, including, but not
limited to, those set forth under the heading Risk Factors.

We are engaged in the development and sales and marketing of
unified voice messaging software through our wholly-owned operating
subsidiaries, Voice Mobility Inc. and Voice Mobility (US) Inc. Our enhanced
messaging software suite allows for legacy voice-mail replacement and
incremental offerings such as real time call connect, voice-mail to e-mail, and
fax to e-mail services. These unified communication services are facilitated by
the creation of a single personal digital mailbox that can receive any type of
communication regardless of its incoming format or medium.

During the year ended December 31, 2009, we continued the shift
of our sales model from a direct sales model to a channel partner model. A
channel partner is a party who will purchase our product for resale to
telecommunication companies. This fundamentally shifted the way our company was
structured. Instead of selling and supporting the customer directly, we intend
to utilize the channel partner to conduct the sales and support activities for
our enhanced messaging software. This shift in our structure allows us to reduce
expenses in the areas of support and training. This allowed us to stretch the
funds we received through equity and debt financing to execute on our business
plan.

Results of Operations for the fiscal years ended December
31, 2009 and December 31, 2008

Sales

Sales for the fiscal year ended December 31, 2009 were $971,768
compared to sales of $469,793 for the fiscal year ended December 31, 2008,
representing a 52% increase. Sales for the fiscal year ended December 31, 2009
were from product license sales, hardware and software product sales and
installation and training services. Sales for the fiscal year ended December 31,
2008 were from support services, product license sales, hardware and software
product sales and installation and training services. For the fiscal years ended
December 31, 2009 and 2008, we derived 100% of our sales from our Canadian
operations.

We continue to shift our sales approach from direct sales to
sales through channel partners. During the fiscal year ended December 31, 2009,
our focus was to establish and develop a relationship with a channel partner
that would provide us with opportunities for sales to Tier I telecommunication
companies and small and medium size business enterprises.

Cost of Sales

Cost of sales were $474,767 and $232,188 for the fiscal years
ended December 31, 2009 and 2008 respectively. Cost of sales for the fiscal year
ended December 31, 2009 were related to hardware and software costs as well as
costs incurred while providing support services. Cost of sales for the fiscal
year ended December 31, 2008 were related to hardware and software costs as well
as costs incurred while providing support services.

---

- 19 -

Operating Expenses

Total operating costs for the year ended December 31, 2009 were
$2,059,171 compared to $2,797,283 for the previous year. The decrease in total
costs of $738,112, was primarily attributable to decreases in salaries of
approximately $339,000, stock-based compensation expenses of approximately
$234,000, travel of approximately $139,000, rent of approximately $80,000, meals
and entertainment of approximately $43,000, bad debts of approximately $23,000,
tradeshow expenses of approximately $22,000, development costs of approximately
$18,000, bank charges of approximately $11,000. There were corresponding
increases in severance costs of approximately $160,000, consulting fees of
approximately $39,000 and regulatory fees of approximately $26,000

Sales and Marketing

Our sales and marketing costs consist primarily of stock-based
compensation, personnel, advertising, promotions, public relations and business
development. Total costs were $882,262 and $1,216,691 for the fiscal years ended
December 31, 2009 and December 31, 2008, respectively, representing a decrease
of $334,429 or 27%. The decrease was primarily attributable to a decrease in
travel costs of approximately $129,000, consulting fees of approximately
$51,000, meals and entertainment of approximately $37,000, salaries of
approximately $36,000, stock-based compensation expenses of approximately
$35,000, tradeshow costs of approximately $22,000 and courier charges of
approximately $6,000.

Research and Development

Our research and development costs consist primarily of
development costs, stock-based compensation, personnel, data and voice
transmission, and related facility costs. Our research and development costs
were $320,760 and $632,043 for the fiscal years ended December 31, 2009 and
2008, respectively, representing a decrease of $311,283 or 49%. The decrease was
primarily due to a decrease in salaries of approximately $209,000, rent costs of
approximately $73,000, stock-based compensation expenses of approximately
$51,000, development costs of approximately $18,000 and license costs of
approximately $5,000. There was a corresponding increase in consulting fees of
approximately $62,000.

General and Administrative

Our general and administrative costs consist primarily of
stock-based compensation, personnel costs, professional and legal costs,
consulting fees, travel, and the lease of office space. General and
administrative costs were $856,149 and $948,549 for the fiscal years ended
December 31, 2009 and 2008, respectively, representing a decrease of $92,400 or
9.7% . The decrease was primarily attributed to decreases in stock-based
compensation expenses of approximately $147,000, salaries of approximately
$94,000, bad debts of approximately $20,000, bank charges of approximately
$11,000 and depreciation of approximately $10,000. There were corresponding
increases in severance costs of approximately $160,000, consulting fees of
approximately $28,000 and regulatory fees of approximately $26,000.

Interest Expense

Our interest expense was $387,300 and $880,302 for the fiscal
years ended December 31, 2009 and 2008 respectively. The interest expense for
the fiscal year ended December 31, 2009 includes the amortization of the debt
discount on the Series I notes of $666 (Cdn$760). The interest expense for the
fiscal year ended December 31, 2008 includes the amortization of the debt
discount on the Series C and D notes of $11,935 (Cdn$12,645), the amortization
of the 15% repayment premium of the Series D note of $1,848 (Cdn$1,961) issued
in September 2003 and the amortization of the deferred charges relating to our
debt restructuring transaction in September 2005 of $198,185 (Cdn$210,235). The
remaining interest expense for the fiscal years ended December 31, 2009 and 2008
consists of the stated interest rate on the principal amount of the then
outstanding notes.

Unusual Gain

On June 30, 2009, we entered into the exchange agreement with
seven persons who held the Series C, D, E, F, G and H notes payable with a
principal amount of Cdn$6,737,601, whereby the holders exchanged the principal
amount underlying the Series C, D, E, F, G and H notes payable for an aggregate
issuance of 19,250,280 Series C convertible preferred shares at a rate of Cdn$0.35 per
preferred share. All accrued interest on the Series C, D, E, F, G and H notes
payable was forgiven as of June 30, 2009.

---

- 20 -

As a result of the exchange agreement, we recorded an unusual
gain of $2,334,841. In addition to eliminating the Series C, D, E, F, G and H
notes payable, the remaining balance of the deferred financing costs related to
the Series C and D notes payable was also eliminated upon the closing of the
exchange agreement.

Effective December 31, 2008, we entered into a settlement
agreement with Aliant Telecom Inc. and Telecommunications Aliant Inc. whereby we
paid $9,880 (Cdn$12,000) in cash to release any and all obligations related to a
Promissory Note dated December 28, 2001 to Innovatia in the principal amount of
Cdn$2,720,142; the LivingLab Agreement dated February 27, 2001 and March 4, 2002
and Software License Agreements dated May 23, 2000, March 1, 2001 and June 14,
2002, including any amendment and addenda.

As a result of the settlement agreement we recorded an unusual
gain of $3,195,836. In addition to eliminating the promissory note payable,
certain assets and liabilities related to the promissory note payable were also
eliminated by the settlement agreement including deferred contract costs of
$81,631, accrued liabilities of $57,223, accounts payable of $83,730 and
deferred revenue of $318,685.

Income Taxes

At December 31, 2009, we had $5,050,803 United States tax net
operating losses that will expire in the years 2020 through to 2028. As at
December 31, 2009, we had Canadian tax non-capital losses of approximately
$11,360,928 that will expire in the years 2009 through 2027. Pursuant to Section
382 of the Internal Revenue Code, use of our net operating loss carry forwards
may be limited if we experience a cumulative change in ownership of greater than
50% in a moving three year period. Ownership changes could impact our ability to
utilize net operating losses and credit carry forwards remaining at the
ownership change date. The limitation will be determined by the fair market
value of common stock outstanding prior to the ownership change, multiplied by
the applicable federal rate.

Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes. For fiscal
years ended December 31, 2009 and 2008 respectively, we recognized a valuation
allowance equal to deferred tax assets for which realization is not more likely
than not.

Net Loss

Our net gain was $385,381 for fiscal year ended December 31,
2009 and a net loss of $228,754 for the fiscal year ended December 31, 2008. The
increase of $614,135 was primarily attributable to an unusual gain on the
settlement agreement with Aliant Telecom of approximately $3,196,000. We also
had decreases in stock-based compensation expenses of approximately $234,000,
interest income of approximately $15,000, development costs of approximately
$19,000, salaries of approximately $339,000. travel expenses of approximately
$139,000, bad debt expense of approximately $23,000, , tradeshow costs of
approximately $22,000, bank charges of approximately $11,000, , rent expenses of
approximately $80,000, telecommunication costs of approximately $9,000, meals
and entertainment expenses of approximately $43,000, promotional expenses of
approximately $5,000, office expenses of approximately $4,000, courier and
freight costs of approximately $9,000, dues and subscription expenses of
approximately $3,000 and insurance costs of approximately $2,000. There were
corresponding increases in consulting fees of approximately $28,000, gross
profits of approximately $260,000 and regulatory fees of approximately $26,000.

---

- 21 -

Since inception through December 31, 2009, we incurred
aggregate net losses of $49.8 million. The losses were primarily incurred as a
result of our focus on the development and testing of our product and the
marketing of our product. We have moved our focus from the development of our
product and we are now in a position to focus on the sales of our product and we
believe that we will continue to incur losses until we generate sufficient
revenues to cover all of our operating expenses. Because we are uncertain as to
the rate at which telecommunications companies will replace their legacy
voicemail systems with technology like our enhanced messaging product, we cannot
accurately predict when we will be able to generate revenues which will exceed
our ongoing operating expenses.

Results of Operations for the fiscal years ended December
31, 2008 and December 31, 2007

Our results of operations for the fiscal years ended December
31, 2008 and December 31, 2007 are hereby incorporated by reference from our
Annual Report on Form 10-K for the year ended December 31, 2008 filed on EDGAR
and SEDAR on March 31, 2010.

Liquidity and Capital Resources

As of December 31, 2009, we had $252,260 in cash and net
working capital deficiency of $1,871,177 and as of December 31, 2008, we had
$74,779 in cash and working capital deficiency of $8,105,369.

Between the months of August to November 2008, we issued a
series of demand promissory notes to shareholders with a maximum aggregate
principal amount of $1,087,800 (Cdn$1,225,000). The demand promissory notes bear
interest at prime plus 4% and is repayable on demand. Prime rate was 2.25% at
December 31, 2009 and 2.5% as at June 7, 2010. On September 24, 2008, the
Company settled $217,035 (Cdn$225,000) of the demand promissory notes and paid
the accrued interest of $1,260 (Cdn$1,313). On July 31, 2009 and September 9,
2009, we paid accrued interest of $37,293 (Cdn$40,929) and $4,837 (Cdn$5,308)
respectively. In January 2009 we accessed an additional $60,073 (Cdn$73,000) of
the principal amount available. In July 2009, we accessed an additional $45,842
(Cdn$50,000) of the principal amount available. On October 15, 2009, we accessed
an additional $95,084 (Cdn$100,000) of the principal amount available. On
November 5, 2009, we paid accrued interest of $76,067 (Cdn$80,000). On November
12, 2009, November 30, 2009, December 9, 2009, and December 14, 2009, we
accessed an additional $95,084 (Cdn$100,000), $47,542 (Cdn$50,000), $9,508
(Cdn$10,000), and $66,559 (Cdn$70,000), respectively, of the principal amount
available.

As at December 31, 2010, the net principal amount outstanding,
  including accrued interest, was $1,630,046 compared to $724,152 as at December
  31, 2009.

On October 15, 2009, we issued a demand promissory note to an
investor with an aggregate principal amount of $93,397 (Cdn$100,000). The demand
promissory note bears interest at prime plus 4% per annum and is repayable on
demand.

On November 5, 2009, we closed a Series I notes payable unit
financing for gross proceeds of $114,177. Each unit consists of a promissory
note and one common share purchase warrant for each $1.00 of the principal
amount of each promissory note. The fair value of the 120,000 warrants issued is
$11,843. The promissory notes mature in one year, bear interest at 10% and are
unsecured. Each share purchase warrant will entitle the holder to purchase one
of our common shares at the price of Cdn$0.25 per share until expiry on November
5, 2012. Upon receipt, we used the proceeds of the financing as follows: (i)payment against a demand promissory note in the amount of Cdn$80,000, (ii)
first installment payment to the promissory notes held by Mr. Buchamer, a former
officer of our company, in the amount of Cdn$25,000, (iii) salary to Mr.
Buchamer of Cdn$7,083 and (iv) legal fees of Cdn$10,000.

On November 12, 2009, we issued a, demand promissory note to an
investor with an aggregate principal amount of $93,397 (Cdn$100,000). The demand
promissory note bears interest at prime plus 4% per annum and is repayable on
demand.

