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 March 31, 2012

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

For the transition period from ____________ to ____________

Commission File No.: 000-51882

VOICESERVE, INC.

(Exact name of registrant as specified in its charter)

Delaware		98-0597288
(State or other jurisdiction of incorporation or organization)		(I.R.S Employer Identification Number)

Grosvenor House, 1 High Street

Middlesex HA8 7TA

England

(Address of principal executive offices)(Zip Code)

(44) 208-136-6000

(Registrant’s telephone number, including area code)

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

Title of each class	Name of each exchange on which registered
None	None

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

Common Stock, 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

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x 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.

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 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, September 30, 2011: $4,023,126.

Number of the issuer’s common stock outstanding as of July 9, 2012: 47,585,198

Documents incorporated by reference: None

TABLE OF CONTENTS

PART I		Page
Item 1.	Business	1
Item 1A.	Risk Factors	10
Item 1B.	Unresolved Staff Comments	10
Item 2.	Properties	10
Item 3.	Legal Proceedings	10
Item 4.	Mine Safety Disclosures	11

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases Of Equity Securities	11
Item 6.	Selected Financial Data	12
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 8.	Financial Statements And Supplementary Data	F-1
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	21
Item 9A.	Controls and Procedures	21
Item 9B.	Other Information	22

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	22
Item 11.	Executive Compensation	26
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	29
Item 13.	Certain Relationships and Related Transactions, and Director Independence	29
Item 14.	Principal Accountant Fees and Services	30

PART IV
Item 15.	Exhibits, Financial Statement Schedules	31

SIGNATURES

CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION

This Annual Report on Form 10-K (this “Report”) contains “forward-looking statements” within the meaning of the Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements discuss matters that are not historical facts. Because they discuss future events or conditions, forward-looking statements may include words such as “anticipate,” “believe,” “estimate,” “intend,” “could,” “should,” “would,” “may,” “seek,” “plan,” “might,” “will,” “expect,” “predict,” “project,” “forecast,” “potential,” “continue” negatives thereof or similar expressions. Forward-looking statements speak only as of the date they are made, are based on various underlying assumptions and current expectations about the future and are not guarantees. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, level of activity, performance or achievement to be materially different from the results of operations or plans expressed or implied by such forward-looking statements.

We cannot predict all of the risks and uncertainties. Accordingly, such information should not be regarded as representations that the results or conditions described in such statements or that our objectives and plans will be achieved and we do not assume any responsibility for the accuracy or completeness of any of these forward-looking statements. These forward-looking statements are found at various places throughout this Report and include information concerning possible or assumed future results of our operations, including statements about potential acquisition or merger targets; business strategies; future cash flows; financing plans; plans and objectives of management; any other statements regarding future acquisitions, future cash needs, future operations, business plans and future financial results, and any other statements that are not historical facts.

These forward-looking statements represent our intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks, uncertainties and other factors. Many of those factors are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than we have described. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this Report. All subsequent written and oral forward-looking statements concerning other matters addressed in this Report and attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this Report.

Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

CERTAIN TERMS USED IN THIS REPORT

When this report uses the words “we,” “us,” “our,” and the “Company,” they refer to VoiceServe, Inc. and its consolidated subsidiaries. “SEC” refers to the Securities and Exchange Commission.

PART I

Item1.

Business.

VoiceServe, Inc. is a holding company whose mission, through its subsidiaries, is to enable voice over internet protocol (“VoIP”) business and entrepreneurs to offer a full array of VoIP services globally. Since the Company was founded, we have worked to achieve this mission by creating technology that addresses the principle communication needs through the economical use of VoIP. We develop and market software, services and solutions that we believe empowers our customers to communicate more efficiently and economically through the Internet throughout the world. Our wholly-owned subsidiary VoIPSwitch, Inc.’s (“VoIPSwitch”) software enables communications providers, businesses, enterprises, hotels and cruise liners VoIP and TDM communication. Time-division multiplexing (TDM) is a method of putting multiple data streams in a single signal by separating the signal into many segments, each having a very short duration. Each individual data stream is reassembled at the receiving end based on the timing. Our customers purchase a license from us. The VoIPSwitch license is a central medium in a telecommunications network that connects telephone calls from one phone line to another entirely by means of software running on a computerized system. This work was formerly carried out by hardware with physical switchboards to route the calls. VoIPSwitch has created an environment whereby the VoIPSwitch license purchaser can control all of its clients’ activity via the Internet. VoIPSwitch controls connections at the junction point between circuit and packet networks. The end user can make calls from a computer, mobile phone, land line or SIP device. Session Initiation Protocol (SIP) is an IETF-defined signaling protocol widely used for controlling communication sessions such as voice and video calls over Internet Protocol (IP). The protocol can be used for creating, modifying and terminating two-party (unicast) or multiparty (multicast) sessions. Sessions may consist of one or several media streams. End users can manage their account online via their specific user names and passwords, with all the basic features available with landline communication systems plus many more convenient parameters. These include for example, call forwarding voice mail SMS and most basic PBX standard features. A private branch exchange (PBX) is a telephone exchange that serves a particular business or office, as opposed to one that a common carrier or telephone company operates for many businesses. We do not have any patents. Capital devoted to research and development is used towards expanding the possibility of communication and its features.

We generate revenue by developing, manufacturing, licensing, and supporting a wide range of VoIP software products and services for many different types of communication devices. Our focus is to build on this foundation through ongoing innovation in our integrated software platforms, by delivering compelling value propositions to customers, by responding effectively to customer and partner needs, and by continuing to emphasize the importance of product excellence, business efficacy, and accountability.

Company History

The Company was incorporated as 4306, Inc. on December 9, 2005 under the laws of the State of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. On February 20, 2007, the Company entered into a share exchange agreement with Voiceserve Limited, a United Kingdom corporation (“Voiceserve Limited”) whose principal place of business at the time of purchase was located at Cavendish House, 369 Burnt Oak Broadway, Edgware, Middlesex HA8 5AW and the shareholders of Voiceserve Limited. Pursuant to the purchase agreement, we acquired all of the outstanding capital stock of Voiceserve Limited in exchange for the issuance of 20,000,000 shares of our common stock to the Voiceserve Limited shareholders. In addition, the shareholders of Voiceserve Limited, agreed to cancel their 100,000 shares of the outstanding common stock of the Company. As a result of the foregoing, Voiceserve Limited became our wholly-owned subsidiary through which we now operate our business in the global telecommunications industry. We changed our name to “VoiceServe, Inc.” to reflect our new business plan.

Payment of the monthly installments of the $600,000 notes payable is contingent upon and limited each month to the future monthly net income of VoIPSwitch. Accordingly, pursuant to SFAS No. 141, this $600,000 “contingent consideration” portion of the $3,000,000 total purchase price was not included in the initial recorded cost of the acquisition or the recorded notes payable. If and when the contingency is resolved and payments of the $600,000 notes payable are made, such paid amounts will be added to goodwill.

Overview

Our wholly owned subsidiary, VoIPSwitch develops and implements various types of Class 5 softswitch software that facilitate the deployment of VoIP services globally. To-date, the company has successfully implemented over approximately 16,000 VoipSwitch licenses around the world.

VoipSwitch is a complete IP telephony licensed softswitch offering a variety of services including wholesale VoIP termination, device to phone technology, PC to phone/web to phone features, calling cards, SMS/ANI/PIN/DID/WEB callback, DIDs’ mapping, call shops and application creating a SIP environment for most mobile phone handsets in a WiFi, 3G or Edge environment. Automatic number identification (ANI) is a feature of telephony intelligent network services that permits subscribers to display or capture the billing telephone number of a calling party. PIN is a code each client has for making a phone number. DID refers to the client’s virtual phone number. Unlike competitive systems composed of many different parts, the VoipSwitch platform is fully integrated in one application which makes it exceptionally easy to manage. All elements that are necessary for successful VoIP implementation are already built in. All the features are integrated in one multiple server based application.

Our Products

We have categorized our products into three divisions:

·	VoipSwitch (www.voipswitch.com);
·	Video On Demand; and

·	Call-to-PBX (www.calltopbx.com)

VoipSwitch

VoipSwitch is an award-winning software platform enabling rapid roll-out of VoIP services. It has all the elements to implement a full range of VoIP services. Customers can profit from a variety of services from wholesale voice and SMS termination, calling cards (phone to phone) and a variety of callback options, as well as benefit from Class 5 services (voicemail and own phone numbers).

The system includes the following feature set:

Billing System

Various authentication methods include prepaid/postpaid accounts with a robust engine, fully integrated with the softswitch. It is in cooperation with MySQL advanced billing features, and includes support for monthly calling plans.

PBX hosted platform module includes:

·	A multi-tenant hosted PBX platform;
·	Voice, video, SMS, IM support;

·	Video conference from web;
·	Enhanced company structure and user accounts management;

·	Ring/Hunt groups; and
·	IVR scenarios.

IP IVR (Phone to Phone calling cards module) includes:

·	Customizable IVR scenarios (XML), ready to use templates, Caller ID recognition, and
·	One or two stage calling procedures, support for DIDs as access numbers.

Callback includes:

·	Authentication by caller ID or PIN, various methods of realizing Callback;
·	Support for DIDs as Callback service numbers, SMS and Web triggered Callback; and

·	Embedded IVR system.

Regular Callback.

·	Call back is initiated by making a phone call to a provider’s service number. The service number can be implemented by DID from a DID provider, PSTN or GSM gateway or a mobile phone connected to a PC (not necessarily server) with a special application (which is part of the module) that communicates with the mobile and forwards the requests to VoipSwitch.
·	Authorization methods:

·	By PIN – the system calls back to the caller ID that has come with the call. After the call is connected the IVR prompts for a PIN; after successful authorization the two stage dialing scenario is processed.
·	By Caller ID (ANI) – the system tries to authorize the Caller ID received with the triggering call. If authorization is successful (the caller ID is associated with a user account in the system), the system makes a call to the caller ID or to a default phone number assigned to the user account (defined by the user e.g. from the web).

By DID – Each user has a unique DID (virtual phone number) associated with his/her account. After dialing this DID the system initiates a call to a predefined phone number associated with the account (not the caller ID). This service is mainly for users requesting callback that use phone services with blocked caller ID.

SMS Callback.

Users trigger the callback by sending an SMS to a provider’s service number via a mobile phone connected to a PC (not necessarily server) with a special application (which is part of the module).Thereafter the call communicates with the mobile and forwards the requests to the VoipSwitch. An alternative method is renting the SMS number from an SMS provider which will forward incoming text messages to a specified VoipSwitch URL. Authorization method: by Caller ID of the phone from which SMS has been sent or by user/password (or PIN) sent in SMS.

Web Callback.

·	Sometimes called Connect Two, this feature creates a conference between two parties initiated from the web interface level or from a special desktop application, Callback Dialer.

Softphones – Vippie and SIPLink includes:

·	Based on SIP protocol, proprietary VoIP tunnel technology – Making/Receiving calls even behind VoIP blockades;
·	Full integration with the web interface, quick access to Voicemail;

·	Sending SMS, Instant Messaging – Chat, presence, file transfer;
·	Address book shared with the Web Portal interface; and

·	G729, G722, G711 and other codecs.

Resellers system (VSR) includes:

·	Multilevel structure, Web-based comprehensive interface;
·	Support for multi-currency; and

·	Customizable web interface for end-users, integration with the E-Shop.

Callshop includes:

·	Real-time monitoring and billing, booths visualization; and
·	Standalone and web based versions invoicing

Authorization of logon data and accounting features are fully integrated within the softswitch engine in one application. This makes the platform exceptionally efficient as it utilizes internal billing procedures without having to connect to external systems. A uniform interface is created that extends the platform functionality by linking account billing details with routing and switching settings.

Main characteristics include:

·	Pre-paid and post-paid accounts;
·	Support for monthly plans with free or promotional minutes to certain destinations;

·	Recurring payments: Monthly, daily or others e.g. monthly payment for DID number, subscription plan, Voicemail to text;
·	transcription, E911 etc;

·	Managing user accounts, blocking, setting limits;
·	Automatic accounts (PIN) generator;

·	Creating and managing rates sheets, attributing rates sheets to individual accounts;
·	Advanced rating system, defining special rating properties per destination/globally per sheet;

·	Payments reports;
·	Alerting procedures on low account balance, alerts sent to customers via email;

·	Billing for terminators (cost control);
·	Profit reports;

·	Invoicing – Automatic invoices generation, invoices available to customers through the web interface or sent by email (PDF format);
·	Detailed calls history reports, available for customers from the web interface (Excel or TXT format), also can be sent along with invoice in PDF format;

·	Import/Export accounts from/to Excel or TXT file;
·	Import/Export rates sheets from/to Excel or TXT file; and

·	All accounts and billing information stored in SQL database.

Provisioning

Provisioning includes graphical interfaces for managing the whole system within the main package. An administrator or user with restricted rights can perform various tasks, from creating new accounts to debugging traffic.

VoipSwitch Real-time monitor includes:

·	Real-time monitoring, live call information, statistics at a glance (number of connections, connected calls, registered users, ASR/ACD/ PDD and others);
·	Registered users details, gatekeepers/Sip registrars status, system logs; and

·	Debug functionality for selected connections.

Main functionality includes:

·	Managing user accounts – divided by type, that limits users to particular services (callback, calling cards, wholesale, broadband calling clients, callshops), also support for one account for all services;
·	Managing rates sheets;

·	Dialing plan;
·	Managing resellers accounts;

·	Protocol settings;
·	Alerts, system services, recurring payments, special tasks, watchdog;

·	Advanced reporting, detailed information on the traffic, CDRs, export to various formats, filters (per route, destination, client, date/time, duration, cost etc.);
·	Statistics – ASR, ACD, PDD and other parameters;

·	Balance reports;
·	Payments management;

·	Invoicing; and
·	PIN generator.

