UNITED ~~STATES~~STATESSECURITIES ~~SECURITIES~~ AND EXCHANGE COMMISSION Washington, 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 ~~fiscal~~transition ~~year~~period ~~ended~~from ~~December~~[ ~~31,~~] ~~2009~~to [ ] Commission file number 000-27387

[VOICE ]MOBILITY ~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15~~INTERNATIONAL, INC.(d)Exact OFname ~~THE SECURITIES~~of ~~EXCHANGE~~registrant ~~ACT~~as OFspecified ~~1934~~in its charter)

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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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 [X] ]

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]

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

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

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

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter. $131,~~622~~765,~~632~~619.50 based on a price of $0.~~25 per~~03 per share, being the average of the bid and asked price of the registrant’s ~~common~~ common stock as quoted on the OTC Bulletin Board on June 30, ~~2009~~2010.

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN ~~BANKRUPTCY~~ ~~PROCEEDINGS~~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. 6719,~~271~~916,~~845~~948 preferred shares and 71,279,722 common shares are issued and outstanding as of ~~July~~April 57, ~~2010~~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

VOICE MOBILITY INTERNATIONAL, INC.

TABLE OF CONTENTS

		Page No.	~~Page No.~~
Part I
Item 1	~~Item 1~~Business	~~Business~~2	2
Item 1A	~~Item~~Risk 1AFactors	~~Risk Factors~~8	9
Item 1B	~~Item~~Unresolved 1BStaff Comments	~~Unresolved Staff Comments~~12	15
Item 2	~~Item 2~~Properties	~~Properties~~12	15
Item 3	~~Item~~Legal 3Proceedings	~~Legal Proceedings~~13	15
Item 4	~~Item~~(Removed 4and Reserved)	~~(Removed and Reserved)~~13	15
Part II
Item 5	~~Item~~Market 5for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	~~Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities~~13	15
Item 6	~~Item~~Selected 6Financial Data	~~Selected Financial Data~~15	18
Item 7	~~Item~~Management's 7Discussions and Analysis of Financial Conditions and Results of Operations	~~Management's Discussions and Analysis of Financial Conditions and Results of Operations~~15	18
Item 7A	~~Item~~Quantitative 7Aand Qualitative Disclosures About Market Risk	~~Quantitative and Qualitative Disclosures About Market Risk~~21	24
Item 8	~~Item~~Financial 8Statements	~~Financial Statements~~22	25
Item 9	~~Item~~Changes 9in and Disagreements with Accountants on Accounting and Financial Disclosure	~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~36	26
	Item 9A(T)	Controls and Procedures	26
Item 9A	Controls and Procedures	36
Item 9B	~~Item~~Other 9BInformation	~~Other Information~~37	27
Part III
Item 10	~~Item~~Directors, 10Executive Officers and Corporate Governance	~~Directors, Executive Officers and Corporate Governance~~37	28
Item 11	~~Item~~Executive 11Compensation	~~Executive Compensation~~41	32
Item 12	~~Item~~Security 12Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters~~44	36
Item 13	~~Item~~Certain 13Relationships and Related Transactions, and Director Independence	~~Certain Relationships and Related Transactions, and Director Independence~~45	37
Item 14	~~Item~~Principal 14Accounting Fees and Services	~~Principal Accounting Fees and Services~~46	38
Item 15	~~Item~~Exhibits, 15Financial Statement Schedules	~~Exhibits, Financial Statement Schedules~~47	39
	Signatures	~~Signatures~~75	75

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PART I

Item 1. Business.

This annual report on Form 10-K contains forward-looking statements. Forward-looking statements ~~which~~ are ~~not~~projections ~~purely~~of ~~historical and include any statements regarding beliefs~~events, ~~plans~~revenues, ~~expectations~~income, orfuture ~~intentions,~~economic ~~including~~performance ~~without~~or ~~limitation~~management’s ~~statements~~plans ~~that~~and ~~relate to~~objectives for future ~~events or our future financial performance~~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. ~~These~~Examples ~~statements are only predictions and involve known and unknown~~of ~~risks,~~forward-looking ~~uncertainties~~statements ~~and~~made ~~other factors, including the risks~~ in ~~the~~this ~~section entitled~~annual ~~"Risk~~report ~~Factors",~~on ~~that~~Form 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 forward10-~~looking~~K include statements. about:

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

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

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

History

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

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

-On 3June 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.

~~Business~~On ~~Overview~~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.

WeAVST ~~are~~also ~~engaged~~has inthe right to purchase the ~~enhanced~~Technology and ~~multimedia~~we ~~messaging~~have the ~~area~~right to sell the Technology for the issuance of an additional 1% Equity ~~the~~Share ~~telecommunications~~and ~~market~~an additional 2.25% WeEquity ~~market~~Share subject to revenue milestones and 2.25% ~~deploy~~Equity ~~next~~Share ~~generation~~subject ~~messaging~~to the execution of long-term distribution agreements ~~solutions~~by ~~that~~AVST. ~~provide~~Assuming ~~enhanced~~all ~~messaging~~of ~~features~~the performance conditions are met and ~~functionality~~AVST ~~while~~purchases ~~ensuring~~the ~~integration~~Technology, ~~with~~the oroverall ~~replacement~~consideration offor ~~existing~~the ~~first~~transaction ~~generation~~is ~~voicemail messaging~~equal ~~systems.~~to ~~Our~~10% ~~enhanced~~of the ~~messaging~~issued ~~software~~and ~~suite:~~outstanding shares of AVST.

allows telecommunications companies to replace their aging legacy voicemail systems and incorporate incremental offerings such as real time call connect, voicemail to email, fax to email and unified mailbox services;

can serve as a first generation voice-mail and messaging system for telecommunications companies that do not have an existing voice-mail system, with the added capability of providing incremental offerings such as real time call connect, voicemail to email, fax to email and unified mailbox services; and

is an ideal solution for telecommunication companies or enterprise customers that have both a large central location and many secondary locations of varied size but wish to put them all under a single umbrella for voice and unified communications. Whether the remote locations have their own telephone legacy systems or utilize voice over internet protocol (commonly referred to as VOIP) technology, the software solution can ensure that company-wide deployment of voice and unified messaging is uniform, consistent and integrated.

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

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

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

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

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

Seamless replacement of legacy Caller Applications vital to our business customers;

Minimize end user disruption with the UCN 250’s Octel Aria telephone interface;

Access to voice and fax messages via any phone, smart phone, web browser or email;

Enhanced messaging with real-time call control features like single number reach, find me follow me, call announce and call screening;

An open Web Services API that is standards based and can be used to create custom integrations to meet unique requirements; and

Scalable and partitionable from 1000’s to 1,000,000s mailboxes per system.

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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

~~The~~Our ~~UCN~~service ~~250~~portfolio allows customers to migrate and replace ~~aging~~ 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 ~~UCN~~service ~~250~~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.

Open API Philosophy

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

Mobile Platform Support

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

The UCN 250 Unified Messaging Platform

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

The UCN 250 platform has the following key advantages:

Supports any combination of TDM and SIP trunks, with unlimited trunk groups and outbound SIP proxies;

Industry leading Multi-Tenancy support with unlimited tenants, communities, and custom branding;

Highly flexible deployment and capacity options allows our customers to cost effectively support anywhere from 1,000 to over 1 million subscribers;

Fully configurable redundancy – any, or all, components are deployable in a redundant manner, ensuring budget and specific needs are met;

No single-point-of-failure, capable of 99.999% uptime;

Supports deployments requiring a geographic disaster recovery solution;

No client side software to deploy or support; and

Carrier-grade reliability brought to the enterprise.

UCN 250 On Premise

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

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UCN 250 Managed Service

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

This option often appeals to larger customers who:

May have existing relationships for telecommunications and/or IT management with third parties;

Wish to engage a third party for this purpose; and

Want their data secured in their own data center.

UCN 250 UMaaS / On Demand

~~The~~We ~~UCN~~have ~~250~~begun ~~platform~~to ~~operates~~offer our services in both TDM and IP ~~telephony~~ telephony environments, is hosted in a secure and redundant data center, and is ~~managed~~ 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~~ 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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All network leased lines are handled by Voice Mobility and its certified partners and can be incorporated into billing;
Clients can receive a monthly turnkey mailbox;
Attractive monthly mailbox fees per user are available through our partners;
All systems are upgraded to the latest release;
Mailboxes are fully unified with voice and fax delivery to any email user; and
Systems are manufactured and supported by us and our certified partners.

Professional Services

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

Maximize total investment in voicemail, unified messaging and telecommunications infrastructure;

Reduce demands on IT staff to quickly address and resolve technological issues;

Implement a path to ‘unified communications’ the customer’s way; and

Solves unique business communications issues.

Pricing of Our Enhanced Messaging Software

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

Target Market for Our Enhanced Messaging Software

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

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Marketing and Distribution Methods

~~The~~In ~~complexity~~January of2011, we made the ~~current~~strategic ~~voicemail~~decision ~~systems~~to ~~used~~license byour core ~~hosted~~technology to AVST, as described under the heading “Corporate ~~service~~Developments”. ~~providers~~The ~~and~~deal ~~business~~was ~~customers~~concluded ~~requires~~on ~~not~~January ~~only~~31, a2011 ~~sound~~and ~~understanding~~provided AVST a 10 ofyear license to utilize and extend the ~~voicemail~~technology ~~system~~relating ~~capabilities~~to ~~but~~our ~~also~~UCN 250 technology so that AVST becomes a ~~thorough~~premium ~~understanding~~solution ofin ~~where~~the hosted offering ~~and~~category. ~~how~~AVST ~~these~~has ~~systems~~agreed ~~can~~to ~~interconnect~~sell ~~with~~the ~~other~~solution ~~systems~~into their key markets under an AVST brand. We retain ownership of the technology.

~~There~~This ~~are~~is ~~very~~a ~~few~~departure ~~companies~~from ~~that~~the ~~have~~direct ~~earned~~selling ~~the~~model ~~trust~~that ofwe ~~our~~have ~~target~~pursued ~~market.~~for ~~These~~many ~~companies~~years. ~~include~~We ~~large~~are ~~hosted~~taking ~~service~~our ~~providers~~expertise and ~~large system~~our ~~integrators~~knowledge of the market and ~~consultants.~~redirecting Weall ~~recognize~~of ~~this~~our ~~reality~~effort and ~~understand that~~energy ~~these~~into ~~relationships~~becoming ~~have~~a ~~been~~hosted service ~~forged~~provider. ~~over~~Growth anwill ~~extended~~be ~~period~~driven ofboth ~~time~~organically and through acquisitions. We intend to acquire small profitable service providers and ~~also~~utilize ~~know~~our ~~that,~~knowledge ~~because~~and ofexpertise ~~these~~to ~~long~~drive ~~standing~~efficiencies ~~relationships,~~and ~~businesses~~to ~~will~~grow net ~~purchase~~subscribers ~~their~~by ~~technology~~utilizing ~~directly~~unique ~~from~~customer ~~these~~acquisition ~~"trusted"~~models ~~companies~~and processes.

We ~~are~~will ~~dedicated~~continue to ~~building~~build ~~and~~our ~~fostering~~relationship ~~strategic relationships~~ with ~~these~~AVST, ~~companies.~~as ~~Our target market will purchase our unified~~we ~~messaging~~believe ~~software~~that ~~directly~~there ~~from~~is ~~our partners. Our channel partner will assist in installation, maintenance and support of our enhanced messaging software. We will play~~ a ~~supporting~~strong ~~role~~desire tobetween ~~these~~the ~~partners.~~companies ~~We intend~~ to ~~limit~~engage ~~the number of~~in ~~relationships~~strategic wemarket ~~enter~~expansion ~~into~~by ~~with~~combining ~~such~~efforts ~~companies~~ and ~~systems integrators, distribution partners and original equipment manufacturer distributors~~expertise. ~~The key in this area of the business is the quality of the partner, not the quantity of partners.~~

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

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

Key Strategic Partners

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

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

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

~~Well-established~~Due ~~suppliers~~to ~~such~~the aslicensing ~~Avaya,~~of ~~Cisco,~~our ~~Microsoft~~core technology to AVST, we no longer compete against the large equipment providers. This is something that AVST, ~~Lucent~~will ~~and~~do ~~Comverse~~by ~~currently~~virtue ~~dominate~~of their exclusive license to the ~~business~~UCN ~~and~~250 ~~service~~technology. ~~provider~~We ~~market~~now ~~segments.~~compete ~~These~~with ~~competitors~~both ~~have~~small ~~provided~~and ~~voice~~large ~~mail~~service providers. Large operating telephone companies offer similar services to both ~~wired~~ ~~and~~mid ~~wireless~~sized ~~telecommunication~~and large companies. ~~since~~Other service providers have focused on the ~~early~~small ~~1980's~~business marketplace. ~~In evaluating~~Service ~~the~~providers, ~~competitive~~by ~~landscape~~nature, wetend ~~believe~~to ~~our~~be ~~closest~~regionally ~~competitors~~focused. ~~are~~We ~~companies~~will ~~offering~~not ~~large~~focus ~~scale~~on a particular region but rather focus on a type of customer. This type is small, ~~Octel~~mobile, ~~replacement~~and ~~business~~looking ~~unified~~for features and services that are not ~~communications~~otherwise ~~applications~~available to a small business.

~~Lucent~~- ~~and~~6 ~~Comverse have continued to target the Tier 1 service~~- ~~providers including wireless and wireline providers since this is where their relationships and expertise are.~~

~~Avaya,~~Some ~~Cisco,~~noteworthy ~~Microsoft~~competitors ~~and~~in ~~AVST~~the ~~all~~hosted ~~have~~services ~~solutions~~category ~~that~~are ~~address~~J2 ~~the~~Communications, ~~business~~M5 ~~verticals~~Networks ~~that~~and ~~Voice~~Ring ~~Mobility~~Central. isWe ~~targeting,~~believe ~~however~~that ~~they lack~~we ~~the~~have ~~ability~~highly differentiated toofferings ~~scale~~and ora ~~migrate~~superior ~~Octel~~cost ~~populations~~structure ~~with~~that ~~little~~will ~~impact~~allow tous ~~the~~to ~~user~~effectively ~~and~~compete ~~integrate~~against ~~across~~a ~~multiple~~wide ~~switch~~range ~~platforms~~of competitors.

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

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

Competitive Advantages

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

Our business and pricing models are designed to set a new expectation in the market for price and flexibility;
Our unified messaging ~~software~~offerings ~~provides~~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;
Our solutions have the unique ability to be deployed as customer premise solutions, managed services and UMaaS or hosted at the service provider’s datacenter or central office;
We have developed a highly available, scalable, hosted solution that can be separated to provide functionality for multiple end user segments such as residential, wireless, enterprise and broadband; and
Our unified messaging software platform is designed to accommodate and support more users while also satisfying the stringent availability requirements of telecom and business environments.