In addition, we entered into a loan agreement dated November 2,
2009 with Randy Buchamer, our former Chief Executive Officer and director who
resigned from such positions on October 13, 2009, whereby we agreed to repay
outstanding promissory notes in the aggregate principal amount of $150,000 to
Mr. Buchamer based upon the following schedule: (i) $25,000 on November 2, 2009; (ii)
$62,500 on March 31, 2010; and (iii) $62,500 on July 31, 2010. The principal
amount outstanding bears interest at the rate equal to the HSBC Prime Rate plus
4% per annum, compounded annually, with interest payable on the date of
repayment as follows: (i) as to $35,000 of the principal amount, from February
16, 2009 to the date of repayment; and (ii) as to $115,000 of the principal
amount, from March 31, 2009 to the date of repayment. In connection with Mr.
Buchamers resignation, we also agreed to pay him the sum of $170,000 over a
period of 12 months payable in bi-weekly installments and continue to extend Mr.
Buchamers previous health and welfare benefits for the same 12 month period, or
such earlier date that Mr. Buchamer becomes employed by another employer. As Mr.
Buchamer has agreed to remain as a consultant of our company following his
resignation, we have agreed to pay Mr. Buchamer a service fee of $30,000 payable
in three equal installments of $10,000 each on November 15, 2009, December 15,
2009 and January 15, 2010.

---

- 22 -

During the year end December 31, 2009, the holders of the
Series C, D, E, F, G and H notes payable exchanged the principal amount for an
aggregate issuance of 19,250,280 Series C convertible preferred shares and the
accrued interest was forgiven. As a result, we recorded a gain of $2,334,841. In
addition to eliminating the Series C, D, E, F, G and H notes payable, the
remaining balance of the deferred financing costs related to the Series C and D
notes payable was written off during the year ending December 31, 2009.

In January 2010, we completed a private placement offering of
1,525,000 units, consisting of one common share one share purchase warrant at a
price of $0.06 per unit, for proceeds of $91,500. The warrants are exercisable
for a period of five years and one share purchase warrant is exercisable into
one share of common stock at a price of $0.08 per share.

In February 2010, we completed a private placement offering of
1,100,000 units, consisting of one share of Common Stock and one common stock
purchase warrant at a price of $0.06 per unit, for proceeds of $66,000. The
warrants are exercisable for a period of five years and entitle the holder to
purchase one share of common stock for $0.08 per share.

In February 2010, we received $32,500 and issued promissory
note. The note bears interest at prime plus 4% monthly, is due on demand and is
unsecured.

On June 17, 2010, we were granted a partial revocation order from the British Columbia Securities Commission allowing us to complete a secured convertible debt offering of $450,000. If our common shares are trading on the TSX Venture Exchange or similar exchange, the holder of the debt may convert the principal of their debt to units (each a Unit) at an exercise price of $0.05 per Unit. Each Unit consists of one common share and one warrant (each a Warrant). Each Warrant entitled the holder to purchase one additional common share at an exercise price of $0.10. On June 30, 2010, the Toronto Stock Exchange conditionally approved of the offering. As of July 5, 2010, we have one subscription agreement for $50,000 and are in the process of closing it.

There is substantial doubt about our ability to continue as a
going concern as the continuation of our business is dependent upon obtaining
further financing, successful and sufficient market acceptance of our current
products and any new products that we may introduce, the continuing successful
development of our products and related technologies, and, finally, achieving a
profitable level of operations. The issuance of additional equity securities by
us could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to obtain further
funds required for our continued operations. We are pursuing various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we will be forced to scale down or perhaps even cease the operation of our
business.

Operating Activities

Our operating activities resulted in net cash outflows of $1.3
million and $2.3 million for the fiscal years ended December 31, 2009 and 2008
respectively. The operating cash outflows for these periods resulted from
investments in research and development and sales and marketing, which led to
operating losses in all periods.

---

- 23 -

Investing Activities

Investing activities resulted in net cash outflows of $21,483
for the fiscal year ended December 31, 2009. These outflows were used to
purchase to purchase property and equipment. Investing activities resulted in
net cash inflows of $3,267 for the fiscal year ended December 31, 2008. During
the fiscal year ended 2008, we received proceeds of $8,400 from the sale of
property and equipment and spent $5,133 on property and equipment purchased
during the period. The investing activities in fiscal 2009 and 2008 were limited
due to our cash conservation plans. At December 31, 2009, we did not have any
material commitments for future capital expenditures.

Financing Activities

Financing activities resulted in net cash inflows of $1,496,264
for the fiscal year ended December 31, 2009. During the fiscal year ended 2009,
we received net proceeds of $1,002,789 from the issuance of a series of demand
promissory notes payable, we repaid $99,905 of demand promissory notes, received
$479,203 from the issuance of common stock and received an additional $114,117
from the proceeds from Series I promissory notes.

Financing activities resulted in net cash inflows of $739,636
for the fiscal year ended December 31, 2008. During the fiscal year ended 2008,
we received net proceeds of $749,516 from the issuance of a series of demand
promissory notes payable and we paid $9,880 in cash in a settlement agreement
with Aliant Telecom Inc.

Debt Obligations

As at December 31, 2009, we had $1,746,038 in debt obligations
and accrued interest with maturity dates as follows:

| |                        |   | Amount outstanding |  |  | Maturity  | 
| | ---------------------- | - | ------------------ |  |  | --------- | 
| |                        |   | as at December 31, |  |  | Date      | 
| |                        |   | 2009               |  |  |           | 
| | Demand promissory note | $ | 1,630,046          |  |  | On demand | 
| | Series I notes payable |   | 115,992            |  |  | On demand | 
| |                        |   |                    |  |  |           | 
| |                        |   | 1,746,038          |  |  |           | 

Trends and Uncertainties

Our ability to generate revenues in the future is dependent on
when telecommunication companies will replace their legacy voicemail systems and
implement new technology, like our enhanced messaging software. We cannot
predict when telecommunication companies will adopt such technology and this
causes some uncertainty with respect to the growth of and our ability to
generate ongoing revenues.

The continued downturn in the telecommunications industry is
causing some telecommunications companies to delay making any capital
expenditures in connection with replacing their legacy voicemail systems. If
telecommunication companies delay their capital expenditures, then the
generation of our revenues could also be delayed.

Future Operations

Presently, our revenues are not sufficient to meet operating
and capital expenses and we have incurred operating losses since inception,
which are likely to continue for the foreseeable future. We anticipate that we
will have negative cash flows during the year ended December 31, 2010.
Management projects that we may require an additional $2.5 million to fund our
ongoing operating expenses and working capital requirements for the next twelve
months. However, if conditions change outside of management's expectations, we
will need to raise additional capital. We intend to raise the capital required
to satisfy our needs primarily through the sale of our equity securities or
debt.

---

- 24 -

We currently anticipate that we will generate revenues in the
long-term as we increase our sales and marketing activities and gain acceptance
of our software from Tier 1 telecommunications companies and small and medium
sized business enterprises. We have implemented cost reductions and expect to
keep our operating costs to a minimum until cash is available through financing
or operating activities. Based on current projections, we anticipate revenues
from telecommunications providers in 2010 to be generated through the
replacement of legacy voicemail systems or new deployments by such providers.

Due to the uncertainty of our ability to meet our current
operating and capital expenses, in their report on the annual consolidated
financial statements for the year ended December 31, 2009, our independent
registered public accounting firm included an explanatory paragraph regarding
concerns about our ability to continue as a going concern in their audit report.

There is substantial doubt about our ability to continue as a
going concern as the continuation of our business is dependent upon obtaining
further financing, successful and sufficient market acceptance of our current
products and any new products that we may introduce, the continuing successful
development of our products and related technologies, and, finally, achieving a
profitable level of operations. The issuance of additional equity securities by
us could result in a significant dilution in the equity interests of our current
stockholders. Obtaining commercial loans, assuming those loans would be
available, will increase our liabilities and future cash commitments.

There are no assurances that we will be able to obtain further
funds required for our continued operations. We are pursuing various financing
alternatives to meet our immediate and long-term financial requirements. There
can be no assurance that additional financing will be available to us when
needed or, if available, that it can be obtained on commercially reasonable
terms. If we are not able to obtain the additional financing on a timely basis,
we will be forced to scale down or perhaps even cease the operation of our
business.

Off-Balance Sheet Arrangements

As of December 31, 2009, we did not have any off-balance sheet
arrangements, including any outstanding derivative financial instruments,
off-balance sheet guarantees, interest rate swap transactions or foreign
currency contracts. Our Company does not engage in trading activities involving
non-exchange traded contracts.

Item 7A.       
Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

---

- 25 -

Item
8.           Financial
Statements.

Financial Statements filed as part of this Annual Report on
Form 10-K

Our financial statements are stated in United States dollars
(US$) and are prepared in accordance with United States generally accepted
accounting principles.

---



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Voice Mobility
  International, Inc.

We have audited the accompanying consolidated balance sheet of
  Voice Mobility International, Inc. (the Company) as at December 31, 2009 and
  the related consolidated statements of operations and comprehensive loss,
  stockholders deficit and cash flows for the year then ended. These financial
  statements are the responsibility of the Company's management. Our
  responsibility is to express an opinion on these financial statements based on
  our audit. The consolidated financial statements as of December 31, 2008 were
  audited by other auditors whose report dated March 20, 2009 expressed an
  unqualified opinion on those financial statements. Our opinion, insofar as it
  relates to amounts included for such prior periods, is based solely on the
  report of such other auditors.

We conducted our audit in accordance with the standards of the
  Public Company Accounting Oversight Board (United States). Those standards
  require that we plan and perform an audit to obtain reasonable assurance whether
  the financial statements are free of material misstatement. The Company is not
  required to have, nor were we engaged to perform, an audit of its internal
  control over financial reporting. Our audit included consideration of internal
  control over financial reporting as a basis for designing audit procedures that
  are appropriate in the circumstances, but not for the purpose of expressing an
  opinion on the effectiveness of the Companys internal control over financial
  reporting. Accordingly, we express no such opinion. An audit also 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
  audit provides a reasonable basis for our opinion.

In our opinion, based on our audit and the report of other
  auditors, these financial statements present fairly, in all material respects,
  the financial position of the Company as at December 31, 2009 and the results of
  its operations and its cash flows for the year 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 1 to the financial statements, to date the Company has
  reported losses since inception from operations and requires additional funds to
  meet its obligations and fund the costs of its operations. These factors raise
  substantial doubt about the Companys ability to continue as a going concern.
  Managements plans in this regard are described in Note 1. The financial
  statements do not include any adjustments that might result from the outcome of
  this uncertainty.

/s/ DMCL

DALE MATHESON CARR-HILTON LABONTE LLP 
  CHARTERED ACCOUNTANTS

Vancouver, Canada 
  June 11, 2010



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- 2 -

Voice Mobility International, Inc.

CONSOLIDATED BALANCE SHEETS(Expressed in U.S. Dollars)

|As at December 31                                                                                                       |  |             |   |  |             |  
|----------------------------------------------------------------------------------------------------------------------- |  | ----------- | - |  | ----------- | -
|                                                                                                                        |  | 2009        |   |  | 2008        |  
|                                                                                                                        |  | $           |   |  | $           |  
|ASSETS                                                                                                                  |  |             |   |  |             |  
|Current                                                                                                                 |  |             |   |  |             |  
|Cash                                                                                                                    |  | 252,260     |   |  | 74,779      |  
|Accounts receivable, net                                                                                                |  | 18,861      |   |  | 215,480     |  
|Other receivables                                                                                                       |  | 3,701       |   |  | 14,019      |  
|Prepaid expenses                                                                                                        |  | 14,430      |   |  | 26,113      |  
|Inventory                                                                                                               |  | -           |   |  | 64,780      |  
|Total current assets                                                                                                    |  | 289,252     |   |  | 395,171     |  
|                                                                                                                        |  |             |   |  |             |  
|Deferred finance costs                                                                                                  |  | -           |   |  | 174,216     |  
|Equipment                                                                                                               |  | 25,057      |   |  | 14,462      |  
|Total assets                                                                                                            |  | 314,309     |   |  | 583,849     |  
|                                                                                                                        |  |             |   |  |             |  
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                                                |  |             |   |  |             |  
|Current                                                                                                                 |  |             |   |  |             |  
|Accounts payable                                                                                                        |  | 202,681     |   |  | 214,777     |  
|Accrued liabilities                                                                                                     |  | 177,251     |   |  | 67,345      |  
|Employee related payables                                                                                               |  | 34,459      |   |  | 51,452      |  
|Demand promissory note                                                                                                  |  | 1,630,046   |   |  | 724,152     |  
|Note payable                                                                                                            |  | 115,992     |   |  | 7,631,492   |  
|Total current liabilities                                                                                               |  | 2,160,429   |   |  | 8,689,218   |  
|                                                                                                                        |  |             |   |  |             |  
|Total liabilities                                                                                                       |  | 2,160,429   |   |  | 8,689,218   |  
|                                                                                                                        |  |             |   |  |             |  
|Mezzanine Equity                                                                                                        |  |             |   |  |             |  
|Series C Convertible preferred stock                                                                                    |  | 6,410,657   |   |  | -           |  
|                                                                                                                        |  |             |   |  |             |  
|Stockholders' deficiency                                                                                                |  |             |   |  |             |  
|Common stock, $0.001 par value, authorized
      100,000,000 
         62,331,428 outstanding [2008 -
      56,842,571] |  | 62,331      |   |  | 56,843      |  
|Preferred stock, $0.001 par value, authorized
      1,000,000 
         Series A Preferred stock, 1
      outstanding   |  | 1           |   |  | 1           |  
|Additional paid-in capital                                                                                              |  | 43,054,960  |   |  | 42,505,826  |  
|Obligation to issue shares                                                                                              |  | 57,088      |   |  | -           |  
|Accumulated deficit                                                                                                     |  | (49,783,268 | ) |  | (50,168,649 | )
|Other accumulated comprehensive loss                                                                                    |  | (1,647,889  | ) |  | (499,390    | )
|Total stockholders' deficit                                                                                             |  | (8,256,777  | ) |  | (8,105,369  | )
|Total liabilities and stockholders' deficit                                                                             |  | 314,309     |   |  | 583,849     |  