Softphones

Softphones are applications that allow users to make phone calls from computers using computer speakers and microphone. VoIPSwitch has developed unrivalled softphones for all kinds of smartphones.

VoIPSwitch’s softphone for mobile solution works both with the VoIPSwitch platform and third party SIP servers. It supports high rate compression codecs, SMS, anti-blockage solution and more.

VoIPSwitch softphone comes in two versions:

Retail version: One license connected to one handset (by IMEI); and

Wholesale version: for VoIP providers with unlimited licence for end-users.

Vippie is a softphone dialer that is downloaded onto mobile “smart phones.” VoipSwitch Vippie softphones are multifunctional VoIP applications for PCs and all mobile platforms. The software is an ideal solution for established telecom providers planning to extend their offering, as well as for those who just enter the VoIP business. The softphones can be seamlessly integrated with any Class 5 or IMS platform including VoipSwitch. With the assistance of VoipSwitch engineers the implementation of mobile and PC softphones becomes extremely easy and time-efficient. VoipSwitch softphones are equipped with excellent video and voice quality, a multitude of functions, clear design and ease of use for end-customers. The applications are constantly developed, enriched with the latest features, which makes them the competitive products in the VoIP market. Our softphones solution is white-labeled, ready to be branded with provider’s logo and design. We currently offer softphone solutions for the following devices:

·	Vippie softphone for Symbian;
·	Vippie softphone for iPhone/iPod/iPad;

·	Vippie softphone for BlackBerry;
·	Vippie softphone for Windows Mobile; and

·	Vippie softphone for Android.

Purchasing the license for any softphone means one can distribute it to an unlimited number of users registered with the same SIP server. The IP/Domain for the SIP server is hard coded in the application. Each application is linked to one handset. Vippie softphone is for regular users to make VoIP calls from their mobiles and also for IP PBX users to communicate with each other (by extensions). Calls can be forwarded to mobiles when one is out of the office, and one can listen to voicemails. Vippie softphones offer multiple features. Vippie softphone works with the VoIPSwitch platform allowing users to send SMSs for free to other Vippie users on the same network and very cheap SMSs to any other destination.

Reseller Module

The module architecture allows resellers to have their own, unique Web Portal module, Online Shop and branded softphone. They can become virtual VoIP providers based on one, central VoipSwitch, with the possibility to manage the Web Portal (under their own domain name) and integrate with their own online payment processors (e.g. PayPal accounts). The billing system behind the reseller structure is based on separate rate sheets associated with each reseller account. Resellers can create their own rate sheets for their users or sub-resellers.

Main characteristics of the Resellers module include:

·	Multi-level structure;
·	Web-based management interface;

·	Active calls monitoring;
·	Advanced reporting;

·	Multi-currency;
·	Multi-lingual;

·	Own, branded Web Portals for resellers;
·	Own E-Shop account; and

·	Branded softphone (Vippie)

Callshop Module

The Callshop module is an additional module intended for Callshop facilities whereby a customer can walk into a shop and make international phone calls. Phones are usually installed in cabins (booths). After making a call or calls, the customer receives a bill for connections made at the cash desk. In this scenario, regular phones are replaced by VoIP clients which can, for example, be multiple lines FXS gateways, SIP/H323 IP phones (adapters) or even softphones installed on personal computers (e.g. in internet cafes).

The Callshop module consists of two parts:

·	A Server side Callshop software integrated into VoipSwitch’s main application; and
·	Web flash interface; calls status as shown in real time

VoipSwitch Pricing

The price of the VoipSwitch system consists of the main package price and separate prices for the additional modules. There are two price options of the basic version of the system: the limited license at the price of $3,500, and the unlimited license at the price of $5,000.

The limited license permits only a maximum of 30 simultaneous connections. This version is recommended for start-ups since it keeps the initial investment minimal. As traffic increases the software can easily be upgraded to the next level. The subsequent upgrade to the unlimited license does not require any troublesome modifications. The limited version may run only on one IP address.

With the unlimited version, there is no limit on the number of simultaneous calls. The only limitation is related to the hardware specifications of the server on which the VoipSwitch operates. The unlimited license supports up to three VoipSwitch’s running simultaneously on independent servers attributed to the same company. There are no restrictions regarding geographical locations.

Both licensed versions have the capacity to implement the following:

·	PC to Phone services(g723.1softphoneincluded);
·	Device to phone services;

·	DID mapping;
·	Wholesale termination;

·	Customers billing;
·	Web interface for end users; and

·	Web interface for administrator.

Beyond the main package, there are additional modules that extend VoipSwitch’s features. The costs of these additional modules are listed below:

Callback module - SMS, ANI, PIN, DID, WEB	$	2,000
IP IVR (Calling cards) module	$	2,000
Resellers module	$	2,000
Call Shop module	$	2,000
Online Shop module	$	2,000
Softphone custom made design	$	1,500
Vippie Soft Phone	$	2,000
IP PBX	$	5,000
VoipSwitch Mobile Softphone (Windows)	$	15,900
VoipSwitch Mobile Softphone (Symbian)	$	15,900
Mobile Softphone Custom (logo)	$	150
VoipSwitch Mobile Softphone (Blackberry)	$	16,900
VoipSwitch Mobile Softphone (iPhone)	$	16,900
VoipSwitch Mobile Softphone (Android)	$	16,900
VoipSwitch Mobile Blackberry Call Back	$	750
Vippie Softphone with IM & SMS	$	1,500

Video On Demand (“VOD”)

A Complete VOD Platform

Videoswitch is a platform for delivering online content to a broad segment of screens ranging from smartphones and PCs to high definition home theatres. The module enhances the functionality of VoipSwitch. It utilizes the same user accounts and billing features used for voice services.

Triple play services approach

VOD functionality can be offered together with VoIP products, thus allowing Internet Telephony Providers to quickly expand their offer and enter the rapidly growing VOD market. The recent progress in media delivery technologies now makes it possible to enhance the IP services by adding video on demand and TV program delivery. VoipSwitch enables ISP and telecoms to seamlessly roll-out the feature-rich services via the public internet. An important element of the system is an integrated billing system enabling sharing the same account for all the services. Registered users can order movies, make calls, watch paid TV programs and be charged from the same account.

Platform Architecture

The system architecture is designed in such a way that a provider can start with limited investment and then scale it up when the number of subscribers grows.

Content protection

In the VOD business model it is crucial to have proper content security. This is implemented to prevent the content from being intercepted and copied. The VoipSwitch system offers protection on different levels:

Set Top Boxes

The Android based Set-top-boxes running our custom Media Center are superior end-user devices for the customers willing to watch VOD/IPTV on a TV screen at home. Intuitive Media Center makes it easy to browse movies catalogue, order videos or buy IPTV access and watch the on-demand content using just a few clicks on the remote controller.

XBMC application with VOD plugin

XBMC Media Center is a popular application for watching videos and playing music, both from offline and online sources. Its interface is designed for TV screens with emphasis on easy navigation using remote controls. The application can run on a wide selection of net top devices such as DLink Dbox, Zotac and others. It also works on Windows 7, XP and VISTA.

Our implementation of XBMC comes with an embedded SIP client, which is responsible for establishing the connection with Videoswitch and decrypting the content. The XMBC extension for Videoswitch is also offered as a plugin for other distributions of this application. The XBMC application supports live streaming over secure RTP with trick play functionality. Users, after logging in, can browse the movies catalogue and place orders.

VoIPSwitch offers the XBMC plugin which is addressed to users with existing XBMC installations. The plugin can be easily installed directly from the XBMC level from the plugins repository.

The other option is the custom made XBMC version which is downloaded and installed on the user’s device or a PC. It supports both Windows and Linux operating systems.

XBMC interface

The custom made version does not require any additional configuration by the user. The look of the interface can be branded for a particular VOD provider.

One of the most popular versions of the XBMC is the Boxee, which, in cooperation with DLink, offers the Boxee box – a set top box type device supporting HD streaming and many other attractive features.

Roku player channel

Roku player is an extremely popular set top box offering HD quality for online streaming. The VoIPSwitch VOD platform delivers ready to use scripts for publishing Roku channels which enable Roku users to enjoy the content. A provider can publish the channel on the Roku Channel Store which requires permission from Roku. Once the channel is approved it will appear in the official Channel Store and become visible to all the Roku users. This method has a tremendous marketing impact.

VOD Mobile

The VoIPSwitch solution for VOD on smartphones includes the custom client for iPhone/iPad, Android based smartphones and tablets. For Apple mobile devices VoIPSwitch offers a custom client which utilizes http live streaming technology for watching the content. The application supports trick play, browsing the movie catalogue and ordering procedures. In addition, it can be connected to the In Apple Purchase system allowing users to pay for the content using their iTunes accounts. The Android client uses direct RTP h264 streaming.

VOD Portal

The Video Portal is a flash-based web application responsible for browsing the movie catalogue, ordering movies and watching the content. The streaming technology is real time messaging protocol (“RTMP”) which is a secure (encrypted) version of flash live streaming. The player supports trick play functionality. The portal can be seamlessly embedded into an existing website.

In addition VoIPSwitch offers web-based components for signing up (creating new accounts directly from the web) and also for recharging existing accounts. The system can be connected to multiple electronic payment systems. At the moment more than 30 payment providers are supported, such as Paypal, authorize.net, cybersource and many more.

Video On Demand Pricing

Video Calls Manager

·	Price: $22,000 for primary license
·	Additional licenses are $15,000 each

·	Softswitch with integrated billing system - responsible for clients authentication, rating and billing
·	Web Admin Portal for managing the content

·	Offline transcoding module: an application responsible for converting uploaded content to required streaming formats.

Streaming Server

·	Price: $15,000 for primary license
·	Additional licenses are $10,000 each

·	Live and VOD streaming
·	Support for http live streaming, RTMP, RTMPe, RSTP, Silverlight

·	Trick play for VOD
·	Capacity 500 HD concurrent streams per server

PC Web Portal

·	Price: $10,000
·	Web portal for browsing content, ordering and instant watching

·	Customizable user interface (css)
·	Sign up component allowing for electronic payments

·	Flash or Silverlight custom players

Mobile Web Portal

·	Price: $10,000
·	Web portal designed for mobile browsers

·	Customizable user interface (css)
·	Support for iPhone/iPad http live streaming,

·	Support for RTSP interleaving (blackberry handsets)

Mobile AIR application for Android and Blackberry Play book

·	Price: $15,000
·	Unlimited number of users

·	Custom application for the devices supporting Adobe Air for mobiles. Works on devices with Android 2.1 and above and on Blackberry Playbook.

Roku Player Channel

·	Price: $8,000
·	Custom channel for Roku devices which can be used as a private or public channel available on Roku store (requires the Roku company approval).

Plugin for the Boxee

·	Box Price: $6,000
·	A plugin which can be downloaded from private repository or submitted to the Boxee main repository.

Call-to-PBX

Call-to-PBX, offers voice, video and mobile IP communications solutions for small-to-medium size businesses and residential customers. A private branch exchange (PBX) is a telephone exchange that serves a particular business or office. These solutions, based on internally developed technologies, leverage existing broadband Internet connections and cellular networks, deliver a high quality phone service at a fraction of the cost of alternative solutions. The Call-to-PBX solution eliminates the need for costly, on-premises phone systems by delivering all telephony services over managed or unmanaged Internet connections. This economical, easy-to-use alternative to traditional PBX systems or Centrex class services allows high-speed Internet users anywhere in the world to be part of a virtual PBX that includes automated attendants, conference bridges, extension-to-extension dialing and ring groups, in addition to a rich variety of other features normally found on dedicated PBX equipment. Virtual Office extensions do not require a dedicated communications infrastructure. The service is received through an existing Internet connection, thus eliminating the need for additional phone lines or digital subscriber lines for extensions, in contrast to traditional Centrex or PBX products.

In addition to the Hosted PBX service, we offer Hosted Key System service for companies whose size or structure dictates the sharing of multiple phone lines along with IP Trunking services for larger enterprises who wish to reap the cost benefits of VoIP phone service while retaining previously acquired on-premise equipment. For mobile phone users, Call-to-PBX offers Vippie Mobile -a softphone easily downloaded that seamlessly connects to the Call-to-PBX via WiFi or GPRS networks. This innovative service enables cell phone users to significantly reduce their international phone bills and maintain high digital voice quality, while still enjoying the convenience and flexibility of mobile calling.

Financing and Revenue Sources

We are headquartered in London. To support our growth and in recognition of global opportunity, our revenue stream is from the VoipSwitch sales of software and support. Revenues are generated from sales of licenses and their ongoing monthly service charges to resellers. Resellers range from small to medium VoIP business’s globally offering telephony via the Internet enabling registered users to call overseas at reduced rates and between users for free. Purchasing the VoIPSwitch license creates a virtual telecom supplier facility.

Manufacturing

All the Company’s development and manufacturing is done on a consultancy basis in Poland. Once a principle idea for software is developed engineers are commissioned on a consultancy basis to implement these principles into the current Voipswitch infrastructure. The Company has many divisions within the software parameters. There are mobile dialers, which need constant updating due to new phone apparatus circulating on the market, and customers’ demands for added features. In addition the Company is working on releasing its Video on Demand portal, software which will enable end users to watch videos from smartphones and tablets.

Sales and Marketing

Our marketing objective is to grow Voipswitch users and revenue by cost-effectively acquiring and retaining customers. We employ an integrated multi-channel approach to marketing, whereby we evaluate and focus our efforts on efficient marketing vehicles to accomplish our goals. To do this, we make use of both broad-reaching and highly-targeted media channels in the general, direct mail, online, alternative media, telemarketing, partner marketing, and international exhibition programs. We make use of marketing research to gain consumer insights into brand, product, and service performance, and utilize those learning’s to improve our messaging and media plans. Market research is also leveraged in the areas of testing, retention marketing, and product marketing to ensure we bring compelling products and services to market for our customers.