Our enhanced messaging software provides all of the following features:

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

We- ~~are~~7 not aware of any competitor that has developed a messaging solution that provides all of these features, that incorporates the ability to emulate existing voicemail technology, provides advanced unified communications features and capabilities and provides migration options from legacy voicemail systems at a lower total cost of ownership. -

Industry Description

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

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

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

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

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

Significant Customers

Sales for the fiscal year ended December 31, ~~2009~~2010 were from hardware and software product sales and training and installation services provided to ~~Verizon~~Communications ~~and~~Resources ~~The~~Inc. ~~Generations~~on ~~Network~~behalf ~~and~~of ~~product~~their ~~license~~customer ~~sales,~~Verizon. ~~hardware~~Pursuant ~~and software product sales and training and installation services~~ to ~~five~~ ~~resellers. Sales for~~ the ~~fiscal~~license ~~year~~agreement ~~ended~~with ~~December 31~~AVST, ~~2008~~our ~~were~~major ~~from technical~~customers ~~training~~serviced ~~and~~by ~~support~~the UCN ~~services~~250 ~~provided~~technology tohave ~~Avaya~~been ~~and~~transferred ~~product license sales, hardware~~ and ~~software~~all ~~product~~future sales and ~~training and installation~~maintenance ~~services to eight resellers. Sales to Verizon and The Generations Network comprised 12% of~~ revenue ~~for~~will ~~the~~be ~~fiscal year~~collected ~~ended~~by ~~December 31, 2009~~AVST. ~~Sales to Avaya comprised 88% of revenue for the fiscal year ended December 31, 2008.~~

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Research and Development

~~Our~~We ~~research~~do ~~and~~not ~~development~~anticipate ~~team~~engaging ~~is located~~ in ~~Victoria, British~~any ~~Columbia, Canada. Our~~ research and development ~~team designs, develops,~~ ~~tests,~~going ~~documents, and localizes our enhanced messaging product~~forward. The research and development team's feature and release direction is governed by all strategic product stakeholders. Each feature is detailed in written business requirements created by our business requirements team. Releases are coordinated with our marketing, sales, and system integration/partner support departments to ensure timely delivery of the grouped features to our partners, clients, and ultimately our target market. Appropriate technology is chosen for all work after performing a technical analysis of each requested feature and also ensuring a match for that release's system requirements. All ~~development work is carried out with reviews and decision gates as part of an overall~~ product ~~development process.~~based ~~The~~ research and development ~~team~~will ~~follows~~be ~~industry~~conducted ~~best practices for~~by ~~software engineering and encourages continuous process improvement~~AVST. ~~Research and development expenses for the years ended December 31, 2009 and 2008 were $320,760 and $632,043 respectively.~~

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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 ~~departure~~breach of any ~~of our management or significant technical personnel, the breach of their~~ confidentiality and non-disclosure ~~obligations~~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 ~~are~~were employed on an "at-will" basis. While we believe that we have adequately protected our proprietary technology, and we will take ~~all~~ 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 ~~July~~April 58, ~~2010~~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.

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

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

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

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

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

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

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

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

support our planned growth and carry out our business plan;
develop new or enhanced services and technologies;

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increase our marketing efforts;
acquire complementary businesses or technologies;
respond to regulatory requirements; and
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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, ~~2009~~2010, we accumulated a deficit of $4950,~~783~~758,~~268~~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, ~~2009~~2010 consolidated financial statements. Our audited consolidated financial statements do not include any adjustments that might result from the outcome of that uncertainty.

We- ~~are~~10 ~~currently operating with an interim Chief Executive Officer and until our company is able to locate and appoint a qualified person to fill these positions, our operations may be disrupted.~~ -

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

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

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

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

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

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

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

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

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

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

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

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

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

The ~~market~~telecommunications ~~for~~industry ~~unified messaging software~~ is highly competitive ~~and~~ and subject to frequent product introductions with improved price and/or ~~performance~~ 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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Rapid technological changes in our industry could render our products non-competitive or obsolete and consequently affect our ability to generate revenues.

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

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

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

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

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

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

Our authorized capital stock consists of 100,000,000 shares of common stock and 21,000,000 shares of preferred stock. As at ~~July~~April 57, ~~2010,~~2011 1 share of Series A preferred stock has been designated and is issued and outstanding, 666,667 shares of Series B preferred stock have been designated, of which nil are issued and outstanding and 19,250,280 shares of Series C preferred ~~stock~~ stock have been designated, of which 19,250,280 are issued and outstanding. Our ~~board~~ 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~~ appropriate and to establish the rights, preferences and privileges of these shares, including dividends, liquidation and voting rights. The rights of holders of shares of preferred stock that may be issued may be superior to the rights granted to the holders of existing shares of our common stock. Further, the ability of our board of directors to designate and issue such undesignated shares could impede or deter an unsolicited tender offer or takeover proposal and the issuance of additional shares having preferential rights could adversely affect the voting power and other rights of holders of our common stock.

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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~~, NEX,~~ or the TSX Venture Exchange, the market price of our common stock could fluctuate substantially due to a variety of factors, including market perception of our ability to achieve our planned growth, quarterly operating results of other telecommunication companies, trading volume in our common stock, changes in general conditions in the economy and the financial markets or other developments affecting our competitors or us. In addition, the stock market is subject to extreme price and volume fluctuations. This volatility has had a significant effect on the market price of securities issued by many companies for reasons unrelated to their operating performance and could have the same effect on our common stock.

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Item 1B. Unresolved Staff Comments

Not Applicable.

Item 2. Properties.

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

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

Item 4. (Removed and Reserved)

PART II

~~Our~~On ~~common~~June ~~shares have been cease traded in British Columbia, Ontario, and Quebec from April~~ 30, 2010, ~~May~~we ~~17,~~were ~~2010,~~de-listed ~~and~~from ~~May~~the ~~20,~~Toronto ~~2010~~Stock ~~respectively~~Exchange ~~for~~(the ~~failure~~“TSX”) ~~to file our annual financial statements, management’s discussion~~ and ~~analysis,~~listed ~~and~~on ~~annual~~the ~~information~~NEX ~~form.~~Board Asof ~~a result, trading in our common shares is prohibited in those jurisdictions and our common shares cannot be traded on~~ the ~~Toronto~~TSX ~~Stock~~Venture Exchange (~~the~~ “~~TSX~~NEX”). ~~Further,~~On ~~while~~August ~~our common~~17, ~~shares~~2010, ~~have~~we ~~not~~announced ~~been~~that the cease ~~traded~~trade inorders ~~Alberta~~issued ~~and~~by the ~~New~~securities ~~Brunswick,~~commissions itin ~~is likely~~British ~~that~~Columbia, ~~the~~Alberta, ~~security~~Ontario ~~commissions~~and inQuebec ~~those~~were revoked. ~~jurisdictions~~On ~~will~~August ~~issue~~23, ~~similar orders~~2010, ~~unless~~our ~~the~~common ~~outstanding~~shares ~~reports~~began ~~are~~trading ~~filed~~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 ~~this~~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 ~~are~~were non-compliant with FINRA ~~Rule 6530 and the~~ ~~quotation of our securities on the OTC Bulletin Board is prohibited. Until we are compliant with FINRA~~ Rule 6530, the market liquidity for our securities will be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Pursuant to Rule 6530(e), if we file our reports late with the Commission three times in a two-year 16period 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.

~~Pursuant~~Our tocommon ~~Rule~~stock ~~6530(e),~~was iflisted weand ~~file~~commenced ~~our~~trading ~~reports~~on ~~late with~~ the ~~Commission~~ ~~three times in a two-year period or our securities are removed from the~~ OTC Bulletin Board ~~for~~on ~~failure~~June to30, ~~timely~~1999 ~~file~~under ~~twice~~the insymbol a"VMII". ~~two-year~~Our ~~period, then~~common westock ~~will~~was listed beand ~~ineligible~~commenced ~~for~~trading ~~quotation~~ on the ~~OTC~~Toronto ~~Bulletin~~Stock ~~Board.~~Exchange ~~Pursuant~~on ~~to Rule~~July ~~6530(e)~~16, ~~if we are late in filing any of our reports for the two year~~2001 ~~period~~under ~~after~~ the ~~date~~symbol of"VMY". ~~filing~~As ~~this~~discussed ~~Annual~~above, ~~Report~~On onAugust ~~Form~~3, ~~10-K~~2010, our ~~securities will~~common ~~be ineligible for quotation on the OTC Bulletin Board until two years after~~shares ~~the~~were ~~date~~transferred ofto ~~filing this Annual Report on Form 10-K~~NEX.

OnThe ~~February~~following ~~18,~~table ~~2010~~sets forth, wefor ~~received~~the aperiods ~~letter~~indicated, ~~from~~ the ~~TSX,~~ ~~whereby~~high ~~the~~and ~~TSX~~low ~~informed~~sales usprices ~~that~~for ~~it is reviewing the eligibility of the shares of~~ our common stock ~~for listing~~ on the ~~TSX~~OTC ~~pursuant~~Bulletin toBoard ~~Part~~and ~~VII of~~ the ~~TSX~~ ~~Company Manual. As our management determined that we no longer meet the requirements to be listed on the~~ TSX~~, we are preparing an application to be listed on~~ /NEX~~. We cannot guarantee that our application will be successful. If we are not able to list on NEX and we are delisted from the TSX~~, ~~there~~as ~~will~~applicable: ~~be no market for our securities in Canada.~~

Our common stock was listed and commenced trading on the OTC Bulletin Board on June 30, 1999 under the symbol "VMII". Because of our failure to file our periodic reports under the Securities and Exchange Act of 1934, as described above, FINRA appended our symbol with an “E” modifier to indicate its belief that we are not in compliance with FINRA’s eligibility requirements and advised us that if we were to fail to file this Annual Report on Form 10-~~K within~~ ~~the~~14 30-day grace period provided by FINRA, we would become ineligible for continued listing on the OTCBB. We failed to file this Annual Report within the 30-day grace period. Our common stock was listed and commenced trading on the Toronto Stock Exchange on July 16, 2001 under the symbol "VMY". As discussed above, trading of our stock on the Toronto Stock Exchange has been prohibited. We are currently applying to be listed on NEX.

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

OTC Bulletin Board			TSX/NEX
Quarter Ended	High	Low	Quarter Ended	High (Cdn$)	Low (Cdn$)
December 31, 2010	$0.05	$0.04	December 31, 2010	$0.08	$0.045
September 30, 2010	$0.07	$0.05	September 30, 2010	$0.08	$0.45
June 30, 2010	$0.03	$0.02	June 30, 2010	n/a	n/a
March 31, 2010	$0.08	$0.03	March 31, 2010	n/a	n/a
December 31, 2009	$0.23	$0.06	December 31, 2009	$0.25	$0.06
September 30, 2009	$0.26	$0.17	September 30, 2009	$0.25	$0.18
June 30, 2009	$0.32	$0.06	June 30, 2009	$0.30	$0.17
March 31, 2009	$0.12	$0.04	March 31, 2009	$0.15	$0.05

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

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.

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

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

- 17 -

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

Dividend Policy

During the years ended December 31, ~~2009~~2010 and ~~2008~~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, ~~2009~~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, ~~2009~~2010.

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

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

	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	10,620,416
Equity compensation plans not approved by security holders	3,000,000	$0.10	N/A
Total	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, ~~2009~~2010.

- 18 -

Item 6. Selected Financial Data.

Not Applicable.

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

Overview

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

We are engaged in the ~~development and~~ sales and marketing of unified voice messaging ~~software~~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.

~~During~~Our ~~the~~primary ~~year~~focus ~~ended December 31, 2009, we continued the shift of our sales model from a direct sales model to a channel partner model. A channel partner is a party who will purchase our product~~ for ~~resale to telecommunication companies. This fundamentally shifted~~ the ~~way~~last ~~our~~part ~~company was structured. Instead~~ of ~~selling and supporting~~ the ~~customer~~fiscal ~~directly,~~2010 weyear ~~intend~~was ~~to utilize~~ the ~~channel~~license ~~partner~~of ~~to conduct the sales and support activities for~~ our ~~enhanced~~core ~~messaging~~technology ~~software. This shift in our structure allows us~~ to ~~reduce expenses~~transition infrom ~~the~~a ~~areas~~developer of telecommunications ~~support~~platforms ~~and training. This allowed us~~ to ~~stretch~~a ~~the funds~~service weprovider ~~received~~for ~~through~~valued ~~equity and debt financing to execute on our business~~added ~~plan.~~telecommunications offerings.

~~Results~~On ofJanuary ~~Operations~~31, ~~for~~2011, ~~the~~we ~~fiscal~~signed ~~years~~and ~~ended~~closed ~~December~~a 10 year license 31agreement with Applied Voice & Speech Technologies, ~~2009~~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 ~~December~~physical 31assets relating to the Technology, ~~2008~~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.

~~Sales~~- 16 -

~~Sales~~AVST ~~for~~also has the ~~fiscal~~right ~~year~~to ~~ended~~purchase ~~December~~the ~~31,~~Technology ~~2009~~and ~~were~~we ~~$971,768~~have ~~compared~~the right to ~~sales~~sell ofthe ~~$469,793~~Technology for the ~~fiscal~~issuance ~~year~~of ~~ended~~an ~~December~~additional ~~31,~~1% ~~2008,~~Equity ~~representing~~Share aand ~~52%~~an ~~increase~~additional 2.25% ~~Sales~~Equity ~~for~~Share ~~the~~subject ~~fiscal~~to ~~year~~revenue ~~ended~~milestones ~~December 31, 2009 were from product license sales, hardware~~ and ~~software product sales and~~ ~~installation~~2.25% ~~and~~Equity ~~training~~Share ~~services.~~subject ~~Sales~~to ~~for~~ the ~~fiscal~~execution ~~year~~of ~~ended~~long-term ~~December~~distribution ~~31,~~agreements ~~2008~~by ~~were~~AVST. ~~from~~Assuming ~~support~~all ~~services,~~of ~~product~~the ~~license~~performance ~~sales,~~conditions ~~hardware~~are ~~and~~met ~~software product sales~~ and ~~installation~~AVST ~~and~~purchases the ~~training~~Technology, ~~services. For~~ the ~~fiscal~~overall ~~years~~consideration ~~ended December~~for ~~31,~~the ~~2009~~transaction ~~and~~is ~~2008,~~equal weto ~~derived 100~~10% of the ~~our~~issued ~~sales~~and ~~from~~outstanding ~~our~~shares ~~Canadian operations.~~of AVST.

