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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,
2010

[ ] 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
[X]      No [ ]

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. $1,765,619.50 based on a price of $0.03 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, 2010.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN
BANKRUPTCYPROCEEDINGS 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.
19,916,948 preferred shares and 71,279,722 common shares are issued and
outstanding as of April 7, 2011.

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                                                                                                       | 8             
|Item
      1B | Unresolved
      Staff Comments                                                                                          | 12            
|Item
      2  | Properties                                                                                                               | 12            
|Item
      3  | Legal
      Proceedings                                                                                                  | 13            
|Item
      4  | (Removed
      and Reserved)                                                                                             | 13            
|              |                                                                                                                          |               
|Part II       |                                                                                                                          |               
|              |                                                                                                                          |               
|Item
      5  | Market
      for Registrants Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities | 13            
|Item
      6  | Selected
      Financial Data                                                                                            | 15            
|Item
      7  | Management's
      Discussions and Analysis of Financial Conditions and Results of Operations                            | 15            
|Item
      7A | Quantitative
      and Qualitative Disclosures About Market Risk                                                         | 21            
|Item
      8  | Financial
      Statements                                                                                               | 22            
|Item
      9  | Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure                         | 36            
|Item
      9A | Controls
      and Procedures                                                                                            | 36            
|Item
      9B | Other
      Information                                                                                                  | 37            
|              |                                                                                                                          |               
|Part III      |                                                                                                                          |               
|              |                                                                                                                          |               
|Item
      10 | Directors,
      Executive Officers and Corporate Governance                                                             | 37            
|Item
      11 | Executive
      Compensation                                                                                             | 41            
|Item
      12 | Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters               | 44            
|Item
      13 | Certain
      Relationships and Related Transactions, and Director Independence                                          | 45            
|Item
      14 | Principal
      Accounting Fees and Services                                                                             | 46            
|Item
      15 | Exhibits,
      Financial Statement Schedules                                                                            | 47            
|              |                                                                                                                          |               
|              | Signatures                                                                                                               | 75            

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PART I

Item 1.Business.

This annual report on Form 10-K contains forward-looking
statements. Forward-looking statements are projections of events, revenues,
income, future economic performance or managements plans and objectives for
future operations. In some cases, you can identify forward-looking statements by
the use of terminology such as may, should, expects, plans,
anticipates, believes, estimates, predicts, potential or continue or
the negative of these terms or other comparable terminology. Examples of
forward-looking statements made in this annual report on Form 10-K include
statements about:

- Our business plans,
- Our ability to raise additional finances,
- Our anticipated future marketplaces,
- Our competitive advantages,
- Our anticipated competitors,
- Our belief regarding the future of the telecommunications industry,
- Our plans regarding our research and development, and
- Our future investments and allocation of capital resources.

These statements are only predictions and involve known and
unknown risks, uncertainties and other factors, including:

- General economic and business conditions,
- Our lack of operating history,
- Our historic negative cash flow from operations ,
- Our potential ineligibility to trade on the OTC Bulletin Board,
- Our ability to successful market our products,
- Our ability to protect our intellectual property,
- Our ability to keep up with technological advances, and
- The risks in the section of this annual report entitled Risk Factors,

any of which 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.

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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. 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.

As used in this annual report on Form 10-K, the terms we,
us our and the Company mean Voice Mobility International, Inc. and our
wholly-owned subsidiaries.

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.

Corporate Developments

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.

On June 30, 2010, we were de-listed from the Toronto Stock
Exchange and listed on the NEX Board of the TSX Venture Exchange (NEX). On
August 17, 2010, we announced that the cease trade orders issued by the
securities commissions in British Columbia, Alberta, Ontario and Quebec were
revoked. On August 23, 2010, our common shares began trading on NEX.

On January 31, 2011, we signed and closed a 10 year license
agreement with Applied Voice & Speech Technologies, Inc. (AVST), whereby
AVST obtained the exclusive use of our unified communications cloud technology,
including all intellectual property related to the UCN250 unified communications
as a service platform (the Technology) and physical assets relating to the
Technology, in exchange for AVST issuing 4.5% of its outstanding equity in the
form of preferred shares (the Equity Share). AVST is also required to issue a
1% Equity Share to Voice Mobility upon the five year anniversary of the
Agreement.

AVST also has the right to purchase the Technology and we have
the right to sell the Technology for the issuance of an additional 1% Equity
Share and an additional 2.25% Equity Share subject to revenue milestones and
2.25% Equity Share subject to the execution of long-term distribution agreements
by AVST. Assuming all of the performance conditions are met and AVST purchases
the Technology, the overall consideration for the transaction is equal to 10% of
the issued and outstanding shares of AVST.

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- 4 -

On March 4, 2011, we completed our purchase of all of the
assets (the Assets) of Tagline Communications Inc. (Tagline). In
consideration of the purchase of the Assets, we paid $425,000 to Tagline and
issued 1,000,000 of our common shares (the Tagline Shares) to Tagline at a
deemed price of $0.05 per Tagline Share for total deemed consideration of
$475,000. The Assets consist of a unified communications platform with customers
throughout North America. Tagline offers the following services either
individually or as a service bundle: 1-800 numbers, voice recognition, fax to
email, auto attendant, web based telephony, and conferencing functionality.
Tagline has a historically stable user base of small and medium size business
professionals.

Business Overview

Since the first quarter of 2011, we have been fundamentally
re-structuring our business. With the licensing of our core technology to AVST,
as discussed above under the heading Corporate Developments, we are focused
less on the development of a unified messaging computing platform and more on
the delivery of unified communications as a service.

Our plan is to target small and medium sized businesses as well
as mobile professionals to sell our services on a month-to-month subscription
basis. A critical part of our strategy is to properly marketing our services to
the small and medium sized businesses through various methods, such as search
engine optimization and referral organizations.

In addition to organic growth through gaining additional
customers, we anticipate that we may also acquire smaller service providers that
are profitable and deliver similar services to business class customer.

Octel Migration and Enhancement

Our service portfolio 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

The service offering incorporates a Google Apps integration
that is built into the service offering. . 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.

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.

UCN 250 UMaaS / On Demand

We have begun to offer our services 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;

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- 5 -

- 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.

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.

Marketing and Distribution Methods

In January 2011, we made the strategic decision to license our
core technology to AVST, as described under the heading Corporate
Developments. The deal was concluded on January 31, 2011 and provided AVST a 10
year license to utilize and extend the technology relating to our UCN 250
technology so that AVST becomes a premium solution in the hosted offering
category. AVST has agreed to sell the solution into their key markets under an
AVST brand. We retain ownership of the technology.

This is a departure from the direct selling model that we have
pursued for many years. We are taking our expertise and our knowledge of the
market and redirecting all of our effort and energy into becoming a hosted
service provider. Growth will be driven both organically and through
acquisitions. We intend to acquire small profitable service providers and
utilize our knowledge and expertise to drive efficiencies and to grow net
subscribers by utilizing unique customer acquisition models and processes.

We will continue to build our relationship with AVST, as we
believe that there is a strong desire between the companies to engage in
strategic market expansion by combining efforts and expertise.

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.

We are working closely with AVST. We are now a supplier of
licenses to deliver unified communications services to our customers. We intend
to work closely with AVST on roadmap items as well as new product introductions
to the subscriber base that we will have.

Competition

Due to the licensing of our core technology to AVST, we no
longer compete against the large equipment providers. This is something that
AVST will do by virtue of their exclusive license to the UCN 250 technology. We
now compete with both small and large service providers. Large operating
telephone companies offer similar services to both mid sized and large
companies. Other service providers have focused on the small business
marketplace. Service providers, by nature, tend to be regionally focused. We
will not focus on a particular region but rather focus on a type of customer.
This type is small, mobile, and looking for features and services that are not
otherwise available to a small business.