See accompanying notes

---

- 3 -

Voice Mobility International, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Expressed in U.S. Dollars)

|Year ended December 31                                  |  | 2009       |   |  | 2008       |  
|------------------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                        |  | $          |   |  | $          |  
|                                                        |  |            |   |  |            |  
|Sales                                                   |  | 971,768    |   |  | 469,793    |  
|Cost of sales                                           |  | 474,767    |   |  | 232,188    |  
|Gross profit                                            |  | 497,001    |   |  | 237,605    |  
|                                                        |  |            |   |  |            |  
|Operating expenses                                      |  |            |   |  |            |  
|Sales and marketing                                     |  | 882,262    |   |  | 1,216,691  |  
|Research and development                                |  | 320,760    |   |  | 632,043    |  
|General and administrative                              |  | 856,149    |   |  | 948,549    |  
|                                                        |  |            |   |  |            |  
|Loss from operations                                    |  | (1,562,170 | ) |  | (2,559,678 | )
|Interest income                                         |  | 10         |   |  | 15,390     |  
|Interest expense                                        |  | (387,300   | ) |  | (880.302   | )
|Loss before other items                                 |  | (1,949,460 | ) |  | (3,424,590 | )
|Gain on settlement agreement                            |  | -          |   |  | 3,195,836  |  
|Gain on exchange agreement                              |  | 2,334,841  |   |  | -          |  
|Net income (loss)                                       |  | 385,381    |   |  | (228,754   | )
|                                                        |  |            |   |  |            |  
|Weighted average shares outstanding  basic and diluted |  | 59,937,935 |   |  | 56,842,571 |  
|                                                        |  |            |   |  |            |  
|Basic and diluted earnings (loss) per share             |  | 0.01       |   |  | (0.00      | )

See accompanying notes

---

- 4 -

VoiceMobilityInternational,Inc.

CONSOLIDATEDSTATEMENTSOFSTOCKHOLDERS'DEFICIT

|Year ended December 31 | (expressed in U.S. dollars)
|---------------------- | ---------------------------

Common Stock
      
      
      Obligation
      
      
      Series A Preferred Stock
      
      
      Series C Preferred Stock
      
      
      Additional
      
      
      OtherAccumulatedNumber
      
      
      
      
      
      To issue
      
      
      Number
      
      
      
      
      
      Number
      
      
      
      
      
      Paid-in
      
      
      Accumulated
      
      
      Comprehensiveof Shares
      
      
      Amount
      
      
      Amount
      
      
      of Shares
      
      
      Amount
      
      
      of Shares
      
      
      Amount
      
      
      Capital
      
      
      Deficit
      
      
      Loss
      
      
      Total#
      
      
      $
      
      
      $
      
      
      #
      
      
      $
      
      
      #
      
      
      $
      
      
      $
      
      
      $
      
      
      $
      
      
      $Balance, December 31, 2007
      
      56,842,571
      
      
      56,843
      
      
      
      
      
      1
      
      
      1
      
      
      
      
      
      
      
      
      42,151,402
      
      
      (49,939,895
      )
      
      (2,898,980
      )
      
      (10,630,629
      )Stock based compensation
      
      -
      
      
      -
      
      
      
      
      
      -
      
      
      -
      
      
      
      
      
      
      
      
      354,424
      
      
      -
      
      
      -
      
      
      354,424Net loss
      
      -
      
      
      -
      
      
      
      
      
      -
      
      
      -
      
      
      
      
      
      
      
      
      -
      
      
      (228,754
      )
      
      -
      
      
      (228,754
      )Foreign currency translation gain
      
      -
      
      
      -
      
      
      
      
      
      -
      
      
      -
      
      
      
      
      
      
      
      
      -
      
      
      -
      
      
      2,399,590
      
      
      2,399,590Total comprehensive income / (loss)
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      2,170,836Balance, December 31, 2008
      
      56,842,571
      
      
      56,843
      
      
      
      
      
      1
      
      
      1
      
      
      
      
      
      
      
      
      42,505,826
      
      
      (50,168,649
      )
      
      (499,390
      )
      
      (8,105,369
      )Common stock issued pursuant to private placement
      
      5,488,857
      
      
      5,488
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      416,627
      
      
      
      
      
      
      
      
      422,115Preferred stock issued pursuant to Exchange Agreement
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      19,250,280
      
      
      5,793,294
      
      
      
      
      
      
      
      
      
      
      
      5,793,294Stock based compensation
      
      -
      
      
      -
      
      
      
      
      
      -
      
      
      -
      
      
      
      
      
      
      
      
      132,507
      
      
      -
      
      
      -
      
      
      132,507Obligation to issue shares
      
      
      
      
      
      
      
      57,088
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      57,088Components of comprehensive income / (loss):Net income
      
      -
      
      
      -
      
      
      
      
      
      -
      
      
      -
      
      
      
      
      
      
      
      
      -
      
      
      385,381
      
      
      -
      
      
      385,381Foreign exchange G/L on Series
        C Preferred Shares
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      617,363
      
      
      
      
      
      
      
      
      (617,363
      )
      
      -Foreign currency translation gain
      
      -
      
      
      -
      
      
      
      
      
      -
      
      
      -
      
      
      
      
      
      
      
      
      -
      
      
      -
      
      
      (531,136
      )
      
      (531,136
      )Total comprehensive loss
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      
      (119,446
      )Balance, December 31, 2009
      
      62,331,428
      
      
      62,331
      
      
      57,088
      
      
      1
      
      
      1
      
      
      19,250,280
      
      
      6,410,657
      
      
      43,054,960
      
      
      (49,783,268
      )
      
      (1,647,890
      )
      
      (1,846,120
      )


Seeaccompanyingnotes

---

- 5 -

Voice Mobility International, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS(Expressed in
  U.S. Dollars)

|Year ended December 31                                                 |  | 2009       |   |  | 2008       |  
|---------------------------------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                                       |  | $          |   |  | $          |  
|                                                                       |  |            |   |  |            |  
|OPERATING ACTIVITIES                                                   |  |            |   |  |            |  
|Net income (loss)                                                      |  | 385,381    |   |  | (228,754   | )
|Non-cash items included in net loss                                    |  |            |   |  |            |  
|Amortization of
      equipment                                        |  | 10,888     |   |  | 21,049     |  
|Amortization of deferred finance costs                                 |  | 88,053     |   |  | 200,033    |  
|Non-cash financing
      expense                                       |  | 11,843     |   |  | -          |  
|Non-cash interest expense                                              |  | 321,549    |   |  | 11,935     |  
|Stock based
      compensation                                         |  | 120,664    |   |  | 354,424    |  
|Gain on disposal of equipment                                          |  | -          |   |  | (8,400     | )
|Gain on settlement
      agreement                                     |  | -          |   |  | (3,195,836 | )
|Gain on exchange agreement                                             |  | (2,334,841 | ) |  | -          |  
|Net change in operating assets and
      liabilities:                  |  |            |   |  |            |  
|Accounts and other receivables                                         |  | 206,937    |   |  | (117,479   | )
|Prepaid expenses                                                       |  | 11,683     |   |  | 32,219     |  
|Inventory                                                              |  | 64,780     |   |  | (66,371    | )
|Accounts payable                                                       |  | (12,096    | ) |  | 117,199    |  
|Accrued liabilities                                                    |  | 109,906    |   |  | (6,648     | )
|Employee related payables                                              |  | (16,993    | ) |  | (11,965    | )
|Accrued interest on promissory notes                                   |  | 4,824      |   |  | 645,837    |  
|Cash used in operating activities                                      |  | (1,348,971 | ) |  | (2,252,757 | )
|                                                                       |  |            |   |  |            |  
|INVESTING ACTIVITIES                                                   |  |            |   |  |            |  
|Purchase of equipment                                                  |  | (21,483    | ) |  | (5,133     | )
|Proceeds on sale of equipment                                          |  | -          |   |  | 8,400      |  
|Cash provided by (used in) investing activities                        |  | (21,483    | ) |  | 3,267      |  
|                                                                       |  |            |   |  |            |  
|FINANCING ACTIVITIES                                                   |  |            |   |  |            |  
|Proceeds from issuance of common stock, net
      of share issue costs |  | 479,203    |   |  | -          |  
|Proceeds on demand promissory notes payable                            |  | 1,002,789  |   |  | 966,551    |  
|Repayment of demand promissory notes
      payable                     |  | (99,905    | ) |  | (217,035   | )
|Proceeds from Series I promissory notes                                |  | 114,117    |   |  | -          |  
|Cash paid on settlement agreement                                      |  | -          |   |  | (9,880     | )
|Cash provided by financing activities                                  |  | 1,496,264  |   |  | 739,636    |  
|                                                                       |  |            |   |  |            |  
|Effect of change in foreign exchange rate on cash                      |  | 51,671     |   |  | (21,815    | )
|                                                                       |  |            |   |  |            |  
|Increase (decrease) in cash                                            |  | 177,481    |   |  | (1,531,669 | )
|Cash, beginning                                                        |  | 74,779     |   |  | 1,606,448  |  
|Cash, ending                                                           |  | 252,260    |   |  | 74,779     |  
|                                                                       |  |            |   |  |            |  
|Supplemental cash flow information                                     |  |            |   |  |            |  
|Cash paid for:                                                         |  |            |   |  |            |  
|Interest                                                               |  | 65,751     |   |  | 6,943      |  
|Income tax                                                             |  | -          |   |  | -          |  

See accompanying notes

---

- 6 -

VOICE MOBILITY INTERNATIONAL, INC.Notes to the
      Consolidated Financial StatementsDecember 31, 2009

1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of BusinessVoice Mobility International,
  Inc. (the "Company") is a Nevada corporation engaged in the development and
  sales and marketing of enhanced messaging software systems. The Company's
  enhanced messaging software suite will allow for legacy voice-mail replacement
  and incremental offerings such as real time call connect, voice-mail to e-mail,
  and fax to e-mail services. These unified communication services are facilitated
  by the creation of a single personal digital mailbox that can receive any type
  of communication regardless of its incoming format or medium.

Basis of PresentationThe financial statements have
  been prepared by management in accordance with United States generally accepted
  accounting principles on a going concern basis, which contemplates the
  realization of assets and the discharge of liabilities in the normal course of
  business for the foreseeable future.

The Company has incurred significant losses from operations
  since inception and has a total shareholders' deficit of $8,256,777 and working
  capital deficiency of $1,871,177 at December 31, 2009 which raises substantial
  doubt about its ability to continue as a going concern. Management has financed
  operations through a series of equity and debt financings. Management continues
  to seek other sources of debt or equity financing; however, there are no
  assurances that any such financing can be obtained on favorable terms, if at
  all. Management believes it has implemented significant cost reductions and
  expects to keep its operating costs to a minimum until cash is available through
  financing or operating activities. There are no assurances that the Company will
  be successful in achieving these goals. On April 30, 2010 the Company was issued
  a cease trade order by the British Columbia Securities Commission for failure to
  timely file its 2009 audited financial statements. On June 17, 2010 the Company
  obtained a partial revocation order in order to permit the Company to complete a
  financing and complete its required filings.

The continuation of business operations is dependent upon
  obtaining further financing, successful and sufficient market acceptance of our
  current products and any new products that we may introduce, the continuing
  successful development of our products and related technologies, and, finally,
  achieving a profitable level of operations. The issuance of additional equity
  securities could result in a significant dilution in the equity interests of
  current stockholders. Obtaining commercial loans, assuming those loans would be
  available, will increase our liabilities and future cash commitments.

These financial statements do not give effect to any
  adjustments which would be necessary should the Company be unable to continue as
  a going concern and therefore be required to realize its assets and discharge
  its liabilities in other than the normal course of business and at amounts
  different from those reflected in the accompanying financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidationThe accompanying
  consolidated financial statements include the accounts of the Company and its
  wholly-owned subsidiaries, Voice Mobility Inc. (VMI), Voice Mobility (US),
  Inc., Voice Mobility Canada Limited and VM Sub Limited. All intercompany
  balances and transactions have been eliminated on consolidation.

Use of estimatesThe preparation of financial
  statements in conformity with U.S. generally accepted accounting principles
  requires management to make estimates and assumptions that affect the reported
  amounts of assets and liabilities and disclosures of contingent assets and
  liabilities at the date of the financial statements and the reported amounts of
  revenues and expenses. Actual results could differ from those estimates.