WeOn ~~continue~~March to4, ~~shift~~2011, ~~our~~we ~~sales~~completed ~~approach~~our ~~from~~purchase ~~direct~~of ~~sales~~all toof the ~~sales~~assets ~~through~~(the ~~channel~~“Assets”) ~~partners~~of Tagline Communications Inc. ~~During~~(“Tagline”). ~~the~~In consideration ~~fiscal~~of ~~year~~the ~~ended~~purchase ~~December~~of 31the Assets, ~~2009~~we paid $425,000 to Tagline and issued 1,000,000 of our ~~focus~~common ~~was~~shares (the “Tagline Shares”) to ~~establish~~Tagline ~~and~~at ~~develop~~a deemed price of $0.05 per Tagline Share for total deemed consideration of $475,000. The Assets consist of a ~~relationship~~unified communications platform with acustomers throughout ~~channel~~North ~~partner~~America. Tagline offers the following services either ~~that~~individually ~~would~~or ~~provide~~as usa ~~with~~service ~~opportunities~~bundle: ~~for~~1-800 ~~sales~~numbers, tovoice ~~Tier~~recognition, Ifax ~~telecommunication~~to ~~companies~~email, auto attendant, web based telephony, and conferencing functionality. Tagline has a historically stable user base of small and medium size business ~~enterprises~~ professionals.

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

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

-Sales 19for -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.

~~Operating~~Cost ~~Expenses~~of Sales:

~~Total~~Cost ~~operating~~of ~~costs~~sales ~~for the year ended December 31, 2009~~ were $~~2,059,171~~nil ~~compared~~and to $2474,~~797,283~~767 for the ~~previous~~fiscal ~~year.~~years ~~The decrease in total~~ended ~~costs~~December ~~of $738~~31,~~112,~~ ~~was~~2010 ~~primarily~~and ~~attributable~~2009 torespectively. ~~decreases~~No incosts ~~salaries~~ of ~~approximately~~ ~~$339,000,~~sales ~~stock-based~~were ~~compensation~~associated ~~expenses of approximately~~with ~~$234,000,~~our ~~travel~~sales offor ~~approximately~~fiscal ~~$139,000,~~2010 ~~rent~~as ofall ~~approximately~~sales ~~$80,000,~~for ~~meals and~~fiscal ~~entertainment~~2010 ofrelated ~~approximately~~to ~~$43,000,~~licensing contracts ~~bad~~to ~~debts~~existing ofcustomers. ~~approximately~~Cost ~~$23,000, tradeshow expenses~~ of ~~approximately~~sales ~~$22,000,~~for ~~development~~the ~~costs~~fiscal ofyear ~~approximately~~ended ~~$18,000,~~December ~~bank charges of approximately $11~~31,~~000.~~ ~~There~~2009 were ~~corresponding increases~~related into ~~severance~~hardware ~~costs~~and ofsoftware ~~approximately~~costs ~~$160,000,~~as ~~consulting~~well ~~fees~~as ofcosts ~~approximately~~incurred ~~$39,000~~while ~~and~~providing ~~regulatory~~support ~~fees of approximately $26,000~~ services.

~~Sales~~Operating ~~and Marketing~~ 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 $~~882~~9,~~262~~ 553 and $1882,~~216,691~~262 for the fiscal years ended December 31, ~~2009~~2010 and December 31, ~~2008~~2009, respectively, representing a decrease of $~~334~~872,~~429~~709 or 2798.9% . The decrease was primarily attributable to aour ~~decrease~~efforts ~~in travel~~to ~~costs~~minimize ofsales ~~approximately $129,000, consulting fees of approximately $51,000, meals~~ and ~~entertainment~~marketing ~~of approximately $37,000, salaries of~~activities ~~approximately~~while ~~$36,000,~~we ~~stock-based~~complete ~~compensation~~our ~~expenses~~financial ofrestructuring ~~approximately $35,000, tradeshow costs of approximately $22,000 and courier charges of approximately $6,000~~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 ~~research~~general and administrative ~~development~~ costs consist primarily of ~~development~~ ~~costs,~~ stock-based compensation, personnel costs, ~~data~~professional and ~~voice transmission~~legal costs, consulting fees, travel, and ~~related~~the ~~facility~~lease ~~costs~~of office space. ~~Our~~General ~~research~~ and ~~development~~administrative costs were $~~320~~846,~~760~~282 and $~~632~~856,~~043~~149 for the fiscal years ended December 31, ~~2009~~2010 and ~~2008~~ 2009, respectively, representing a decrease of $~~311~~9,~~283~~867 or ~~49%~~1.1% The decrease was primarily due to a decrease in salaries of approximately $209,000, rent costs of approximately $73,000, stock-based compensation expenses of approximately $51,000, development costs of approximately $18,000 and license costs of approximately $5,000. ~~There was a corresponding increase in consulting fees of approximately $62,000.~~

~~General~~- ~~and~~17 ~~Administrative~~ -

~~Our~~As ~~general~~management ~~and~~has ~~administrative~~made ~~costs~~significant ~~consist~~efforts ~~primarily~~to ~~of stock-based~~reduce ~~compensation, personnel~~ operating costs, ~~professional~~to ~~and~~minimal ~~legal~~operating ~~costs, consulting~~levels ~~fees,~~while ~~travel,~~we ~~and~~complete ~~the~~our ~~lease~~financial ofrestructuring efforts, ~~office~~general ~~space. General~~ and administrative costs ~~were $856,149 and $948,549~~ for ~~the~~ fiscal ~~years~~2010 ~~ended December~~consisted ~~31,~~primarily ~~2009~~of costs ~~and~~associated ~~2008,~~with ~~respectively,~~maintaining ~~representing~~our aregulatory ~~decrease~~filing ~~of $92,400 or 9~~requirements.7% . The ~~decrease was primarily attributed to decreases in stock-based~~cost ~~compensation~~savings ~~expenses~~experienced ofby ~~approximately~~us ~~$147,000,~~for ~~salaries~~fiscal of2010 ~~approximately $94,000,~~have ~~bad~~been ~~debts~~offset ofby ~~approximately~~an ~~$20,000,~~increase ~~bank charges of approximately~~in ~~$11,000~~professional ~~and depreciation of approximately $10,000. There were corresponding increases in severance costs of approximately $160,000, consulting~~ fees ~~of approximately~~relating ~~$28,000~~to ~~and~~our ~~regulatory~~recent ~~fees~~financial ofrestructuring ~~approximately $26,000~~activities.

Interest Expense :

Our interest expense was $~~387~~205,~~300~~590 and $~~880~~387,~~302~~300 for the fiscal years ended December 31, ~~2009~~2010 and ~~2008~~2009 respectively. The interest expense for the fiscal ~~year~~years ended December 31, ~~2009~~2010 ~~includes~~and ~~the~~2009 ~~amortization~~consists of the ~~debt~~stated ~~discount on the Series I notes of $666 (Cdn$760). The~~ interest ~~expense~~rate ~~for~~on the ~~fiscal~~ ~~year~~principal ~~ended~~amount ~~December 31, 2008 includes the amortization~~ of the ~~debt discount~~then onoutstanding ~~the Series C and D~~ notes. The decrease of $11181,~~935~~700 ~~(Cdn$12,645),~~or ~~the~~46.9% ~~amortization of~~is ~~the~~largely ~~15%~~a ~~repayment~~result ~~premium~~ of the ~~Series~~June ~~D note of $1~~30,~~848~~ ~~(Cdn$1,961) issued~~2009 inconversion ~~September 2003 and the amortization~~ of ~~the~~notes ~~deferred~~payable ~~charges~~with ~~relating~~a toprincipal ~~our debt~~amount ~~restructuring transaction in September 2005~~ of ~~$198,185 (~~Cdn$~~210~~6,~~235).~~737,601 ~~The~~into ~~remaining interest expense for the fiscal years ended December 31~~19,250,280 ~~2009~~Series ~~and~~C ~~2008 consists~~convertible ofpreferred ~~the~~shares ~~stated~~at ~~interest~~a rate ~~on the principal amount~~ of ~~the~~Cdn$0.35 ~~then~~per ~~outstanding~~preferred ~~notes~~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.

- 20 -

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

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

AsAt aDecember ~~result~~31, of2010, we had $5,544,360 United States tax net operating losses that will expire in the ~~settlement~~years ~~agreement~~2020 wethrough ~~recorded~~to an2029. ~~unusual~~As at ~~gain~~December 31, 2010 we had Canadian tax non-capital losses of approximately $39,~~195~~549,~~836.~~507 Inthat ~~addition~~will toexpire ~~eliminating~~in the ~~promissory~~years ~~note~~2014 ~~payable, certain~~through ~~assets~~2030. ~~and~~Pursuant ~~liabilities~~to ~~related~~Section 382 toof the ~~promissory~~Internal ~~note~~Revenue ~~payable~~Code, ~~were~~use ~~also~~of our net operating loss carry forwards ~~eliminated~~may bybe ~~the~~limited ~~settlement~~if ~~agreement~~we ~~including~~experience ~~deferred~~a ~~contract~~cumulative ~~costs~~change in ownership of greater than ~~$81,631,~~50% ~~accrued~~in ~~liabilities~~a ofmoving ~~$57,223,~~three ~~accounts~~year ~~payable~~period. ofOwnership ~~$83,730~~changes could impact our ability to utilize net operating losses and credit carry forwards remaining at the ~~deferred~~ownership ~~revenue~~change date. The limitation will be determined by the fair market value of ~~$318~~common stock outstanding prior to the ownership change,~~685.~~ multiplied by the applicable federal rate.

~~Income~~Deferred ~~Taxes~~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.

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

~~Deferred~~Our ~~income~~net ~~taxes~~loss ~~reflect~~was ~~the~~$978,224 ~~net~~for ~~tax~~fiscal ~~effects~~year ofended ~~temporary~~December 31, ~~differences~~2010 ~~between~~compared ~~the~~to ~~carrying~~a ~~amounts~~net income of ~~assets~~$385,381 ~~and~~for ~~liabilities~~the ~~for~~fiscal ~~financial reporting~~year ~~purposes~~ended ~~and~~December ~~the~~31, 2009. ~~amounts~~This ~~used~~represents ~~for~~an ~~income~~increase ~~tax~~in ~~purposes~~loss of $1,363,605. ~~For~~Excluding ~~fiscal~~prior year’s ~~years~~unusual ~~ended~~gain ~~December~~of 31$2,334,841, ~~2009~~we ~~and~~experienced ~~2008~~a ~~respectively~~$971,236 decrease in loss. During fiscal 2010, we ~~recognized~~reduced aoperating ~~valuation~~expenses by $1,189,430 and reduced interest ~~allowance~~expense ~~equal~~by $181,700 as a result of management’s efforts to ~~deferred~~reduce ~~tax~~operating costs ~~assets~~to ~~for~~minimal ~~which~~operating ~~realization~~levels iswhile ~~not~~we ~~more~~completed ~~likely than~~our ~~not~~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.

~~Net~~Since ~~Loss~~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.

Our net gain was $385,381 for fiscal year ended December 31, 2009 and a net loss of $228,754 for the fiscal year ended December 31, 2008. The increase of $614,135 was primarily attributable to an unusual gain on the settlement agreement with Aliant Telecom of approximately $3,196,000. We also had decreases in stock-~~based~~ ~~compensation~~18 expenses of approximately $234,000, interest income of approximately $15,000, development costs of approximately $19,000, salaries of approximately $339,000. travel expenses of approximately $139,000, bad debt expense of approximately $23,000, , tradeshow costs of approximately $22,000, bank charges of approximately $11,000, , rent expenses of approximately $80,000, telecommunication costs of approximately $9,000, meals and entertainment expenses of approximately $43,000, promotional expenses of approximately $5,000, office expenses of approximately $4,000, courier and freight costs of approximately $9,000, dues and subscription expenses of approximately $3,000 and insurance costs of approximately $2,000. There were corresponding increases in consulting fees of approximately $28,000, gross profits of approximately $260,000 and regulatory fees of approximately $26,000. -

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

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

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

Liquidity and Capital Resources

As of December 31, ~~2009~~2010, we had $~~252,260~~431 in cash and net ~~working~~ working capital deficiency of $12,~~871~~400,~~177~~260 and as of December 31, ~~2008~~2009, we had $74252,~~779~~260 in cash and working capital deficiency of $81,~~105~~871,~~369~~177.

~~Between~~On ~~the months of August to~~ November ~~2008~~5, 2009, we ~~issued~~closed a ~~series~~ ofdebt ~~demand~~financing ~~promissory~~for ~~notes to shareholders with a maximum aggregate~~gross ~~principal~~proceeds ~~amount~~ of $1114,~~087,800 (Cdn$1,225,000)~~177. ~~The~~All ~~demand~~of ~~promissory~~the outstanding notes ~~bear interest~~payable atare ~~prime~~denominated ~~plus~~in Canadian ~~4% and is repayable on demand~~dollars. ~~Prime~~Each ~~rate~~unit ~~was~~consists ~~2.25%~~of ~~at December~~a ~~31,~~promissory ~~2009~~note and ~~2.5%~~one ascommon atshare purchase ~~June~~warrant 7,for ~~2010~~each $1.00 Onof ~~September 24, 2008,~~ the ~~Company~~ ~~settled~~principal ~~$217,035~~amount ~~(Cdn$225,000)~~ of ~~the~~each ~~demand~~ promissory ~~notes and paid~~note. ~~the~~The ~~accrued~~fair ~~interest~~value of ~~$1,260~~the ~~(Cdn$1~~120,~~313).~~000 Onwarrants ~~July~~issued 31is $11,843. ~~2009~~The ~~and~~promissory ~~September 9,~~notes ~~2009,~~bear ~~we paid accrued~~ interest ofat ~~$37~~10%,~~293~~ ~~(Cdn$40,929)~~are unsecured and ~~$4,837~~due ~~(Cdn$5,308) respectively~~on demand. InEach ~~January~~share ~~2009~~purchase warrant wewill ~~accessed~~entitle ~~an additional $60,073 (Cdn$73,000) of~~ the ~~principal~~holder ~~amount~~to ~~available.~~purchase Inone ~~July~~common ~~2009,~~share weof ~~accessed~~our ancompany ~~additional $45,842~~at ~~(Cdn$50,000) of~~ the ~~principal~~price ~~amount~~of ~~available. On October 15, 2009, we accessed an additional $95,084 (~~Cdn$~~100,000)~~0.25 ofper ~~the~~share ~~principal~~until ~~amount~~expiry ~~available.~~on On November 5, ~~2009,~~2012. weThe ~~paid~~balance ~~accrued interest~~ of ~~$76,067 (Cdn$80,000). On November~~ ~~12,~~the ~~2009,~~notes ~~November~~payable 30outstanding, ~~2009,~~including ~~December~~principal 9,and ~~2009~~interest, ~~and~~as ~~December~~at 14December 31, ~~2009,~~2010 ~~we accessed~~is ~~an additional~~ $95134,~~084~~630 (~~Cdn$100,000),~~December ~~$47~~31,~~542~~ ~~(Cdn$50,000),~~2009: $9115,~~508 (Cdn$10,000~~992)~~, and $66,559 (Cdn$70,000), respectively, of the principal amount available~~.