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Some noteworthy competitors in the hosted services category are
J2 Communications, M5 Networks and Ring Central. We believe that we have highly
differentiated offerings and a superior cost structure that will allow us to
effectively compete against a wide range of competitors.

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 offerings provide 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;
- 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
- speech recognition integration.

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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, 2010 were from
hardware and software product sales and training and installation services
provided to Communications Resources Inc. on behalf of their customer Verizon.
Pursuant to the license agreement with AVST, our major customers serviced by the
UCN 250 technology have been transferred and all future sales and maintenance
revenue will be collected by AVST.

Research and Development

We do not anticipate engaging in any research and development
going forward. All product based research and development will be conducted by
AVST.

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- 8 -

Governmental Regulation

We do not expect any negative government regulation to impact
our business model.

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 breach of any confidentiality and non-disclosure agreement,
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 former employees who were 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.

While we still own the intellectual property relating to the
UCN 250 technology, we have granted an exclusive license to AVST. As we rely on
trade secrets to protect our intellectual property, we are dependent on AVST to
keep the confidentially of our intellectual property.

Employees

As of April 8, 2011, other than our executive officer, 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.

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;

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- 9 -

- increase our marketing efforts;
- acquire complementary businesses or technologies;
- respond to regulatory requirements; and
- 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 may not be eligible to trade on the OTC Bulletin
Board.

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 Commission, subject to a 30 day grace period. We failed to
timely file our 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 were non-compliant with FINRA
Rule 6530.

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 for a one
year period. Pursuant to Rule 6530(e), if we are late in filing any of our
reports for the two year period after July 6, 2010, being the date of filing of
our Annual Report on Form 10-K for the year ended December 31, 2009, our
securities will be ineligible for quotation on the OTC Bulletin Board until July
6, 2011.

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, 2010, we accumulated a
deficit of $50,758,455. 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, 2010 consolidated financial statements. Our audited
consolidated financial statements do not include any adjustments that might
result from the outcome of that uncertainty.

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- 10 -

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

The telecommunications industry 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.

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- 11 -

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 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. 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 April 7, 2011 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.

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.

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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
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.

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. We are currently leasing this
facility on a month-to-month basis.

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.

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- 13 -

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 As of June 2010,
all former employee claims were paid in full and we received releases from all
former employees that filed claims against us.

Item 4.  (Removed and Reserved)

PART II

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

On June 30, 2010, we were de-listed from the Toronto Stock
Exchange (the TSX) and listed on the NEX Board of the TSX Venture Exchange
(NEX). On August 17, 2010, we announced that the cease trade orders issued by
the securities commissions in British Columbia, Alberta, Ontario and Quebec were
revoked. On August 23, 2010, our common shares began trading on NEX.

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 our 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 were non-compliant with FINRA
Rule 6530.

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 July 6, 2010, being the date of filing of our Annual Report on Form
10-K for the year ended December 31, 2009, our securities will be ineligible for
quotation on the OTC Bulletin Board until July 6, 2011.

Our common stock was listed and commenced trading on the OTC
Bulletin Board on June 30, 1999 under the symbol "VMII". Our common stock was
listed and commenced trading on the Toronto Stock Exchange on July 16, 2001
under the symbol "VMY". As discussed above, On August 3, 2010, our common shares
were transferred to 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
TSX/NEX, as applicable:

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OTC Bulletin Board
    TSX/NEXQuarter Ended
    High
    Low
    Quarter Ended
    High(Cdn$)
    Low(Cdn$)December 31, 2010
    $0.05
    $0.04
    December 31, 2010
    $0.08
    $0.045September 30, 2010
    $0.07
    $0.05
    September 30, 2010
    $0.08
    $0.45June 30, 2010
    $0.03
    $0.02
    June 30, 2010
    n/a
    n/aMarch 31, 2010
    $0.08
    $0.03
    March 31, 2010
    n/a
    n/aDecember 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
    $0.05


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 at April 7, 2011, the shareholders' list for our common
stock showed 148 registered stockholders and 71,279,722 shares issued and
outstanding. The closing sale price for our common stock on April 7, 2011, as
reported on the Pink Sheets was $0.047 and on the NEX was $0.045

Dividend Policy

During the years ended December 31, 2010 and 2009, 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, 2010 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, 2010.

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- 15 -

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
    879,584
    $0.63
    10,620,416Equity compensation plans not
      approved by security holders
    3,000,000
    $0.10
    N/ATotal
    3,879,584
    $0.22
    10,620,416


| | (1) | The maximum number of options issuable under our stock
      option plan is 12,000,000, less 879,584 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. NEX policies limit us to
      granting 10% of our issued and outstanding shares in stock options in any
      12 month period. As of April 8, 2011, we currently have 71,279,722 common
      shares outstanding and can only grant 7,127,972 options per 12 month
      period.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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, 2010.

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 sales and marketing of unified voice
messaging services 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.

Our primary focus for the last part of the fiscal 2010 year was
the license of our core technology to transition from a developer of
telecommunications platforms to a service provider for valued added
telecommunications offerings.

On January 31, 2011, we signed and closed a 10 year license
agreement with Applied Voice & Speech Technologies, Inc. (AVST), whereby
AVST obtained the exclusive use of our unified communications cloud technology,
including all intellectual property related to the UCN250 unified communications
as a service platform (the Technology) and physical assets relating to the
Technology, in exchange for AVST issuing 4.5% of its outstanding equity in the
form of preferred shares (the Equity Share). AVST is also required to issue a
1% Equity Share to Voice Mobility upon the five year anniversary of the
Agreement.

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- 16 -

AVST also has the right to purchase the Technology and we have
the right to sell the Technology for the issuance of an additional 1% Equity
Share and an additional 2.25% Equity Share subject to revenue milestones and
2.25% Equity Share subject to the execution of long-term distribution agreements
by AVST. Assuming all of the performance conditions are met and AVST purchases
the Technology, the overall consideration for the transaction is equal to 10% of
the issued and outstanding shares of AVST.

On March 4, 2011, we completed our purchase of all of the
assets (the Assets) of Tagline Communications Inc. (Tagline). In
consideration of the purchase of the Assets, we paid $425,000 to Tagline and
issued 1,000,000 of our common shares (the Tagline Shares) to Tagline at a
deemed price of $0.05 per Tagline Share for total deemed consideration of
$475,000. The Assets consist of a unified communications platform with customers
throughout North America. Tagline offers the following services either
individually or as a service bundle: 1-800 numbers, voice recognition, fax to
email, auto attendant, web based telephony, and conferencing functionality.
Tagline has a historically stable user base of small and medium size business
professionals.

Results of Operations for the fiscal years ended December
31, 2010 and December 31, 2009

Sales:

Sales for the fiscal year ended December 31, 2010 were $97,107
compared to sales of $971,768 for the fiscal year ended December 31, 2009,
representing a 90% decrease. Sales for the fiscal year ended December 31, 2010
were a result of licensing contracts with existing customers. Sales for the
fiscal year ended December 31, 2009 were from product license sales, hardware
and software product sales and installation and training services. The decrease
in sales for fiscal 2010 is a result of our focused efforts to complete our
financial restructuring. As part of our restructuring, we began to execute a
shift from the sale of software platforms to the sales of telecommunications
services. We intend to build a direct customer base for the services offered as
well as acquiring companies in the business of delivering service offerings for
small and medium businesses.

Cost of Sales:

Cost of sales were $nil and $474,767 for the fiscal years ended
December 31, 2010 and 2009 respectively. No costs of sales were associated with
our sales for fiscal 2010 as all sales for fiscal 2010 related to licensing
contracts to existing customers. 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.

Operating Expenses:

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 $9,553
and $882,262 for the fiscal years ended December 31, 2010 and December 31, 2009,
respectively, representing a decrease of $872,709 or 98.9% . The decrease was
primarily attributable to our efforts to minimize sales and marketing activities
while we complete our financial restructuring efforts.