Customers

The company exhibits at many shows globally, including in the United States, Europe, Asia and the Middle East. These shows attract local customers from these regions. Advertising through forums and on the web internationally is another source for gaining customer interest. Our sales to customers are wide spread globally and cover most continents.

Competition

We face continued competition from alternative communication providers. Our success is dependent upon our ability to attract customers away from more expensive softswitch manufactures. We believe that the principal competitive factors affecting our ability to attract and retain customers are price, call quality, customer service, and enhanced services and features.

Patent and Trademarks

We currently do not own any patents or licenses of any kind and therefore we have no protected rights with respect to our services. However the VoIPSwitch logo and name has been trademarked in the United Kingdom and Ireland as of June 18, 2010. Applications have been submitted to expand the trade mark across the European continent.

Governmental Regulations

There are no governmental approvals necessary to conduct our current business. Although this permits us to provide our services without the time and expense of governmental supervision it also allows competitors to more easily enter this business market.

Employees

Currently, we have no full-time or part-time employees. All those who perform services for the Company do so as consultants and independent contractors. We have retained 75 consultants that are spread globally in five countries, including Poland, the United Kingdom, Switzerland, Belgium and Israel.

Item 1A.

Risk Factors.

Smaller reporting companies are not required to provide the information required by this item.

Item 1B.

Unresolved Staff Comments.

None.

Item 2.

Properties.

Our registered offices are located at Grosvenor House 1 High Street, Middlesex HA8 7TA. We house our equipment at the above address. There is a lease agreement between us and the landlord with a rent of approximately £710 (or $1,136 translated at the March 31, 2012 exchange rate) per month. We believe that this space is sufficient and adequate to operate our current business.

Item 3.

Legal Proceedings.

We are currently not involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

Item 4.

Mine Safety Disclosure.

Not Applicable.

PART II

Item 5.

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

Market Information

Our common stock has traded on the OTC Bulletin Board (“OTCBB”) system under the symbol “VSRV” since July 24, 2007. There is a limited trading market for our common stock. The following table sets forth the range of high and low bid quotations for each quarter within the last fiscal year. These quotations as reported by the OTCBB reflect inter-dealer prices without retail mark-up, mark-down or commission and may not necessarily represent actual transactions. The high and low prices listed have been rounded up to the next highest two decimal places.

	High		Low
January 1, 2011 to March 31, 2012	$	0.50		0.24
October 1, 2011 to December 31, 2011	$	0.31		0.19
July 1, 2011 to September 30, 2011	$	0.50		0.14
April 1, 2011 to June 30, 2011	$	0.38		0.24
January 1, 2011 to March 31, 2011	$	0.25		0.12
October 1, 2010 to December 31, 2010	$	0.33		0.18
July 1, 2010 to September 30, 2010	$	0.35		0.20
April 1, 2010 to June 30, 2010	$	0.48		0.15

The market price of our common stock is subject to significant fluctuations in response to variations in our quarterly operating results, general trends in the market, and other factors, many of which we have little or no control. In addition, broad market fluctuations, as well as general economic, business and political conditions, may adversely affect the market for our common stock, regardless of our actual or projected performance.

Holders

As of July 9, 2012 we had approximately 50 record holders of our common stock, holding 47,585,198 shares of common stock. Because shares of our common stock are held by depositaries, brokers and other nominees, the number of beneficial holders of our shares is substantially larger than the number of stockholders of record.

Holders of our common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Therefore, holders of a majority of the shares of common stock voting for the election of directors can elect all of the directors. Holders of our common stock representing a majority of the voting power of our capital stock issued and outstanding and entitled to vote, represented in person or by proxy, are necessary to constitute a quorum at any meeting of our stockholders. A vote by the holders of a majority of our outstanding shares is required to effectuate certain fundamental corporate changes such as liquidation, merger or an amendment to our Certificate of Incorporation.

Although there are no provisions in our charter or by-laws that may delay, defer or prevent a change in control, we are authorized, without shareholder approval, to issue shares of preferred stock that may contain rights or restrictions that could have this effect.

Holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of liquidation, dissolution or winding up, each outstanding share entitles its holder to participate pro rata in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. Holders of our common stock have no pre-emptive rights, no conversion rights and there are no redemption provisions applicable to our common stock.

Dividends

Since inception we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock, although we intend to retain our earnings, if any, to finance the exploration and growth of our business, our Board of Directors will have the discretion to declare and pay dividends in the future.

Payment of dividends in the future will depend upon our earnings, capital requirements, and other factors, which our Board of Directors may deem relevant.

Securities Authorized for Issuance Under Equity Compensation Plans

At March 31, 2012, Voiceserve, Inc. 2009 Equity Incentive Plan was in effect. There were no other equity compensation plans in effect. The following information concerning this plan is as of March 31, 2012:

Equity Compensation Plan Information
Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a)		Weighted-average exercise price of outstanding options, warrants and rights (b)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))(c)
Equity compensation plans approved by security holders		-		-		-
Equity compensation plans not approved by security holders		0		-		2,000,000
Total		0		0		2,000,000

Item 6.

Selected Financial Data.

Smaller reporting companies are not required to provide the information required by this item.

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following provides information which management believes is relevant to an assessment and understanding of our results of operations and financial condition. The discussion should be read along with our financial statements and notes thereto. The following discussion and analysis contains forward-looking statements, which involve risks and uncertainties. Our actual results may differ significantly from the results, expectations and plans discussed in these forward-looking statements. See “Cautionary Statement on Forward-Looking Information.”

Overview

We were founded December 9, 2005 as 4306, Inc. On February 20, 2007, pursuant to a share exchange agreement (the “Share Exchange”), Voiceserve Limited became our wholly owned subsidiary. Following the Share Exchange, we adopted Voiceserve Limited’s business plan and began conducting business as a global Internet communications company. We are now a global Internet communications company that makes it possible for anyone with an Internet connection to make low cost, high quality voice calls over the Internet. Immediately following the Share Exchange, we changed our name to VoiceServe, Inc., to better reflect our new business plan.

Voiceserve Limited was founded in March 2002 by Michael Bibelman, Alexander Ellinson and Mike Ottie. The founders each have over 15 years of experience in the telecommunications industry.

We generate revenue by developing, manufacturing, licensing, and supporting a wide range of VoIP software products and services for many different types of devices, including a wide range of cellular telephones. Our founders began their careers in 1991 with Econophone Inc. (“Econophone”) a marketer of international “call-back” and “calling cards”. The founders worked as independent resellers of calling cards creating markets in Europe and third world countries transmitting the calls via universal 0800 numbers. While working at Econophone, the founders discovered a huge potential in the market for pre-paid calling cards and were one of the first groups in the industry to market such a product in Europe. Our founders introduced, among the many famous European distributors to market such a product, the Audax Group (“Audax”), based in Holland with an annual turnover in excess of $850 million. Our founders were also instrumental in aiding Econophone LLC in its transformation from a privately held company to one listed on the New York Stock Exchange, known thereafter as Viatel. Once Viatel was listed on the New York Stock Exchange, our founders independently set up their own ISDN and VoIP platforms with the intention of developing and marketing a comprehensive VoIP solution.

Our marketing efforts are focused on VoIP wholesalers termination carriers, retail VoIP providers, Internet providers, including WiFi and WiMax operators, Cable TV networks, GSM providers, telecom resellers, prepaid serve companies, and small-to-medium size companies (businesses, hotels, hospitals, etc.).

On January 15, 2008, we acquired all of the issued and outstanding ordinary shares of VoIPSwitch as well as all of VoipSwitch’s assets, including customer orders and intangible assets, for total consideration of $3,000,000 consisting of $450,000 cash, $150,000 notes payable due on demand, $600,000 notes payable in total monthly installments of $50,000 per month for 12 months, and 3,750,000 shares of our common stock valued at $0.48 per share or $1,800,000. Payment of the monthly installments of the $600,000 notes payable was contingent upon and limited each month to the future monthly net income of VoIPSwitch. Accordingly, pursuant to SFAS No. 141, this $600,000 “contingent consideration” portion of the $3,000,000 total purchase price was not included in the initial recorded cost of the acquisition or the recorded notes payable. As payments of the $600,000 notes payable were made, such paid amounts were added to goodwill.

On December 7, 2010, pursuant to a verbal agreement on October 19, 2010, Voiceserve issued a total of 2,250,000 SEC Rule 144 restricted shares of its common stock to the three sellers of VoipSwitch in full and final satisfaction of debt totaling $463,000, consisting of the $150,000 demand note payable and the remaining $313,000 “contingent consideration” potential amount due the three sellers. The $131,250 excess of the $281,250 estimated fair value of the shares, which was calculated based on the October 19, 2010 nearest day closing trading price of $0.25 per share and a 50% restricted stock discount (2,250,000 shares x $0.125 [50% discount applied to 0.25 per share price] per share = $281,250), over the $150,000 demand note payable was added to goodwill.

VoipSwitch

VoipSwitch is a complete IP telephony system offering a variety of services including device to phone technology, PC to phone/web to phone features, calling cards, SMS/ANI/PIN/DID/WEB callback, DIDs’ mapping, call shops and more. Unlike competitive VoIP systems composed of many different parts, the VoipSwitch platform is fully integrated into one application, which makes it easy to manage. All elements that are necessary for VoIP implementation are already built in. All the features are integrated in one multiple server based application. To date, we have installed over 16,000 VoipSwitch systems around the world.

The “VoipSwitch Brand” has gained recognition and popularity especially in countries where land-line telecommunication infrastructure are less developed. Since increasing our participation in telecom conferences and exhibitions over the last year, awareness of our comprehensive VoIP software offering has significantly increased.

To further the breadth of VoipSwitch’s system, we added VoIP dialers for cellular phones. Over the last twelve months, we have enhanced its dialers for Blackberry and Apple’s iPhone, in addition to its existing dialers for Symbian (Nokia, Motorola, Samsung, Sony, etc.), Android and Windows® cellular phones. We have also introduced video conferencing for Apple, iPads and iPods, enabling the end-users to conduct economical VoIP video conference calls, worldwide via the internet.

The Company cultivates long-term growth of its businesses through technological innovation, engineering excellence, advanced functionality and security, and a commitment to delivering high-quality products and services. Our goal is to deliver products that provide the best platform with the lowest total cost of ownership.

We will continue to invest in research and development in existing and new lines of business, including Video On Demand. We will also invest in research and development of advanced technologies for future products. We believe that delivering innovative and high-value solutions through our integrated platform is the key to meeting customer needs and to our future growth.

We believe that we have laid a foundation for long-term growth by delivering innovative products, creating opportunities for wholesale and retail partners, and offering a comprehensive VoIP software platform with a low cost of ownership for service providers as well as end users. Our focus in fiscal year 2013 is to build on this foundation, and expand our marketing efforts into North, Central and South America and Asia.

Key market opportunities:

VoipSwitch Softswitch Technology. We are focused on delivering consumers softswitch products that we believe are compelling in terms of design, features, and functionality. We also are working to define the next era of VoIP telephony through the development of innovative software that runs on a wide range of devices and connects people quickly and easily to the information, experiences, and communities they care about.

Mobile phone VoIP connectivity. The ability to combine the power of VoIP and mobile technology via the Internet represents an opportunity across all our businesses lines. We believe our approach will enable us to deliver new experiences to end users and new value to businesses.

Expanding our presence. Through our ability to deliver additional value in VoIP telephony, we believe we are well-positioned to build on our strength. In addition to wholesalers and retailers, we intend to market our VoIP software to small-to-medium size business, hotels, cruise lines, hospitals and schools/universities.

Plan of Operation

During the next twelve months, we expect to take the following steps in connection with the development of our business and the implementation of our plan of operations:

·	Maintain a strong presence at key telecommunications exhibitions across the world.
·	Further develop our Video On Demand capabilities with additional full-time programmers hired during the quarter. We expect to introduce a Video On Demand solution for Hoteliers during our second or third quarter of the current fiscal year. We believe providing VOD to our customers will have a material impact on our ability to penetrate market opportunities.

·	Market our VoIP software capabilities to the transportation industry (commercial and leisure), hotel industry, small-to-medium size business and larger commercial enterprises, as well as wholesalers and resellers.
·	Amass a large subscription base for our Vippie retail service via Internet advertising and direct marketing.

·	Expand our distribution partnership network throughout Asia.

Private Placements

On May 6, 2011, we entered into definitive agreements with investors to sell in a private placement an aggregate of 2,623,077 shares of our common stock and warrants to purchase 1,311,539 shares of our common stock at a purchase price of $0.13 per unit, resulting in gross proceeds to us of $341,000, before deducting placement agent fees and other offering expenses. The warrants are exercisable at an exercise price of $0.30 per share and expire three years from the closing date.

On June 6, 2011, we entered into definitive agreements with investors to sell in a private placement an aggregate of 1,207,692 shares of our common stock and warrants to purchase 603,846 shares of our common stock at a purchase price of $0.13 per unit, resulting in gross proceeds to us of $157,000, before deducting placement agent fees and other offering expenses. The warrants are exercisable at an exercise price of $0.30 per share and expire three years from the initial closing date.

Results of Operations

Year Ended March 31, 2012 Compared to the Year Ended March 31, 2011

The following table presents the statement of operations for the year ended March 31, 2012 as compared to the year ended March 31, 2011. The discussion following the table is based on these results.