AsDuring atthe year ended December 31, ~~2010~~2009, ~~the~~we ~~net~~received ~~principal~~proceeds of ~~amount~~$1,002,789 ~~outstanding~~by way of demand promissory notes and repaid $99,905 of their ~~including~~demand ~~accrued~~promissory ~~interest,~~notes ~~was~~resulting in an outstanding liability of $1,630,046 ~~compared~~as at toDecember 31, 2009. During the year ended December 31, 2010, we received proceeds of $~~724~~68,~~152~~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.

OnDuring ~~October~~the 15year ended December 31, ~~2009~~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 ~~demand~~general ~~promissory~~security ~~note~~agreement over our assets. The secured convertible debentures are repayable one year from the date of issuance we have the right to anprepay all ~~investor~~or ~~with~~any anpart ~~aggregate~~of the secured convertible debentures at anytime without penalty. At any time until the maturity, the principal amount of ~~$93~~the secured convertible debentures may be converted into a conversion unit at the option of the holder of the debenture,~~397~~ ~~(Cdn~~in whole or in part at conversion rate of CDN$~~100,000)~~0.05. ~~The~~A conversion ~~demand~~unit consists of one share of common stock and one warrant. Each ~~promissory~~warrant ~~note~~entitles ~~bears~~the ~~interest~~holder to purchase an additional share of common stock at an ~~prime~~exercise ~~plus~~price 4%of ~~per~~CDN$0.10 ~~annum~~for ~~and~~a isperiod ~~repayable~~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 ~~demand~~of our company.

On ~~November~~June 58, 2009, we ~~closed~~issued a5,000,000 ~~Series~~units Iat ~~notes~~Cdn$0.10 ~~payable~~per unit ~~financing~~ for gross proceeds of Cdn$~~114~~500,~~177~~000. Each unit consists of aone ~~promissory~~share of common ~~note~~stock and one ~~common~~ share purchase warrant, ~~for~~with each ~~$1.00~~warrant ofexercisable ~~the~~for ~~principal amount~~a period of ~~each~~three ~~promissory~~years ~~note.~~at ~~The~~an ~~fair~~exercise ~~value~~price of ~~the 120,000 warrants issued is~~ Cdn$~~11,843~~0.20 ~~The~~per ~~promissory~~share. ~~notes~~We ~~mature~~also ~~in one year~~issued 446,000 ~~bear~~units ~~interest~~as ata ~~10%~~financing fee and ~~are unsecured.~~issued ~~Each~~42,857 ~~share~~common ~~purchase~~shares ~~warrant~~to ~~will~~finders ~~entitle~~of this ~~the~~private ~~holder~~placement. toOn ~~purchase~~February ~~one of~~24, ~~our~~2010, ~~common~~we ~~shares~~issued at4,316,667 ~~the~~units ~~price of~~ at Cdn$0.2506 per ~~share~~unit ~~until~~for ~~expiry~~gross onproceeds ~~November 5,~~of ~~2012~~Cdn$259,000. ~~Upon~~Each ~~receipt,~~unit weconsists ~~used the proceeds~~ of ~~the financing as follows: (i)~~one ~~payment~~share ~~against~~of acommon ~~demand~~stock ~~promissory~~and ~~note~~one inshare ~~the~~purchase ~~amount~~warrant, ofwith ~~Cdn$80,000,~~each ~~(ii)~~warrant ~~first~~exercisable ~~installment~~for ~~payment to the promissory notes held by Mr. Buchamer,~~ a ~~former officer~~period of ~~our~~five ~~company,~~years inat ~~the~~an ~~amount~~exercise price of Cdn$~~25,000,~~0.08. ~~(iii)~~We ~~salary to Mr.~~also ~~Buchamer~~issued ~~of Cdn$7~~323,~~083~~750 ~~and~~common ~~(iv)~~shares ~~legal~~to ~~fees~~finders of ~~Cdn$10,000.~~this private placement.

OnDuring ~~November~~the 12year end December 31, 2009, wethe ~~issued~~holders aof the Series C, ~~demand~~D, ~~promissory~~E, ~~note~~F, toG ~~an investor~~and ~~with~~H annotes ~~aggregate~~payable exchanged the principal amount for an aggregate issuance of ~~$93~~19,~~397~~250,280 ~~(Cdn~~Series C convertible preferred shares and the accrued interest was forgiven. As a result, we recorded a gain of $~~100~~2,~~000)~~334,841 in fiscal 2009. ~~The~~In ~~demand~~addition to eliminating the Series C, D, E, F, G and H notes ~~promissory~~payable, ~~note~~the ~~bears~~remaining ~~interest~~balance atof ~~prime~~the ~~plus~~deferred 4%financing ~~per~~costs ~~annum~~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 ~~repayable~~recorded on the balance sheet (December 31, ~~demand~~2009: 6,410,657).

InOn ~~addition,~~March ~~we entered into a loan agreement dated November 2~~4, ~~2009~~ ~~with Randy Buchamer~~2011, ~~our former Chief Executive Officer and director who resigned from such positions on October 13, 2009, whereby~~ we ~~agreed~~issued toa ~~repay outstanding~~secured ~~promissory~~non-convertible ~~notes~~ debenture in the ~~aggregate principal~~ amount of $~~150~~580,000 ~~to Mr~~. ~~Buchamer~~We ~~based~~used ~~upon the following schedule: (i)~~ $25425,000 onof ~~November 2, 2009; (ii) $62,500 on March 31, 2010; and (iii) $62,500 on July 31, 2010. The principal amount outstanding bears interest at~~ the ~~rate~~debenture ~~equal~~proceeds to finance the ~~HSBC~~acquisition ~~Prime~~of ~~Rate~~Tagline ~~plus 4%~~Communications ~~per annum~~Inc., ~~compounded~~as ~~annually,~~described ~~with~~under ~~interest payable on~~ the ~~date of~~heading ~~repayment~~“Business as— ~~follows:~~Corporate ~~(i)~~Developments”. asWe toused $35115,000 of the ~~principal~~proceeds ~~amount,~~to ~~from February~~settle ~~16,~~a ~~2009~~debt towith ~~the~~a ~~date~~secured ofcreditor. ~~repayment;~~The ~~and~~remaining ~~(ii) as to~~ $~~115~~40,000 ofwill ~~the~~be ~~principal amount,~~used ~~from~~for ~~March~~general working ~~31,~~capital. The ~~2009~~debenture tois ~~the~~repayable ~~date~~on ofJuly ~~repayment.~~1, In2011 ~~connection~~and ~~with~~bears ~~Mr.~~interest ~~Buchamer’s~~at ~~resignation, we also agreed to pay him~~ the ~~sum~~rate of ~~$170,000 over a period of~~ 12% ~~months~~per ~~payable in bi-weekly installments and continue to extend Mr~~annum. ~~Buchamer’s~~ ~~previous~~In ~~health~~the ~~and~~event ~~welfare~~of ~~benefits~~default ~~for~~under the ~~same 12 month period~~debenture, orthe ~~such~~interest ~~earlier~~rate ~~date that Mr. Buchamer~~ becomes ~~employed~~20% byper ~~another employer~~annum. AsThe ~~Mr. Buchamer~~debenture ~~has~~is ~~agreed~~secured toby ~~remain~~way asof a ~~consultant~~charge over all of our ~~company~~present ~~following~~and ~~his resignation,~~after-acquired weproperty ~~have~~and ~~agreed to pay Mr~~assets. ~~Buchamer~~We ~~a service fee of $30,000 payable~~issued ~~in three equal installments of $10~~1,500,000 ~~each~~common onshares ~~November~~as ~~15,~~additional ~~2009,~~consideration ~~December~~for ~~15, 2009~~the ~~and~~debenture ~~January 15, 2010~~financing.

- 2219 -

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

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

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

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

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

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

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

Operating Activities

Our operating activities resulted in net cash outflows of ~~$1.3~~ ~~million~~$614,606 and $~~2.3~~1,348,971 ~~million~~ for the fiscal years ended December 31, ~~2009~~2010 and ~~2008~~2009 respectively. The operating cash outflows for ~~these~~the ~~periods~~year resulted from the general ~~investments~~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 ~~research~~outflows ~~and~~relative ~~development~~to ~~and~~the prior year is a result of the significant reduction in sales and marketing, ~~which~~as ~~led~~well toas research and development ~~operating~~activities, ~~losses~~as inwe ~~all~~completes ~~periods.~~our financial restructuring.

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Investing Activities

~~Investing~~The investing activities ~~resulted~~ in ~~net cash outflows of $21,483 for the~~ fiscal ~~year~~2010 ~~ended~~and ~~December 31,~~ 2009. ~~These outflows~~ were ~~used to~~limited ~~purchase~~due to ~~purchase~~our ~~property~~cash ~~and~~conservation ~~equipment~~plans. Investing activities resulted in net cash outflows ~~inflows~~ of $~~3,267~~nil for the fiscal year ended December 31, ~~2008~~2010. ~~During~~Investing ~~the~~activities ~~fiscal~~resulted ~~year~~in ~~ended~~net ~~2008,~~cash weoutflows ~~received proceeds~~ of $821,~~400~~483 ~~from~~for the ~~sale~~fiscal ofyear ended ~~property~~December ~~and equipment and spent $5~~31,~~133~~ ~~on property and equipment purchased during the period~~2009. ~~The~~These ~~investing~~outflows ~~activities in fiscal 2009 and 2008~~ were ~~limited due~~used to ~~our~~purchase ~~cash~~to ~~conservation~~purchase ~~plans~~property and equipment. At December 31, ~~2009~~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.

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

Debt Obligations

As at December 31, ~~2009~~2010, we had $12,~~746~~053,~~038~~342 in debt obligations and accrued interest with maturity dates as follows:

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

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	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, ~~2010~~2011. Management projects that we may require an additional $~~2.5~~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 24have -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.

WeDue ~~currently~~to ~~anticipate that we will generate revenues in~~ the ~~long-term~~ asuncertainty weof ~~increase~~ our ~~sales~~ability ~~and~~to ~~marketing~~meet ~~activities~~our ~~and gain acceptance~~current ofoperating ~~our~~and ~~software~~capital ~~from~~expenses, ~~Tier~~in 1their ~~telecommunications~~report ~~companies~~on ~~and~~the ~~small~~annual ~~and medium~~consolidated ~~sized~~financial ~~business~~statements ~~enterprises.~~for Wethe ~~have~~year ~~implemented~~ended ~~cost~~December ~~reductions~~31, ~~and~~2010, ~~expect to keep~~ our ~~operating costs to a minimum until cash is available through financing~~independent orregistered ~~operating~~public ~~activities.~~accounting ~~Based~~firm onincluded ~~current~~an ~~projections,~~explanatory weparagraph ~~anticipate revenues~~regarding ~~from~~concerns ~~telecommunications~~about ~~providers~~our inability ~~2010~~ to becontinue ~~generated~~as ~~through~~a ~~the replacement~~going ofconcern ~~legacy~~in ~~voicemail~~their ~~systems or new deployments by such providers.~~audit report.

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

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Off-Balance Sheet Arrangements

As of December 31, ~~2009~~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.

- 2522 -

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, ~~2009~~2010 and December 31, 2009 and the related consolidated statements of operations ~~and comprehensive loss~~, stockholders’ deficit and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our ~~audit~~audits. The consolidated financial statements as of December 31, 2008 were audited by other auditors whose report dated March 20, 2009 expressed an unqualified opinion on those financial statements. Our opinion, insofar as it relates to amounts included for such prior periods, is based solely on the report of such other auditors.

We conducted our ~~audit~~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, ~~based on our audit and the report of other auditors,~~ these financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 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 ~~since inception~~ from operations and requires additional funds to meet its obligations and fund the costs of its ongoing operations. These factors ~~raise~~ 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~~ financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ DMCL

DALE MATHESON CARR-HILTON LABONTE ~~LLP~~ LLPCHARTERED ~~CHARTERED~~ ACCOUNTANTS

Vancouver, Canada ~~June~~April 118, ~~2010~~ 2011

- 224 -

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

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

		As at December 31
		2010			2009

ASSETS
Current
Cash	$	431		$	252,260
Accounts receivable		23,039			18,861
Other receivables		-			3,701
Prepaid expenses		-			14,430
Total current assets		23,470			289,252

Equipment		10,221			25,057
Total assets	$	33,691		$	314,309

LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current
Accounts payable	$	245,388		$	237,140
Accrued liabilities		125,000			177,251
Convertible debentures		237,040			-
Demand promissory notes		1,681,672			1,630,046
Notes payable		134,630			115,992
Total current liabilities		2,423,730			2,160,429

Mezzanine Equity
Series C Convertible preferred stock		6,773,984			6,410,657

Stockholders' deficiency
Common stock, $0.001 par value, authorized 100,000,000 67,271,845 outstanding [2009 - 62,631,428]		67,272			62,631
Preferred stock, $0.001 par value, authorized 1,000,000 Series A Preferred stock, 1 outstanding		1			1
Additional paid-in capital		43,648,249			43,054,660
Obligation to issue shares		-			57,088
Accumulated deficit		(50,761,492	)		(49,783,268	)
Other accumulated comprehensive loss		(2,118,053	)		(1,647,889	)
Total stockholders' deficit		(9,164,023	)		(8,256,777	)
Total liabilities and stockholders' deficit	$	33,691		$	314,309

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

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

~~See~~- ~~accompanying~~25 ~~notes~~-

-Voice 3Mobility -International, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in U.S. Dollars)

Voice Mobility International, Inc.