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 $13,906 and $320,760 for the fiscal years ended
December 31, 2010 and 2009, respectively, representing a decrease of $306,854 or
95.7% . The decrease was primarily attributable to our efforts to minimize
research and development activities while we completed our financial
restructuring efforts. We anticipate that we will not engage in any research and
development going forward.

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 $846,282 and $856,149 for
the fiscal years ended December 31, 2010 and 2009, respectively, representing a
decrease of $9,867 or 1.1% .

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- 17 -

As management has made significant efforts to reduce operating
costs to minimal operating levels while we complete our financial restructuring
efforts, general and administrative costs for fiscal 2010 consisted primarily of
costs associated with maintaining our regulatory filing requirements. The cost
savings experienced by us for fiscal 2010 have been offset by an increase in
professional fees relating to our recent financial restructuring activities.

Interest Expense:

Our interest expense was $205,590 and $387,300 for the fiscal
years ended December 31, 2010 and 2009 respectively. The interest expense for
the fiscal years ended December 31, 2010 and 2009 consists of the stated
interest rate on the principal amount of the then outstanding notes. The
decrease of $181,700 or 46.9% is largely a result of the June 30, 2009
conversion of notes payable with a principal amount of Cdn$6,737,601 into
19,250,280 Series C convertible preferred shares at a rate of Cdn$0.35 per
preferred share.

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.

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.

Income Taxes:

At December 31, 2010, we had $5,544,360 United States tax net
operating losses that will expire in the years 2020 through to 2029. As at
December 31, 2010 we had Canadian tax non-capital losses of approximately
$9,549,507 that will expire in the years 2014 through 2030. 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, 2010 and 2009 respectively, we recognized a valuation
allowance equal to deferred tax assets for which realization is not more likely
than not.

Net Loss:

Our net loss was $978,224 for fiscal year ended December 31,
2010 compared to a net income of $385,381 for the fiscal year ended December 31,
2009. This represents an increase in loss of $1,363,605. Excluding prior years
unusual gain of $2,334,841, we experienced a $971,236 decrease in loss. During
fiscal 2010, we reduced operating expenses by $1,189,430 and reduced interest
expense by $181,700 as a result of managements efforts to reduce operating
costs to minimal operating levels while we completed our financial restructuring
efforts. These reductions in cost were mitigated by a $399,894 decrease in gross
profit due to our decrease in fiscal 2010s sales results.

Since inception through December 31, 2010, we incurred
aggregate net losses of $50,761,492. The losses are reflective of our past
expenditures associated with the research, development, testing, and marketing
efforts 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. 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.

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- 18 -

Liquidity and Capital Resources

As of December 31, 2010, we had $431 in cash and net working
capital deficiency of $2,400,260 and as of December 31, 2009, we had $252,260 in
cash and working capital deficiency of $1,871,177.

On November 5, 2009, we closed a debt financing for gross
proceeds of $114,177. All of the outstanding notes payable are denominated in
Canadian dollars. 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
bear interest at 10%, are unsecured and due on demand. Each share purchase
warrant will entitle the holder to purchase one common share of our company at
the price of Cdn$0.25 per share until expiry on November 5, 2012. The balance of
the notes payable outstanding, including principal and interest, as at December
31, 2010 is $134,630 (December 31, 2009: $115,992).

During the year ended December 31, 2009, we received proceeds
of $1,002,789 by way of demand promissory notes and repaid $99,905 of their
demand promissory notes resulting in an outstanding liability of $1,630,046 as
at December 31, 2009. During the year ended December 31, 2010, we received
proceeds of $68,358 by way of demand promissory notes and repaid $192,720 of
their demand promissory notes resulting in outstanding liability of $1,681,672
as at December 31, 2010. The demand promissory notes bear interest at prime plus
4% per annum and are payable on demand. All of the outstanding demand promissory
notes are denominated in Cdn dollars. At December 31, 2010, an amount of
$1,573,988 is due to our former directors or to companies controlled by former
directors in common (2009 - $770,695). At December 31, 2010, a demand promissory
note for an amount of $1,068,238 (Cdn$1,062,500) [(2009  $951,475),
(Cdn$1,000,000)], is secured by way of a general security agreement over the
assets of our company.

During the year ended December 31, 2010, we issued secured
convertible debentures for gross proceeds of $314,242. These secured convertible
debentures accrue interest at rate of 10% per annum and are secured by means of
a general security agreement over our assets. The secured convertible debentures
are repayable one year from the date of issuance we have the right to prepay all
or any part of the secured convertible debentures at anytime without penalty. At
any time until the maturity, the principal amount of the secured convertible
debentures may be converted into a conversion unit at the option of the holder
of the debenture, in whole or in part at conversion rate of CDN$0.05. A
conversion unit consists of one share of common stock and one warrant. Each
warrant entitles the holder to purchase an additional share of common stock at
an exercise price of CDN$0.10 for a period of two years from the date of
conversion. At the time of conversion, the debenture holder may elect to have
the accrued interest on these debentures converted into shares of common stock
of our company.

On June 8, 2009, we issued 5,000,000 units at Cdn$0.10 per unit
for gross proceeds of Cdn$500,000. 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 Cdn$0.20 per share. We also issued
446,000 units as a financing fee and issued 42,857 common shares to finders of
this private placement. On February 24, 2010, we issued 4,316,667 units at
Cdn$0.06 per unit for gross proceeds of Cdn$259,000. Each unit consists of one
share of common stock and one share purchase warrant, with each warrant
exercisable for a period of five years at an exercise price of Cdn$0.08. We also
issued 323,750 common shares to finders of this private placement.

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
fiscal 2009. 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. At December 31, 2010, an amount of $6,773,984 attributable to these Series
C convertible preferred shares is recorded on the balance sheet (December 31,
2009: 6,410,657).

On March 4, 2011, we issued a secured non-convertible debenture
in the amount of $580,000. We used $425,000 of the debenture proceeds to finance
the acquisition of Tagline Communications Inc., as described under the heading
Business  Corporate Developments. We used $115,000 of the proceeds to settle
a debt with a secured creditor. The remaining $40,000 will be used for general
working capital.  The debenture is repayable on July 1, 2011 and bears interest
at the rate of 12% per annum. In the event of default under the debenture, the
interest rate becomes 20% per annum. The debenture is secured by way of a charge
over all of our present and after-acquired property and assets. We issued
1,500,000 common shares as additional consideration for the debenture financing.

---

- 19 -

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
$614,606 and $1,348,971 for the fiscal years ended December 31, 2010 and 2009
respectively. The operating cash outflows for the year resulted from the general
and administrative costs associated with maintaining our regulatory filing
requirements. As well, fiscal 2010s operating cash outflows include
professional fees relating to our recent financial restructuring activities. The
decrease in outflows relative to the prior year is a result of the significant
reduction in sales and marketing, as well as research and development
activities, as we completes our financial restructuring.

Investing Activities

The investing activities in fiscal 2010 and 2009 were limited
due to our cash conservation plans. Investing activities resulted in net cash
outflows of $nil for the fiscal year ended December 31, 2010. 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. At December 31, 2010, we did not have any material commitments for
future capital expenditures.

Financing Activities

Financing activities resulted in net cash inflows of $378,011
for the fiscal year ended December 31, 2010. During the fiscal year ended 2010,
we received net proceeds of $188,131 from the issuance of common stock, $314,242
from the issuance of a secured convertible debenture, $68,358 from demand
promissory notes and repaid $192,720 in demand promissory notes.

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.

Debt Obligations

As at December 31, 2010, we had $2,053,342 in debt obligations
and accrued interest with maturity dates as follows:

---

- 20 -

|                       | Amount outstanding | Amount outstanding | Maturity                                    
|---------------------- | ------------------ | ------------------ | --------------------------------------------
|                       | as at December 31, | as at December 31, | Date                                        
|                       | 2010               | 2009               |                                             
|Demand promissory note | $1,681,672         | $1,630,046         | On demand                                   
|Series I notes payable | 134,630            | 115,992            | On demand                                   
|Convertible debentures | 237,040            | -                  | Various dates from July 6 to August 27, 2011
|                       | $2,053,342         | $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, 2011.
Management projects that we may require an additional $1 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.