	Year Ended March 31,
	2012			2011

Operating revenues:
Software license fees	$	4,553,595		$	4,140,211
Revenues from communications air time		527			255,117
Total operating revenues		4,554,122			4,395,328

Cost of operating revenues:
Software license fees		2,636,587			2,076,685
Communications air time		(4,390	)		228,778
Total cost of operating revenues		2,632,197			2,305,463

Gross profit (loss)		1,921,925			2,089,865

Operating expenses:
Selling, general and administrative expenses, including
stock-based compensation of $592,664 and
$330,552, respectively		3,103,182			3,166,134



Total operating expenses		3,103,182			3,166,134

Loss from operations		(1,181,257	)		(1,076,269	)
Income (loss) from revaluation of liability for common stock purchase warrants		(700,472	)		305,394
Interest income		82			29
Interest expense		(899	)		(1,211	)

Loss before income taxes		(1,882,546	)		(772,057	)

Income taxes (benefit)		4,669			---

Net Loss	$	(1,887,215	)		(772,057	)

Net Loss per share - basic and diluted	$	(0.04	)		(0.02	)

Weighted average number of shares
outstanding - basic and diluted		43,592,574			36,352,342

Total Revenues

Revenues were $4,554,122 for the year ended March 31, 2012 and $4,395,328 for the year ended March 31, 2011. The increase in sales is primarily attributed to increased marketing at industry shows and conferences, the addition of softswitch modules and increased sales to existing clients. The company has been exhibiting globally at prominent and significant IT and VoIP exhibitions. Presence at shows increases awareness to the company’s broad spectrum of its software products and modules. Furthermore, we have added three additional types of mobile dialers: Windows, Android and the Apple dialers. This allows connectivity to the VoipSwitch softphone not only from a PC, but even from a mobile phone while in WiFi, 3G or Edge environment. The Company’s client base is spread globally. For the year ended March 31, 2012, the revenues were generated 26% from Europe, 29% from North America, 26% from Asia, and 19% from other regions. It should be noted that Deferred Revenue decreased to $181,503 at March 31, 2012 as compared with $188,197 at March 31, 2011. In most cases, Deferred Revenue will be recognized over the subsequent twelve month period.

Cost of Revenues

Cost of revenues for fiscal year 2011 was $2,632,197 compared to $2,305,463 for fiscal year 2011. The increase in cost of revenues in 2012 reflects higher configuration and support labor costs as a result of the increase in customers and prospective customers. Also included in cost of revenues is amortization of intangible assets of $200,000 in both fiscal years 2012 and 2011. Gross margin averaged 42% in fiscal year 2012 compared to 48% for fiscal 2011.

Operating Expenses

Selling, General and Administrative Costs

SG&A for fiscal 2012 was $3,103,182 a decrease of $62,952 over the prior year level of $3,166,134. The decrease results primarily from the $451,288 decrease in advertising and sales promotion expenses (from $805,598 in 2011 to $354,310 in 2012), offset partially by the $262,112 increase in stock-based compensation (from $330,552 in 2011 for $592,664 in 2012). Also included in SG&A is amortization of intangible assets of $30,000 in both fiscal years 2012 and 2011.

Net Income (Loss)

The Company incurred a net loss for the year ended March 31, 2012 of $1,887,215 compared to a net loss of $772,057 for the year ended March 31, 2011. The $1,115,158 increase in net loss was primarily due to the $1,005,866 change in income (loss) from revaluation of liability for common stock purchase warrants from income of $305,394 in fiscal 2011 to a loss of $700,472 in fiscal 2012 (which was due to a higher stock price of our common stock at March 31, 2012). Excluding income (loss) from revaluation of liability for common stock purchase warrants, the net loss for the years ended March 31, 2012 and 2011 was $1,186,743 and $1,077,451, respectively.

Year Ended March 31, 2011 Compared to the Year Ended March 31, 2010

The following table presents the statement of operations for the year ended March 31, 2011 as compared to the year ended March 31, 2010. The discussion following the table is based on these results.

	Year Ended March 31,
	2011			2010

Operating revenues:
Software license fees	$	4,140,211		$	3,168,876
Revenues from communications air time		255,117			141,189
Total operating revenues		4,395,328			3,310,065

Cost of operating revenues:
Software license fees		2,076,685			1,038,671
Communications air time		228,778			124,422
Total cost of operating revenues		2,305,463			1,163,093

Gross profit (loss)		2,089,865			2,146,972

Operating expenses:
Selling, general and administrative expenses, including
stock-based compensation of $330,552 and
$405,772, respectively		3,166,134			2,812,453



Total operating expenses		3,166,134			2,812,453

Loss from operations		(1,076,269	)		(665,481	)
Income from revaluation of liability for common stock purchase warrants		305,394			-
Interest income		29			39
Interest expense		(1,211	)		-

Loss before income taxes		(772,057	)		(665,442	)

Income taxes (benefit)		---			---

Net Loss	$	(772,057	)		(665,442	)

Net Loss per share - basic and diluted	$	(0.02	)		(0.02	)

Weighted average number of shares
outstanding - basic and diluted		36,352,342			31,990,848

Total Revenues

Revenues were $4,395,328 for the year ended March 31, 2011 and $3,310,065 for the year ended March 31, 2010. The increase in sales is primarily attributed to increased marketing at industry shows and conferences, the addition of softswitch modules and increased sales to existing clients. The company has been exhibiting globally at prominent and significant IT and VoIP exhibitions. Presence at shows increases awareness to the company’s broad spectrum of its software products and modules. Furthermore, we have added three additional types of mobile dialers: Windows, Android and the Apple dialers. This allows connectivity to the VoipSwitch softphone not only from a PC, but even from a mobile phone while in WiFi, 3G or Edge environment. The Company’s client base is spread globally. The revenues were generated from 40% of sales in Asia, 33% of sales in North America, 20% of sales in Europe and 7% across other regions. It should be noted that Deferred Revenue decreased to $188,197 at March 31, 2011 as compared with $245,666 at March 31, 2010. In most cases, Deferred Revenue will be recognized over the subsequent twelve month period.

Cost of Revenues

Cost of revenues for fiscal year 2011 was $2,305,463 compared to $1,163,093- for fiscal year 2010. The increase in cost of revenues in 2011 reflects higher configuration and support labor costs as a result of the increase in customers and prospective customers. Also included in costs of revenues is amortization of intangible assets of $200,000 in both fiscal years 2011 and 2010. Gross margin averaged 48% in fiscal year 2011 compared to 65% for fiscal 2010.

Operating Expenses

Sales, General and Administrative Costs

SG&A for fiscal 2011 was $3,166,134, an increase of $353,681 over the prior year level of $2,812,453. The increase results primarily from the $368,697 increase in advertising (from $436,901 in 2010 to $805,598 in 2011) and higher consulting fees, offset partially by the $75,220 decrease in stock based compensation (from $405,772 in 2010 to $330,552 in 2011). Also included in SG&A is amortization of intangible assets of $30,000 in both fiscal years 2011 and 2010.

Net Income (Loss)

The Company incurred a loss from operations for the year ended March 31, 2011 of $1,076,269 compared to a loss of $665,481 for the year ended March 31, 2010. Our increase in our loss from operations for the year ended March 31, 2011 was due to our investment in a larger support facility, which was required due to our developing VOD as well as our increased data base through our increase in sales.

Liquidity and Capital Resources

As of March 31, 2012 we had $315,774 in cash and cash equivalents. On May 26, 2010, we closed on the sale to certain accredited investors of a total of 2,760,000 shares of common stock at a price of $0.25 per share and 1,380,000 warrants to purchase 1,380,000 shares of common stock, for $690,000 gross proceeds. Each warrant entitles the holder to purchase one share of common stock at a price of $0.50 per share and is exercisable for a period of five years.

Additionally, on May 6, 2011 and June 6, 2011 we raised a total of $498,000 through the sale of shares of the Company’s common stock and warrants to purchase shares of the Company’s common stock. Each warrant entitles the holder to purchase one share of common stock at a price of $0.30 per share and is exercisable for a period of three years. In connection with the sale, the Company and the investors executed a securities purchase agreement and a registration rights agreement. The Company has not yet filed a registration statement covering the resale of the shares of common stock issued in the offering and the shares of common stock underlying the warrants. The Company is liable to pay monthly (until cured) partial liquidated damages to the investors equal to 1% of the purchase price paid by the investors, subject to a maximum of 10% of the purchase price paid by the investors.

Additional capital may be required in order to grow and sustain operations over the next twelve months. In addition, unless the Company becomes profitable and begins generating sufficient cash flow, we will need to raise additional capital to continue our operations past 12 months, and there is no assurance we will be successful in raising the needed capital. We believe that, if the Company’s operational cash flow is not sufficient to support its operational and/or its marketing strategy, its short-term capital needs could range between $500,000 and $1,500,000 for which it would most probably seek to raise the capital in the equity markets.

Long term capital needs of the company highly depend upon the amount of time it takes for us to achieve market penetration. If we are successful in growing market share and developing new markets around the world, it will be necessary for us to hire additional employees to support an expanding client base. If additional working capital is needed to support an expanded operation, we will seek such capital in the form of debt and/or equity. Management believes that the Company’s long term capital needs could potentially range between $1,500,000 and $3,000,000.

Currently, we have no material commitments for capital expenditures. Management believes that actions presently being taken to obtain additional funding and implement its strategic plans provide the opportunity for the Company to continue as a going concern. In the short term, should the release of our new features and modules take longer than we anticipate capital will be required to finance the engineers working on these products. Long term, once the products are fully developed, enhanced capital will be required in order to expand our marketing prospects we plan to introduce in different regions and markets.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Arrangements

We have never entered into any off-balance sheet financing arrangements and have never established any special purpose entities. We have not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Critical Accounting Policies

Management’s discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amount of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to impairment of long-lived assets, finite lived intangible assets, accrued liabilities and certain expenses. We base our estimate on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are summarized in Note 2 of our audited financial statements for the year ended March 31, 2012. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:

Revenue Recognition

Revenues from licenses of software are recognized upon delivery of the software when persuasive evidence of an arrangement exists, the fee is fixed or determinable, and collectability is probable. The portion of the fee allocated to post contract customer support and services is recognized ratably over the period of the agreed support and services.

Sales of communications devices are recorded when title passes to the customer which is generally at time of shipment to the customer. Substantially all sales are prepaid by the customer by credit card.

Property and Equipment, Net

Property and equipment, net is stated at cost less accumulated depreciation. Depreciation is calculated using an accelerated declining balance method over the estimated useful lives of the respective assets.

Intangible Assets

Intangible assets, net are stated at their estimated fair values at date of acquisition less accumulated amortization. Amortization is calculated using the straight-line method over the estimated economic lives of the respective assets.

Goodwill and Intangible Assets with Indefinite Lives

The Company does not amortize goodwill and intangible assets with indefinite useful lives, but instead tests for impairment at least annually. When conducting the annual impairment test for goodwill, the Company compares the estimated fair value of a reporting unit containing goodwill to its carrying value. If the estimated fair value of the reporting unit is determined to be less than its carrying value, goodwill is reduced and an impairment loss is recorded.

Long-lived Assets

The Company reviews long-lived assets held and used, intangible assets with finite useful lives and assets held for sale for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If an evaluation of recoverability is required, the estimated undiscounted future cash flows associated with the asset is compared to the asset’s carrying amount to determine if a write-down is required. If the undiscounted cash flows are less than the carrying amount, an impairment loss is recorded to the extent that the carrying amount exceeds the fair value.

Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation”.

In addition to requiring supplemental disclosures, ASC 718, Compensation – Stock Compensation, addresses the accounting for share-based payment transactions in which a company receives goods in exchange for (a) equity instruments of the company or (b) liabilities that are based on the fair value of the company’s equity instruments or that may be settled by the issuance of such equity instruments. FASB ASC 718 focuses primarily on accounting for transactions in which a company obtains employee services in share-based payment transactions.

References to the issuances of restricted stock refer to stock of a public company issued in private placement transactions to individuals who are eligible to sell all or some of their shares of restricted Common Stock pursuant to Rule 144 promulgated under the Securities Act of 1933 (“Rule 144”), subject to certain limitations. In general, pursuant to Rule 144, a stockholder who is not an affiliate and has satisfied a six-month holding period may sell all of his restricted stock without restriction, provided that the Company has current information publicly available. Rule 144 also permits, under certain circumstances, the sale of restricted stock, without any limitations, by a non-affiliate of the Company that has satisfied a one- year holding period.

Recently Adopted Accounting Pronouncements

The FASB has issued ASU 2010-29, Business Combinations (Topic 805): Disclosure of Supplementary Pro Forma Information for Business Combinations. This ASU reflects the decision reached in EITF Issue No. 10-G. The amendments in this ASU affect any public entity that enters into business combinations that are material on an individual or aggregate basis.

The amendments in this ASU specify that if a public entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination(s) that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period only. The amendments also expand the supplemental pro forma disclosures to include a description of the nature and amount of material, nonrecurring pro forma adjustments directly attributable to the business combination included in the reported pro forma revenue and earnings.

The amendments were effective prospectively for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2010. The adoption of this amendment did not have a material impact on the Company’s financial statements.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk.

Smaller reporting companies are not required to provide the information required by this item.

Item 8.

Financial Statements and Supplementary Data.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

VoiceServe, Inc.

I have audited the accompanying consolidated balance sheets of VoiceServe, Inc. and subsidiaries (the “Company”) as of March 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. My responsibility is to express an opinion on these financial statements based on my audits.

I conducted my audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that I plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. I believe that my audits provide a reasonable basis for my opinion.

In my opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Voiceserve, Inc. and subsidiaries as of March 31, 2012 and 2011 and the results of their operations and cash flows for the years then ended in conformity with accounting principles generally accepted in the United States.

The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company’s present financial situation raises substantial doubt about its ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Michael T. Studer CPA P.C.