		For the year ended
		December 31
		2010			2009

Sales	$	97,107		$	971,768
Cost of sales		-			474,767
Gross profit		97,107			497,001

Operating expenses
Sales and marketing		9,553			882,262
Research and development		13,906			320,760
General and administrative		846,282			856,149
Interest		205,590			387,290
		1,075,331			2,446,461

Gain on exchange agreement		-			2,334,841
Net income (loss)	$	(978,224	)	$	385,381


Weighted average shares outstanding – basic and diluted		66,297,638			59,937,935

Basic and diluted (loss) income per share	$	(0.01	)	$	0.01

~~CONSOLIDATED~~The ~~STATEMENTS~~accompanying OFnotes ~~OPERATIONS~~are ~~AND~~an ~~COMPREHENSIVE~~integral ~~LOSS~~part of these ~~(Expressed~~financial ~~in U~~statements.~~S. Dollars)~~

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

- 26 -

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

- 4 -

	Mezzanine Equity			Stockholders’ Deficiency
	Preferred Stock Series C			Common Stock						Preferred Stock Series A				Additional Paid-in Capital			Accumulated Deficit			Comprehensive Loss			Total
	Preferred Stock Series C			Common Stock						Preferred Stock Series A
	Number of Shares #		Amount	Number of Shares #		Amount		Obligation Amount		Number of Shares #		Amount
Balance, 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			-			-			422,115
Preferred stock issued pursuant to Exchange Agreement	19,250,280		5,793,294	-		-		-		-		-		-			-			-			-
Stock based compensation	-		-	-		-		-		-		-		132,507			-			-			132,507
Obligation to issue shares	-		-	-		-		57,088		-		-		-			-			-			57,088
Components of comprehensive income/(loss):
Net income	-		-	-		-		-		-		-		-			385,381			-			385,381
Foreign 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			-			-			183,077
Net 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						-			188,131
Finders’ fee - share issuance	-		-	323,750		324		-		-		-		(324	)		-			-			-
Fair value of equity component on secured convertible debentures	-		-	-		-		-		-		-		169,934			-			-			169,934
Balance, 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	)

~~Voice~~The ~~Mobility~~accompanying ~~International,~~notes ~~Inc.~~are an integral part of these financial statements.

~~CONSOLIDATED~~- ~~STATEMENTS~~27 ~~OF STOCKHOLDERS' DEFICIT~~-

~~Year~~Voice ~~ended~~Mobility ~~December~~International, 31Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS (~~expressed~~Expressed in U.S. ~~dollars~~Dollars)

		Common Stock					Obligation	Series A Preferred Stock		Series C Preferred Stock		Additional			Other
		Year ended December 31
															Accumulated
		2010			2009
		Number					To issue	Number		Number		Paid-in	Accumulated		Comprehensive
OPERATING ACTIVITIES
		of Shares			Amount		Amount	of Shares	Amount	of Shares	Amount	Capital	Deficit		Loss		Total
Net income (loss)	$	(978,224	)	$	385,381
		#			$		$	#	$	#	$	$	$		$		$
Non-cash items included in net loss
Balance, December 31, 2007		56,842,571			56,843			1	1			42,151,402	(49,939,895	)	(2,898,980	)	(10,630,629	)
Amortization of equipment		14,009			10,888
Stock based compensation		-			-			-	-			354,424	-		-		354,424
Amortization of deferred finance costs		-			88,053
Net loss		-			-			-	-			-	(228,754	)	-		(228,754	)
Non-cash interest expense		205,590			11,843
Foreign currency translation gain		-			-			-	-			-	-		2,399,590		2,399,590
Stock based compensation		183,077			120,664
Total comprehensive income / (loss)																	2,170,836
Gain on exchange agreement		-			(2,334,841	)
Balance, December 31, 2008		56,842,571			56,843			1	1			42,505,826	(50,168,649	)	(499,390	)	(8,105,369	)
Net change in operating assets and liabilities:
Common stock issued pursuant to private placement		5,488,857			5,488							416,627					422,115
Accounts and other receivables		(477	)		206,937
Preferred stock issued pursuant to Exchange Agreement										19,250,280	5,793,294						5,793,294
Prepaid expenses		14,430			11,683
Stock based compensation		-			-			-	-			132,507	-		-		132,507
Inventory		-			64,780
Obligation to issue shares							57,088										57,088
Accounts payable and accrued liabilities		(53,011	)		80,817
Components of comprehensive income / (loss):
Accrued interest on promissory notes		-			4,824
Net income		-			-			-	-			-	385,381		-		385,381
Cash used in operating activities		(614,606	)		(1,348,971	)
Foreign exchange G/L on Series C Preferred Shares											617,363				(617,363	)	-
INVESTING ACTIVITIES
Foreign currency translation gain		-			-			-	-			-	-		(531,136	)	(531,136	)
Purchase of equipment		-			(21,483	)
Total comprehensive loss																	(119,446	)
Cash used in investing activities		-			(21,483	)
Balance, December 31, 2009		62,331,428			62,331		57,088	1	1	19,250,280	6,410,657	43,054,960	(49,783,268	)	(1,647,890	)	(1,846,120	)
FINANCING ACTIVITIES
Proceeds from issuance of common stock, net of share issue costs		188,131			479,203
Proceeds from secured convertible debentures		314,242			-
Proceeds on demand promissory notes payable		68,358			1,002,789
Repayment of demand promissory notes payable		(192,720	)		(99,905	)
Proceeds from Series I promissory notes		-			114,117
Cash provided by financing activities		378,011			1,496,264
Effect of change in foreign exchange rate on cash		(15,234	)		51,671
Increase (decrease) in cash for the year		(251,829	)		177,481
Cash, beginning		252,260			74,779
Cash, ending	$	431		$	252,260
Supplemental cash flow information
Cash paid for:
Interest	$			$	65,751
Income tax	$	-		$	-

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

- 528 -

~~Voice~~VOICE ~~Mobility~~MOBILITY ~~International~~INTERNATIONAL, ~~Inc~~INC. Notes to the Consolidated Financial Statements December 31, 2010

~~CONSOLIDATED~~1. ~~STATEMENTS~~NATURE OF ~~CASH~~BUSINESS ~~FLOWS~~AND ~~(Expressed~~BASIS ~~in U.S.~~OF ~~Dollars)~~ PRESENTATION

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

Nature of Business

~~See~~Voice ~~accompanying~~Mobility ~~notes~~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 6March -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).

~~VOICE~~Basis ~~MOBILITY~~of ~~INTERNATIONAL, INC. Notes to the Consolidated Financial Statements December 31, 2009~~ Presentation

1The 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. ~~NATURE~~The OFCompany ~~OPERATIONS~~has ~~AND~~incurred ~~BASIS~~significant OFlosses ~~PRESENTATION~~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).

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

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

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

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

2. SIGNIFICANT ACCOUNTING POLICIES

Principles of 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~~accompanying ofconsolidated financial statements ininclude ~~conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect~~ the ~~reported~~ ~~amounts~~accounts of ~~assets~~the ~~and~~Company ~~liabilities~~ and ~~disclosures~~its ofwholly-owned ~~contingent~~subsidiaries, ~~assets~~Voice ~~and~~Mobility Inc. ~~liabilities~~(“VMI”), atVoice ~~the~~Mobility ~~date~~(US), ofInc., ~~the~~Voice ~~financial~~Mobility ~~statements~~Canada Limited and ~~the~~VM ~~reported amounts of~~Sub ~~revenues~~Limited. ~~and~~All ~~expenses.~~intercompany ~~Actual~~balances ~~results~~and ~~could~~transactions ~~differ~~have ~~from~~been ~~those~~eliminated ~~estimates~~on consolidation.

-Use 7of - estimates

~~Revenue~~The ~~recognition~~preparation ~~Revenues~~of ~~are~~financial ~~derived~~statements ~~from~~in ~~sales~~conformity with U.S. ofgenerally ~~software~~accepted ~~licenses,~~accounting ~~hardware,~~principles ~~maintenance,~~(“GAAP”) ~~training~~requires ~~services~~management ~~and~~to ~~language~~make ~~localization~~estimates ~~services.~~and ~~The~~assumptions ~~Company~~that ~~has~~affect ~~sold~~the ~~software~~reported ~~licenses~~amounts ~~with~~of ~~maintenance~~assets and liabilities and ~~training~~disclosures ~~services,~~of ~~hardware~~contingent onassets aand ~~stand-alone~~liabilities ~~basis~~at ~~and~~the ~~bundled~~date ~~arrangements~~of ~~including~~the ~~software,~~financial ~~hardware~~statements and ~~maintenance~~the ~~and~~reported ~~training~~amounts ~~services.~~of ~~The~~revenues ~~Company~~and expenses. ~~generally~~Actual ~~licenses~~results ~~software~~could todiffer ~~customers~~from ~~for~~those ~~an indefinite period of time~~estimates.

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

~~For~~Revenues ~~software~~are ~~arrangements~~derived ~~involving~~from ~~multiple~~sales ~~elements,~~of ~~the Company~~software ~~allocates~~licenses. Software revenue tois ~~each~~recognized ~~element~~when ~~based~~persuasive ~~on vendor specific objective~~ evidence of ~~relative~~an ~~fair~~arrangement ~~values~~exists, ~~which~~the ~~are~~fee is ~~derived~~fixed byor ~~allocating~~determinable aand ~~value~~collection ~~to each~~is ~~element~~reasonably ~~that~~assured. isFees ~~based~~are considered ~~upon~~fixed ~~the~~or ~~prices~~determinable ~~charged~~if ~~when~~ the ~~element~~contracts isare ~~sold~~similar to others for ~~separately.~~which Ifthe ~~vendor~~Company ~~specific~~has ~~objective~~a ~~evidence~~standard ~~does~~business ~~not~~practice ~~exist,~~and ~~the~~a ~~revenue~~history isof successful ~~recognized~~collection ~~upon~~under ~~delivery~~the oforiginal ~~all~~payment ~~elements~~terms. ~~The~~Revenues ~~Company's~~from ~~product~~consulting and maintenance ~~services~~ are ~~generally~~ ~~sold~~recognized asratably ~~part~~over ofthe aterm ~~contract~~of ~~involving~~the ~~software~~arrangement, ~~hardware~~generally one year, ~~maintenance~~ and revenues from training are generally recognized as the services are performed.

~~Revenues~~- ~~from~~29 ~~consulting and maintenance are recognized ratably over the term of the arrangement, generally one year, and revenues from training are generally recognized as the services are performed.~~ -

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

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 and notes payable approximates their carrying value due to their short-term nature.

~~Equipment~~The ~~Property~~estimated ~~and~~fair ~~equipment~~values ~~are~~for ~~recorded~~financial instruments are determined at discrete points in time based on relevant market information. ~~cost~~These estimates involve uncertainties and cannot be determined with precision. The ~~Amortization~~estimated isfair ~~provided~~value ~~using~~of ~~the~~cash, ~~straight-line~~accounts ~~method~~receivable, ~~over~~other ~~the~~receivables, account ~~assets~~payable, amounts due to related parties, convertible debt, demand ~~estimated~~promissory ~~useful~~notes ~~lives~~and asnotes ~~follows:~~payable approximate their carrying value due to their short-term nature.

Computer equipment	3 years
Computer software	2 years
Office equipment and furniture	5 years
Leasehold improvements	Term of the lease

Equipment

~~Software~~Equipment ~~development~~is ~~costs~~recorded ~~Costs~~at ~~incurred~~cost. ~~internally to~~Amortization ~~develop~~is ~~computer~~provided ~~software products and the costs to acquire externally~~using ~~developed software products (which have no alternative future use) to be sold, leased or otherwise marketed are charged to expense until~~ the ~~technological feasibility~~straight-line ofmethod ~~the~~over ~~product has been established. After technological feasibility is established and until~~ the ~~product~~assets isestimated ~~available~~useful ~~for~~lives ~~general~~as ~~release, software~~follows: ~~development,~~Computer ~~product~~equipment ~~enhancements~~3 ~~and acquisition costs are capitalized and amortized on a product-by-product basis~~years.

Stock-based ~~8 -~~ compensation

~~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. ~~Upon the exercise of the stock options, the consideration paid is recorded as an increase in share capital.~~

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

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~~ statement carrying amounts of assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax ~~rates~~ 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~~Basic ~~Accounting~~income ~~Pronouncements~~(loss) ~~The~~per ~~Company~~share ~~has reviewed~~is ~~issued~~computed ~~accounting~~by ~~pronouncements~~dividing ~~and~~income (loss) ~~plans~~available to ~~adopt~~common ~~those~~stockholders ~~that~~by ~~are applicable~~the toweighted ~~it.~~average Itnumber ~~does~~of ~~not~~common stock ~~expect~~and ~~the~~exchangeable ~~adoption~~shares ofoutstanding ~~these~~for ~~pronouncements~~the toperiod. Diluted income (loss) ~~have~~per anshare ~~impact~~reflects onthe dilutive potential of outstanding securities using the treasury ~~financial~~stock ~~statements~~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	$	23,~~226~~002,~~770~~081	$	2,~~206~~977,~~216~~024	$	2025,~~554~~057
Computer software		639,447		639,083		364
Office equipment and furniture		142,997		141,519		4,216
Leasehold improvements		7,867		5,206		2,661
		3,017,081		2,992,023		25,057
2008
Computer equipment		1,907,660		1,896,680		10,980
Computer software		551,773		550,814		959
Office equipment and furniture		123,391		120,868		2,523
Leasehold improvements		30,279		30,279		-
		2,613,103		2,598,641		14,462

- 9 -

4. ECONOMIC DEPENDENCE

Sales to ~~two customers comprised 65% of revenue in 2009. Sales to~~ one customer comprised 15100% of revenue ~~and~~(2009 ~~sales~~– ~~to four other customers~~two ~~comprise~~customers comprised 65% of revenue ~~in 2008~~).

5. DEMAND PROMISSORY NOTES

		December 31, 2009		December 31, 2008
		December 31,		December 31,
Principal		1,622,265		720,033
		2010		2009
Accrued interest		7,781		4,119
Principal	$	1,575,964	$	1,622,265
Total demand promissory notes		1,630,046		724,152
Accrued interest		105,708		7,781
Total demand promissory notes	$	1,681,672	$	1,630,046

~~During~~The ~~the~~demand ~~year~~promissory ~~ended~~notes ~~December~~bear ~~31,~~interest ~~2009,~~at ~~the~~prime ~~Company~~plus ~~issued~~4% aper annum, due on demand ~~promissory~~and ~~note~~are ~~for~~repayable ain ~~principal~~Canadian dollars. At December 31, 2010, an amount of $~~951,475 (Cdn$~~1,~~000~~573,~~000),~~988 is due to former directors of the Company or to ~~[(2008~~companies –controlled ~~716,152),~~by former directors (~~Cdn~~2009 - $~~877~~770,~~000~~695)]. The ~~demand~~amount ~~promissory note bears interest at~~is ~~prime~~secured ~~plus~~by ~~1.5%~~way ~~monthly~~of ~~with~~ 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.