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 2011 to be generated through continued
acquisitions.

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, 2010, 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.

---

- 21 -

Off-Balance Sheet Arrangements

As of December 31, 2010, 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.

---

- 22 -

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.

---

- 23 -





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, 2010 and
December 31, 2009 and the related consolidated statements of operations,
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 audits.

We conducted our audits 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, these financial statements present fairly, in
all material respects, the financial position of the Company as at December 31,
2010 and 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 significant losses from operations and requires additional funds to
meet its obligations and fund the costs of its ongoing 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 LLPCHARTERED
ACCOUNTANTS

Vancouver, Canada April 8, 2011



---

- 24 -

|Voice Mobility International, Inc.
|----------------------------------
|                                  
|CONSOLIDATED BALANCE SHEET        
|(Expressed in U.S. Dollars)       

|                                                                                                                   |   | As at December 31 |  
|------------------------------------------------------------------------------------------------------------------ | - | ----------------- | -
|                                                                                                                   |   | 2010              |  
|                                                                                                                   |   |                   |  
|ASSETS                                                                                                             |   |                   |  
|Current                                                                                                            |   |                   |  
|Cash                                                                                                               | $ | 431               |  
|Accounts receivable                                                                                                |   | 23,039            |  
|Other receivables                                                                                                  |   | -                 |  
|Prepaid expenses                                                                                                   |   | -                 |  
|Total current assets                                                                                               |   | 23,470            |  
|                                                                                                                   |   |                   |  
|Equipment                                                                                                          |   | 10,221            |  
|Total
      assets                                                                                                 | $ | 33,691            |  
|                                                                                                                   |   |                   |  
|LIABILITIES AND STOCKHOLDERS' DEFICIENCY                                                                           |   |                   |  
|Current                                                                                                            |   |                   |  
|Accounts payable                                                                                                   | $ | 245,388           |  
|Accrued liabilities                                                                                                |   | 125,000           |  
|Convertible debentures                                                                                             |   | 237,040           |  
|Demand promissory notes                                                                                            |   | 1,681,672         |  
|Notes payable                                                                                                      |   | 134,630           |  
|Total current liabilities                                                                                          |   | 2,423,730         |  
|                                                                                                                   |   |                   |  
|Mezzanine Equity                                                                                                   |   |                   |  
|Series C Convertible preferred stock                                                                               |   | 6,773,984         |  
|                                                                                                                   |   |                   |  
|Stockholders' deficiency                                                                                           |   |                   |  
|Common stock, $0.001 par value, authorized
      100,000,000 
          67,271,845 outstanding [2009 - 62,631,428] |   | 67,272            |  
|Preferred stock, $0.001 par value, authorized 1,000,000
          Series A Preferred stock, 1 outstanding          |   | 1                 |  
|Additional paid-in capital                                                                                         |   | 43,648,249        |  
|Obligation to issue shares                                                                                         |   | -                 |  
|Accumulated deficit                                                                                                |   | (50,761,492       | )
|Other accumulated
      comprehensive loss                                                                         |   | (2,118,053        | )
|Total stockholders' deficit                                                                                        |   | (9,164,023        | )
|Total
      liabilities and stockholders' deficit                                                                  | $ | 33,691            |  

The accompanying notes are an integral part of these
financial statements.

---

- 25 -

|Voice Mobility International, Inc.   
|-------------------------------------
|                                     
|CONSOLIDATED STATEMENTS OF OPERATIONS
|(Expressed in U.S. Dollars)          

|                                                              |   | For the year ended |  
|------------------------------------------------------------- | - | ------------------ | -
|                                                              |   | December 31        |  
|                                                              |   | 2010               |  
|                                                              |   |                    |  
|Sales                                                         | $ | 97,107             |  
|Cost of sales                                                 |   | -                  |  
|Gross profit                                                  |   | 97,107             |  
|                                                              |   |                    |  
|Operating expenses                                            |   |                    |  
|Sales and marketing                                           |   | 9,553              |  
|Research and
      development                                |   | 13,906             |  
|General and
      administrative                              |   | 846,282            |  
|Interest                                                      |   | 205,590            |  
|                                                              |   | 1,075,331          |  
|                                                              |   |                    |  
|Gain on exchange agreement                                    |   | -                  |  
|Net income (loss)                                             | $ | (978,224           | )
|                                                              |   |                    |  
|                                                              |   |                    |  
|Weighted average shares outstanding  basic
      and diluted |   | 66,297,638         |  
|                                                              |   |                    |  
|Basic and diluted (loss) income per share                     | $ | (0.01              | )

The accompanying notes are an integral part of these
financial statements.

---

- 26 -

|Voice Mobility International, Inc.              
|------------------------------------------------
|CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
|(Expressed in U.S. dollars)                     
|For the year ended December 31,                 

Mezzanine Equity
    
    Stockholders
      DeficiencyPreferred
      Stock Series C
    
    Common
      Stock
    Preferred
      Stock Series A
    
    Additional Paid-in 
      Capital
    
    
    Accumulated
      Deficit
    
    
    Comprehensive 
      Loss
    
    
    TotalNumber of 
      Shares
      #
    
    
    Amount
    
    Number of 
      Shares
      #
    
    
    Amount
    
    
    Obligation 
      Amount
    
    Number of 
      Shares #
    
    
    AmountBalance, December 31, 2008
    -
    
    $
    -
    
    57,142,571
    
    $
    57,143
    
    $
    -
    
    1
    
    $
    1
    $
    42,505,526
    
    $
    (50,168,649
    )
    $
    (499,390
    )
    $
    (8,105,369
    )Common shares 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
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    
    -Stock based compensation
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    132,507
    
    
    -
    
    
    -
    
    
    132,507Obligation to issue shares
    -
    
    
    -
    
    -
    
    
    -
    
    
    57,088
    
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    
    57,088Components of comprehensive 
         income/(loss):Net income
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    -
    
    
    385,381
    
    
    -
    
    
    385,381Foreign exchange gain/(loss) 
            on Series C Preferred Shares
    -
    
    
    617,363
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    -
    
    
    -
    
    
    (617,363
    )
    
    (617,363
    )Foreign currency translation gain
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    -
    
    
    -
    
    
    (531.136
    )
    
    (531,136
    )Balance, December 31, 2009
    19,250,280
    
    
    6,410,657
    
    62,631,428
    
    
    62,631
    
    
    57,088
    
    1
    
    
    1
    
    43,054,660
    
    
    (49,783,268
    )
    
    (1,647,889
    )
    
    (8,256,777
    )Stock based compensation
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    183,077
    
    
    -
    
    
    -
    
    
    183,077Net
      loss for the period
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    -
    
    
    (978,224
    )
    
    -
    
    
    (978,224
    )Foreign currency translation loss
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    -
    
    
    -
    
    
    (106,837
    )
    
    (106,837
    )Foreign for the period exchange G/L on
        Series C
      Preferred Shares
    
    
    
    363,327
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    -
    
    
    -
    
    
    (363,327
    )
    
    (363,327
    )Share issuance
    -
    
    
    -
    
    4,316,667
    
    
    4,317
    
    
    (57,088
    )
    
    
    
    
    
    240,902
    
    
    
    
    
    -
    
    
    188,131Finders fee - share issuance
    -
    
    
    -
    
    323,750
    
    
    324
    
    
    -
    
    -
    
    
    -
    
    (324
    )
    
    -
    
    
    -
    
    
    -Fair value of equity component on 
         secured
      convertible debentures
    -
    
    
    -
    
    -
    
    
    -
    
    
    -
    
    -
    
    
    -
    
    169,934
    
    
    -
    
    
    -
    
    
    169,934Balance, December 31, 2010
    19,250,280
    
    $
    6,773,984
    
    67,271,845
    
    $
    67,272
    
    $
    -
    
    1
    
    $
    1
    $
    43,648,249
    
    $
    (50,761,492
    )
    $
    (2,118,053
    )
    $
    (9,164,023
    )


The accompanying notes are an integral part of these
financial statements.