---

- 7 -

Revenue recognitionRevenues are derived from sales
  of software licenses, hardware, maintenance, training services and language
  localization services. The Company has sold software licenses with maintenance
  and training services, hardware on a stand-alone basis and bundled arrangements
  including software, hardware and maintenance and training services. The Company
  generally licenses software to customers for an indefinite period of time.

Software revenue is recognized when persuasive evidence of an
  arrangement exists, when all elements essential to the functionality of the
  software including installation and training are delivered in accordance with
  the terms and conditions of the customer contract, when the fee is fixed or
  determinable, and when collection is reasonably assured. Fees are considered
  fixed or determinable if the contracts are similar to others for which the
  Company has a standard business practice and a history of successful collection
  under the original payment terms.

For software arrangements involving multiple elements, the
  Company allocates revenue to each element based on vendor specific objective
  evidence of relative fair values, which are derived by allocating a value to
  each element that is based upon the prices charged when the element is sold
  separately. If vendor specific objective evidence does not exist, the revenue is
  recognized upon delivery of all elements. The Company's product and services are
  generally sold as part of a contract involving software, hardware, maintenance
  and training.

Revenues from consulting and maintenance are recognized ratably
  over the term of the arrangement, generally one year, and revenues from training
  are generally recognized as the services are performed.

Foreign currencyThese consolidated financial
  statements have been presented in United States dollars. The functional currency
  of the Company is the Canadian dollar. The functional currency of the Company's
  Canadian subsidiary is the Canadian dollar. Accordingly, all assets and
  liabilities of the Canadian subsidiary which are denominated in Canadian dollars
  are translated at the year-end exchange rate and revenues and expenses are
  translated using a weighted average exchange rate for the applicable year. Any
  resulting exchange gains and losses are presented as cumulative foreign currency
  translation gains (losses) within other accumulated comprehensive loss.

Transactions denominated in foreign currencies are translated
  at the exchange rate in effect on the respective transaction dates and gains and
  losses are reflected in the consolidated statements of operations.

Fair Value of Financial instrumentsThe estimated
  fair values for financial instruments are determined at discrete points in time
  based on relevant market information. These estimates involve uncertainties and
  cannot be determined with precision. The estimated fair value of cash, accounts
  receivable, other receivables, account payable, amounts due to related parties
  and notes payable approximates their carrying value due to their short-term
  nature.

EquipmentProperty and equipment are recorded at
  cost. Amortization is provided using the straight-line method over the assets
  estimated useful lives as follows:

Computer equipment
      3 yearsComputer software
      2 yearsOffice equipment and furniture
      5 yearsLeasehold improvements
      Term of the lease


Software development costsCosts incurred internally
  to develop computer software products and the costs to acquire externally
  developed software products (which have no alternative future use) to be sold,
  leased or otherwise marketed are charged to expense until the technological
  feasibility of the product has been established. After technological feasibility
  is established and until the product is available for general release, software
  development, product enhancements and acquisition costs are capitalized and
  amortized on a product-by-product basis.

---

- 8 -

Stock-based compensationThe Company records
  compensation expense in the financial statements for share based payments using
  the fair value method. The fair value of share-based compensation to directors
  and employees is determined using the Black-Scholes option valuation model at
  the time of grant. Fair value for common shares issued for goods or services
  rendered by non-employees are measured based on the fair value of the goods and
  services received. Share-based compensation is expensed with a corresponding
  increase to share capital. Upon the exercise of the stock options, the
  consideration paid is recorded as an increase in share capital.

InventoryInventory is valued at the lower of cost,
  determined on a first in first out basis, and net realizable value. Inventory
  consists of computer hardware and software acquired from suppliers to be resold
  to the Companys customers.

Income taxesIncome taxes are determined using the
  liability method. Deferred tax assets and liabilities are recognized for the
  future tax consequences attributable to differences between the financial
  statement carrying amounts of assets and liabilities and their respective tax
  basis. Deferred tax assets and liabilities are measured using the enacted tax
  rates expected to apply to taxable income in the years in which those temporary
  differences are expected to be recovered or settled. The effect on deferred tax
  assets and liabilities of a change in tax rates is recognized in income in the
  period that includes that date of enactment. In addition, a valuation allowance
  is established to reduce any deferred tax asset for which it is determined that
  it is more likely than not that some portion of the deferred tax asset will not
  be realized.

The Company accounts for uncertainty in income taxes by
  applying a two-step method. First, it evaluates whether a tax position has met a
  more likely than not recognition threshold, and second, it measures that tax
  position to determine the amount of benefit, if any, to be recognized in the
  financial statements. The application of this method did not have a material
  effect on the Company's financial statements.

Income (Loss) per shareBasic income (loss) per
  share is computed by dividing income (loss) available to common stockholders by
  the weighted average number of common stock and exchangeable shares outstanding
  for the period. Diluted income (loss) per share reflects the dilutive potential
  of outstanding securities using the treasury stock method.

Recent Accounting PronouncementsThe Company has
  reviewed issued accounting pronouncements and plans to adopt those that are
  applicable to it. It does not expect the adoption of these pronouncements to
  have an impact on the financial statements.

3. EQUIPMENT

|                                     |  |           |  |  | Accumulated  |  |  | Net Book | 
|------------------------------------ |  | --------- |  |  | ------------ |  |  | -------- | 
|                                     |  | Cost      |  |  | Amortization |  |  | Value    | 
|                                     |  | $         |  |  | $            |  |  | $        | 
|2009                                 |  |           |  |  |              |  |  |          | 
|Computer equipment                   |  | 2,226,770 |  |  | 2,206,216    |  |  | 20,554   | 
|Computer software                    |  | 639,447   |  |  | 639,083      |  |  | 364      | 
|Office equipment and furniture       |  | 142,997   |  |  | 141,519      |  |  | 4,216    | 
|Leasehold improvements               |  | 7,867     |  |  | 5,206        |  |  | 2,661    | 
|                                     |  | 3,017,081 |  |  | 2,992,023    |  |  | 25,057   | 
|                                     |  |           |  |  |              |  |  |          | 
|2008                                 |  |           |  |  |              |  |  |          | 
|Computer equipment                   |  | 1,907,660 |  |  | 1,896,680    |  |  | 10,980   | 
|Computer software                    |  | 551,773   |  |  | 550,814      |  |  | 959      | 
|Office equipment and
      furniture |  | 123,391   |  |  | 120,868      |  |  | 2,523    | 
|Leasehold improvements               |  | 30,279    |  |  | 30,279       |  |  | -        | 
|                                     |  | 2,613,103 |  |  | 2,598,641    |  |  | 14,462   | 

---

- 9 -

4. ECONOMIC DEPENDENCE

Sales to two customers comprised 65% of revenue in 2009. Sales
  to one customer comprised 15% of revenue and sales to four other customers
  comprise 65% of revenue in 2008.

5. PROMISSORY NOTES

December 31, 2009
      
      
      December 31, 2008Principal
      
      1,622,265
      
      
      720,033Accrued interest
      
      7,781
      
      
      4,119Total demand promissory notes
      
      1,630,046
      
      
      724,152


During the year ended December 31, 2009, the Company issued a
  demand promissory note for a principal amount of $951,475 (Cdn$1,000,000),
  [(2008  716,152), (Cdn$877,000)]. The demand promissory note bears interest at
  prime plus 1.5% monthly with a general security agreement over the assets of the
  Company.

During the year ended December 31, 2009, the Company issued a
  series of demand promissory notes with an aggregate principal amount of $770,695
  (Cdn$810,000). The demand promissory notes bear interest at prime plus 4% and
  are unsecured. During the year the company repaid $99,905 (Cdn$105,000). At
  December 31, 2009 the principal balance of these outstanding notes is $670,790
  (Cdn$705,000).

During the year ended December 31, 2008, the Company issued a
  series of demand promissory notes with an aggregate principal amount of
  $1,087,800 (Cdn$1,225,000). The demand promissory notes bear interest at prime
  plus 4% per annum, are repayable on demand and are collateralized by the assets
  of the Companys subsidiary, VMI. On September 24, 2008, the Company repaid
  $217,035 (Cdn$225,000) of the demand promissory notes and paid the accrued
  interest of $1,260 (Cdn$1,313).

December
      
      
      December31, 2009
      
      
      31, 2008$
      
      
      $Series C notes payable
      
      -
      
      
      5,176,846Series D notes payable
      
      -
      
      
      617,605Series E notes payable
      
      -
      
      
      744,114Series F convertible note payable
      
      -
      
      
      167,639Series G notes payable
      
      -
      
      
      446,814Series H notes payable
      
      -
      
      
      478,474Series I notes payable
      
      115,992
      
      
      -115,992
      
      
      7,631,492


Exchange agreement 
  During the year end December 31,
  2009, the holders of the Series C, D, E, F, G and H notes payable owing to
  directors of the Company or relatives of directors of the Company exchanged the
  principal amount for an aggregate issuance of 19,250,280 Series C convertible
  preferred shares and the accrued interest was forgiven (See Note 6). As a
  result, the Company recorded a gain of $2,334,841. In addition to eliminating
  the Series C, D, E, F, G and H notes payable, the remaining balance of the
  deferred financing costs related to the Series C and D notes payable was written
  off during the year ending December 31, 2009.

The Company has classified the Series C convertible preferred
  share in mezzanine equity in the financial statements. The Series C convertible
  preferred shares includes a feature whereby holders of he Series C convertible
  preferred shares may demand cash in exchange for their securities after ten
  years and according to ASR 268, The Company must reflect the maximum possible
  cash obligation related to the Series C convertible preferred shares outside of
  permanent equity. Shares redeemable at the holders option are treated as
  contingently redeemable shares and are presented outside of shareholders equity
  in mezzanine equity.

---

- 10 -

On November 5, 2009, the Company closed a Series I notes
  payable unit financing for gross proceeds of $114,177. Each unit consists of a
  promissory note and one common share purchase warrant for each $1.00 of the
  principal amount of each promissory note. The fair value of the 120,000 warrants
  issued is $11,843. The promissory notes mature in one year, bear interest at 10%
  and are unsecured. Each share purchase warrant will entitle the holder to
  purchase one common share of the Company at the price of Cdn$0.25 per share
  until expiry on November 5, 2012. All of the outstanding notes payable are
  denominated in Canadian dollars and include accrued interest.

6. SHARE CAPITAL

[a] Issued and Authorized

Authorized:    100,000,000 shares of common
  stock, par value $0.001 
                           
  21,000,000 shares of preferred stock, par value $0.001

Series C Convertible Preferred StockFollowing
  receipt of shareholder approval at the Companys annual and special meeting held
  on June 11, 2009, the Company closed the exchange agreement dated April 16, 2009
  on June 30, 2009. The Company entered into the exchange agreement with Voice
  Mobility Inc., a wholly-owned operating subsidiary of the Company, and seven
  persons who held the Series C, D, E, F, G and H notes payable with a principal
  amount of Cdn$6,737,601. On the closing date, the holders exchanged the
  principal amount underlying the notes payable for an aggregate issuance of
  19,250,280 Series C convertible preferred shares of the Company at a price of
  Cdn$0.35 per preferred share. All accrued interest on the notes payable was
  forgiven as of June 30, 2009. VMI has agreed to secure the potential redemption
  or retraction amount that may be payable by the Company to the holders of the
  convertible preferred shares upon the redemption or retraction of such shares.
  On June 30, 2009 VMI entered into a general security agreement whereby it agreed
  to grant a fixed security interest in favor of the holders in all personal
  property held and a floating charge against all real and personal property held
  or later acquired by VMI.

The Series C convertible preferred shares are convertible into
  common shares in the capital of the Company on a one for one basis, retractable
  by the holder following the ten year anniversary from the date of grant at
  Cdn$0.35 per share and redeemable by the Company at any time upon 30 days notice
  at Cdn$0.35 per share, subject to adjustment for certain corporate alterations
  such as stock splits and consolidations. The Series C convertible preferred
  shares are non-voting and not entitled to dividends.

Common StockOn June 8, 2009, the Company issued
  5,000,000 units at $0.09 (Cdn$0.10) per unit for net cash proceeds of $422,115
  (Cdn$474,035). Each unit consists of one share of common stock and one share
  purchase warrant, with each warrant exercisable for a period of three years at
  an exercise price of $0.17 (Cdn$0.20) per share. The Company also issued 446,000
  units as a financing fee.