~~During the year ended December 31, 2009, the Company issued a series of demand promissory notes with an aggregate principal amount of $770,695 (Cdn$810,000)~~6. ~~The~~NOTES demand promissory notes bear interest at prime plus 4% and are unsecured. During the year the company repaid $99,905 (Cdn$105,000). At December 31, 2009 the principal balance of these outstanding notes is $670,790 (Cdn$705,000). PAYABLE

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

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

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

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.

Exchange agreement During the year end December 31, 2009, the holders of the Series C, D, E, F, G and H notes payable owing to directors of the Company or relatives of directors of the Company exchanged the principal amount for an aggregate issuance of 19,250,280 Series C convertible preferred shares and the accrued interest was forgiven (See Note 6)7. AsCONVERTIBLE 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. DEBENTURES

~~The~~During ~~Company~~the ~~has~~year ~~classified~~ended ~~the~~December ~~Series~~31, C2010, ~~convertible~~the ~~preferred~~Company issued ~~share~~secured inconvertible ~~mezzanine~~debentures ~~equity~~for ingross ~~the~~proceeds ~~financial~~of ~~statements~~$314,242. ~~The~~A ~~Series C convertible~~$169,934 ~~preferred~~discount ~~shares~~on ~~includes~~the adebt ~~feature~~was ~~whereby~~recorded ~~holders~~due ofto hethe ~~Series~~beneficial Cconversion ~~convertible~~features ~~preferred~~provided. ~~shares~~These ~~may~~secured ~~demand~~convertible ~~cash~~debentures inhave ~~exchange~~an ~~for~~effective ~~their~~interest ~~securities after ten~~rate ~~years~~of ~~and~~141%, ~~according~~are tosecured ~~ASR~~by ~~268,~~means ~~The~~of ~~Company~~a ~~must~~GSA ~~reflect~~over the ~~maximum~~Company’s ~~possible~~assets, and are ~~cash~~repayable ~~obligation~~one ~~related~~year tofrom the ~~Series~~date ~~C convertible preferred shares outside~~ of ~~permanent~~ ~~equity~~issuance. ~~Shares~~The ~~redeemable~~Company athas the ~~holder’s~~right ~~option~~to prepay ~~are~~all ~~treated~~or ~~as contingently~~any ~~redeemable~~part ~~shares~~of ~~and~~the ~~are~~secured ~~presented~~convertible ~~outside~~debentures ofat ~~shareholders’~~anytime ~~equity~~without ~~in mezzanine equity~~penalty.

- 1031 -

OnAt ~~November~~any 5,time ~~2009,~~until the ~~Company~~maturity, ~~closed~~the aprincipal ~~Series~~amount Iof ~~notes~~the ~~payable~~secured ~~unit~~convertible ~~financing~~debentures ~~for~~may ~~gross~~be ~~proceeds~~converted ofinto ~~$114,177.~~a ~~Each~~conversion unit ~~consists~~at ~~of a~~the ~~promissory~~option ~~note and one common share purchase warrant for each $1.00~~ of the ~~principal~~ ~~amount~~holder of ~~each~~the ~~promissory~~debenture, ~~note.~~in ~~The~~whole ~~fair~~or ~~value~~in ofpart ~~the~~at ~~120,000~~conversion ~~warrants issued~~rate is of Cdn$~~11,843~~0.05. ~~The~~A ~~promissory~~conversion ~~notes~~unit ~~mature~~consists inof one ~~year,~~share ~~bear~~of ~~interest~~common atstock ~~10%~~ and ~~are unsecured~~one warrant. Each ~~share purchase~~ warrant ~~will~~entitles ~~entitle~~ the holder to purchase ~~one~~an ~~common~~additional share of common ~~the~~stock ~~Company~~ at ~~the~~an exercise price of Cdn$0.2510 ~~per~~for ~~share until~~a ~~expiry~~period onof ~~November~~two 5,years ~~2012.~~from ~~All~~the date of conversion. At the ~~outstanding~~time ~~notes~~of ~~payable~~conversion, ~~are denominated~~the indebenture ~~Canadian~~holder ~~dollars~~may ~~and~~elect ~~include~~to have the accrued interest on these debentures converted into shares of common stock of the Company.

68. SHARE CAPITAL

[a] Issued and Authorized

[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

~~Authorized: 100,000,000~~Series ~~shares~~C ofConvertible ~~common stock,~~Preferred ~~par value $0.001 21,000,000 shares of preferred stock, par value $0.001~~ Stock

~~Series~~On ~~C Convertible Preferred Stock Following receipt of shareholder approval at the Company’s annual and special meeting held on~~ June 1130, 2009, the Company ~~closed the exchange agreement dated April 16, 2009 on June 30, 2009. The Company~~ entered into ~~the~~an exchange agreement with ~~Voice Mobility Inc~~VMI., a wholly-owned operating subsidiary of the Company, and ~~seven~~the ~~persons~~holders ~~who~~of ~~held~~ the Series C, D, E, F, G and H notes payable with aaggregate principal ~~amount~~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 or retraction amount that may be payable by the Company to the holders of the convertible preferred shares upon the redemption or retraction of such shares. On June 30, 2009, VMI entered into a ~~general~~GSA ~~security agreement~~ whereby it agreed to grant a fixed security interest in favor of the holders in all personal property held and a floating charge against all real and personal property held or later acquired by VMI.

The Series C convertible preferred shares are convertible into common shares ~~in the capital of the Company~~ on a one for one basis, retractable by the holder following the ten year anniversary from the date of grant at Cdn$0.35 per share and 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 June 8, 2009, the Company issued 5,000,000 units at $0.09 (Cdn$0.10) per unit for net cash proceeds of $422,115 (Cdn$474,035). Each unit consists of one share of common stock and one share purchase warrant, with each warrant exercisable for a period of three years at an exercise price of $0.17 (Cdn$0.20) per share. The Company also issued 446,000 units as a financing fee.

~~[b]~~On ~~Stock~~February ~~options~~24, ~~The~~2010, ~~stock~~the ~~option~~Company ~~plan~~issued ~~("Plan")~~4,316,667 units at ~~authorizes~~Cdn$0.06 anper ~~aggregate~~unit ~~amount~~for gross proceeds of 12Cdn$259,000~~,000~~. ~~common~~Each ~~shares~~unit toconsists beof ~~issued pursuant~~one tocommon ~~the~~share ~~exercise~~and ofone ~~stock~~share ~~options.~~purchase ~~Option~~warrant, ~~awards~~with ~~are~~each ~~generally~~warrant ~~granted~~exercisable ~~with~~for ana ~~exercise~~period ~~price~~of ~~equal~~five toyears ~~the~~at ~~market~~an exercise price of ~~the~~Cdn$0.08. The Company’s ~~stock~~also ~~at the date of~~issued ~~grant;~~323,750 ~~those~~common ~~option~~shares ~~awards~~to ~~generally~~finders ~~vest based on 3 years~~ of ~~continuous~~this ~~service and~~private ~~have 5-year contractual terms~~placement.

	Options Outstanding
			Exercise	Weighted
	Number		Price	Average
	of Shares		per Share	Exercise Price
Balance, December 31, 2007	7,724,884		$0.23 - $1.31	$0.71
Options granted	1,235,000		$0.16 - $0.19	$0.17
Options expired and cancelled	(1,226,299	)	$0.22 – $1.07	$0.45
Balance, December 31, 2008	7,733,585		$0.17 - $0.95	$0.53
Options expired and cancelled	(3,144,694	)	$0.20 - $1.10	$0.80
Balance, December 31, 2009	4,588,891		$0.20 – $1.02	$0.56

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] 11Stock - options

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

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.

~~Total stock~~-~~based~~ ~~compensation~~32 ~~for the year ended December 31, 2009 includes stock~~-~~based compensation expense related to employees of $120,664 (2008 - $354,424) reported in the statement of operations as follows:~~

	2009		2008
The following is a summary of the Company’s stock option activity:
	$		$
	Options Outstanding
Stock-based compensation
Balance, December 31, 2008	7,733,585
Sales and marketing	64,575		79,842
Options expired and cancelled	(3,144,694	)
Research and development	44,239		62,384
Balance, December 31, 2009	4,588,891
General and administrative	11,850		212,198
Options expired and cancelled	(3,709,307	)
Total stock-based compensation	120,664		354,424
Options granted	3,000,000
Balance, December 31, 2010	3,879,584

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

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

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:

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

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

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

[d] Warrants

- 12 -

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

[c] Warrants

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

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

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

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

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

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

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

7.- ~~INCOME~~33 ~~TAX~~ -

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:

		2009			2008
		2010			2009
		$			$
Statutory income tax rate		35%			35%
Statutory income tax rates		35%			35%
Net income (loss)	$	(978,224	)	$	385,381
Net income (loss)		385,381			(228,574	)
Expected in tax recovery at statutory income tax rates	$	(342,378	)	$	134,883
Expected tax expense (recovery)		134,883			(80,000	)
Higher effective tax rate of Canadian subsidiary		(98,639	)		(165,650	)
Higher effective tax rate of Canadian subsidiary		(165,650	)		(729,000	)
Change in valuation allowance		(470,208	)		(904,829	)
Change in valuation allowance		(904,828	)		(729,000	)
Change in tax rate applied in valuation allowance		(53,113	)		9,552
Change in tax rate applied in valuation		9,552			(7,000	)
Imputed interest		56,777			73,303
Imputed interest		73,303			222,000
Expiration of loss carry forwards		767,028			805,382
Expiration of loss carry forwards		805,382			-
Non-deductible expenses and other		140,534			47,358
Non-deductible expenses		47,358			653,000
Income tax expense	$	-		$	-
Income tax expense		-			-

-Deferred 13tax -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.

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

Significant components of the Company's deferred tax assets as of December 31 are as follows:
		2010			2009
Deferred potential income tax assets
Net operating loss carry forwards	$	1,940,526		$	1,767,781
Non-capital loss carry forwards		2,387,377			2,840,232
Equipment		1,230,870			1,227,374
Unrealized foreign exchange		-			216,077
Other		35,639			4,600
		5,594,411			6,056,064
Valuation allowance		(5,594,411	)		(6,056,064	)
	$	-		$	-

~~Significant~~- ~~components~~34 ~~of the Company's deferred tax assets as of December 31 are as follows:~~ -

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

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

~~Canada~~	Canada	$
2010		2,147,594
	2014	$	2,655,634
2014		2,655,634
	2016		1,785,913
2015		1,785,913
	2026		1,706,040
2026		1,706,040
	2027		1,801,399
2027		1,801,399
	2029		1,068,274
2029		1,264,348
	2030		532,247
~~Total Canada~~	Total Canada	~~11,360,928~~$	9,549,507
~~U.S.~~	U.S.
~~2020~~	2020	~~2,301,382~~$	2,178,194
~~2021~~	2021	~~2,338,944~~	2,338,944
~~2022~~	2022	~~258,969~~	258,969
~~2024~~	2024	~~292,971~~	292,971
~~2028~~	2028	~~194,651~~	194,651
~~2029~~	2029	~~(336,114~~	)280,631
Total US		5,050,803
	Total U.S.	$	5,544,360
		16,411,731
	Grand 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.

810. RELATED PARTY TRANSACTIONS

InDuring ~~May~~the ~~2009~~year ended December 31, 2010, the Company ~~obtained~~incurred $68,528 ain ~~loan~~consulting ~~from~~fees to a company controlled by a ~~shareholder~~director inand officer of the ~~amount~~Company. ofAt ~~$25,819~~December ~~(Cdn$26~~31,~~000).~~ On2010 ~~July~~a ~~7, 2009,~~liability ~~The~~of ~~Company~~$8,445 ~~repaid~~remains ~~the~~outstanding ~~principal~~with respect into ~~full~~these fees and ~~paid~~is ~~the~~included ~~accrued~~as ~~interest~~part of ~~$238~~ ~~(Cdn$240)~~accounts payable.

InDuring ~~August~~the ~~2009~~year ended December 31, 2010, the Company obtained advances ~~a loan~~ from acompanies ~~company owned~~with byformer adirectors ~~shareholder~~ in ~~the~~common; ~~amount~~a balance outstanding of $~~18,832 (Cdn$~~20,~~000).~~519 Onexists ~~September~~as 8at December 31, ~~2009,~~ ~~The~~2010 ~~Company~~and ~~repaid~~is ~~the~~included ~~loan~~as ~~and~~part ~~paid~~of ~~the~~accounts payable. ~~accrued~~These advances are unsecured, non-interest ofbearing ~~$29~~and are due on ~~(Cdn$31)~~demand.

-During 14the -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 August 2009, the Company obtained a loan from a director of the company in the amount of $18,832 (Cdn$20,000). On September 8, 2009, The Company repaid the loan and paid the accrued interest of $29 (Cdn$31).

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

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

During the year end December 31, 2009, the holders, 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 57). 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.

9.- ~~SUBSEQUENT~~35 ~~EVENTS~~ -

~~In January 2010, the Company completed a private placement offering of 1,525,000 units, consisting of one common share one share purchase warrant at a price of $0~~11.06 ~~per~~SUBSEQUENT ~~unit, for proceeds of $91,500. The warrants are exercisable for a period of five years and one share purchase warrant is exercisable into one share of common stock at a price of $0.08 per share.~~EVENTS

InOn ~~February~~January ~~2010~~31, 2011, the Company ~~completed~~closed a ~~private~~10 ~~placement~~year license ~~offering~~agreement ofwith ~~1,100,000~~AVST. ~~units,~~AVST ~~consisting~~obtained ofthe ~~one~~exclusive ~~share~~use of ~~Common~~our ~~Stock~~technology and ~~one~~ ~~common~~physical ~~stock~~assets ~~purchase~~relating ~~warrant~~to atthe atechnology, ~~price~~in ofexchange ~~$0.06~~for ~~per~~AVST ~~unit,~~issuing ~~for~~4.5% ~~proceeds~~ of ~~$66,000.~~its ~~The~~outstanding ~~warrants~~equity ~~are~~in ~~exercisable~~the ~~for~~form aof ~~period~~preferred ofshares. ~~five~~AVST ~~years~~is ~~and~~also ~~entitle~~required ~~the~~to ~~holder~~issue toa ~~purchase~~1% ~~one~~equity share ofto ~~common~~the ~~stock~~Company ~~for~~upon ~~$0.08~~the ~~per~~five ~~share~~year anniversary of the agreement.

InAVST ~~February~~also ~~2010,~~has the right to purchase the technology and the Company ~~received~~has ~~$32,500~~the right to sell the technology for the issuance of an additional 1% equity share of AVST and ~~issued~~an additional 2.25% equity share subject to revenue ~~promissory~~milestones ~~note~~and 2.25% ~~The~~equity ~~note~~share ~~bears~~subject ~~interest~~to atthe ~~prime~~execution ~~plus~~of 4%long-term distribution ~~monthly,~~agreements isby ~~due~~AVST. onAssuming all of the performance conditions are ~~demand~~met and AVST purchases the technology, the overall consideration for the transaction is ~~unsecured.~~equal to 10% of the issued and outstanding shares of AVST.