---

- 27 -

|Voice Mobility International, Inc.   
|-------------------------------------
|                                     
|CONSOLIDATED STATEMENTS OF CASH FLOWS
|(Expressed in U.S. Dollars)          

|                                                                       |   | Year ended December 31 |  
|---------------------------------------------------------------------- | - | ---------------------- | -
|                                                                       |   | 2010                   |  
|                                                                       |   |                        |  
|OPERATING ACTIVITIES                                                   |   |                        |  
|Net income (loss)                                                      | $ | (978,224               | )
|Non-cash items included in net loss                                    |   |                        |  
|Amortization of equipment                                              |   | 14,009                 |  
|Amortization of
      deferred finance costs                           |   | -                      |  
|Non-cash interest expense                                              |   | 205,590                |  
|Stock based
      compensation                                         |   | 183,077                |  
|Gain on exchange agreement                                             |   | -                      |  
|Net change in operating assets and
      liabilities:                  |   |                        |  
|Accounts and other receivables                                         |   | (477                   | )
|Prepaid expenses                                                       |   | 14,430                 |  
|Inventory                                                              |   | -                      |  
|Accounts payable and accrued
      liabilities                         |   | (53,011                | )
|Accrued interest on promissory notes                                   |   | -                      |  
|Cash used in operating activities                                      |   | (614,606               | )
|                                                                       |   |                        |  
|INVESTING ACTIVITIES                                                   |   |                        |  
|Purchase of
      equipment                                            |   | -                      |  
|Cash used in investing activities                                      |   | -                      |  
|                                                                       |   |                        |  
|FINANCING ACTIVITIES                                                   |   |                        |  
|Proceeds from issuance of common stock, net of share issue
      costs |   | 188,131                |  
|Proceeds from secured convertible
      debentures                     |   | 314,242                |  
|Proceeds on demand promissory notes payable                            |   | 68,358                 |  
|Repayment of demand promissory notes
      payable                     |   | (192,720               | )
|Proceeds from
      Series I promissory notes                          |   | -                      |  
|Cash provided by financing activities                                  |   | 378,011                |  
|                                                                       |   |                        |  
|Effect of change in foreign exchange rate on cash                      |   | (15,234                | )
|                                                                       |   |                        |  
|Increase (decrease) in cash for the year                               |   | (251,829               | )
|Cash, beginning                                                        |   | 252,260                |  
|Cash, ending                                                           | $ | 431                    |  
|                                                                       |   |                        |  
|Supplemental cash flow information                                     |   |                        |  
|Cash paid for:                                                         |   |                        |  
|Interest                                                               | $ |                        |  
|Income tax                                                             | $ | -                      |  

The accompanying notes are an integral part of these
financial statements.

---

- 28 -

VOICE MOBILITY INTERNATIONAL, INC. Notes to the
Consolidated Financial Statements December 31, 2010

1. NATURE OF BUSINESS AND BASIS OF PRESENTATION

Nature of Business

Voice Mobility International, Inc. (the "Company") is a Nevada
corporation engaged in the sales and marketing of enhanced messaging software
systems. On January 31, 2011, the Company closed a 10 year license agreement
with Applied Voice & Speech Technologies, Inc. (AVST), whereby AVST
obtained the exclusive use of the Companys technology, including all
intellectual and physical assets relating thereto (Note 11).

On March 4, 2011, the Company completed the purchase of all of
the assets of Tagline Communications Inc. (Tagline) for consideration of
Cdn$425,000 and the issuance of 1,000,000 common shares. Tagline has a unified
communications platform with customers throughout North America. Tagline offers
a number of telecom services (Note 11).

Basis of Presentation

The 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 $9,164,023 and working
capital deficiency of $2,400,260 at December 31, 2010. The Company has funded
its operations through the issuance of capital stock and debt. Management plans
to raise additional funds through equity and/or debt financings. There is no
certainty that further funding will be available as needed if the Company
continues to incur losses. These factors raise substantial doubt about the
ability of the Company to continue operation as a going concern. The Companys
ability to continue its operations as a going concern, realize the carrying
value of its assets, and discharge its liabilities in the normal course of
business is dependent upon its ability to raise new capital sufficient to fund
its commitments and costs of operations, and ultimately on generating profitable
operations from its business. Management intends to continue to raise funds as
needed by way of debenture financings (Note 11).

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The 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 estimates

The preparation of financial statements in conformity with U.S.
generally accepted accounting principles (GAAP) 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.

Revenue recognition

Revenues are derived from sales of software licenses. Software
revenue is recognized when persuasive evidence of an arrangement exists, the fee
is fixed or determinable and 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. 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.

---

- 29 -

Foreign currency

These consolidated financial statements have been presented in
United States dollars. The functional currency of the Company 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 instruments

The 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, convertible debt, demand
promissory notes and notes payable approximate their carrying value due to their
short-term nature.

Equipment

Equipment is recorded at cost. Amortization is provided using
the straight-line method over the assets estimated useful lives as follows:
Computer equipment 3 years.

Stock-based compensation

The 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.

Income taxes

Income 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 share

Basic 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 Pronouncements

The Company has reviewed recently issued accounting
pronouncements and plans to adopt those that are applicable to it. It does not
expect the adoption of these pronouncements to have a material impact on its
financial position, results of operations or cash flows.

---

- 30 -

3. EQUIPMENT

|                   |   |           |  |   | Accumulated  |  |   | Net Book | 
|------------------ | - | --------- |  | - | ------------ |  | - | -------- | 
|                   |   | Cost      |  |   | Amortization |  |   | Value    | 
|2010               |   |           |  |   |              |  |   |          | 
|Computer equipment | $ | 3,006,311 |  | $ | 2,996,090    |  | $ | 10,221   | 
|2009               |   |           |  |   |              |  |   |          | 
|Computer equipment | $ | 3,002,081 |  | $ | 2,977,024    |  | $ | 25,057   | 

4. ECONOMIC DEPENDENCE

Sales to one customer comprised 100% of revenue (2009  two
customers comprised 65% of revenue).

5. DEMAND PROMISSORY NOTES

|                              |   | December 31, |  |   | December 31, | 
|----------------------------- | - | ------------ |  | - | ------------ | 
|                              |   | 2010         |  |   | 2009         | 
|Principal                     | $ | 1,575,964    |  | $ | 1,622,265    | 
|Accrued interest              |   | 105,708      |  |   | 7,781        | 
|Total demand promissory notes | $ | 1,681,672    |  | $ | 1,630,046    | 

The demand promissory notes bear interest at prime plus 4% per
annum, due on demand and are repayable in Canadian dollars. At December 31,
2010, an amount of $1,573,988 is due to former directors of the Company or to
companies controlled by former directors (2009 - $770,695). The amount is
secured by way of a general security agreement (GSA) over the assets of the
Company. During the year ended December 31, 2010, a $200,000 demand promissory
note was repaid and two demand promissory notes totaling $62,500 were
issued.

6. NOTES PAYABLE

|                              |   | December 31, |  |   | December 31, | 
|----------------------------- | - | ------------ |  | - | ------------ | 
|                              |   | 2010         |  |   | 2009         | 
|Principal                     | $ | 120,648      |  | $ | 114,177      | 
|Accrued interest              |   | 13,982       |  |   | 1,815        | 
|Total demand promissory notes | $ | 134,630      |  | $ | 115,992      | 

During the year ended December 31, 2009, the Company completed
a 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. The promissory notes bear interest at 10%, per
annum, are unsecured, due on demand and are denominated in Canadian dollars.
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. The fair value of the 120,000 warrants issued was $11,843.