[b] Stock options 
  The stock option plan ("Plan")
  authorizes an aggregate amount of 12,000,000 common shares to be issued pursuant
  to the exercise of stock options. Option awards are generally granted with an
  exercise price equal to the market price of the Companys stock at the date of
  grant; those option awards generally vest based on 3 years of continuous service
  and have 5-year contractual terms.

|                              |  | Options Outstanding |  
|----------------------------- |  | ------------------- | -
|                              |  |                     |  
|                              |  | Number              |  
|                              |  | of Shares           |  
|Balance, December 31, 2007    |  | 7,724,884           |  
|Options granted               |  | 1,235,000           |  
|Options expired and cancelled |  | (1,226,299          | )
|Balance, December 31, 2008    |  | 7,733,585           |  
|Options expired and cancelled |  | (3,144,694          | )
|Balance, December 31, 2009    |  | 4,588,891           |  

---

- 11 -

Options Outstanding
      Options ExercisableWeightedNumber
      Weighted
      Average
      Number
      WeightedRange of
      Outstanding at
      Average
      Remaining
      Exercisable at
      AverageExercise
      December 31,
      Exercise
      Contractual
      December 31,
      ExercisePrices
      2009
      Price
      Life (years)
      2009
      Price$0.16 - $0.50
      2,488,891
      $0.29
      2.76
      1,860,954
      $0.32$0.51 - $0.97
      2,140,000
      $0.78
      1.01
      2,140,000
      $0.784,588,891
      $0.56
      1.89
      4,000,954
      $0.57


Total stock-based compensation for the year ended December 31,
  2009 includes stock-based compensation expense related to employees of $120,664
  (2008 - $354,424) reported in the statement of operations as follows:

|                                 |  | 2009    |  |  | 2008    | 
|-------------------------------- |  | ------- |  |  | ------- | 
|                                 |  | $       |  |  | $       | 
|Stock-based compensation         |  |         |  |  |         | 
|Sales and marketing              |  | 64,575  |  |  | 79,842  | 
|Research
      and development   |  | 44,239  |  |  | 62,384  | 
|General and
      administrative |  | 11,850  |  |  | 212,198 | 
|Total stock-based compensation   |  | 120,664 |  |  | 354,424 | 

Valuation Assumptions

|                                                                                                                      |  | **2009** |  |  | 2008          | 
|--------------------------------------------------------------------------------------------------------------------- |  | -------- |  |  | ------------- | 
|                                                                                                                      |  |          |  |  |               | 
|Expected life of employee
      stock options (in years)                                                              |  | -        |  |  | 3.0           | 
|Weighted average volatility                                                                                           |  | -        |  |  | 84%           | 
|Expected volatility                                                                                                   |  | -        |  |  | 82% - 85%     | 
|Risk-free interest rate                                                                                               |  | -        |  |  | 3.09% - 3.37% | 
|Dividend yields                                                                                                       |  | -        |  |  | 0%            | 
|Weighted average fair value of stock options
      under employee stock 
      option plans granted during the period |  | -        |  |  | $0.09         | 

A summary of the status of the Companys nonvested options as
  of December 31, 2009 and changes during the year ended December 31, 2009, is
  presented below:

|Nonvested Options                    |  | Options    |   |  | Weighted Average      | 
|------------------------------------ |  | ---------- | - |  | --------------------- | 
|                                     |  |            |   |  | Grant-Date Fair Value | 
|                                     |  |            |   |  | $                     | 
|Nonvested at December 31,
      2008 |  | 1,632,548  |   |  | 0.14                  | 
|Vested during 2009                   |  | (1,044,611 | ) |  | 0.15                  | 
|Nonvested at December 31, 2009       |  | 587,937    |   |  | 0.12                  | 

---

- 12 -

[c] Warrants

As at December 31, 2009 and 2008, the Company has the following
  common stock warrants outstanding:

|                                                   |  | Number of       |   |  | Exercise Price | 
|-------------------------------------------------- |  | --------------- | - |  | -------------- | 
|                                                   |  | Common          |   |  | Cdn$           | 
|                                                   |  | Shares Issuable |   |  |                | 
|Balance, December 31, 2008                         |  | 3,465,500       |   |  | 0.65           | 
|Expired                                            |  | (3,465,000      | ) |  |                | 
|Issued                                             |  | 5,446,000       |   |  | 0.20           | 
|Issued                                             |  | 120,000         |   |  | 0.25           | 
|Total warrants outstanding
      December 31, 2009 |  | 5,566,000       |   |  | 0.15           | 

All of the share purchase warrants outstanding have exercise
  prices denominated in Canadian dollars.

As at December 31, 2009 the warrants outstanding have a
  weighted average contractual life remaining of 1.45 years (December, 31, 2008 
  0.97 years).

The following share purchase warrants have a call feature by
  which the Company can demand exercise of the share purchase warrants if the
  common stock trades at a price equal to or greater than a specified Canadian
  dollar amount on the Toronto Stock Exchange for a period of 30 consecutive days
  and if the share purchase warrants have not been exercised then such share
  purchase warrants will terminate on the date that is 120 days from the date such
  demand is given to the holders.

5,446,000 Class B warrants have a call feature by which the
  Company can demand exercise of the share purchase warrants if the common stock
  trades at a price equal to or greater than Cdn$0.30 on the Toronto Stock
  Exchange for a period of 30 consecutive days and the average daily trading
  volume is greater than 100,000 shares for such 30 consecutive trading day
  period. If the share purchase warrants have not been exercised then such share
  purchase warrants will terminate on the date that is 120 days from the date such
  demand is given to the holders.

7. INCOME TAX

The Company and its subsidiaries are subject to U.S. federal
  income tax, Canadian income tax, as well as income tax of multiple state and
  local jurisdictions. Based on the Companys evaluation, the Company has
  concluded that there are no significant uncertain tax positions requiring
  recognition in the Companys financial statements. The Companys evaluation was
  performed for the tax years ended December 31, 2001, 2002, 2003, 2004, 2005,
  2006, 2007 and 2008, the tax years which remain subject to examination by major
  tax jurisdictions as of September 30, 2009. The Company may from time to time be
  assessed interest or penalties by major tax jurisdictions, although any such
  assessments historically have been minimal and immaterial to the Companys
  financial results. In the event the Company has received an assessment for
  interest and/or penalties, it has been classified in the financial statements as
  selling, general and administrative expense.

The Company is subject to United States federal and state
  income taxes at an approximate rate of 35%. The Company is also subject to
  Canadian federal and British Columbia provincial taxes in Canada. The
  reconciliation of the provision (recovery) for income taxes at the United States
  federal statutory rate compared to the Company's income tax expenses as of
  December 31 is as follows:

|                                                       |  | 2009     |   |  | 2008     |  
|------------------------------------------------------ |  | -------- | - |  | -------- | -
|                                                       |  | $        |   |  | $        |  
|Statutory income tax rates                             |  | 35%      |   |  | 35%      |  
|Net income (loss)                                      |  | 385,381  |   |  | (228,574 | )
|Expected tax expense
      (recovery)                  |  | 134,883  |   |  | (80,000  | )
|Higher effective tax rate of Canadian
      subsidiary |  | (165,650 | ) |  | (729,000 | )
|Change in valuation allowance                          |  | (904,828 | ) |  | (729,000 | )
|Change in tax rate applied in valuation                |  | 9,552    |   |  | (7,000   | )
|Imputed interest                                       |  | 73,303   |   |  | 222,000  |  
|Expiration of loss carry forwards                      |  | 805,382  |   |  | -        |  
|Non-deductible expenses                                |  | 47,358   |   |  | 653,000  |  
|Income tax expense                                     |  | -        |   |  | -        |  

---

- 13 -

Deferred tax assets reflect the effects of tax losses, credits
  and the future income tax effects of temporary differences between the carrying
  amounts of assets and liabilities for financial reporting purposes and the
  amounts used for income tax purposes and are measured using enacted tax rates
  that apply to the taxable income in the years in which those temporary
  differences are expected to be recovered or settled. The Company has recognized
  a valuation allowance for those deferred tax assets for which realization is not
  more likely than not to occur.

Significant components of the Company's deferred tax assets as
  of December 31 are as follows:

|                                        |  | 2009       |   |  | 2008       |  
|--------------------------------------- |  | ---------- | - |  | ---------- | -
|                                        |  | $          |   |  | $          |  
|Deferred income tax assets:             |  |            |   |  |            |  
|Net operating
      loss carry forwards |  | 1,767,781  |   |  | 2,000,000  |  
|Non-capital loss carry forwards         |  | 2,840,232  |   |  | 2,900,000  |  
|Property and
      equipment            |  | 1,227,374  |   |  | 1,099,000  |  
|Unrealized foreign exchange             |  | 216,077    |   |  | (465,000   | )
|Debt discount
      accretion           |  | -          |   |  | 94,000     |  
|Other                                   |  | 4,600      |   |  | 7,000      |  
|Total deferred tax assets               |  | 6,056,064  |   |  | 5,635,000  |  
|Valuation allowance                     |  | (6,056,064 | ) |  | (5,635,000 | )
|Net deferred tax assets                 |  | -          |   |  | -          |  

The non-capital and net operating loss carry forwards expire as
  follows:

Canada
      
      $2010
      
      2,147,5942014
      
      2,655,6342015
      
      1,785,9132026
      
      1,706,0402027
      
      1,801,3992029
      
      1,264,348Total Canada
      
      11,360,928U.S.2020
      
      2,301,3822021
      
      2,338,9442022
      
      258,9692024
      
      292,9712028
      
      194,6512029
      
      (336,114
      )Total US
      
      5,050,80316,411,731


Pursuant to Section 382 of the Internal Revenue Code, use of
  the Company's net operating loss carry forwards may be limited if the Company
  experiences a cumulative change in ownership of greater than 50% in a moving
  three year period. Ownership changes could impact the Company's ability to
  utilize net operating losses and credit carry forwards remaining at the
  ownership change date. The limitation will be determined by the fair market
  value of common stock outstanding prior to the ownership change, multiplied by
  the applicable federal rate.

8. RELATED PARTY TRANSACTIONS

In May 2009, the Company obtained a loan from a company
  controlled by a shareholder in the amount of $25,819 (Cdn$26,000). On July 7,
  2009, The Company repaid the principal in full and paid the accrued interest of
  $238 (Cdn$240).

In August 2009, the Company obtained a loan from a company
  owned by a shareholder in the amount of $18,832 (Cdn$20,000). On September 8,
  2009, The Company repaid the loan and paid the accrued interest of $29
  (Cdn$31).

---

- 14 -

In August 2009, the Company obtained a loan from a director of
  the company in the amount of $18,832 (Cdn$20,000). On September 8, 2009, The
  Company repaid the loan and paid the accrued interest of $29 (Cdn$31).

In December 2009, the Company obtained a loan from a director
  and shareholder of the company in the amount of $256,898 (Cdn$270,000). As of
  December 31, 2009, the principal and accrued of $132 (Cdn$139) is
  outstanding.

In March 2009, the Company obtained a loan from a former
  director in the amount of $118,934 (Cdn$125,000). As of December 31, 2009,
  $6,798 (Cdn$7,145) is outstanding.

During the year end December 31, 2009, the holders of the
  Series C, D, E, F, G and H notes payable exchanged the principal amount for an
  aggregate issuance of 19,250,280 Series C convertible preferred shares and the
  accrued interest was forgiven (See Note 5).

9. SUBSEQUENT EVENTS

In January 2010, the Company completed a private placement
  offering of 1,525,000 units, consisting of one common share one share purchase
  warrant at a price of $0.06 per unit, for proceeds of $91,500. The warrants are
  exercisable for a period of five years and one share purchase warrant is
  exercisable into one share of common stock at a price of $0.08 per share.

In February 2010, the Company completed a private placement
  offering of 1,100,000 units, consisting of one share of Common Stock and one
  common stock purchase warrant at a price of $0.06 per unit, for proceeds of
  $66,000. The warrants are exercisable for a period of five years and entitle the
  holder to purchase one share of common stock for $0.08 per share.

In February 2010, the Company received $32,500 and issued
  promissory note. The note bears interest at prime plus 4% monthly, is due on
  demand and is unsecured.

---

- 26 -

Item
9.           Changes in and
Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A(T).   Controls and Procedures.

Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other
procedures that are designed to ensure that information required to be disclosed
in our reports filed or submitted under the Securities Exchange Act of 1934 (the
Exchange Act) is recorded, processed, summarized and reported, within the time
periods specified in the Securities and Exchange Commission's rules and forms.
Disclosure controls and procedures include controls and procedures designed to
ensure that information required to be disclosed in our reports filed or
submitted under the Exchange Act is accumulated and communicated to management
to allow timely decisions regarding required disclosure.

As required by paragraph (b) of Rules 13a-15 or 15d-15 under
the Exchange Act, our chief executive officer evaluated the effectiveness of our
disclosure controls and procedures as of the end of the period covered by this
annual report, being December 31, 2009. Our chief executive officer evaluated
our companys disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) of the Exchange Act) as of December 31, 2009.

Based on this evaluation, these officers concluded that, as of
as of December 31, 2009, these disclosure controls and procedures were not
effective to ensure that the information required to be disclosed by our company
in reports it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the rules and forms
of the Securities Exchange Commission. The conclusion that our disclosure
controls and procedures were not effective was due to the presence of material
weaknesses in internal control over financial reporting as identified below
under the heading Managements Annual Report on Internal Control Over Financial
Reporting. Management anticipates that such disclosure controls and procedures
will not be effective until the material weaknesses are remediated.

Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues,
if any, within our company have been detected. These inherent limitations
include the realities that judgments in decision-making can be faulty and that
breakdowns can occur because of simple error or mistake.