Michael T. Studer CPA P.C.

Freeport, New York

July 13, 2012

F-1

VOICESERVE, INC. AND SUBSIDIARIES
Consolidated Balance Sheets

	March 31,			March 31,
	2012			2011

Assets

Current assets:
Cash and cash equivalents	$	315,774		$	141,739
Accounts receivable, net of allowance
for doubtful accounts of $89,662 and $6,735, respectively		106,691			48,769
Prepaid expenses and other current assets		27,714			82,823

Total current assets		450,179			273,331

Property and equipment, net of accumulated depreciation
of $68,573 and $66,878 respectively		7,927			10,045
Intangible assets, net of accumulated amortization of
$967,917 and $737,917, respectively		1,895,124			2,125,124

Total assets	$	2,353,230		$	2,408,500

Liabilities and Stockholders' Equity

Current liabilities:
Accounts payable	$	420,125		$	348,493
Accrued expenses payable		10,410			11,464
Deferred software license fees and support		181,503			188,197
Loans payable to related parties		38,308			38,236

Total current liabilities		650,346			586,390
Liability for common stock purchase warrants		1,066,808			152,214


Total liabilities		1,717,154			738,604

Stockholders' equity:
Preferred stock, $.001 par value; authorized
10,000,000 shares, none issued and outstanding		-			-
Common stock, $.001 par value; authorized
100,000,000 shares, issued and outstanding
44,585,198 and 38,354,429 shares, respectively		44,585			38,354
Additional paid-in capital		6,310,662			5,482,281
Deficit		(5,653,427	)		(3,766,212	)
Accumulated other comprehensive loss		(65,744	)		(84,527	)

Total stockholders' equity		636,076			1,669,896

Total liabilities and stockholders' equity	$	2,353,230		$	2,408,500

See notes to consolidated financial statements.

F-2

VOICESERVE, INC. AND SUBSIDIARIES
Consolidated Statements of Operations and Comprehensive Loss

	Year Ended March 31,
	2012			2011
Operating revenues:
Software license fees and support	$	4,553,595		$	4,140,211
Revenues from communications airtime and devices		527			255,117

Total operating revenues		4,554,122			4,395,328

Cost of operating revenues:
Software license fees and support		2,636,587			2,076,685
Cost of communications airtime and devices		(4,390	)		228,778

Total cost of operating revenues		2,632,197			2,305,463

Gross profit		1,921,925			2,089,865

Operating expenses:
Selling, general and administrative expenses, including
stock-based compensation of $592,664 and
$330,552, respectively		3,103,182			3,166,134

Total operating expenses		3,103,182			3,166,134

Loss from operations		(1,181,257	)		(1,076,269	)

Income/(loss) from revaluation of liability for common stock purchase warrants		(700,472	)		305,394
Interest income		82			29
Interest expense		(899	)		(1,211	)

Loss before income taxes		(1,882,546	)		(772,057	)

Income taxes		4,669			-

Net loss	$	(1,887,215	)	$	(772,057	)

Net loss per share - basic and diluted	$	(0.04	)	$	(0.02	)

Weighted average number of shares
outstanding - basic and diluted		43,592,574			36,352,342

Comprehensive Loss:
Net loss	$	(1,887,215	)	$	(772,057	)
Foreign currency translation adjustment		18,783			(72,415	)
Comprehensive loss	$	(1,868,432	)	$	(844,472	)

See notes to consolidated financial statements.

F-3

VOICESERVE, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity

										Accumulated
	Common Stock,				Additional					Other			Total
	$.001 par value				Paid-In					Comprehensive			Stockholders'
	Shares		Amount		Capital		Deficit			Income (Loss)			Equity

Balances,
March 31, 2010		32,402,935	$	32,403	$	4,733,537	$	(2,994,155	)	$	(12,112	)	$	1,759,673

Private placement of shares
and warrants,
less $89,499 costs and
less $457,608
attributable to warrants
classified as liabilities		2,760,000		2,760		140,133		-			-			142,893

Shares issued for services		941,494		941		157,109		-			-			158,050

Shares issued in satisfaction of debt
and contingent debt due sellers of
VoipSwitch Inc.		2,250,000		2,250		279,000		-			-			281,250

Stock options expense		-		-		172,502		-			-			172,502

Foreign currency
translation
adjustment		-		-		-		-			(72,415	)		(72,415	)

Net loss		-		-		-		(772,057	)		-			(772,057	)

Balances,
March 31, 2011		38,354,429		38,354		5,482,281		(3,766,212	)		(84,527	)		1,669,896

Private placement of shares
and warrants,
less $41,930 costs and
less $214,122
attributable to warrants
classified as liabilities		3,830,769		3,831		238,117		-			-			241,948

Shares issued to the Company's chairman and
to the Company's chief executive officer
for services		2,400,000		2,400		429,600		-			-			432,000

Stock options expense		-		-		160,664		-			-			160,664

Foreign currency
translation
adjustment		-		-		-		-			18,783			18,783

Net loss		-		-		-		(1,887,215	)		-			(1,887,215	)

Balances, March 31, 2012		44,585,198	$	44,585	$	6,310,662	$	(5,653,427	)	$	(65,744	)	$	636,076

See notes to consolidated financial statements.

F-4

VOICESERVE, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows

	Year Ended March 31,
	2012			2011
Cash flows from operating activities:
Net loss	$	(1,887,215	)	$	(772,057	)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation		3,706			3,064
Amortization		230,000			230,000
Stock-based compensation		592,664			330,552
Provision for doubtful accounts		83,305			60,922
Loss (income) from revaluation of liability for common stock purchase warrants		700,472			(305,394	)
Changes in operating assets and liabilities:
Accounts receivable, net		(141,227	)		(83,503	)
Prepaid expenses and other current assets		55,109			(65,922	)
Accounts payable		71,632			92,035
Accrued expenses payable		(1,054	)		(46,241	)
Deferred software license fees		(6,694	)		(57,469	)

Net cash used in operating activities		(299,302	)		(614,013	)

Cash flows from investing activities:
Property and equipment additions		-			(5,034	)

Net cash provided by (used in) investing activities		-			(5,034	)

Cash flows from financing activities:
Proceeds from sales of common stock, net of offering costs of $41,930 and $89,499, respectively		456,070			600,501
Increase in loans payable to related parties		72			4,024

Net cash provided by financing activities		456,142			604,525

Effect of exchange rate changes on cash and cash equivalents		17,195			(62,177	)

Increase (decrease) in cash and cash equivalents		174,035			(76,699	)

Cash and cash equivalents, beginning of period		141,739			218,438

Cash and cash equivalents, end of period	$	315,774		$	141,739

Supplemental disclosures of cash flow information:

Interest paid	$	899		$	1,840

Income taxes paid	$	4,669		$	-

Non - cash investing and financing activities:
Shares issued in satisfaction of debt and contingent debt
due 3 sellers of VoipSwitch Inc. (See Note 3):
Debts satisfied in exchange for issuance of restricted common stock:
Contingent consideration remaining due to 3 sellers before agreement to
accept restricted common stock	$	-		$	313,000

Contingent consideration paid added to goodwill by virtue of issuance
of restricted common stock	$	-		$	131,250
Notes payable to 3 sellers of VoipSwitch outstanding as debt in financial
statements prior to agreement to accept issuance of restricted common stock		-			150,000

Total	$	-		$	281,250

Fair value of 2,250,000 shares of restricted common stock issued in exchange for
debts satisfied	$	-		$	281,250

See notes to consolidated financial statements.

F-5

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

NOTE 1 – ORGANIZATION AND NATURE OF BUSINESS

VoiceServe, Inc. (“VoiceServe”) was incorporated in the State of Delaware on December 9, 2005 under the name 4306, Inc. On February 20, 2007, VoiceServe acquired 100% of the issued and outstanding stock of VoiceServe Limited (“Limited”), a corporation incorporated in the United Kingdom on March 21, 2002, in exchange for 20,000,000 shares of VoiceServe common stock (representing 100% of the issued and outstanding shares of VoiceServe after the exchange). From October 1, 2006 to February 20, 2007, Limited owned 100% of the issued and outstanding shares of VoiceServe. Accordingly, this acquisition was treated as a combination of entities under common control and was accounted for in a manner similar to pooling of interests accounting.

On January 15, 2008, VoiceServe acquired 100% of the issued and outstanding stock of VoipSwitch Inc. (“VoipSwitch”), a corporation incorporated in the Republic of Seychelles on May 9, 2005 (see Note 3). VoipSwitch licensed software systems (online telephony management applications) to customers online. Generally, the license of a system includes remote installation and initial configuration of the main system, training relating to the use of the system and modules, and 1 year technical support.

VoiceServe has had no operations; VoiceServe is a holding company for its wholly owned subsidiaries Limited (since February 20, 2007) and VoipSwitch (since January 15, 2008). In 2010, Voiceserve formed two additional subsidiaries: VoipSwitch Inc., a Delaware corporation, and VoipSwitch AG, a Swiss corporation. VoipSwitch Inc. was formed to provide a future North American presence and has had no significant operations to date. VoipSwitch AG was formed to coordinate sales and billing activities from Switzerland and commenced operations in the three months ended December 31, 2010.

Limited is engaged in the telephone communications business from its London, United Kingdom office. Limited offers its software to large enterprises and carriers. The software allows communication through the Company’s exchange via the internet. Since January 15, 2008, Limited has also licensed VoipSwitch software systems.

F-6

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)	Principles of Consolidation

The consolidated financial statements include the accounts of VoiceServe and its wholly owned subsidiaries (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation.

(b)	Basis of presentation

The financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”).

The financial statements have been prepared on a “going concern” basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, as of March 31, 2012, the Company had negative working capital of $200,167. Further, since inception, the Company has incurred losses of $5,653,427. These factors raise substantial doubt as to the Company’s ability to continue as a going concern. The Company plans to improve its financial condition by raising capital through sales of shares of its common stock. Also, the Company plans to pursue new customers and certain acquisition prospects to attain profitable operations. However, there is no assurance that the Company will be successful in accomplishing these objectives. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts and classification of liabilities that might be necessary in the event the Company is unable to continue as a going concern.

(c)	Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

F-7

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

(d)	Fair Value of Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, net, accounts payable, accrued expenses payable, and loans payable to related parties. The fair value of these financial instruments approximate their carrying amounts reported in the balance sheets due to the short term maturity of these instruments.

(e)	Foreign Currency Translation

The functional currency of VoiceServe is the United States dollar. The functional currency of Limited is the United Kingdom pound sterling (“£”). The functional currency of VoipSwitch is the United States dollar. The functional currency of VoipSwitch AG is the Swiss Franc (“chf”). The reporting currency of the Company is the United States dollar. Limited’s assets and liabilities are translated into United States dollars at period-end exchange rates ($1.586475 and $1.605445 at March 31, 2012 and March 31, 2011, respectively). Limited’s revenue and expenses are translated at weighted average exchange rates ($1.600388 and $1.553765 for the years ended March 31, 2012 and 2011, respectively). VoipSwitch AG’s assets and liabilities are translated into United States dollars at the period end exchange rates ($ 1.091597 and 1.091716 at March 31, 2012 and March 31, 2011, respectively). VoipSwitch AG’s revenue and expenses are translated into United States dollars at the weighted average exchange rate ($1.137534 and $1.051127 for the years ended March 31, 2012 and 2011, respectively. Translation adjustments are included in accumulated other comprehensive income (loss) in the stockholders’ equity section of the balance sheets.

Foreign currency exchange transaction losses (which are included in selling general and administrative expenses ) were $108,348 and $68,456 for the years ended March 31, 2012 and 2011, respectively.

(f)	Cash and Cash Equivalents

The Company considers all liquid investments purchased with a maturity of three months or less to be cash equivalents.

(g)	Accounts Receivalbe

The Company extends unsecured credit to certain customers in the ordinary course of business but mitigates the associated risks by performing credit checks and actively pursuing past due accounts. An allowance for doubtful accounts is established and recorded based on historical experience and the aging of the related accounts receivable. The Company writes off accounts receivable once over one year old and not deemed probable of collection.

(h)	Property and Equipment, Net

F-8

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

(i)	Intangible Assets

(j)	Goodwill and Intangible Assets with Indefinite Lives

(k)	Long-lived Assets

(l)	Revenue Recognition

Revenues from licenses of software are recognized upon delivery of the software when persuasive evidence of an arrangement exists, the fee is fixed or determinable, and collectibility is probable. The portion of the fee allocated to post contract customer support and services is recognized ratably over the period of the agreed support and services.

(m)	Advertising

Advertising costs, which include sales promotion costs, are expensed as incurred and amounted to $354,310 and $805,598 for the years ended March 31, 2012 and 2011, respectively.

F-9

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

(n)	Stock-Based Compensation

Stock-based compensation is accounted for at fair value in accordance with Accounting Standards Codification (“ASC”) Topic 718, “Compensation – Stock Compensation”.

(o)	Income Taxes

Income taxes are accounted for under the assets and liability method. Current income taxes are provided in accordance with the laws of the respective taxing authorities. Deferred income taxes are provided for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is not more likely than not that some portion or all of the deferred tax assets will be realized.

F-10

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

(p)	Net Income (Loss) per Share

Basic net income (loss) per share is computed on the basis of the weighted average number of common shares outstanding during the period.

Diluted net income (loss) per share is computed on the basis of the weighted average number of common shares and dilutive securities (such as stock options and convertible securities) outstanding. Dilutive securities having an anti-dilutive effect on diluted net income (loss) per share are excluded from the calculation. For the years ended March 31, 2012 and 2011, the diluted net loss per share calculation excluded the effect of stock options outstanding and exercisable into a total of 1,903,000 and 1,403,000 shares of common stock, respectively, and warrants outstanding and exercisable into a total of 3,295,385 and 1,380,000 shares of common stock, respectively.