7. CONVERTIBLE DEBENTURES

During the year ended December 31, 2010, the Company issued
secured convertible debentures for gross proceeds of $314,242. A $169,934
discount on the debt was recorded due to the beneficial conversion features
provided. These secured convertible debentures have an effective interest rate
of 141%, are secured by means of a GSA over the Companys assets, and are
repayable one year from the date of issuance. The Company has the right to
prepay all or any part of the secured convertible debentures at anytime without
penalty.

---

- 31 -

At any time until the maturity, the principal amount of the
secured convertible debentures may be converted into a conversion unit at the
option of the holder of the debenture, in whole or in part at conversion rate of
Cdn$0.05. A conversion unit consists of one share of common stock and one
warrant. Each warrant entitles the holder to purchase an additional share of
common stock at an exercise price of Cdn$0.10 for a period of two years from the
date of conversion. At the time of conversion, the debenture holder may elect to
have the accrued interest on these debentures converted into shares of common
stock of the Company.

8. SHARE CAPITAL

|[a] | Authorized                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------
|    |                                                                                                                  
|    | 100,000,000 shares of common stock, par value $0.001
      21,000,000 shares of preferred stock, par value $0.001
|    |                                                                                                                  
|[b] | Mezzanine Equity                                                                                                 

Series C Convertible Preferred Stock

On June 30, 2009, the Company entered into an exchange
agreement with VMI., a wholly-owned operating subsidiary of the Company and the
holders of the Series C, D, E, F, G and H notes payable with aggregate principal
amounts 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. As a result, the Company recorded a gain on
settlement of debt 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. 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 GSA 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 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 they are
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.

[b] Common Stock

On February 24, 2010, the Company issued 4,316,667 units at
Cdn$0.06 per unit for gross proceeds of Cdn$259,000. Each unit consists of one
common share and one share purchase warrant, with each warrant exercisable for a
period of five years at an exercise price of Cdn$0.08. The Company also issued
323,750 common shares to finders of this private placement.

On June 8, 2009, the Company issued 5,000,000 units at Cdn$0.10
per unit for gross proceeds of Cdn$500,000. Each unit consists of one common
stock and one share purchase warrant, with each warrant exercisable for a period
of three years at an exercise price of Cdn$0.20 per share. The Company also
issued 446,000 units as a financing fee and issued 42,857 common shares in
finders fees.

[c] Stock options

The stock option 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. Options granted generally
vest based on 3 years of continuous service and have 5-year contractual
terms.

---

- 32 -

|The following is a
      summary of the Companys stock option activity: |  |                     |  
|------------------------------------------------------------------------ |  | ------------------- | -
|                                                                         |  | Options Outstanding |  
|Balance, December 31, 2008                                               |  | 7,733,585           |  
|Options expired
      and cancelled                                      |  | (3,144,694          | )
|Balance, December 31, 2009                                               |  | 4,588,891           |  
|Options expired and cancelled                                            |  | (3,709,307          | )
|Options granted                                                          |  | 3,000,000           |  
|Balance, December
      31, 2010                                         |  | 3,879,584           |  

The weighted average exercise price and weighted average life
of the options at December 31, 2010 are $0.16 and 4.09 years, respectively.

Total stock-based compensation for the year ended December 31,
2010 includes employees of $142,510 (2009 -$120,664) reported in the statement
of operations using the following assumptions:

Expected life of employee stock options (in
      years)
    5Volatility
    132%Risk-free interest rate
    1.25%Dividend yields
    0%


[d] Warrants

|The following
      summarizes the common stock warrant activity: |  |            |  
|----------------------------------------------------------------- |  | ---------- | -
|Number
      of Common Shares Issuable                            | 
|Balance, December 31, 2008                                        |  | 3,465,500  |  
|Expired                                                           |  | (3,465,000 | )
|Issued                                                            |  | 5,446,000  |  
|Issued                                                            |  | 120,000    |  
|Total warrants outstanding December 31, 2009                      |  | 5,566,000  |  
|Issued                                                            |  | 4,316,667  |  
|Total warrants outstanding December 31, 2010                      |  | 9,882,667  |  

The following summarizes the common stock warrants
      outstanding as at December 31, 2010:Number of
    Weighted Average
    
    RemainingCommon
    Exercise Price
    
    contractualIssue Date
    Shares Issuable
    (Cdn$)
    Expiry Date
    lifeClass B - June 8, 2009
    5,446,000
    
    June 7, 2012Class C - November 4, 2009
    120,000
    
    November 3, 2012Class D - February 10, 2010
    4,316,667
    
    February 4, 2015Balance, December 31, 2010
    9,882,667
    $0.15
    
    2.69


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.

---

- 33 -

9. 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:

|                                                             |   | 2010     |   |   | 2009     |  
|------------------------------------------------------------ | - | -------- | - | - | -------- | -
|Statutory income tax rate                                    |   | 35%      |   |   | 35%      |  
|Net income (loss)                                            | $ | (978,224 | ) | $ | 385,381  |  
|Expected in tax recovery at statutory
      income tax rates | $ | (342,378 | ) | $ | 134,883  |  
|Higher effective tax rate of Canadian subsidiary             |   | (98,639  | ) |   | (165,650 | )
|Change in valuation allowance                                |   | (470,208 | ) |   | (904,829 | )
|Change in tax rate applied in valuation allowance            |   | (53,113  | ) |   | 9,552    |  
|Imputed interest                                             |   | 56,777   |   |   | 73,303   |  
|Expiration of loss carry forwards                            |   | 767,028  |   |   | 805,382  |  
|Non-deductible expenses and other                            |   | 140,534  |   |   | 47,358   |  
|Income tax expense                                           | $ | -        |   | $ | -        |  

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
sufficiently likely. to occur.

|Significant components of the Company's deferred tax assets as
      of December 31 are as follows: |  
|--------------------------------------------------------------------------------------------------- | -
|                                                                                                    |  
|Deferred potential income tax assets                                                                |  
|Net operating loss carry forwards                                                                   | $
|Non-capital loss
      carry forwards                                                               |  
|Equipment                                                                                           |  
|Unrealized foreign
      exchange                                                                   |  
|Other                                                                                               |  
|                                                                                                    |  
|Valuation allowance                                                                                 |  
|                                                                                                    | $

---

- 34 -

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

Canada2014
    $
    2,655,6342016
    
    1,785,9132026
    
    1,706,0402027
    
    1,801,3992029
    
    1,068,2742030
    
    532,247Total Canada
    $
    9,549,507U.S.2020
    $
    2,178,1942021
    
    2,338,9442022
    
    258,9692024
    
    292,9712028
    
    194,6512029
    
    280,631Total U.S.
    $
    5,544,360Grand Total
    $
    15,093,867


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.

10. RELATED PARTY TRANSACTIONS

During the year ended December 31, 2010, the Company incurred
$68,528 in consulting fees to a company controlled by a director and officer of
the Company. At December 31, 2010 a liability of $8,445 remains outstanding with
respect to these fees and is included as part of accounts payable.

During the year ended December 31, 2010, the Company obtained
advances from companies with former directors in common; a balance outstanding
of $20,519 exists as at December 31, 2010 and is included as part of accounts
payable. These advances are unsecured, non-interest bearing and are due on
demand.

During the year ended December 31, 2009, the Company obtained
loans from a company owned by a shareholder, a company controlled by a
shareholder, and directors and a shareholder of the company for a total of
$320,381 (Cdn$336,000). The Company recorded $428 (Cdn$441) in interest expense
with respect to these loans. As at December 31, 2009, $257,030 of principal plus
accrued interest remains 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, former
directors of the Company, 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 7).
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.