Managements Annual Report on Internal Control over
Financial Reporting

Our management is responsible for establishing and maintaining
adequate internal control over financial reporting. The term internal control
over financial reporting is defined as a process designed by, or under the
supervision of, an issuers principal executive and principal financial
officers, or persons performing similar functions, and effected by the issuers
board of directors, management and other personnel, to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles and includes those policies and procedures that:

| | (1) | pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the issuer;                                                                                                                                                                                           
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                    
| | (2) | provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with generally accepted accounting principles, and that
      receipts and expenditures of the issuer are being made only in accordance
      with authorizations of management and directors of the issuer;
  and
| |     |                                                                                                                                                                                                                                                                                                                                                                    
| | (3) | provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, or use or disposition of the
      issuers assets that could have a material effect on the financial
      statements.                                                                                                                                   

---

- 27 -

Under the supervision and with the participation of our chief
executive officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting as of December 31, 2009 using the
criteria established in Internal ControlIntegrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). This
evaluation included review of the documentation of controls, evaluation of the
design effectiveness of controls, testing of the operating effectiveness of
controls and a conclusion on this evaluation. Based on this evaluation, our
management concluded our internal control over financial reporting was not
effective as at December 31, 2009.

A material weakness is a deficiency, or combination of
deficiencies, in internal control over financial reporting, such that there is a
reasonable possibility that a material misstatement of our companys annual or
interim financial statements will not be prevented or detected on a timely
basis. In its assessment of the effectiveness of our internal control over
financial reporting as of December 31, 2009, we determined that there were
control deficiencies that constituted material weaknesses some of which are
indicative of many small companies with small staff, such as:

| | (1) | inadequate segregation of duties and effective risk
      assessment;                                                                                                                                                                                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (2) | insufficient written policies and procedures for
      accounting and financial reporting with respect to the requirements and
      application of both generally accepted accounting principles in the United
      States and guidelines of the Securities and Exchange Commission;                                                                                                                                      
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (3) | inadequate security and restricted access to computers,
      including insufficient disaster recovery plans; and                                                                                                                                                                                                                                                                                                           
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                             
| | (4) | on October 13, 2009, Randy Buchamer, our Chief Executive
      Officer, acting Chief Financial Officer and director resigned and
      management did not have time to find a replacement with sufficient SEC and
      public company reporting experience as well as a background of the
      Companys processes and transactions to perform the year-end preparation
      and compilation of the financial statements.

These control deficiencies resulted in a reasonable possibility
that a material misstatement of the annual or interim financial statements could
not have been prevented or detected on a timely basis. Further, these
deficiencies resulted in our failure to file this Annual Report on Form 10-K for
the year ended December 31, 2009 and our Interim Report on Form 10-Q for the
three month period ended March 31, 2010 on time. As a result of the material
weaknesses described above, we concluded that we did not maintain effective
internal control over financial reporting as of December 31, 2009 based on
criteria established in Internal ControlIntegrated Framework issued by COSO.
Our management is currently evaluating remediation plans for the above
deficiencies. During the period covered by this annual report on Form 10-K, we
have not been able to remediate the weaknesses described above. However, we plan
to take steps to enhance and improve the design of our internal control over
financial reporting.

This annual report does not include an attestation report of
our independent registered public accounting firm regarding internal control
over financial reporting. Our internal control over financial reporting was not
subject to attestation by our independent registered public accounting firm
pursuant to temporary rules of the Securities and Exchange Commission that
permit us to provide only managements report in this annual report.

Changes in Internal Controls

As noted above, management is disclosing material weaknesses in
internal control over financial reporting. These changes have materially
affected our internal control over financial reporting as of December 31, 2009
because they affected our ability to prepare the year-end financial information
in a timely and accurate way.

Item 9B.        Other
Information.

Following the resignation of Randy Buchamer as Chief Executive
Officer, acting Chief Financial Officer and director on October 13, 2009,
William Krebs, a director of our company and member of the audit committee, has
agreed to act on an interim basis to carry out the functions as Chief Executive
Officer and Chief Financial Officer of our company until a qualified person is
located and appointed to fill these positions.

---

- 28 -

In connection with Mr. Buchamers resignation, we entered into
a loan agreement dated November 2, 2009 with Mr. Buchamer, whereby we agreed to
repay outstanding promissory notes in the aggregate principal amount of $150,000
to Mr. Buchamer based upon the following schedule: (i) $25,000 on November 2,
2009; (ii) $62,500 on March 31, 2010; and (iii) $62,500 on July 31, 2010. The
principal amount outstanding bears interest at the rate equal to the HSBC Prime
Rate plus 4% per annum, compounded annually, with interest payable on the date
of repayment as follows: (i) as to $35,000 of the principal amount, from
February 16, 2009 to the date of repayment; and (ii) as to $115,000 of the
principal amount, from March 31, 2009 to the date of repayment. To secure the
payment of the principal and interest of such amounts, and any other amount that
our company may owe Mr. Buchamer in the future, we granted a security interest
in all present and after acquired property of our company and our subsidiaries
to Mr. Buchamer. In addition, Voice Mobility (US) Inc., our wholly-owned
subsidiary, agreed to guarantee the payment obligations of our company and Voice
Mobility Inc. in the event of default under the terms of the loan agreement.

In connection with Mr. Buchamers resignation, we agreed to pay
him the sum of $170,000 over a period of 12 months (from October 14, 2009 to
September 30, 2010) payable in bi-weekly installments and continue to extend Mr.
Buchamers previous health and welfare benefits for the same 12 month period or
such earlier date that Mr. Buchamer becomes employed by another employer. As Mr.
Buchamer has agreed to remain as a consultant of our company following his
resignation, we have agreed to pay Mr. Buchamer a service fee of $30,000 payable
in three equal instalments of $10,000 each on November 15, 2009, December 15,
2009 and January 15, 2010. We have also agreed that all vested stock options
held by Mr. Buchamer as of October 13, 2009 will remain exercisable in
accordance with the stock option agreements entered into between Mr. Buchamer
and our company prior to October 13, 2009.

We have received a letter dated April 1, 2010 from Mr.
Buchamer, which states that the letter serves as formal notice under the loan
agreement dated November 2, 2009 (the Agreement) that we are in default of our
obligation to make the March 31, 2010 payment of $62,500 plus interest to Mr.
Buchamer. Mr. Buchamer further states that, as per the Agreement, unless he
receives payment in full by April 10, 2010, he will exercise whatever rights and
remedies he has under the law to enforce such payment, including institution of
legal proceedings. As of June 14, 2010, to our knowledge Mr. Buchamer has not
commence any lawsuit against us.

PART III

Item
10.         Directors, Executive
Officers and Corporate Governance.

The following table sets forth the names, positions and ages of
our executive officers and directors. All our directors serve until the next
annual meeting of shareholders or until their successors are elected and
qualify. The board of directors elects officers and their terms of office are,
except to the extent governed by employment contract, at the discretion of the
board of directors.

Name
      Position Held with the Company
      Age
      Date First Elected or AppointedWilliam Krebs(1)(2)
    Interim Chief Executive
      Officer and Director
    63
    Chairman of the Board of Directors -
      June 2008; 1995William H. Laird(1)(2)
    Director
    62
    June 2007Michael Dyde(1)(2)
    Director
    74
    November 2009Jay Hutton
    Director
    44
    May 12, 2010Robert Eisses(3)
    Interim Chief Operating
      Officer
    44
    November 25, 2009


---

- 29 -

|(1) | Members of our Audit Committee                                                 
|--- | -------------------------------------------------------------------------------
|(2) | Members of our Corporate Governance Committee                                  
|(3) | On March 1, 2010, Mr. Eisses resigned as Interim Chief
      Operating Officer.

Business Experience

William Krebs - Interim Chief Executive Officer and Director

Mr. Krebs previously served as a director from 1995 to June
2007. Mr. Krebs previously served as the chairman of our board of directors from
1995 to September 2000 and as interim Chief Executive Officer from October 13,
2009. From 1995 to September 2000, Mr. Krebs was our Treasurer and Secretary.
From January 1995 to August 2000, Mr. Krebs has also served as a director of
Acrex Ventures Ltd. He also has served as President and a director of Pacific
Western Mortgage Corp. since 1987 and served as President and a Director of
Tsalix Investments Inc. (formerly Pacific Western Mortgage Corp.) from 1994 to
1995. These companies provided consulting services and investment capital. From
1997 to 1999, he was a director and officer of WaveRider Communications, Inc., a
company which dealt with wireless broadband technology. From 1990 to 1995, Mr.
Krebs served as director and President of TelcoPlus Enterprises Ltd. and its
wholly-owned subsidiary, Intertec Telecommunications Inc. Mr. Krebs served as a
director and President of CT&T Telecommunications Inc. from 1990 to 1995.
Mr. Krebs is a Chartered Accountant and practiced as such from 1973 to 1980. Mr.
Krebs has been a member of the Canadian Institute of Chartered Accountants since
1973.

We believe Mr. Krebs is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

William H. Laird - Director

Mr. Laird is a venture capitalist and served for the past
fifteen years as director to several start-up companies. Mr. Laird is president
of W.H. Laird Holdings Ltd., and director and secretary of Tech-Crete Processors
Ltd., Piccadilly Place Mall Inc., and Excel Construction Ltd. These companies
encompass manufacturing, construction, and property development and leasing.

We believe Mr. Laird is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Michael Dyde - Director

Mr. Dydecareer spans the banking
and hospitality industries. He has worked with Westminster Bank, CIBC, and more
recently Chairman at Dorchester Hotels Ltd and Arbutus Foods Limited. Michael
has also served with the Royal Air Force.

We believe Mr. Dyde is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from working for our company as described above, in
addition to his education and business experiences as described above.

Jay Hutton - Director

Mr. Hutton is the President and Chief Executive Officer of
Hutton Capital Corporation, Hutton Capital Management and Hutton Development
Corp., which are companies engaged in investment banking and real estate
development. Prior to that, Mr. Hutton was the founder, President and Chief
Executive Officer of the Canada Dominion Resources Group of companies. Mr.
Hutton has been a director of Terra Ventures Inc. since January 2007, and since
May 2008, has also been serving as the Chairman of their board of directors. Mr.
Hutton was previously our President from June 29, 2001 to April 5, 2007.

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- 30 -

We believe Mr. Hutton is qualified to serve on our board of
directors because of his knowledge of our companys history and current
operations, which he gained from previously working for our company as described
above, in addition to his education and business experiences as described above.

Term of Office

Our directors hold office until the next annual meeting or
until their successors have been elected and qualified, or until they resign or
are removed. Our board of directors appoints our officers, and our officers hold
office until their successors are chosen and qualify, or until their resignation
or their removal.

Family Relationships

There are no family relationships among our directors or
officers.

Involvement In Certain Legal Proceedings

Our directors and executive officers have not been involved in
any of the following events during the past ten years:

(1) any bankruptcy petition filed by or
against any business of which such person was an executive officer either at the
time of the bankruptcy or within two years prior to that time;

(2) any conviction in a criminal
proceeding or being subject to a pending criminal proceeding (excluding traffic
violations and other minor offenses);

(3) being subject to any order,
judgment, or decree, not subsequently reversed, suspended or vacated, of any
court of competent jurisdiction, permanently or temporarily enjoining, barring,
suspending or otherwise limiting his involvement in any type of business,
securities or banking activities;

(4) being found by a court of competent
jurisdiction (in a civil action), the Securities and Exchange Commission or the
Commodity Futures Trading Commission to have violated a federal or state
securities or commodities law, and the judgment has not been reversed,
suspended, or vacated;

(5) being the subject of, or a party
to, any federal or state judicial or administrative order, judgment, decree, or
finding, not subsequently reversed, suspended or vacated, relating to an alleged
violation of: (i) any federal or state securities or commodities law or
regulation; or (ii) any law or regulation respecting financial institutions or
insurance companies including, but not limited to, a temporary or permanent
injunction, order of disgorgement or restitution, civil money penalty or
temporary or permanent cease- and-desist order, or removal or prohibition order;
or (iii) any law or regulation prohibiting mail or wire fraud or fraud in
connection with any business entity; or

(6) being the subject of, or a party
to, any sanction or order, not subsequently reversed, suspended or vacated, of
any self-regulatory organization (as defined in Section 3(a)(26) of the
Securities Exchange Act of 1934), any registered entity (as defined in Section
1(a)(29) of the Commodity Exchange Act), or any equivalent exchange,
association, entity or organization that has disciplinary authority over its
members or persons associated with a member.

---

- 31 -

Compliance with Section 16(a) of the Securities Exchange Act
of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires
our officers and directors, and persons who own more than ten percent of a
registered class of our equity securities, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission. Officers,
directors and greater than 10% shareholders are required by SEC regulation to
furnish us with copies of all Section 16(a) forms they file.

Based solely on our review of the copies of such forms received
by our Company, or written representations from certain reporting persons that
no Form 5s were required for those persons, we believe that, during the year
ended December 31, 2009, all filing requirements applicable to our officers,
directors and greater than ten percent beneficial owners were complied with.