-On 26March -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~~(T)~~. Controls and Procedures.Disclosure Controls and Procedures

Disclosure ~~Controls~~controls and ~~Procedures~~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.

~~Disclosure~~As ~~controls and procedures are controls and other procedures that are designed to ensure that information~~ required toby beparagraph ~~disclosed in~~(b) ~~our~~of ~~reports~~Rules ~~filed~~13a-15 or ~~submitted~~15d-15 under the ~~Securities~~ Exchange Act, ofour ~~1934~~chief ~~(the “Exchange~~executive ~~Act”)~~officer isevaluated ~~recorded,~~the ~~processed,~~effectiveness ~~summarized~~of ~~and~~our disclosure ~~reported,~~controls ~~within~~and ~~the~~procedures ~~time periods~~as ~~specified~~of in the ~~Securities~~end ~~and~~of ~~Exchange~~the ~~Commission's~~period ~~rules~~covered ~~and~~by ~~forms.~~this ~~Disclosure~~annual ~~controls~~report, ~~and~~being ~~procedures~~December ~~include~~31, ~~controls~~2010. ~~and~~Our ~~procedures~~chief ~~designed~~executive toofficer evaluated ~~ensure~~our ~~that~~company’s ~~information~~disclosure ~~required~~controls toand beprocedures ~~disclosed~~(as defined in ~~our~~Rules ~~reports filed or~~13a-15(e) ~~submitted~~and ~~under~~15d-15(e) of the Exchange Act) isas ~~accumulated~~of ~~and~~December ~~communicated~~31, ~~to management to allow timely decisions regarding required disclosure~~2010.

AsBased 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 ~~paragraph~~our ~~(b)~~company in ofreports ~~Rules~~it ~~13a-15~~files or ~~15d-15~~submits under the Exchange Act is recorded, ~~our~~processed, summarized ~~chief~~and ~~executive~~reported ~~officer~~within ~~evaluated~~the time periods specified in the ~~effectiveness~~rules and forms of the Securities Exchange Commission. The conclusion that our ~~disclosure~~ disclosure controls and procedures aswere ofnot ~~the~~effective ~~end~~was ofdue to the ~~period~~presence ~~covered~~of ~~by this~~material ~~annual~~weaknesses ~~report,~~in ~~being~~internal ~~December~~control ~~31,~~over ~~2009.~~financial ~~Our~~reporting ~~chief~~as ~~executive~~identified ~~officer evaluated~~below ~~our~~under ~~company~~the heading “Management’s ~~disclosure~~Annual ~~controls~~Report ~~and~~on ~~procedures~~Internal ~~(as~~Control ~~defined~~Over inFinancial Reporting.” ~~Rules~~Management ~~13a-15(e)~~ anticipates that such disclosure controls and ~~15d-15(e)~~procedures will ofnot ~~the~~be ~~Exchange~~effective ~~Act)~~until asthe ofmaterial ~~December~~weaknesses ~~31,~~are ~~2009~~remediated.

~~Based~~Because onof ~~this~~the ~~evaluation,~~inherent ~~these~~limitations ~~officers~~in ~~concluded~~all ~~that~~control systems, ~~as of~~no asevaluation of ~~December 31, 2009, these disclosure~~ controls ~~and~~can ~~procedures~~provide ~~were~~absolute ~~not effective~~assurance ~~to ensure~~ that ~~the~~all ~~information~~control ~~required to be disclosed by our company~~issues, inif ~~reports it files or submits under the Exchange Act is recorded~~any, ~~processed, summarized and reported~~ within ~~the~~our ~~time~~company ~~periods~~have ~~specified~~been indetected. ~~the~~These ~~rules~~inherent ~~and forms~~limitations ofinclude the ~~Securities~~realities ~~Exchange Commission. The conclusion~~ that ~~our~~judgments ~~disclosure controls and procedures were not effective was due to the presence of material weaknesses~~ in ~~internal~~decision-making ~~control~~can ~~over~~be ~~financial~~faulty ~~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~~that ~~will~~breakdowns ~~not~~can beoccur ~~effective~~because ~~until~~of ~~the~~simple ~~material~~error ~~weaknesses~~or ~~are remediated~~mistake.

~~Because~~Management’s ofAnnual ~~the~~Report ~~inherent~~on ~~limitations~~Internal inControl ~~all control systems, no~~over ~~evaluation~~Financial 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. Reporting

~~Management~~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 ~~Annual~~principal ~~Report~~executive onand ~~Internal~~principal ~~Control~~financial officers, ~~over~~or persons performing similar functions, and effected by the issuer’s ~~Financial~~board ~~Reporting~~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:

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.

	(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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-Under 27the -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.

~~Under~~A ~~the~~material ~~supervision~~weakness ~~and~~is ~~with~~a ~~the~~deficiency, ~~participation~~or ofcombination ~~our chief~~of ~~executive officer~~deficiencies, wein ~~conducted an evaluation of the effectiveness of our~~ internal control over financial reporting, assuch ofthat ~~December~~there ~~31,~~is ~~2009~~a reasonable ~~using~~possibility ~~the criteria~~that ~~established~~a inmaterial ~~Internal~~misstatement ~~Control—Integrated~~of ~~Framework~~our ~~issued~~company’s byannual ~~the~~or ~~Committee~~interim offinancial ~~Sponsoring~~statements ~~Organizations~~will ofnot ~~the~~be ~~Treadway~~prevented ~~Commission~~or ~~(COSO).~~detected ~~This evaluation~~on ~~included~~a ~~review~~timely basis. ofIn ~~the~~its ~~documentation~~assessment of ~~controls, evaluation of~~ the ~~design~~ effectiveness of ~~controls,~~our ~~testing~~internal ofcontrol ~~the~~over financial ~~operating~~reporting ~~effectiveness~~as of ~~controls~~ ~~and~~December a31, ~~conclusion~~2010, onwe ~~this~~determined ~~evaluation.~~that ~~Based~~there onwere control ~~this~~deficiencies ~~evaluation,~~that ~~our management~~constituted ~~concluded~~material ~~our~~weaknesses ~~internal~~some ~~control~~of ~~over~~which ~~financial~~are indicative ~~reporting~~of ~~was~~many ~~not effective~~small ascompanies atwith ~~December~~small 31staff, ~~2009.~~such as:

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

	(1)	inadequate segregation of duties and effective risk assessment;

	(2)	insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of both generally accepted accounting principles in the United States and guidelines of the Securities and Exchange Commission; and

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

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

These control deficiencies resulted in a reasonable possibility that a material misstatement of the annual or interim financial statements could not have been prevented or detected on a timely basis. Further, these deficiencies resulted in our failure to file 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.

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

~~This~~There ~~annual~~were ~~report~~no ~~does~~changes ~~not~~in ~~include an attestation report of~~ our ~~independent~~company’s ~~registered public accounting firm regarding~~ internal control ~~over~~ ~~financial reporting. Our internal control~~ over financial reporting ~~was~~during ~~not subject~~the toquarter ~~attestation~~ended byDecember ~~our~~31, ~~independent~~2010 ~~registered~~that ~~public accounting firm~~have ~~pursuant~~materially toaffected, ~~temporary~~or ~~rules~~are ofreasonably ~~the~~likely ~~Securities and Exchange Commission that permit us~~ to ~~provide~~materially ~~only~~affect, ~~management~~our company’s ~~report~~internal incontrol ~~this~~over ~~annual~~financial ~~report~~reporting.

Changes in Internal Controls

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

Item 9B. Other Information.

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

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

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

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

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

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

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

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- 29 -

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

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

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

Business Experience

~~William~~Jay ~~Krebs~~Hutton -– ~~Interim~~ Chief Executive Officer and ~~Director~~ Director

Mr. ~~Krebs~~Hutton ~~previously~~is ~~served as a director from 1995 to June 2007. Mr. Krebs previously served as~~ the ~~chairman~~President of ~~our~~Arrowstone ~~board~~Ventures ~~of directors from 1995 to September 2000 and as interim Chief Executive Officer from October 13, 2009~~Ltd. ~~From 1995 to September 2000, Mr. Krebs was our Treasurer~~ and ~~Secretary.~~a ~~From~~partner ~~January~~in ~~1995~~HGH toCapital ~~August 2000, Mr~~Partnership. ~~Krebs~~He ~~has~~is also ~~served~~the asPresident ~~a director~~ of ~~Acrex~~ ~~Ventures~~Telemerx ~~Ltd~~Systems Inc., Hea ~~also~~business ~~has~~involved ~~served~~in aselectronic ~~President~~payments and aworkflow ~~director of Pacific~~management ~~Western Mortgage Corp~~solutions. ~~since~~His ~~1987~~business ~~and~~experience ~~served~~includes asre-structuring ~~President~~ and abusiness ~~Director of~~planning ~~Tsalix~~for ~~Investments~~new ~~Inc.~~and ~~(formerly~~emerging ~~Pacific~~businesses. ~~Western~~His ~~Mortgage~~previous ~~Corp.)~~engagements ~~from~~have ~~1994 to~~included ~~1995.~~strategic ~~These~~planning ~~companies~~for ~~provided~~technology ~~consulting~~companies ~~services~~as ~~and~~well ~~investment~~as ~~capital.~~structuring ~~From 1997 to 1999, he was~~ a ~~director~~large limited ~~and~~partnership ~~officer~~for ~~of WaveRider Communications, Inc.,~~ a ~~company~~ ~~which~~real ~~dealt~~estate ~~with wireless broadband technology~~development. ~~From~~He ~~1990 to 1995, Mr. Krebs~~ served as ~~director~~both President and ~~President~~CEO of ~~TelcoPlus~~Voice ~~Enterprises~~Mobility ~~Ltd. and its wholly-owned subsidiary~~International, ~~Intertec Telecommunications~~ Inc. ~~Mr.~~in ~~Krebs~~the ~~served~~past ~~as a director~~ and ~~President~~was ofon ~~CT&T~~the ~~Telecommunications Inc. from 1990 to 1995.~~Board ~~Mr. Krebs is a Chartered Accountant and practiced as such from 1973 to 1980. Mr. Krebs has been a member~~ of ~~the~~Directors ~~Canadian~~until ~~Institute~~May of ~~Chartered Accountants since 1973.~~ 2007

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

William H. Laird - Director

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

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

Michael Dyde - Director

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

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

Jay Hutton - Director

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

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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.

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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 ~~31 -~~ 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 ~~our Company~~us, or written representations from certain reporting persons ~~that no Form 5s were required for those persons~~, we believe that, ~~during~~other ~~the~~than ~~year ended~~as ~~December~~disclosed 31below, ~~2009,~~ 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 ~~Company's~~ board of directors adopted a Code of Ethics and Business Conduct that applies to, among other persons, our ~~Company's~~ Chief Executive Officer (being our principal executive officer, ~~and~~ principal financial officer), ~~our~~and ~~Company's Controller (being our~~ principal accounting officer), as well as persons performing similar functions. As adopted, our Code of Ethics and Business Conduct sets forth written standards that are designed to deter wrongdoing and to promote:

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

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

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

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

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

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

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

- 41 -

Nomination Procedures For Appointment of Directors

As of March 131, ~~2010~~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 ~~William~~Sean ~~Krebs~~O’Mahony, ~~William~~Jay ~~Laird~~Hutton, and ~~Michael~~Aron ~~Dyde~~Buchman. ~~William~~Sean ~~Laird~~O’Mahony and ~~Michael~~Aron ~~Dyde are~~Buchman are independent as defined by Nasdaq Marketplace Rule 4200(a)(15) and ~~Multilateral~~ National Instrument 52-110 – Audit Committee (“NI 52-110”), adopted by various Canadian securities commissions,. ~~and~~Jay ~~William~~Hutton ~~Krebs~~ is not independent as he is also our Chief Executive Officer. Each of the members of the Audit Committee ~~are~~ is financially literate as defined in ~~Multilateral~~NI ~~Instrument~~ 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.

- 32 -

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

Audit Committee Financial Expert

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

Item 11. Executive Compensation.Summary Compensation Table

~~Summary~~The ~~Compensation~~particulars ~~Table~~of compensation paid to the following persons:

~~The~~(a) ~~particulars~~our principal executive officer; (b) each of ~~compensation~~our ~~paid~~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 ~~following~~fact ~~persons:~~ that the individual was not serving as our executive officer at the end of the year ended December 31, 2010,

~~(a)~~who ~~our~~we ~~principal~~will ~~executive~~collectively ~~officer;~~refer ~~(b)~~to ~~each~~as of our ~~two~~named ~~most highly compensated~~ executive officers, ~~who~~of ~~were~~our ~~serving~~company asfor ~~executive officers at~~ the ~~end~~years ~~of the year~~ ended December 31, ~~2009;~~2010 and ~~(c)~~2009, upare toset out ~~two~~in ~~additional~~the ~~individuals~~following ~~for~~summary ~~whom~~compensation ~~disclosure~~table, ~~would~~except ~~have~~that ~~been~~no disclosure is provided ~~under (b) but~~ for ~~the~~any ~~fact~~named ~~that~~executive ~~the~~officer, ~~individual~~other ~~was~~than ~~not serving as~~ our ~~executive~~principal executive officer, atwhose ~~the~~total ~~end~~compensation ofdoes ~~the~~not ~~year~~exceed ~~ended~~$100,000 ~~December~~for ~~31,~~the ~~2009,~~respective fiscal year:

~~who~~- we42 will collectively refer to as our named executive officers, of our company for the years ended December 31, 2009 and 2008, are set out in the following summary compensation table, except that no disclosure is provided for any named executive officer, other than our principal executive officer, whose total compensation does not exceed $100,000 for the respective fiscal year: -

- 33 -

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/A
William 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

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($)	Option Awards ($)(1)	Non- Equity Incentive Plan Compensa- tion ($)	Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)	Other Annual Compen- sation ($)(2)	Total ($)
	(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).
William Krebs, Interim Chief Executive Officer (3)	2009 2008	Nil Nil	Nil Nil	Nil Nil	Nil 5,168	Nil Nil	Nil Nil	Nil Nil	Nil 5,168
	(2)	Jay Hutton was appointed as Chief Executive Officer on July 6, 2010.
Rob Collins Director of Marketing (4)	2009 2008	102,759 88,670	Nil Nil	Nil Nil	Nil 12,921	Nil Nil	Nil Nil	5,708 4,926	108,467 106,517
	(2)	William Krebs resigned as interim Chief Executive Officer on July 6, 2010.
John Gavin (5)	2009 2008	106,400 150,400	Nil Nil	Nil Nil	Nil 5,168	Nil Nil	Nil Nil	7,200 7,200	113,600 162,768
Randy Buchamer Former Chief Executive Officer (6)	2009 2008	184,348 164,204	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	4,519 4,926	188,868 169,130
Robert Eisses, Former Interim Chief Operation Officer(7)	2009 2008	15,000 Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	Nil Nil	$15,000 Nil

~~(1) Reflects the grant date fair value calculated in accordance with FAS 123(R). See "Notes to Financial Statement – Summary of Significant Accounting Policies – Stock Based~~ Compensation" ~~for~~Discussion ~~a discussion~~and ~~of the relevant assumptions used in calculating the grant date fair value pursuant to FAS 123(R).~~ Analysis

~~(2)~~The ~~Mr.~~compensation ~~Buchamer~~committee of our board of directors determines compensation for our Chief Executive Officer, ~~Mr.~~reviews ~~Collins~~and makes recommendations regarding compensation of executive officers, and Mrsupervises the administration of our equity plans for executives and all employees. ~~Gavin~~As ~~“All~~at December 31, 2010, ~~Other~~the ~~Compensation"~~committee ~~consists~~was composed of ~~car~~two ~~allowances.~~independent directors, Sean O’Mahony and Aron Buchman and one non-independent director, Jay Hutton.