NOTE 3 – ACQUISITION OF VOIPSWITCH INC.

On January 15, 2008, VoiceServe closed an Acquisition Agreement with VoipSwitch Inc. (“VoipSwitch”) whereby VoiceServe acquired all VoipSwitch issued and outstanding ordinary shares as well as all of VoipSwitch’s assets, including customer orders and intangible assets, for total consideration of $3,000,000 ($450,000 cash, $150,000 notes payable due on demand, $600,000 notes payable in total monthly installments of $50,000 per month for 12 months, and 3,750,000 shares of VoiceServe common stock valued at $0.48 per share or $1,800,000).

Payment of the monthly installments of the $600,000 notes payable was contingent upon and limited each month to the future monthly net income of VoipSwitch. Accordingly, pursuant to SFAS No. 141, this $600,000 “contingent consideration” portion of the $3,000,000 total purchase price was not included in the initial recorded cost of the acquisition or the recorded notes payable. As payments of the $600,000 notes payable were made, such paid amounts were added to goodwill.

The estimated fair values of the identifiable net assets of VoipSwitch at January 15, 2008 (date of acquisition) consisted of:

Cash and cash equivalents	$	6,682
Developed software (for licensing to customers)		2,000,000
In-place contracts and customer list		100,000
Trade name		100,000
Accounts payable and accrued expenses		(2,999	)
Deferred software license fees		(48,474	)

Identifiable net assets	$	2,155,209

F-11

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

Goodwill of $244,791 (excess of the $2,400,000 consideration, excluding the $600,000 contingent consideration, over the $2,155,209 identifiable net assets) was recorded at the acquisition date January 15, 2008. In February and March 2008, $100,000 of the $600,000 “contingent consideration” notes payable was paid and added to goodwill. In the year ended March 31, 2009, an additional $99,000 of the $600,000 “contingent consideration” notes payable was paid and added to goodwill. In the three months ended June 30, 2009, an additional $88,000 of the $600,000 “contingent consideration” notes payable was paid and added to goodwill.

On December 7, 2010, pursuant to a verbal agreement on October 19, 2010, Voiceserve issued a total of 2,250,000 SEC Rule 144 restricted shares of its common stock to the three sellers of VoipSwitch in full and final satisfaction of debt totaling $463,000, consisting of the $150,000 demand note payable and the remaining $313,000 “contingent consideration” potential amount due the three sellers. The $131,250 excess of the $281,250 estimated fair value of the shares, which was calculated based on the October 19, 2010 nearest day closing trading price of $0.25 per share and a 50% restricted stock discount (2,250,000 shares x $0.125 [50% discount applied to $0.25 per share price] per share = $281,250), over the $150,000 demand note payable was added to goodwill.

NOTE 4 – INTANGIBLE ASSETS, NET

Intangible assets, net, consisted of:

	March 31,			March 31,
	2012			2011
Acquisition of VoipSwitch:
Developed software (for licensing to customers)	$	2,000,000		$	2,000,000
In-place contracts and customer list		100,000			100,000
Trade name		100,000			100,000
Goodwill		663,041			663,041

Total		2,863,041			2,863,041

Accumulated amortization		(967,917	)		(737,917	)

Intangible assets, net	$	1,895,124		$	2,125,124

The developed software, in-place contracts and customer list, and trade name are amortized using the straight-line method over their estimated economic lives (ten years for the developed software and trade name; five years for the in-place contracts and customer list). Goodwill is not amortized.

F-12

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

For the years ended ended March 31, 2012 and 2011, amortization of intangible assets expense was $230,000. $200,000 was included in cost of software license fees and $30,000 was included in selling, general and administrative expenses.

Expected future amortization expense for acquired intangible assets as of March 31, 2012 follows:

Year ending March 31,	Amount
2013		225,833
2014		210,000
2015		210,000
2016		210,000
2017		210,000
Thereafter		166,250

Total	$	1,232,083

NOTE 5 – DEFERRED SOFTWARE LICENSE FEES AND SUPPORT

The licenses of the VoipSwitch systems generally include certain postcontract customer support (“PCS”). In accordance with Accounting Standards Codification (“ASC”) Topic 985-605-25, “Software Revenue Recognition”, the Company allocates a portion of the license fees to PCS based on the vendor-specific objective evidence of fair value (generally $1,000 for 1 year technical support) of the PCS and recognizes the PCS revenues ratably over the period of the agreed PCS.

Deferred software license fees (attributable to PCS) for the years ended March 31, 2012 and 2011 were accounted for as follows:


	Year Ended December 31,
	2012			2011
Balance, beginning of period	$	188,197		$	245,666
Additions		329,168			364,800
Recognized as revenue		(335,862	)		(422,269	)

Balance, end of period	$	181,503		$	188,197

F-13

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

NOTE 6 – LOANS PAYABLE TO RELATED PARTIES

Loans payable to related parties consisted of:

	March 31, 2011		March 31, 2011
Due chairman of the board of directors	$	22,840	$	22,582
Due former chief operational officer		15,389		15,574
Due former chief financial officer		79		80

Total	$	38,308	$	38,236

The loans payable to related parties are all non-interest bearing, unsecured, and due on demand.

NOTE 7 – LIABILITY FOR COMMON STOCK PURCHASE WARRANTS

As part of the private placement which closed on May 26, 2010 (see Note 8), the Company issued a total of 1,380,000 warrants to certain accredited investors. Each warrant entitles the holder to purchase one share of common stock at a price of $0.50 per share (the “Exercise Price”) to May 26, 2015.

As part of the private placement which closed on June 6, 2011 (see Note 8), the Company issued a total of 1,915,385 warrants to certain accredited investors. Each warrant entitles the holder to purchase one share of common stock at a price of $0.30 per share (the “Exercise Price”) to June 6, 2014.

F-14

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

The Exercise Price of the warrants is to be adjusted in the event of any stock splits or stock dividends or in the event that the Company issues or sells any shares of common stock, options, warrants or any convertible instruments (other than exempted issuances) at an effective price per share which is less than the Exercise Price. Accordingly, in accordance with EITF Issue No. 07-05, "Determining whether an Instrument (or Embedded Feature) is indexed to an Entity's Own Stock", the Company reflected the $457,608 fair value of the warrants issued on May 26, 2010 (calculated using the Black-Scholes option pricing model and the following assumptions: stock price of $0.45 per share, exercise price of $0.50 per share, risk-free interest rate of 2.06%, term of five years, and expected volatility of 100%) and the $214,122 fair value of the warrants issued on June 6, 2011 (calculated using the Black-Scholes option pricing model and the following assumptions: stock price of $0.15 per share for the 1,311,539 warrants sold May 6, 2011 and $0.318 per share for the 603,846 warrants sold June 6, 2011, exercise price of $0.30 per share, risk-free interest rate of 0.96% for the 1,311,539 warrants sold May 6, 2011 and 0.74% for the 603,846 warrants sold June 6, 2011, term of 3 years, and expected volatility of 100%) as a liability and remeasures the fair value of the warrants each quarter, adjusts the liability balance, and reflects changes in operations as "income (expense) from revaluation of liability for common stock purchase warrants”.

At March 31, 2012 and March 31, 2011, the fair values of the warrants (calculated using the Black-Scholes option pricing model with the following assumptions at March 31, 2012: stock price of $0.37 per share, risk-free interest rates ranging from 0.37% to 0.55%, terms ranging from 2.21 years to 3.15 years, and expected volatility of 191% and at March 31, 2011: stock price of $0.20 per share, risk-free interest rate of 1.84%, term of 4.15 years, and expected volatility of 100%) consisted of:

	March 31, 2012				March 31, 2011
	Common				Common
	Shares		Fair		Shares		Fair
	Equivalent		Value		Equivalent		Value
Warrants issued May 26, 2010,
exercise price of $0.50 per share, expiration
date May 26, 2015.		1,380,000	$	457,332		1,380,000	$	152,214

Warrants issued June 6, 2011,
exercise price of $0.30 per share, expiration
date June 6, 2014.		1,915,385		609,476		-		-

Totals		3,295,385	$	1,066,808		1,380,000	$	152,214

F-15

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

Below is a reconciliation of the change in the fair values of the warrants from May 26, 2010 to March 31, 2012.

	Common
	Shares		Fair
	Equivalent		Value
Issuance to accredited investors in
conjuction with common stock in private
placement on May 26, 2010 (see Note 9)		1,380,000	$	457,608
Revaluation credited to operations		-		(121,854	)
Balance, June 30, 2010		1,380,000		335,754
Revaluation credited to operations		-		(33,120	)
Balance, September 30, 2010		1,380,000		302,634
Revaluation credited to operations		-		(116,196	)
Balance, December 31, 2010		1,380,000		186,438
Revaluation credited to operations		-		(34,224	)
Balance, March 31, 2011		1,380,000		152,214
Issuance to accredited investors in
conjuction with common stock in private
placement which closed June 6, 2011
(see Note 8)		1,915,385		214,122
Revaluation charged to operations		-		450,954
Balance, June 30, 2011		3,295,385		817,290
Revaluation credited to operations		-		(243,143	)
Balance, September 30, 2011		3,295,385		574,147
Revaluation credited to operations		-		(167,989	)
Balance, December 31, 2011		3,295,385		406,158
Revaluation charged to operations		-		660,650
Balance, Match 31, 2012		3,295,385	$	1,066,808

NOTE 8 – STOCKHOLDERS’ EQUITY

Common stock issuances

Effective April 2010, VoiceServe issued 41,494 shares of its common stock to a consultant for services rendered. The $10,000 estimated fair value of the shares was included in selling, general and administrative expenses in the three months ended June 30, 2010.

F-16

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

On May 26, 2010, VoiceServe closed on the sale to certain accredited investors of a total of 2,760,000 shares of common stock at a price of $0.25 per share and 1,380,000 warrants to purchase 1,380,000 shares of common stock, for $690,000 gross proceeds ($600,501 net proceeds after deducting costs of the private placement). Each warrant (see Note 7) entitles the holder to purchase one share of common stock at a price of $0.50 per share (the "Exercise Price") to May 26, 2015.

Effective September 30, 2010, VoiceServe issued a total of 900,000 shares of its common stock to its new chief financial officer (300,000 shares) and to two new members of the Board of Directors (300,000 shares each) pursuant to the employment agreement and director agreements discussed in Note 12. The $148,050 estimated fair value of the shares, which was calculated based on the closing trading price of $0.329 per share and a 50% restricted stock discount, was included in selling, general and administrative expenses in the three months ended September 30, 2010.

On December 7, 2010, pursuant to a verbal agreement on October 19, 2010, VoiceServe issued a total of 2,250,000 SEC Rule 144 restricted shares of its common stock to the three sellers of VoipSwitch (see Note 3) in full and final satisfaction of debt totaling $463,000, consisting of the $150,000 demand note payable and the remaining $313,000 “contingent consideration” potential amount due the three sellers. The $131,250 excess of the $281,250 estimated fair value of the shares, which was calculated based on the October 19, 2010 nearest day closing trading price of $0.25 per share and a 50% restricted stock discount (2,250,000 shares x $0.125 [50% discount applied to $0.25 per share price] per share = $281,250), over the $150,000 demand note payable was added to goodwill.

On May 6, 2011, the Company closed on the sale to certain accredited investors of a total of 2,623,077 shares of common stock at a price of $0.13 per share and 1,311,539 warrants to purchase 1,311,539 shares of common stock, for $341,000. Net proceeds, after deducting $27,280 in commissions and $20 in other expenses, were $313,700. Each warrant entitles the holder to purchase one share of common stock at a price of $0.30 per share (the “Exercise Price”) to June 6, 2014.

On June 6, 2011, the Company closed on the sale to certain accredited investors of a total of an additional 1,207,692 shares of common stock at a price of $0.13 per share and 603,846 warrants to purchase 603,846 shares of common stock for $157,000. Net proceeds, after deducting $12,560 in commissions and $2,070 in other expenses, were $142,370. Each warrant entitles the holder to purchase one share of common stock at a price of $0.30 per share to June 6, 2014.

F-17

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

On June 21, 2011, the Company’s Board of Directors authorized the issuance of a total of 2,400,000 shares (1,200,000 shares each) of common stock to the Company’s Chief Executive Officer and the Company’s President and Chairman of the Board of Directors for prior services rendered. The $432,000 estimated fair value of the shares, based on the nearest day closing trading price of $0.36 per share and a 50% restricted stock discount, was included in selling, general and administrative expenses in the three months ended June 30, 2011.

Stock options

Effective May 12, 2009, VoiceServe granted non-qualified stock options to 4 service providers exercisable into a total of up to 703,000 shares of common stock at an exercise price of $0.13 per share to December 23, 2013. The options vested 2/3 on December 23, 2010 and 1/3 on December 23, 2011. The $81,618 estimated fair value of the options (calculated using the Black-Scholes option pricing model and the following assumptions: (i) $0.15 share price, (ii) 5 year term, (iii) 100% expected volatility, and (iv) 3% risk free interest rate) was expensed ratably over the requisite service period from May 12, 2009 to December 23, 2011. To date, none of the options which vested December 23, 2010 have been exercised.

On January 4, 2010, VoiceServe granted non-qualified stock options to 2 service providers exercisable into a total of up to 200,000 shares of common stock at an exercise price of $0.13 per share to January 4, 2015. The options vest 2/3 on January 4, 2012 and 1/3 on January 4, 2013. The $39,520 estimated fair value of the options (calculated using the Black-Scholes option pricing model and the following assumptions: (i) $0.24 share price, (ii) 5 year term, (iii) 100% expected volatility, and (iv) 2.65% risk free interest rate) is being expensed ratably over the three year requisite service period.