Code of Ethics

Effective February 11, 2004, our Company's board of directors
adopted a Code of Ethics and Business Conduct that applies to, among other
persons, our Company's Chief Executive Officer (being our principal executive
officer and principal financial officer), our Company's Controller (being our
principal accounting officer), as well as persons performing similar functions.
As adopted, our Code of Ethics and Business Conduct sets forth written standards
that are designed to deter wrongdoing and to promote:

(1) honest and ethical conduct,
including the ethical handling of actual or apparent conflicts of interest
between personal and professional relationships;

(2) full, fair, accurate, timely, and
understandable disclosure in reports and documents that we file with, or submit
to, the Securities and Exchange Commission and in other public communications
made by us;

(3) compliance with applicable
governmental laws, rules and regulations;

(4) the prompt internal reporting of
violations of the Code of Ethics and Business Conduct to an appropriate person
or persons identified in the Code of Ethics and Business Conduct; and

(5) accountability for adherence to the
Code of Ethics and Business Conduct.

Our Code of Ethics and Business Conduct requires, among other
things, that all of our Company's personnel shall be accorded full access to our
Chief Executive Officer or Audit Committee with respect to any matter which may
arise relating to the Code of Ethics and Business Conduct. Further, all of our
Company's personnel are to be accorded full access to our Company's Audit
Committee if any such matter involves an alleged breach of the Code of Ethics
and Business Conduct by the Chief Executive Officer.

We will provide a copy of the Code of Ethics and Business
Conduct to any person without charge, upon request. Requests can be sent to:
Voice Mobility International, Inc., 107 - 645 Fort Street, Victoria, British
Columbia, Canada, 8W 1G2 or via email to investors@voicemobility.com.

Nomination Procedures For Appointment of Directors

As of March 1, 2010, we did not effect any material changes to
the procedures by which our stockholders may recommend nominees to our board of
directors that were otherwise disclosed in our proxy statement on Schedule 14A
filed with the Securities and Exchange Commission on April 23, 2008.

Audit Committee

We have a standing Audit Committee which currently consists of
William Krebs, William Laird, and Michael Dyde. William Laird and Michael Dyde
are independent as defined by Nasdaq Marketplace Rule 4200(a)(15) and
Multilateral Instrument 52-110, adopted by various Canadian securities
commissions, and William Krebs is not. Each of the members of the Audit
Committee are financially literate as defined in Multilateral Instrument
52-110.

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- 32 -

For a description of each members education and experience,
see the section of this Annual Report entitled Business Experience. The Audit
Committee was established in accordance with Section 3(a)(58)(A) of the
Securities and Exchange Act of 1934. The Audit Committee is directed to review
the scope, cost and results of the independent audit of our books and records,
the results of the annual audit with management and the adequacy of our
accounting, financial and operating controls; to recommend annually to the board
of directors the selection of the independent registered accountants; to
consider proposals made by the independent registered chartered accountants for
consulting work; and to report to the board of directors, when so requested, on
any accounting or financial matters. The board of directors adopted its charter
for the Audit Committee on April 26, 2002 and was formed in February, 2000, a
copy of which is filed with this Annual Report.

Audit Committee Financial Expert

Our board of directors has determined that our company has one
audit committee financial expert serving on the audit committee, which person is
William Krebs. William Krebs is a chartered accountant. Our board of directors
has also determined that William Krebs is not "independent", as that term is
defined by Nasdaq Marketplace Rule 4200(a)(15), as William Krebs is our interim
Chief Executive Officer.

Item
11.         Executive Compensation.

Summary Compensation Table

The particulars of compensation paid to the following persons:

|(a) | our principal executive officer;                                                                                                                                                                                                       
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                        
|(b) | each of our two most highly compensated executive
      officers who were serving as executive officers at the end of the year
      ended December 31, 2009; and                                                                      
|    |                                                                                                                                                                                                                                        
|(c) | up to two additional individuals for whom disclosure
      would have been provided under (b) but for the fact that the individual
      was not serving as our executive officer at the end of the year ended
      December 31, 2009,

who we will collectively refer to as our named executive
officers, of our company for the years ended December 31, 2009 and 2008, are set
out in the following summary compensation table, except that no disclosure is
provided for any named executive officer, other than our principal executive
officer, whose total compensation does not exceed $100,000 for the respective
fiscal year:

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- 33 -

Name and Principal
      Position
      Year
      Salary ($)
      Bonus ($)
      Stock Awards ($)
      Option Awards
      ($)(1)
      Non- Equity Incentive Plan
      Compensa- tion ($)
      Change in 
        Pension Value and Nonqualified
      Deferred Compensation Earnings ($)
      Other Annual Compen-
      sation ($)(2)
      Total ($)William Krebs, Interim Chief
      Executive Officer (3)
    2009 2008
    Nil Nil
    Nil Nil
    Nil Nil
    Nil 5,168
    Nil Nil
    Nil Nil
    Nil Nil
    Nil 5,168Rob Collins Director of Marketing
      (4)
    2009 2008
    102,759 88,670
    Nil Nil
    Nil Nil
    Nil 12,921
    Nil Nil
    Nil Nil
    5,708 4,926
    108,467 106,517John Gavin (5)
    2009 2008
    106,400 150,400
    Nil Nil
    Nil Nil
    Nil 5,168
    Nil Nil
    Nil Nil
    7,200 7,200
    113,600 162,768Randy Buchamer Former Chief Executive
      Officer (6)
    2009 2008
    184,348 164,204
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    4,519 4,926
    188,868 169,130Robert Eisses, Former Interim Chief
      Operation Officer(7)
    2009 2008
    15,000 Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    $15,000 Nil


> (1)Reflects the grant date fair value calculated
>     in accordance with FAS 123(R). See "Notes to Financial Statement  Summary
>     of Significant Accounting Policies  Stock Based Compensation" for a
>     discussion of the relevant assumptions used in calculating the grant date
>     fair value pursuant to FAS 123(R).
>   (2)Mr. Buchamer, Mr. Collins and Mr. Gavin All
>     Other Compensation" consists of car allowances.
>   (3)William Krebs, a director of our company has
>     agreed to act on an interim basis to carry out the functions as Chief Executive
>     Officer of our company until a qualified person is located and appointed to
>     fill these positions. No compensation is being paid to Mr. Krebs for services
>     rendered.
>   (4)Compensation was paid to Mr. Collins by VMI,
>     our operating subsidiary. Mr. Collins, Director of Marketing entered into
>     an indefinite term employment agreement on January 19, 2000. He receives a
>     salary of $102,759 (Cdn$108,000) per year plus a car allowance of $476 (Cdn$500)
>     per month.
>   (5)Compensation was paid to Mr. Gavin by VMI
>     (US), our operating subsidiary. Mr. Gavin, US Channel Manager entered into
>     an indefinite term employment agreement on September 1, 2007. He receives
>     a salary of $100,000 per year plus and office allowance of $200 per month
>     and a car allowance of $600 per month. During 2009, Mr. Gavin also received
>     a draw on commission of $4,000.
>   (6)Compensation was paid to Mr. Buchamer by VMI,
>     our operating subsidiary. Mr. Buchamer, Former Chief Executive Officer of
>     our company and our subsidiary, entered into an indefinite term employment
>     agreement on August 16, 2001. On October 13, 2009 Mr. Buchamer resigned from
>     his position as Chief Executive Officer. He received a salary of $184,348
>     (Cdn$193,750) plus a car allowance of $476 (Cdn$500) per month up to his date
>     of resignation.
>   (7)Mr. Eisses was appointed as interim Chief
>     Operating Officer on November 25, 2009 and Resigned on March 1, 2010.

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- 34 -

Compensation Discussion and Analysis

The compensation committee of our board of directors determines
compensation for our Chief Executive Officer, reviews and makes recommendations
regarding compensation of executive officers, and supervises the administration
of our equity plans for executives and all employees. During the year ended
December 31, 2009, the committee was composed of two independent directors,
William Laird and Michael Dyde, and one non-independent director, William Krebs.
No member is an employee or former employee of our company.

Executive Compensation Objectives

On behalf of our board of directors, the compensation committee
reviews and makes recommendations concerning:

1. the compensation policy with respect
to our employees or any of our subsidiaries ensuring that our company is in
compliance with all legal compensation reporting requirements; 2. the
compensation of our Chief Executive Officer and other officers of our company;
3. management compensation programs including, stock option plans, incentive
plans, and perquisites; 4. the annual, or more often if appropriate review
of:

(a) management succession plans and
process; (b) performance appraisal and management and employee development
programs; (c) contingency plans in the event of the unexpected disability of
key management; and (d) proposed personnel changes involving officers
reporting to the Chief Executive Officer.

Components of Compensation

Executive compensation consists primarily of base salary and
stock options.

Base Salary. We target executives base salaries
according to salary surveys. In determining each executive officer's base
salary, the compensation committee takes into account competitive market data
for similar positions at high-technology companies, individual responsibilities
and performance, and internal equity within our company.

Stock Options. Our equity incentives have been in the
form of stock options. Stock options are issued at an exercise price of fair
market value on the date of grant. Options granted in fiscal 2008 vest ratably
over thirty-six months. Fair-market-value stock options become valuable and
exercisable only if the executive officer continues to work at our company and
the stock price subsequently increases.

CEO Compensation

Following the resignation of Randy Buchamer as Chief Executive
Officer, acting Chief Financial Officer and director on October 13, 2009,
William Krebs, a director of our company and member of the audit committee, has
agreed to act on an interim basis to carry out the functions as Chief Executive
Officer of our company until a qualified person is located and appointed to fill
these positions. No compensation is being paid to Mr. Krebs for services
rendered.

Stock Option Grants in 2009 to Named Executive Officers

During 2009, we did not grant any stock option awards to
Executive Officers or other employees.

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- 35 -

Outstanding Equity Awards at Fiscal Year End

The following table summarizes equity awards granted to our
named executive officers that were outstanding as of December 31, 2009.

Option Awards
      Stock AwardsName
      Number of 
        Securities 
        Underlying 
        Exercisable 
        Options 
        (#)
      Number of 
        Securities 
        Underlying 
        Unexercisable 
        Options 
        (#)
      Equity Incentive 
        Plan Awards: 
        Number of 
        Securities 
        Underlying 
        Unexercised 
        Unearned Options 
        (#)
      Option Exercise 
        Price 
        ($)
      Option 
        Expiration 
        Date
      Number of 
        Shares of 
        Units of Stock 
        that have not 
        Vested 
        (#)
      Market 
        Value of 
        Shares or 
        Units of 
        Stock that 
        have not 
        Vested 
        ($)
      Equity  Incentive 
        Plan 
        Awards: 
        Number 
        of 
        Unearned 
        Shares, 
        Units or 
        Other 
        Rights 
        that have 
        not 
        Vested 
        (#)
      Equity  Incentive 
        Plan 
        Awards: 
        Market or 
        Payout 
        Value of 
        Unearned 
        Shares, 
        Units or 
        Other 
        Rights that 
        have not 
        Vested 
        ($)Randy 
        Buchamer
      108,800 
        400,000 
        491,900
      0 
        0 
        0
      N/A
      0.75 (Cdn 0.79) 
        0.48 (Cdn 0.50) 
        0.94 (Cdn 0.99)
      Mar 30/11 
        Aug 22/11 
        Aug 24/10
      N/A
      N/A
      N/A
      N/ARob Collins
      55,000 
        54,400 
        50,000 
        0
      0 
        0 
        0 
        125,000
      N/A
      0.44 (Cdn 0.46) 
        0.75 (Cdn 0.79) 
        0.26 (Cdn 0.27) 
        0.19 (Cdn 0.20)
      Feb 20/12 
        Mar 30/11 
        Jul 24/12 
        Jul 31/13
      N/A
      N/A
      N/A
      N/AJohn Gavin
      0 
        0
      50,000 
        200,000
      N/A
      0.19 (Cdn 0.20) 
        0.22 (Cdn 0.23)
      Jul 31/13 
        Sep 4/12
      N/A
      N/A
      N/A
      N/AWilliam Krebs
      0
      100,000
      N/A
      0.19 (Cdn 0.20)
      Jul 31/13


Retirement or Similar Benefit Plans

There are no arrangements or plans in which we provide
retirement or similar benefits for our directors or executive officers.

Compensation of the Company's Directors

Our non-employee directors are granted incentive stock options.
Employee directors are granted incentive stock options based on their individual
employment agreements. All stock option grants are made pursuant to our Second
Amended and Restated 1999 Stock Option Plan.

The following table summarizes compensation paid to all of our
non-employee directors:

Name
      Fees Earned or Paid in Cash
      ($)
      Stock Awards ($)
      Option Awards ($)
      Non- 
        Qualified Deferred
      Compensation Earnings ($)
      Non-Equity Incentive Plan
      Compensation ($)
      All Other Compensation
      ($)
      Total ($)Michael Dyde
    Nil
    Nil
    10,336
    nil
    nil
    nil
    10,336William Krebs
    Nil
    Nil
    10,336
    nil
    nil
    nil
    10,336William H. Laird
    Nil
    Nil
    10,336
    nil
    nil
    nil
    10,336


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- 36 -

We have no formal plan for compensating our directors for their
service in their capacity as directors, although such directors are expected to
receive stock options to purchase common shares as awarded by our board of
directors or through our compensation committee. Directors are entitled to
reimbursement for reasonable travel and other out-of-pocket expenses incurred in
connection with attendance at meetings of our board of directors. Our board of
directors may award special remuneration to any director undertaking any special
services on our behalf other than services ordinarily required of a
director.