---

- 35 -

11. SUBSEQUENT EVENTS

On January 31, 2011, the Company closed a 10 year license
agreement with AVST. AVST obtained the exclusive use of our technology and
physical assets relating to the technology, in exchange for AVST issuing 4.5% of
its outstanding equity in the form of preferred shares. AVST is also required to
issue a 1% equity share to the Company upon the five year anniversary of the
agreement.

AVST also has the right to purchase the technology and the
Company has the right to sell the technology for the issuance of an additional
1% equity share of AVST and an additional 2.25% equity share subject to revenue
milestones and 2.25% equity share subject to the execution of long-term
distribution agreements by AVST. Assuming all of the performance conditions are
met and AVST purchases the technology, the overall consideration for the
transaction is equal to 10% of the issued and outstanding shares of AVST.

On March 1, 2011, the Company issued a secured debenture in the
amount of Cdn$580,000. The debenture is secured by a GSA, bears interest at 12%
per annum and matures on July 1, 2011. If the Company completes a financing or a
series of financings in an amount of not less than Cdn$700,000, then the
maturity date of the debenture is accelerated to no later than 5 business days
following the completion of the financing. As consideration for the debenture
financing, the Company issued 1,500,000 shares.

On March 4, 2011, the Company completed the purchase of Tagline
Communications Inc. (Tagline). In consideration of Cdn$425,000and issued
1,000,000 common shares. The Assets consist of a unified communications platform
with customers throughout North America. Tagline offers the following services
either individually or as a service bundle: 1-800 numbers, voice recognition,
fax to email, auto attendant, web based telephony, and conferencing
functionality.

Subsequent to year end, the Company issued 875,000 common
shares at a price of Cdn$0.10 per common share as settlement of Cdn$87,000 in
debt obligations.

---

- 36 -

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

None.

Item 9A.  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, 2010. 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, 2010.

Based on this evaluation, these officers concluded that, as of
as of December 31, 2010, 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.                                                                                                                                   

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- 37 -

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, 2010.

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, 2010, 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;
  and
| |     |                                                                                                                                                                                                                                                                                             
| | (3) | inadequate security and restricted access to computers,
      including insufficient disaster recovery plans.                                                                                                                                                                               

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 our 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, 2010 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.

Changes in Internal Controls

There were no changes in our companys internal control over
financial reporting during the quarter ended December 31, 2010 that have
materially affected, or are reasonably likely to materially affect, our
companys internal control over financial reporting.

Item 9B.  Other Information.

None.

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.

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- 38 -

Name
    Position Held with the
      Company
    Age
    Date First Elected or
      AppointedJay Hutton(1)
    Chief Executive Officer and Director
    45
    May 12, 2010Aron Buchman(1)
    Director
    40
    July 6, 2010Sean OMahony(1)
    Director
    52
    September 29, 2010


(1)Members of our Audit Committee and our Corporate
Governance Committee

Business Experience

Jay Hutton  Chief Executive Officer and
Director

Mr. Hutton is the President of Arrowstone Ventures Ltd. and a
partner in HGH Capital Partnership. He is also the President of Telemerx Systems
Inc., a business involved in electronic payments and workflow management
solutions. His business experience includes re-structuring and business planning
for new and emerging businesses. His previous engagements have included
strategic planning for technology companies as well as structuring a large
limited partnership for a real estate development. He served as both President
and CEO of Voice Mobility International, Inc. in the past and was on the Board
of Directors until May of 2007

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.

Aron Buchman  Director

Aron Buchman has been focused on driving long-lasting financial
and operational success for both global corporations and start-ups over the last
10 years. Mr. Buchman's work in the IT and Telecommunications industry has
generated senior industry relationships, enabling him to provide solid advice on
strategic issues shaping global adoption within emerging technology trends.

Mr. Buchman has experience in raising venture and public market
capital, due diligence of start-up and mature investment portfolio additions,
the introduction of angel investment opportunities and establishing public
market retail and institutional support.

Mr. Buchman has been extensively involved in application
development and defining strategic commercialization and change management. Mr.
Buchman has developed and managed deals with Multinational Channel Partners
including IBM, Microsoft, Oracle, and industry leading SAP systems integration
providers as well as the banking, payroll and business analytics sectors.

We believe Mr. Buchman 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.

Sean OMahony  Director

Mr. OMahony has extensive international management and
operational experience. He is currently the principal of Lux Holding Inc.,
through which he provides due diligence services to potential investors in
wireless/mobile-related startups, advises companies with sales and marketing
strategies, and advises clients during M&A transactions. From 2007 to 2008, Mr. OMahony was CEO of Cubic Telecom, a
company that developed a GSM roaming product under the brand name MaxRoam. From
2006 to 2007, he was engaged as a consultant by Sequoia funded JAJAH to assist
with the introduction of a mobile phone product. In 2001, Mr. OMahony founded
FatPort Corporation and served as their CEO until 2004. FatPort Corporation was
the first greenfield public Wi-Fi operator (WISP) in Canada.

---

- 39 -

We believe Mr. OMahony 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.

Director Independence

Our determination of independence of directors is made using
the definition of independent director contained in Rule 4200(a)(15) of the
Marketplace Rules of the NASDAQ Stock Market (NASDAQ), even though such
definitions do not currently apply to us because we are not listed on NASDAQ. We
have determined that Jay Hutton does not meet the definition of independent as
a result of his position as an executive officer. We have determined that Aron Buchman and Sean OMahony meet the
definition of independent and have no material relationship with our company
that would reasonably be expected to affect their independent judgment.

---

- 40 -

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 us, or written representations from certain reporting persons, we believe
that other than as disclosed below, all filing requirements applicable to our
officers, directors and greater than ten percent beneficial owners were complied
with.

|Name          | Number of Late Reports | Number of Transactions Not Reported
      on a Timely Basis | Failure to File Requested
      Forms
|------------- | ---------------------- | ----------------------------------------------------------- | -------------------------------------
|Jay Hutton    | 1                      | 1                                                           | 0                                    
|Aron Buchman  | 1                      | 1                                                           | 0                                    
|Sean OMahony | 1                      | 1                                                           | 0                                    

Code of Ethics

Effective February 11, 2004, our board of directors adopted a
Code of Ethics and Business Conduct that applies to, among other persons, our
Chief Executive Officer (being our principal executive officer, principal
financial officer, and 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 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
personnel are to be accorded full access to our 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.

---

- 41 -

Nomination Procedures For Appointment of
Directors

As of March 31, 2011, 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
Sean OMahony, Jay Hutton, and Aron Buchman. Sean OMahony and Aron Buchman are
independent as defined by Nasdaq Marketplace Rule 4200(a)(15) and National
Instrument 52-110  Audit Committee(NI 52-110), adopted by various
Canadian securities commissions. Jay Hutton is not independent as he is also our
Chief Executive Officer. Each of the members of the Audit Committee is
financially literate as defined in NI 52-110. For a description of each members
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
Sean OMahony.

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, 2010; 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, 2010,

who we will collectively refer to as our named executive
officers, of our company for the years ended December 31, 2010 and 2009, 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:

---

- 42 -

Name
      and Principal Position
    Year
    Salary ($)
    Bonus ($)
    Stock Awards ($)
    Option Awards ($)(1)
    Non- Equity Incentive Plan
      Compensa- tion ($)
    Nonqualified Deferred Compensation
      Earnings ($)
    All
      Other Compensa tion ($)(2)
    Total ($)Jay Hutton Chief Executive Officer (2)
    2010 2009
    $68,528 N/A
    Nil N/A
    Nil N/A
    $55,220 N/A
    Nil N/A
    Nil N/A
    Nil N/A
    $123,748 N/AWilliam Krebs, Former Interim Chief
      Executive Officer (3)
    2010
      2009
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil Nil
    Nil 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) | Jay Hutton was appointed as Chief Executive Officer on
      July 6, 2010.                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                   
| | (2) | William Krebs resigned as interim Chief Executive Officer
      on July 6, 2010.                                                                                                                                                                                                                                                  

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. As at December 31, 2010,
the committee was composed of two independent directors, Sean OMahony and Aron
Buchman and one non-independent director, Jay Hutton.