Effective July 26, 2010, VoiceServe committed to grant non-qualified stock options exercisable into up to a total of 500,000 shares of common stock at an exercise price of $0.25 per share to its president and chairman (250,000 options) and chief executive officer (250,000 options) pursuant to the employment agreements discussed in Note 12. The $128,200 estimated fair value of the options (calculated using the Black-Scholes option pricing model and the following assumptions: (i) $0.33 share price, (ii) term of 1773 days, (iii) 100% expected volatility, and (iv) 1.7037% risk free interest rate) was expensed and included in selling, general and administrative expenses in the three months ended September 30, 2010.

F-18

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

On June 4, 2011, pursuant to employment agreements with its (1) President and Chairman and (2) Chief Executive Officer (See Note 12), the Company became obligated to issue a total of 500,000 common stock options exercisable at a 25% discount from the common stock closing price on that date. The $124,600 estimated fair value of the options at June 4, 2011 (calculated using the Black-Scholes option pricing model and the following assumptions: (i) $0.318 share price, (ii) $0.2385 exercise price, (iii) term of 5 years, (iv) 100% expected volatility, and (v) 1.6% risk free interest rate) was included in selling, general and administrative expenses in the three months ended June 30, 2011.

Stock options expense for years ended March 31, 2012, and 2011 was $160,664 and $172,502, respectively. As of March 31, 2012, there was $10,034 of total unrecognized compensation cost relating to unexpired stock options. That cost is expected to be recognized in the year ending March 31, 2013.

A summary of stock options activity for the years ended March 31, 2012 and 2011 follows:

	Vested		Nonvested			Total
Outstanding at March 31, 2010		-		903,000			903,000
Granted		-		500,000			500,000
Vested		468,667		(468,667	)		-
Outstanding at March 31, 2011		468,667		934,333			1,403,000
Granted		-		500,000			500,000
Vested		367,666		(367,666	)		-
Outstanding at March 31, 2012		836,333		1,066,667			1,903,000

At March 31, 2012, stock options consisted of:

Date of Grant	Number of Stock Options		Exercise Price		Expiration Date
May 12, 2009		703,000	$	0.13	December 23, 2013
January 4, 2010		200,000		0.13	January 4, 2015
July 26, 2010		500,000		0.25	July 26, 2015
June 4, 2011		500,000		0.2385	June 4, 2016
Total		1,903,000

NOTE 9 – INCOME TAXES

The provision for income taxes consisted of:

	Year Ended
	March 31,
	2012		2011

Current:
Switzerland	$	4,669	$	-
United States		-		-
United Kingdom		-		-
Total Current		4,669		-

Deferred		-		-
Totals	$	4,669		-

Based on management‘s present assessment, the Company has not yet determined it to be more likely than not that a deferred tax asset attributable to the future utilization of net operating loss carryforwards of VoiceServe and Limited as of March 31, 2012 will be realized. Accordingly, the Company has maintained a 100% allowance against the deferred tax asset in the financial statements at March 31, 2012. The Company will continue to review this valuation allowance and make adjustments as appropriate.

Voiceserve Inc. has not filed its United States corporate income tax returns commencing year 2007. Such failure may result in the Company’s inability to utilize certain net operating loss carry forwards.

F-19

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

NOTE 10 – SEGMENT INFORMATION

The Company operates in one business segment: telephone communications.

Operating revenues by customer geographic area follow:

	Year Ended March 31,
	2012		2011

Europe	$	1,202,746	$	885,988
North America		1,331,772		1,460,209
Asia		1,175,400		1,741,034
Other		844,204		308,097

Total	$	4,554,122	$	4,395,328

NOTE 11 – RELATED PARTY TRANSACTIONS

For the years ended March 31, 2012 and 2011, consulting fees paid or accrued to officers, directors, and their affiliates totaled $1,656,686 and $1,629,058, respectively. These fees were included in cost of software license fees and support ($908,878 and $864,181 for years ended March 31, 2012 and 2011, respectively) and selling, general, and administrative expenses ($747,808 and $764,877 for the years ended March 31, 2012 and 2011, respectively) in the accompanying statements of operations.

Included in accounts payable at March 31, 2012 are amounts due these related parties totaling $95,285.

NOTE 12 – COMMITMENTS AND CONTINGENCIES

Registration Rights Agreements

In connection with the private placement which closed May 26, 2010 (see Note 8), the Company and the investors executed a Securities Purchase Agreement and a Registration Rights Agreement. Among other things, the Registration Rights Agreement provides that the Company will prepare and file with the SEC a Registration Statement covering the resale of the Registrable Securities and use its commercially reasonable efforts to cause it to be declared effective. If the Registration Statement is not filed by July 30, 2010 or if the Registration Statement filed is not declared effective by the SEC within certain time periods (by December 27, 2010 in the event of a "full review" by the SEC) and the Company has not exercised its reasonable best efforts to secure the Registration Statement's effectiveness with the SEC, the Registration Agreement provides that the Company will pay monthly (until cured) partial liquidated damages to the investors equal to 1% of the purchase price paid by the investors, subject to a maximum of 10% of the purchase price paid by the investors. The Registration Statement was declared effective by the SEC on April 25, 2011.

F-20

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

Potential claims for liquidated damages relating to this Registration Rights Agreement, which the Company does not believe are probable of assertion, approximate $41,400 at March 31, 2012 and 2011.

In connection with the private placement which closed May 6, 2011 and June 6, 2011 (see Note 8), the Company and the investors executed a Securities Purchase Agreement and a Registration Rights Agreement. Among other things, the Registration Rights Agreement provides that the Company will prepare and file with the SEC a Registration Statement covering the resale of the Registrable Securities and use its commercially reasonable efforts to cause it to be declared effective.

If the Registration Statement is not filed by July 6, 2011 or if the Registration Statement filed is not declared effective by the SEC within certain time periods (by December 2, 2011 in the event of a "full review" by the SEC) and the Company has not exercised its reasonable best efforts to secure the Registration Statement's effectiveness with the SEC, the Registration Agreement provides that the Company will pay monthly (until cured) partial liquidated damages to the investors equal to 1% of the purchase price paid by the investors, subject to a maximum of 10% of the purchase price paid by the investors. The Registration Statement has not yet been filed.

Potential claims for liquidated damages relating to this Registration Rights Agreement, which the Company does not believe are probable of assertion, approximate $44,820 at March 31, 2012.

F-21

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

Employment and Director Agreements

On June 4, 2010, VoiceServe, Inc. executed employment agreements with (i) its President and Chairman, Alexander Ellinson, and (ii) its Chief Executive Officer, Michael Bibelman. Each agreement has a term of five (5) years and each provides for (i) an annual base salary of $240,000, (ii) an annual bonus of up to 100% of the base salary as determined in the sole discretion of the Board of Directors, and (iii) annual grants of stock options under the Company's Equity Incentive Stock Plan to purchase 250,000 shares of common stock at $0.25 per share for the first year, which shall occur on or before July 26, 2010, and at a 25% discount off the price on each June 4 thereafter in 2011, 2012, 2013, and 2014 (which vest at such time as approved by the Board of Directors). The Board has not yet approved the initial grant of the 250,000 common stock options, which was to occur on or before July 26, 2010, nor the grant of an additional 250,000 common stock options, which was to occur on June 4, 2011, for either Mr. Ellinson or Mr. Bibelman.

Both employment agreements also provide for other employee benefits, such as an allowance for leasing a car for the Company or the Company providing one, healthcare insurance, vacation and other benefits provided in accordance with Company policy. In addition, each agreement contains provisions concerning early termination of the executive for death, disability, or with or without cause by the executive. In the event of death or disability, the Company is obligated to pay three months base salary plus accrued benefits. In the event of a termination of the executive "without cause," the Company is obligated to pay each executive, in lieu of "severance payments," his base pay and bonus, including percentage of profits, for the term in which the termination occurs for 36 months after the termination date in accordance with Company payroll practices, and maintain other benefits for that executive also for that 36 month period. Finally, the Company is obligated to pay the exercise price for the stock options to be granted as described in the preceding paragraph and the Company is required to issue 250,000 shares of common stock to the terminated executive with demand registration rights.

On September 30, 2010, VoiceServe, Inc. executed an employment agreement with Alfred Stefansky, its concurrently appointed Chief Financial Officer. The agreement has a term of five (5) years and provides for (i) a monthly base salary of $8,000, (ii) an annual bonus of up to 100% of the base salary as determined in the sole discretion of the Board of Directors, and (iii) a one-time issuance of 300,000 restricted shares of Company common stock (which was issued as discussed in Note 8). Additionally, the agreement provides that the Company shall provide standard health insurance coverage for the executive and each individual family member and the Executive shall be eligible to participate in any employee benefit plans of the Company. Either party may terminate the agreement without cause upon 60 days prior written notice. In the event of death or disability, the Company is obligated to pay three months base salary plus accrued benefits.

F-22

VOICESERVE, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, 2012

Also on September 30, 2010, VoiceServe, Inc. executed director agreements with Michael Taylor and Andrew Millet, concurrently appointed members of the Board of Directors. Both agreements had terms of one year, subject to a one year renewal term upon reelection by a majority of the Company stockholders). Both agreements provide for (i) a monthly retainer of $1,000 and (ii) a one-time issuance of 300,000 restricted shares of Company common stock (which was issued as discussed in Note 8. Additionally, the agreements provide that the Company shall provide reimbursements for all reasonable out-of- pocket expenses incurred.

Rental Agreements

Limited rents office space in England at monthly rentals of £710 (or $1,126 translated at the March 31, 2012 exchange rate). For the years ended March 31, 2012 and 2011, rent expense was $13,635 and $13,238 respectively.

VoipSwitch AG rents office space in Switzerland at quarterly rentals of CHF 6,000 (or $6,550 translated at the March 31, 2012 exchange rate and rents office space in Poland (commencing November 2011) at monthly rentals of PLN 12,985 (or $4,172 translated at the March 31, 2012 exchange rate). For the years ended March 31, 2012 and 2011, rent expense was $58,204 and $14,716, respectively.

Cash Deposits in Excess of Insured Limits

At March 31, 2012 Voipswitch AG had cash in one bank which exceeded the Switzerland national insurance limit by approximately $159,000.

NOTE 13 – SUBSEQUENT EVENTS

Issuance of Common Stock for Services

On April 20, 2012, the Company’s Board of Directors authorized the issuance of a total of 2,400,000 shares (1,200,000 shares each) of common stock to the Company’s Chief Executive Officer and the Company’s President and Chairman of the Board of Directors for prior services rendered. The $252,000 estimated fair value of the shares, based on the nearest day closing trading price of $0.21 per share and a 50% restricted stock discount, will be included in selling, general and administrative expenses in the three months ended June 30, 2012.

Also on April 20, 2012, the Company’s Board of Directors renewed the director agreements with Michael Taylor and Andrew Millet (see Note 12) and approved the issuance of a total of 600,000 restricted shares of Company common stock (300,000 shares each). The $63,000 estimated fair value of the shares, based on the nearest day closing trading price of $0.21 per share and a 50% restricted stock discount, will be included in selling, general and administrative expenses in the three months ended June 30, 2012.

Grant of Stock Options Pursuant to Employment Agreements.

On June 4, 2012, pursuant to employment agreements with its (1) President and Chairman and (2) Chief Executive Officer (See Note 12), the Company became obligated to issue a total of 500,000 common stock options exercisable at a 25% discount from the common stock closing price on that date. The $76,000 estimated fair value of the options at June 4, 2012 (calculated using the Black-Scholes option pricing model and the following assumptions: (i) $0.162 share price, (ii) $0.1215 exercise price, (iii) term of 5 years, (iv) 161% expected volatility, and (v) 0.68% risk free interest rate) will be included in selling, general and administrative expenses in the three months ended June 30, 2012.

F-23

Item 9.

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

None.

Item 9A.

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (“Exchange Act”), the Company carried out an evaluation, with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”) and Chief Accounting Officer (“CAO”) (the Company’s principal financial and accounting officer), of the effectiveness of the Company’s disclosure controls and procedures (as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Company’s CEO and CAO concluded that the Company’s disclosure controls and procedures are not effective to ensure that information required to be disclosed by the Company in the reports that the Company files or submits under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including the Company’s CEO and CAO, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) 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 Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Management assessed our internal control over financial reporting as of March 31, 2012, which was the end of our fiscal year. Management based its assessment on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process, documentation, accounting policies, and our overall control environment.

Based on our assessment, management has concluded that our internal control over financial reporting was not effective as of the end of the fiscal year to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Based upon their evaluation, the Company’s CEO and CAO concluded that the Company’s disclosure controls and procedures were not effective as they principally relate to the disclosure of compensation amounts as reported in the Company’s Management’s Discussion and Analysis section of its Annual Report on Form 10-K for the fiscal year ended March 31, 2010, filed on June 29, 2010. It was determined that the cause for the misstatement was due to a lack of multiple levels of internal review prior to the filing that report with the SEC.

Our management has been actively engaged in the planning for, and implementation of, remediation measures to address our control deficiencies and to enhance our overall financial control environment. This is necessary for us to maintain a strong control environment, high ethical standards, and financial reporting integrity.

On September 30, 2010, we appointed Andrew Millet, as the Chairman of our newly formed Audit Committee to mitigate the risk of misstating compensation amounts. Thereafter the figures are reviewed by our auditor.

We have continued to monitor the results of our remediation efforts and related testing as part of our year-end 2012 assessment of the effectiveness of our internal control over financial reporting.

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

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting, identified in connection with the evaluation of such internal control that occurred during the fourth quarter of the fiscal year ended March 31, 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information.