Employment Agreement with Our Named Executive Officers

Randy Buchamer, Chief Executive Officer of our Company and our
subsidiary, entered into an employment agreement on August 16, 2001. Except for
any accrued salary, Mr. Buchamer is not entitled to any payment following, or in
connection with, the resignation, retirement or other termination of Mr.
Buchamer's employment as Chief Executive Officer, or in connection with Mr.
Buchamer's responsibilities following a change in control. During the year ended
December 31, 2008, Mr. Buchamer received a salary of $164,204 (Cdn$200,000) plus
a car allowance of $411 (Cdn$500) per month. Mr. Bunchamer resigned on October
19, 2009 and his employment agreement was terminated.

Rob Collins, Director of Marketing, entered into an employment
agreement on January 19, 2000. Except for any accrued salary, Mr. Collins is not
entitled to any payment following, or in connection with, the resignation,
retirement or other termination of Mr. Collins's employment as Director of
Marketing, or in connection with Mr. Collinss responsibilities following a
change in control. During the year ended December 31, 2008, Mr. Collins received
a salary of $88,670 (Cdn$108,000) plus a car allowance of $411 (Cdn$500) per
month.

John Gavin, US Channel Manager, entered into an employment
agreement on September 1, 2007. Except for any accrued salary, Mr. Gavin is not
entitled to any payment following, or in connection with, the resignation,
retirement or other termination of Mr. Gavin's employment as US Channel Manager,
or in connection with Mr. Gavin's responsibilities following a change in
control. During the year ended December 31, 2008, Mr. Gavin received a salary of
$100,000, a draw on commission of $48,000, a car allowance of $7,200 and an
office allowance of $ 2,400.

Item 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters.

The following table sets forth certain information known to us
with respect to the beneficial ownership of our common stock as of that date by
(i) each of our directors, (ii) each of our executive officers, and (iii) all of
our directors and executive officers as a group. Except as set forth in the
table below, there is no person known to us who beneficially owns more than 5%
of our common stock. As of July 5, 2010, we had 67,271,845 common shares issued
and outstanding.

Name and Address of Beneficial
      Owner
      Amount and Nature of Beneficial
      Ownership
      Percentage of
      Class(1)William E. Krebs c/o 107  645
      Fort Street Victoria, BC V8W 1G2
    4,379,639(2)
    6.5%William H. Laird c/o 107  645
      Fort Street Victoria, BC V8W 1G2
    3,832,721(3)
    5.7%Michael Dyde c/o 107  645 Fort
      Street Victoria, BC V8W 1G2
    205,500
    0.3%


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- 37 -

Name and Address of Beneficial
      Owner
      Amount and Nature of Beneficial
      Ownership
      Percentage of
      Class(1)Jay Hutton c/o 107  645 Fort
      Street Victoria, BC V8W 1G2
    nil
    nilDirectors and Executive Officers as a
      Group(4 persons)
    8,417,860
    12.5%


(1) Based on 67,271,845 shares of common stock issued and outstanding as of
June 14, 2010. Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power with respect to
securities, including those securities convertible or exercisable within 60
days. Except as otherwise indicated, we believe that the beneficial owners of
the common stock listed above, based on information furnished by such owners,
have sole investment and voting power with respect to such shares, subject to
community property laws where applicable.

(2) Includes 2,593,131 shares owned by Margit Kristiansen, Mr. Krebs' wife. Includes
910,000 shares owned by a company of which Mr. Krebs wife is a shareholder.
Also includes stock options to acquire an aggregate of 250,000 shares of our
common stock exercisable within the next 60 days.

(3) Includes 339,000 shares owned by Mr. Laird's wife. Includes 400,000 shares
owned by Grey Friars Rentals Ltd. of which Mr. Laird is a shareholder. Includes
options to acquire an aggregate of 69,311 shares of our common stock exercisable
within the next 60 days.

Changes in Control

We are unaware of any contract or other arrangement the
operation of which may at a subsequent date result in a change of control of our
company.

Equity Plan Compensation Information

This information can be found under Item 5 - Market for
Registrant's Common Equity, Related Stockholder Matters and Issuer Repurchases
of Equity Securities.

Item 13.        
Certain Relationships and Related Transactions, and Director Independence.

Other than as described under the heading "Executive
Compensation", no director, executive officer, principal stockholder holding at
least 5% of our common shares, or any family member thereof, had any material
interest, direct or indirect, in any transaction, or proposed transactions,
during the year ended December 31, 2009, in which the amount involved in the
transaction exceeded or exceeds the lesser of $120,000 or one percent of the
average of our total assets at year-end for the last three completed fiscal
years.

Corporate Governance

We currently act with three directors, consisting of Michael
Dyde, William Krebs and William Laird. We have determined that Michael Dyde, and
William Laird are independent directors as defined by Nasdaq Marketplace Rule
4200(a)(15) and William Krebs is not.

We currently act with a standing audit and Governance
committee. We do not have a standing nominating committee but our entire board
of directors acts as our nominating committee. If any shareholders seeks to
nominate a director or bring any other business at any meeting of our
shareholders, the shareholder must comply with the procedures contained in our
bylaws and the shareholder must notify us in writing and such notice must be
delivered to or received by the Secretary in accordance with Rule 14a-8 of the
Exchange Act. A shareholder may write to the Secretary of our company at our
principal executive office, 107  645 Fort Street, Victoria, British Columbia,
Canada V8W 1G2, to deliver the notices discussed above and for
a copy of the relevant bylaw provisions regarding the requirements for making
stockholder proposals and nominating director candidates.

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- 38 -

Audit Committee

Our Audit Committee consists of Michael Dyde, William Krebs and
William Laird, of whom Michael Dyde and William Lair are non-employee directors
of our Company and are independent as defined by Nasdaq Marketplace Rule
4200(a)(15). The Audit Committee was established in accordance with Section
3(a)(58)(A) of the Securities and Exchange Act of 1934. The Audit Committee is
directed to review the scope, cost and results of the independent audit of our
books and records, the results of the annual audit with management and the
adequacy of our accounting, financial and operating controls; to recommend
annually to the board of directors the selection of the independent registered
chartered accountants; to consider proposals made by the independent registered
chartered accountants for consulting work; and to report to the board of
directors, when so requested, on any accounting or financial matters. The Audit
Committee of the board of directors was formed in February 2000 and adopted its
charter on April 26, 2002.

Governance Committee

The Governance Committee currently consists of Michael Dyde,
William Krebs and William Laird, of whom Michael Dyde and William Lair are
non-employee directors of our Company and are independent as defined by Nasdaq
Marketplace Rule 4200(a)(15) The Governance Committee monitors the effectiveness
of senior management and the Governance Committee of the Board identifies and
reports on candidates to be nominated to the Board

Transactions with Independent Directors

Other than as set out below or disclosed under the heading
"Certain Relationships and Related Transactions, and Director Independence",
none of our independent directors entered into any transaction, relationship or
arrangement during the year ended December 31, 2008 that was considered by our
board of directors in determining whether the director maintained his or her
independence in accordance with Nasdaq Marketplace Rule 4200(a)(15).

During 2009 no stock options were issued to directors of the
Company. Other than reimbursement for travel expenses incurred in connection
with attending our directors' meetings, our Company did not pay any other fees
to our directors during the year ended December 31, 2009.

Item 14.        
Principal Accounting Fees and Services.

Audit Fees

Our independent registered public accounting firm, Dale
Matheson Carr-Hilton Labonte LLP provided audit and other services during the
years ended December 31, 2009 and Ernst & Young LLP provided audit and other
services during the years ended December 31, 2008 as follows:

2009
    
    
    2008Audit Fees
    $
    50,500
    
    $
    81,000Audit Related Fees
    
    -
    
    
    -Tax Fees
    
    7,500
    
    
    11,000All Other Fees
    
    -
    
    
    1,000Total Fees
    $
    58,000
    
    $
    93,000


Audit Fees. This category
includes the fees for the audit of our consolidated financial statements and the
quarterly reviews of interim financial statements. This category also includes
advice on audit and accounting matters that arose during or
as a result of the audit or the review of interim financial statements and
services in connection with SEC filings.

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- 39 -

Audit Related Fees. There were
no audit related fees paid to our independent registered public accounting firm.

Tax Fees. This category includes
the fees for professional services rendered for tax compliance, tax advice and
tax planning.

All Other Fees. There were no
other fees paid to our independent registered public accounting firm.

The Securities and Exchange Commission requires that, before
Dale Matheson Carr-Hilton Labonte LLP is engaged by our Company or its
subsidiaries to render any auditing or permitted non-audit related service, the
engagement be:

- approved by our Company's Audit
Committee; or

- entered into pursuant to pre-approval
policies and procedures established by the Audit Committee, provided the
policies and procedures are detailed as to the particular service, the Audit
Committee is informed of each service, and such policies and procedures do not
include delegation of the Audit Committee's responsibilities to management.

The Audit Committee requires advance approval of all audit,
audit-related, tax, and other services performed by the independent auditor.
Unless the specific service has been previously pre-approved with respect to
that year, the Audit Committee must approve the permitted service before the
independent auditor is engaged to perform it. The Audit Committee has delegated
to the chair of the Audit Committee authority to approve permitted services
provided that the chair reports any decisions to the committee at its next
scheduled meeting.

The Audit Committee has considered the nature and amount of the
fees billed by Ernst & Young LLP, and believes that the provision of the
services for activities unrelated to the audit is compatible with maintaining
Ernst & Young LLP's independence.

Item 15.        
Exhibits, Financial Statement Schedules.

Exhibits Required by Item 601 of Regulation S-B

Exhibit Number/Description

|Exhibit |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Number  | Description                                                                              
|        |                                                                                          
|3.1     | Articles of Incorporation,
      dated October 1, 1997 (1)                               
|        |                                                                                          
|3.2     | Articles of Amendment of
      Articles of Incorporation, dated June 24, 1999 (1)        
|        |                                                                                          
|3.6     | Amended and Restated Bylaws (2)                                                          
|        |                                                                                          
|4.1     | Common Stock Certificate (1)                                                             
|        |                                                                                          
|4.2     | Form of Warrant (1)                                                                      
|        |                                                                                          
|4.3     | Certificate of Designation of
      Series A Preferred Stock (1)                         
|        |                                                                                          
|4.4     | Certificate of Designation of
      Series B Preferred Stock, dated December 27, 2000 (3)

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- 40 -

|4.5   | Certificate
        of Amendment to Certificate of Designation of Series B Preferred Stock
        (4)                                                                         
|----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|      |                                                                                                                                                                                
|10.1  | Amended and
        Restated 1999 Stock Option Plan (4)                                                                                                                        
|      |                                                                                                                                                                                
|10.2  | Employment Agreement
        between Voice Mobility Inc. and Randy Buchamer, dated August 16, 2001
        (4)                                                                 
|      |                                                                                                                                                                                
|10.3  | Settlement Agreement
        dated November 2, 2009 among our company, Voice Mobility Inc., Voice Mobility
        (US) Inc., Voice Mobility Canada Limited and Randy Buchamer*
|      |                                                                                                                                                                                
|14.1  | Code of Ethics.
        (5)                                                                                                                                                    
|      |                                                                                                                                                                                
|21.1  | Subsidiaries
        of our company                                                                                                                                            
|      | Voice Mobility Inc. (Canadian
        Corporation)                                                                                                                             
|      | Voice Mobility
        Canada Limited (Canadian Corporation)                                                                                                                   
|      | VM Sub Limited (Canadian Corporation)                                                                                                                                          
|      | Voice Mobility
        (US) Inc. (Nevada corporation)                                                                                                                          
|      |                                                                                                                                                                                
|31*   | Section
        302 Certification of William Krebs                                                                                                                             
|      |                                                                                                                                                                                
|32*   | Section
        906 Certification of William Krebs                                                                                                                             
|      |                                                                                                                                                                                
|99.1* | Audit
        Committee Charter                                                                                                                                                

* Filed herewith. (1) Previously submitted with our
Registration Statement on Form 10-SB, as originally filed on September 17, 1999,
and all amendments thereto. (2) Previously submitted with our Definitive
Schedule 14A as filed on May 19, 2000. (3) Previously submitted with our
Form 10-KSB, as filed on April 11, 2001. (4) Previously submitted with our
Form 10-K, as filed on April 1, 2002. (5) Previously submitted with our Form
SB-2, as filed on October 20, 2005.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act or 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.

VOICE MOBILITY INTERNATIONAL, INC.

By: /s/ William Krebs
  William
Krebs Interim Officer and Director (Principal Executive Officer and
Principal Financial Officer) 
Date: July 6, 2010

Pursuant to the requirements of the Securities Exchange Act
of 1934, 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/ William Krebs
  William
Krebs Interim Chief Executive Officer and Director (Principal Executive
Officer, Principal Accounting Officer and Principal Financial Officer)

Date: July 6, 2010

By: /s/ Michael Dyde
  Michael
Dyde Director 
Date: July 6, 2010

By: /s/ Jay HuttonJay
Hutton Director 
Date: July 6, 2010

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