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; and                                                                                
| |    |                                                                                                                                                                                            
| | 4. | the annual, or more often if appropriate review
  of:                                                                                                                                      
| |    |                                                                                                                                                                                            
| |    | (a)                                                                                                                                                                                        
| |    |                                                                                                                                                                                            
| |    | (b)                                                                                                                                                                                        
| |    |                                                                                                                                                                                            
| |    | (c)                                                                                                                                                                                        
| |    |                                                                                                                                                                                            
| |    | (d)                                                                                                                                                                                        

Components of Compensation

Executive compensation consists primarily of base salary and
stock options.

---

- 43 -

Base Salary. Due to our financial condition, we do not
currently pay our Chief Executive Officer a salary. Once our financial condition
improves, we anticipate that we will 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.

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. On July 6, 2010, Mr. Krebs resigned as our interim chief
executive officer and Jay Hutton was appointed as Chief Executive Officer.

Stock Option Grants in 2010 to Named Executive
Officers

On November 12, 2010, we entered into stock option agreements
with Jay Hutton, whereby we granted Mr. Hutton stock options to purchase
1,000,000 of our common shares at a price of $0.10 until November 12, 2015.

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, 2010.

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 ($)Jay Hutton
    1,000,000
    nil
    nil
    $0.10
    November 12, 2015
    nil
    nil
    nil
    nilWilliam Krebs
    nil
    nil
    nil
    nil
    nil
    nil
    nil
    nil
    nil


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 our Directors

Our non-employee directors are granted incentive stock options.
Employee directors are granted incentive stock options based on their individual
employment agreements.

---

- 44 -

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 ($)Aron Buchman
    nil
    nil
    $55,220
    nil
    nil
    nil
    $55,220Sean OMahony
    nil
    nil
    $55,220
    nil
    nil
    nil
    $55,220William Krebs
    nil
    nil
    nil
    nil
    nil
    nil
    nilWilliam H. Laird
    nil
    nil
    nil
    nil
    nil
    nil
    nil


On November 12, 2010, we entered into stock option agreements
with Aron Buchman and Sean OMahony, whereby we granted each of these
individuals stock options to purchase 1,000,000 of our common shares at a price
of $0.10 until November 12, 2015.

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

We do not have any employment agreements with our named
executive officers.

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 March 31, 2011, we had 71,279,722common shares issued
and outstanding.

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
    1,000,000(2)
    0.7%Aron Buchman c/o 107  645
      Fort Street Victoria, BC V8W 1G2
    1,000,000(2)
    0.7%Sean OMahony c/o 107  645
      Fort Street Victoria, BC V8W 1G2
    1,000,000(2)
    0.7%


---

- 45 -

Name and Address of Beneficial
      Owner
    Amount and Nature of Beneficial
      Ownership
    Percentage of Class(1)Directors and
      Executive Officers as a Group(3 persons)
    3,000,000
    2.1%Alan G. Smith 4430 Haggart
      Street Vancouver, BC Canada V6L 2H3
    5,561,000
    7.8%


|(1) | Based on 71,279,722 shares of common stock issued and
      outstanding as of April 7, 2011. 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) | Consists of 1,000,000 stock options exercisable at $0.10
      per common share until November 12, 2015.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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, 2010, 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 Jay
Hutton, Aron Buchman and Sean OMahony. We have determined that Aron Buchman and
Sean OMahony are independent directors as defined by Nasdaq Marketplace Rule
4200(a)(15) and Jay Hutton 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.

Audit Committee

Our Audit Committee consists of Jay Hutton, Aron Buchman and
Sean OMahony, of whom Aron Buchman and Sean OMahony 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.

---

- 46 -

Governance Committee

The Governance Committee currently consists of Jay Hutton, Aron
Buchman and Sean OMahony, of whom Aron Buchman and Sean OMahony 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 none of our independent directors
entered into any transaction, relationship or arrangement during the year ended
December 31, 2010 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).

On November 12, 2010, we entered into stock option agreements
with Aron Buchman and Sean OMahony, whereby we granted each of these
individuals stock options to purchase 1,000,000 of our common shares at a price
of $0.10 until November 12, 2015.

Item 14. Principal Accounting Fees and Services.

Dale Matheson Carr-Hilton Labonte LLP provided audit and other
services during the years ended December 31, 2010 and 2009 as follows:

2010
    
    
    2009Audit Fees
    $
    35,000
    
    $
    50,500Audit Related Fees
    
    -
    
    
    -Tax Fees
    $
    5,000
    
    
    7,500All Other Fees
    
    -
    
    
    -Total Fees
    $
    40,000
    
    $
    58,000


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.

Audit Related Fees. This
category includes are fees that were not included in audit fees that are billed
by our auditor for assurance and related services that are reasonably related to
the performance of the audit review of our companys financial statements. 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.

---

- 47 -

All Other Fees. This category
includes the fees billed by our auditor for products and services not included
in the foregoing categories. 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 Dale Matheson Carr-Hilton Labonte LLP and believes that the
provision of the services for activities unrelated to the audit is compatible
with maintaining Dale Matheson Carr-Hilton Labonte 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)                                                                                     
|        |                                                                                                                                                                               
|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    | Settlement Agreement dated
      November 2, 2009 among our company, Voice Mobility Inc., Voice Mobility
      (US) Inc., Voice Mobility Canada Limited and Randy Buchamer (5)

---

- 48 -

|10.3 | License Agreement dated January
      31, 2011 by and among Voice Mobility International, Inc, Voice Mobility
      Inc., and Applied Voice & Speech Technologies, Inc. (6)                                                    
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|     |                                                                                                                                                                                                                                
|10.4 | Asset Purchase Agreement
      between Voice Mobility International, Inc. and Tagline Communications Inc.
      (7)                                                                                                            
|     |                                                                                                                                                                                                                                
|10.5 | Form of Debenture (7)                                                                                                                                                                                                          
|     |                                                                                                                                                                                                                                
|14.1 | Code of Ethics. (8)                                                                                                                                                                                                            
|     |                                                                                                                                                                                                                                
|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
      Jay Hutton                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                
|32*  | Section 906 Certification of
      Jay Hutton                                                                                                                                                                                  
|     |                                                                                                                                                                                                                                
|99.1 | Audit Committee Charter (9)                                                                                                                                                                                                    

* Filed herewith.

(1) Incorporated by reference from our Registration Statement
on Form 10-SB, as originally filed on September 17, 1999, and all amendments
thereto.(2) Incorporated by reference from our Definitive Schedule 14A as
filed on May 19, 2000. (3) Incorporated by reference from our Form 10-KSB,
as filed on April 11, 2001.(4) Incorporated by reference from our Form 10-K,
as filed on April 1, 2002.(5) Incorporated by reference from our Form 10-Q,
as filed on November 20, 2010 (6) Incorporated by reference from our Form
8-K, as filed on February 4, 2011. (7) Incorporated by reference from our
Form 8-K, as filed on March 11, 2011. (8) Incorporated by reference from our
Form SB-2, as filed on October 20, 2005. (9) Incorporated by reference from
our Form 10-K, as filed on July 7, 2010.

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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/Jay Hutton
Jay HuttonChief Executive
Officer and Director(Principal Executive Officer, Principal Financial
Officer, and Principal Accounting Officer)
Date: April 13,
2011Pursuant 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/Jay Hutton  Jay HuttonChief Executive Officer and
Director
Date: April 13, 2011
By: /s/Aron
BuchmanAron
BuchmanDirector
Date: April 13, 2011
By:
/s/Sean OMahonySean OMahonyDirector
Date: April 13,
2011

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