~~(3) William Krebs, a director of our company has agreed to act on an interim basis to carry out the functions as Chief~~ Executive ~~Officer~~ ofCompensation ~~our company until a qualified person is located and appointed to fill these positions. No compensation is being paid to Mr. Krebs for services rendered.~~ Objectives

~~(4)~~On ~~Compensation~~behalf ~~was~~of ~~paid to Mr. Collins by VMI,~~ our ~~operating~~board ~~subsidiary. Mr. Collins, Director~~ of ~~Marketing entered into an indefinite term employment agreement on January 19~~directors, ~~2000.~~the Hecompensation ~~receives a~~committee ~~salary~~reviews ofand ~~$102,759~~makes ~~(Cdn$108,000)~~recommendations ~~per year plus a car allowance of $476 (Cdn$500) per month.~~ concerning:

(5) Compensation was paid to Mr. Gavin by VMI (US), our operating subsidiary. Mr. Gavin, US Channel Manager entered into an indefinite term employment agreement on September 1, 2007. He receives a salary of $100,000 per year plus and office allowance of $200 per month and a car allowance of $600 per month. During 2009, Mr. Gavin also received a draw on commission of $4,000.

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)	management succession plans and process;

	(b)	performance appraisal and management and employee development programs;

	(c)	contingency plans in the event of the unexpected disability of key management; and

	(d)	proposed personnel changes involving officers reporting to the Chief Executive Officer.

~~(6)~~Components ~~Compensation was paid to Mr. Buchamer by VMI, our operating subsidiary. Mr. Buchamer, Former Chief Executive Officer~~ of ~~our~~ ~~company~~Compensation and our subsidiary, entered into an indefinite term employment agreement on August 16, 2001. On October 13, 2009 Mr. Buchamer resigned from his position as Chief Executive Officer. He received a salary of $184,348 (Cdn$193,750) plus a car allowance of $476 (Cdn$500) per month up to his date of resignation.

~~(7)~~Executive ~~Mr.~~compensation ~~Eisses~~consists ~~was~~primarily ~~appointed~~of asbase ~~interim~~salary ~~Chief~~and ~~Operating~~stock ~~Officer on November 25, 2009 and Resigned on March 1, 2010~~options.

- 3443 -

~~Compensation~~Base ~~Discussion~~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, ~~Analysis~~and internal equity within our company.

~~The~~Stock ~~compensation~~Options. ~~committee~~Our ofequity ~~our~~incentives ~~board~~have ofbeen ~~directors~~in ~~determines~~the ~~compensation~~form ~~for our Chief Executive Officer, reviews and makes recommendations regarding compensation~~ of ~~executive~~stock ~~officers, and supervises the administration of our equity plans for executives and all employees~~options. ~~During~~Stock ~~the~~options ~~year~~are ~~ended December~~issued ~~31,~~at ~~2009,~~an ~~the~~exercise ~~committee~~price ~~was composed~~ of ~~two independent directors,~~fair ~~William~~market ~~Laird~~value ~~and~~on ~~Michael~~the ~~Dyde,~~date ~~and one non-independent director, William Krebs. No member is an employee or former employee~~ of ~~our company~~grant.

~~Executive~~CEO Compensation ~~Objectives~~

OnFollowing ~~behalf~~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 ~~board~~company and member of ~~directors~~the audit committee, has agreed to act on an interim basis to carry out the ~~compensation~~functions ~~committee~~as Chief Executive ~~reviews~~Officer of our company until a qualified person is located and ~~makes~~appointed ~~recommendations~~to ~~concerning:~~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.

1.Stock ~~the~~Option ~~compensation~~Grants ~~policy~~in ~~with~~2010 ~~respect~~ to ~~our~~Named ~~employees or any of our subsidiaries ensuring that our company is in compliance with all legal compensation reporting requirements; 2. the compensation of our Chief~~ Executive ~~Officer and other officers of our company;~~ ~~3. management compensation programs including, stock option plans, incentive plans, and perquisites; 4. the annual, or more often if appropriate review of:~~ Officers

~~(a)~~On ~~management~~November ~~succession~~12, ~~plans~~2010, ~~and process;~~we ~~(b)~~entered ~~performance~~into ~~appraisal~~stock ~~and~~option ~~management and employee development~~agreements ~~programs;~~with ~~(c)~~Jay ~~contingency~~Hutton, ~~plans~~whereby inwe ~~the~~granted ~~event~~Mr. ofHutton ~~the~~stock ~~unexpected~~options ~~disability~~to ofpurchase ~~key~~1,000,000 ~~management;~~of ~~and~~our ~~(d)~~common ~~proposed~~shares ~~personnel~~at ~~changes~~a ~~involving~~price ~~officers reporting~~of to$0.10 ~~the~~until ~~Chief~~November ~~Executive~~12, ~~Officer~~2015.

~~Components~~Outstanding ofEquity ~~Compensation~~Awards at Fiscal Year End

~~Executive~~The ~~compensation~~following ~~consists~~table ~~primarily~~summarizes ofequity ~~base~~awards ~~salary~~granted ~~and~~to our ~~stock~~named ~~options~~executive officers that were outstanding as of December 31, 2010.

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

Option Awards						Stock Awards
Name	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	nil
William Krebs	nil	nil	nil	nil	nil	nil	nil	nil	nil

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

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

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

~~Stock~~Our ~~Option~~non-employee ~~Grants~~directors inare ~~2009~~granted toincentive ~~Named~~stock ~~Executive~~options. Employee ~~Officers~~directors are granted incentive stock options based on their individual employment agreements.

~~During~~- ~~2009,~~44 ~~we did not grant any stock option awards to Executive Officers or other employees.~~-

-The 35following table summarizes compensation paid to all of our non-employee directors:

Outstanding Equity Awards at Fiscal Year End

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	$55,220
Sean O’Mahony	nil	nil	$55,220	nil	nil	nil	$55,220
William Krebs	nil	nil	nil	nil	nil	nil	nil
William H. Laird	nil	nil	nil	nil	nil	nil	nil

~~The~~On ~~following~~November ~~table~~12, ~~summarizes~~2010, ~~equity~~we ~~awards~~entered ~~granted~~into tostock ~~our~~option agreements ~~named~~with ~~executive~~Aron ~~officers~~Buchman ~~that~~and ~~were~~Sean ~~outstanding~~O’Mahony, aswhereby we granted each of ~~December~~these individuals 31stock options to purchase 1,000,000 ~~2009~~of our common shares at a price of $0.10 until November 12, 2015.

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

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.

~~Retirement~~Employment orAgreement ~~Similar~~with ~~Benefit~~Our ~~Plans~~Named Executive Officers

~~There~~We ~~are~~do nonot ~~arrangements~~have orany ~~plans~~employment inagreements ~~which~~with ~~we provide retirement or similar benefits for~~ our ~~directors or~~ named executive officers.

Compensation of the Company's Directors

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

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

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

- 36 -

Employment Agreement with Our Named Executive Officers

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

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

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

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

The following table sets forth certain information known to us with respect to the beneficial ownership of our common stock as of that date by (i) each of our directors, (ii) each of our executive officers, and (iii) all of our directors and executive officers as a group. Except as set forth in the table below, there is no person known to us who beneficially owns more than 5% of our common stock. As of ~~July~~March 531, ~~2010~~2011, we had 6771,~~271~~279,~~845~~722common ~~common~~ shares issued and outstanding.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Class(1)
William E. Krebs c/o 107 – 645 Fort Street Victoria, BC V8W 1G2	4,379,639 (2)	6.5%
Jay Hutton c/o 107 – 645 Fort Street Victoria, BC V8W 1G2	1,000,000(2)	0.7%
William H. Laird c/o 107 – 645 Fort Street Victoria, BC V8W 1G2	3,832,721 (3)	5.7%
Aron Buchman c/o 107 – 645 Fort Street Victoria, BC V8W 1G2	1,000,000(2)	0.7%
Michael Dyde c/o 107 – 645 Fort Street Victoria, BC V8W 1G2	205,500	0.3%
Sean O’Mahony c/o 107 – 645 Fort Street Victoria, BC V8W 1G2	1,000,000(2)	0.7%

- 3745 -

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percentage of Class(1)
Jay Hutton c/o 107 – 645 Fort Street Victoria, BC V8W 1G2	nil	nil
Directors and Executive Officers as a Group(3 persons)	3,000,000	2.1%
Directors and Executive Officers as a Group(4 persons)	8,417,860	12.5%
Alan G. Smith 4430 Haggart Street Vancouver, BC Canada V6L 2H3	5,561,000	7.8%

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

(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.

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

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

Changes in Control

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

Equity Plan Compensation Information

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

Other than as described under the heading "Executive Compensation", no director, executive officer, principal stockholder holding at least 5% of our common shares, or any family member thereof, had any material interest, direct or indirect, in any transaction, or proposed transactions, during the year ended December 31, ~~2009~~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 ~~Michael~~Jay ~~Dyde~~Hutton, ~~William~~Aron ~~Krebs~~Buchman and ~~William~~Sean ~~Laird~~O’Mahony. We have determined that ~~Michael~~Aron ~~Dyde,~~Buchman and ~~William~~Sean ~~Laird~~O’Mahony are independent directors as defined by Nasdaq Marketplace Rule 4200(a)(15) and ~~William~~Jay ~~Krebs~~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.

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Audit Committee

Our Audit Committee consists of ~~Michael~~Jay ~~Dyde~~Hutton, ~~William~~Aron ~~Krebs~~Buchman and ~~William~~Sean ~~Laird~~O’Mahony, of whom ~~Michael~~Aron ~~Dyde~~Buchman and ~~William~~Sean ~~Lair~~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.

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Governance Committee

The Governance Committee currently consists of ~~Michael~~Jay ~~Dyde~~Hutton, Aron ~~William~~Buchman ~~Krebs~~ and ~~William~~Sean ~~Laird~~O’Mahony, of whom ~~Michael~~Aron ~~Dyde~~Buchman and ~~William~~Sean ~~Lair~~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 ~~or disclosed under the heading "Certain Relationships and Related Transactions, and Director Independence",~~ none of our independent directors entered into any transaction, relationship or arrangement during the year ended December 31, ~~2008~~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).

~~During~~On ~~2009~~November no12, ~~stock~~2010, ~~options~~we ~~were~~entered ~~issued~~into tostock ~~directors~~option ~~of the~~agreements ~~Company.~~with ~~Other~~Aron ~~than~~Buchman ~~reimbursement~~and ~~for~~Sean ~~travel~~O’Mahony, ~~expenses~~whereby ~~incurred~~we ingranted ~~connection~~each of these ~~with~~individuals ~~attending~~stock ~~our~~options ~~directors'~~to ~~meetings~~purchase 1,000,000 of our ~~Company~~common ~~did~~shares ~~not~~at ~~pay~~a ~~any other fees~~price toof ~~our~~$0.10 ~~directors~~until ~~during~~November ~~the year ended December 31~~12, ~~2009~~2015.

Item 14. Principal Accounting Fees and Services.

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

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

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

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

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

-Audit 39Related -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.

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

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

~~All~~- ~~Other~~47 ~~Fees. There were no other fees paid to our independent registered public accounting firm.~~ -

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 ~~Ernst~~Dale &Matheson ~~Young~~Carr-Hilton Labonte LLP, and believes that the provision of the services for activities unrelated to the audit is compatible with maintaining ~~Ernst~~ &Dale ~~Young~~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)

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4.5	Certificate of Amendment to Certificate of Designation of Series B Preferred Stock (4)
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)
10.1	Amended and Restated 1999 Stock Option Plan (4)
10.4	Asset Purchase Agreement between Voice Mobility International, Inc. and Tagline Communications Inc. (7)
10.2	Employment Agreement between Voice Mobility Inc. and Randy Buchamer, dated August 16, 2001 (4)
10.5	Form of Debenture (7)
10.3	Settlement Agreement dated November 2, 2009 among our company, Voice Mobility Inc., Voice Mobility (US) Inc., Voice Mobility Canada Limited and Randy Buchamer*
14.1	Code of Ethics. (8)
14.1	Code of Ethics. (5)
21.1	Subsidiaries of our company Voice Mobility Inc. (Canadian Corporation) Voice Mobility Canada Limited (Canadian Corporation) VM Sub Limited (Canadian Corporation) Voice Mobility (US) Inc. (Nevada corporation)
21.1	Subsidiaries of our company
31*	Section 302 Certification of Jay Hutton
	Voice Mobility Inc. (Canadian Corporation)
32*	Section 906 Certification of Jay Hutton
	Voice Mobility Canada Limited (Canadian Corporation)
99.1	Audit Committee Charter (9)
	VM Sub Limited (Canadian Corporation)
	Voice Mobility (US) Inc. (Nevada corporation)
31*	Section 302 Certification of William Krebs
32*	Section 906 Certification of William Krebs
99.1*	Audit Committee Charter

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

(1) Incorporated by reference from our Registration Statement on Form 10-SB, 41as 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 Buchman Aron BuchmanDirector Date: April 13, 2011 By: /s/Sean O’Mahony Sean O’MahonyDirector Date: April 13, 2011

VOICE MOBILITY INTERNATIONAL, INC.

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

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

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

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

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

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