None.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

Our executive officers and directors and their respective ages as of March 31, 2012 are as follows:

Name	Age	Position	Date Appointed
Michael Bibelman	43	Chief Executive Officer and Director	October 1, 2006
Alexander Ellinson	47	Chairman of the Board of Directors and President	October 1, 2006
Mike Ottie	44	Chief Operational Officer and Director	October 1, 2006
Krzysztof Oglaza	37	Chief Technical Officer and Director	January 21, 2008
Alfred Stefansky	49	Chief Financial Officer and Principal Accounting Officer	September 30, 2010
Michael Taylor	47	Director	September 30, 2010
Andrew Millet	45	Director	September 30, 2010

Set forth below is a brief description of the background and business experience of our executive officers and directors for the past five years.

MR. MICHAEL BIBELMAN, CHIEF EXECUTIVE OFFICER AND DIRECTOR. Mr. Bibelman is the co-founder of Voiceserve Limited and has been involved in telecommunications since 1994. Having completed his studies in the summer of 1994, Mr. Bibelman acquired his marketing telecommunication skills after becoming an independent reseller for Calling Card companies. Mr. Bibelman achieved contracts with major Belgium and United Kingdom calling card distributors. In 1996 he joined Ambro International bringing with his amassed calling card experience and introduced the United Kingdom and Scotland telecommunications market with the famous “Big Talk” calling card. In March 2002, Mr. Bibelman co-founded Voiceserve Limited with the goal of developing VoIP technology and offering a complete solution to end users.

Mr. Bibelman has over 15 years experience in the telecommunications industry. His professional experience includes creating markets and marketing telephone calling card throughout Europe and third world countries. He was central in the introduction of the popular “Big Talk!” phone card to the United Kingdom and Scotland. He was also instrumental in advancing Econophone LLC, later renamed Viatel, from a privately held company to a publicly owned one listed on the New York Stock Exchange. Shortly after Viatel listed on the NYSE, Mr. Bibelman created an integrated services digital network (ISDN) platform as the precursor to a comprehensive VoIP solution. He co-founded Voiceserve Ltd. with Mr. Ellinson.

Mr. Bibleman’s qualifications to serve on our board of directors include his eighteen years of experience in the telecommunications filed and experience as co-founder of the Company.

MR. ALEXANDER ELLINSON, CHAIRMAN OF THE BOARD OF DIRECTORS AND PRESIDENT. Mr. Ellison is the co- founder of Voiceserve Limited and has been involved in telecommunications since 1994. Having completed his studies in the summer of 1989, Mr. Ellinson became the senior Manager at Le Galerie Versailles Antique Auctioneers in Belgium. Mr. Ellinson’s corporate telecommunication experience was gained after he became an Independent Marketing agent for a European Telecom provider. He achieved major contracts with blue chip companies in both Holland and Germany. In 1996 Mr. Ellinson relocated from Europe to the United Kingdom where he became involved with the corporate infrastructure of Ambro International. In March 2002 Mr. Ellinson co-founded Voiceserve Limited with the goal of developing VoIP technology and offering a complete solution to end users.

Mr. Ellinson, who serves as chairman of Voiceserve, Inc., is a co- founder of Voiceserve Limited and has over 15 years experience the telecommunications industry. He has served as an independent marketing agent for a European Telecom provider, during which he was responsible for developing major contracts with blue chip companies in both Holland and Germany. Mr. Ellinson worked in corporate management for Ambro International. In March 2002 Mr. Ellinson co-founded Voiceserve Ltd. with the goal of developing VoIP technology and offering a complete solution to end users.

Mr. Ellinson’s qualifications to serve on our board of directors include his eighteen years of experience in the telecommunications filed and experience as co-founder of the Company.

MR. MIKE OTTIE, CHIEF OPERATIONAL OFFICER AND DIRECTOR. Mr. Ottie is a co-founding director of Voiceserve Limited and has been involved in the telecommunications since August 1997. Having completed an accounting degree in July 1992, Mr. Ottie proceeded to acquire knowledge in computer and electronic systems. In August 1997 Mr. Ottie was appointed senior computer and switching engineer for Econophone UK. During September 2000 he became Chief Switching and Billing Manager for Ambro International, a United Kingdom telecom company which offered reduced rates to business and residential users. In March 2002 Mr. Ottie became the co-founder of Voiceserve Limited, with the goal of developing VoIP technology and offering a complete solution to end users.

Mr. Ottie’s qualifications to serve on our board of directors include his fifteen years of experience in the telecommunications filed and experience as co-founder of the Company.

MR. KRZYSZTOF OGLAZA, CHIEF TECHNICAL OFFICER AND DIRECTOR. Mr. Oglaza is a co-founding director of VoipSwitch Inc. Having completed his Engineering degree in Information Technology at the Politeck School of Opole in Poland, Mr Oglaza continued to secure a Masters in Technology in the college of Wroclaw Poland in 2000. During his studies for his masters he became a partner in Intermic S.C. a local Internet provider. Mr. Krysztof was a partner in Intermic S.C., a local Internet provider, which was acquired by Netia Holding, Poland’s largest private telcom company in 2002. In 2002, Mr. Oglaza became a co-founder of VoipSwitch, Inc., which was acquired by Voiceserve, Inc. in 2008.

Mr. Oglaza’s qualifications to serve on our board of directors include his technological background.

MR. ALFRED STEFANSKY, CHIEF FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER. Alfred Stefansky is a trade and finance specialist offering over 25 years of management, trading and administrative experience from the international commodity and finance industry. He has experience managing an organization’s day-to-day operations, financial structure and ongoing corporate strategies. From 1997 to 2009, Mr. Stefansky worked for a commodity investment company which focused on the physical commodity market. He was responsible for building comprehensive processes and systems around the treasury/finance function. Mr. Stefansky managed financial and cash transactions from physical payments, hedges, liquidity management, including bank contacts and management of credit lines. He also helped build a proprietary electronic cash management system, a proprietary fund management system and a financial trading system.

MR. MICHAEL TAYLOR, DIRECTOR – Mr. Taylor was admitted to the Bar in England in 1986. Between 1996 and 1999, he served as Deputy General Counsel to the global mobile personal communications satellite operator, ICO Global Communications (“ICO”). At ICO, he provided legal and regulatory support in the US, Latin and South America, Europe, the Middle East, South Africa, India, the Far East and Australia. While at ICO, he chaired the interconnect working group of the European Telecommunications Platform in Brussels with the responsibility of producing a pan-European framework interconnect agreement. Mr. Taylor presented the framework agreement to the European Commission who accepted it for use by operators and service providers across Europe.

From 1999 to 2001, Mr. Taylor served as Senior Vice President and General Counsel to FirstMark Communications Europe, a pan-European operator providing broadband wireless services and backbone fibre connectivity. There, he was responsible for managing a team of attorneys across Europe and was closely involved in the company’s fixed wireless frequency auctions and competitive tender license processes. In early 2001, he joined the ONSLOW Group, offering regulatory, legal, tax, business development and strategic services principally to clients in the telecoms, media and technology sectors. In 2005, he was elected as a Council Member of the UK Internet Telephony Service Providers Association (ITSPA). In 2009 Mr. Taylor was appointed to the board of OpenPlanet Limited. The company is involved in the establishment and provision of open access networks utilizing next generation access broadband fibre technology.

Mr. Taylor is also a founding director of The Oplan Foundation (the “Foundation”). The Foundation is an independent, non-political and not-for-profit organization that seeks to build greater awareness and understanding of the social and economic benefits that open networks will deliver to their communities.

Because of his legal background, as well as his insight into geographic markets of interest to the Company, Mr. Taylor was appointed a director of Voiceserve, Inc. on September 30, 2010.

MR. ANDREW MILLET, DIRECTOR – Mr. Millet qualified as a Chartered Accountant in England and Wales in 1995 and became a fellow member of the ICAEW in 2005. In 2000, he obtained an MBA at Henley Management College. Following an accountancy training contract with Stoy Hayward, Mr. Millet has held a number of senior commercial posts between 1998 and 2001. He was finance director for Maintel, a telecoms group, now an AIM listed company. Between 2002 and 2003 Mr. Millet was finance director for Huntress, a recruitment group, now owned by Nomura. In 2002, Mr. Millet established Wisteria, an accountancy practice. The practice specializes in technology and growth businesses. He currently sits on the board of a number of technology and media clients as a non-executive director. These clients include Activinstinct Ltd., Cyber-Duck Ltd. and Pinkunlimited.co.uk Ltd.

Mr. Millet’s telecommunications expertise, as well as his financial background supported the decision to appoint Mr. Millet as a director of Voiceserve, Inc. on September 30, 2010.

Term of Office

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. There are no agreements with respect to the election of Directors. Our officers are appointed by our board of directors and hold office until removed by the board. However, we have entered into employment agreements with our President and Chairman, Alexander Ellinson, our Chief Executive Officer, Michael Bibelman, and our Chief Financial Officer, Alfred Stefansky, each for a term of five years. Please refer to “Executive Compensation—Employment Agreements” for a discussion of the material terms of the employment agreements between the Company and the named executive officers identified in the Summary Compensation Table below.

Board Committees

Compensation Committee

On May 2, 2011, the Board established a compensation committee composed of our two independent directors of Michael Taylor and Andrew Millet. The compensation committee exists to assist the Board of Directors in the discharge of its fiduciary responsibilities relating to the fair and competitive compensation of the executives and other key employees of the Company as well as to identify qualified candidates for presentation to the Board of Directors for election as directors, officers and members. The compensation committee has the ultimate responsibility for assuring that the senior executives of the Company are compensated in a manner consistent with the compensation philosophy and strategy of the Board of Directors and in compliance with the requirements of the regulatory bodies that oversee the Company. Generally, the compensation committee is charged with reviewing and approving the Company’s compensation philosophy and its executive compensation programs, plans and awards.

Audit Committee

We formed an Audit Committee on September 30, 2010. Andrew Millet and Michael Taylor are the members of the Audit Committee. The Audit Committee assists the Board of Directors in overseeing (i) our accounting and financial reporting processes and principles, (ii) our disclosure controls and procedures and internal control over financial reporting designed to promote compliance with generally accepted accounting principles and applicable laws and regulations, (iii) the preparation, presentation and integrity of our financial statements, and (iv) the administration of an audit our annual financial statements by our independent auditor in accordance with generally accepted accounting standards. Our Board has also determined that Mr. Millet qualifies as an “audit committee financial expert.”

Certain Legal Proceedings

To the best of our knowledge, none of our directors or executive officers has, during the past ten years:

·	been convicted in a criminal proceeding or been subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);
·	had any bankruptcy petition filed by or against the business or property of the person, or of any partnership, corporation or business association of which he was a general partner or executive officer, either at the time of the bankruptcy filing or within two years prior to that time;

been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction or federal or state authority, permanently or temporarily enjoining, barring, suspending or otherwise limiting, his involvement in any type of business, securities, futures, commodities, investment, banking, savings and loan, or insurance activities, or to be associated with persons engaged in any such activity;

been found by a court of competent jurisdiction in a civil action or by the SEC 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;

been 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 (not including any settlement of a civil proceeding among private litigants), relating to an alleged violation of any federal or state securities or commodities law or regulation, 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 any law or regulation prohibiting mail or wire fraud or fraud in connection with any business entity; or

been 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 Exchange Act), 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.

Except as set forth in our discussion below in “Item 13—Certain Relationships and Related Transactions, and Director Independence” none of our directors or executive officers has been involved in any transactions with us or any of our directors, executive officers, affiliates or associates which are required to be disclosed pursuant to the rules and regulations of the SEC.

Compliance with Section 16(a) of the Exchange Act

Under Section 16(a) of the Exchange Act, our directors and certain of our officers, and persons holding more than 10 percent of our common stock are required to file forms reporting their beneficial ownership of our common stock and subsequent changes in that ownership with the United States Securities and Exchange Commission.

Based solely upon a review of copies of such forms filed on Forms 3, 4, and 5, and amendments thereto furnished to us, we believe that as of the date of this Report, our executive officers, directors and greater than 10 percent beneficial owners have not complied on a timely basis with all Section 16(a) filing requirements. While no Forms 3, 4, and 5’s were required to be filed in the last fiscal year, such filings are not currently up to date. The following table lists which of our officers, directors and greater than 10 percent beneficial owners are delinquent in their filings:

Alexander Ellinson

Michael Bibelman

Mike Ottie

Krzystof Oglaza

Alfred Stefansky

We expect within 30 days of the filing of this Report, that all filings will be updated.

Code of Ethics

The company has adopted a Code of Ethics applicable to its Chief Executive Officer and Chief Financial Officer. This Code of Ethics was included as Exhibit 14.1 to the Company’s Annual Report on Form 10-K for the fiscal year ended March 31, 2010 and is incorporated by reference herein.

Item 11.

Executive Compensation.

The following sets forth information with respect to the compensation awarded or paid to our principal executive officer and the two most highly compensated executive officers during the fiscal years ended March 31, 2012 (collectively, the “named executive officers”) for all services rendered in all capacities to us and our subsidiaries in fiscal 2012 and 2011. On September 30, 2010, Aaron Sandler resigned as our Chief Financial Officer.

Summary Compensation Table

Name And Principal Position	Year	Salary ($)		Stock Awards ($) (1)		Option Awards (2)		All Other Compensation ($) (3)		Total ($)
Michael Bibelman,	2012		0		216,000		62,300		325,060		603,360
Chief Executive Officer	2011		0		0		64,100		314,977		379,097

Alexander Ellinson,	2012		63,986		216,000		62,300		153,839		496,125
Chairman of the Board & President	2011		31,534		0		64,100		263,076		358,710

Mike Ottie	2012		0		0		0		69,133		69,133
Chief Operations Officer	2011		0		0		0		116,916		116,916

Krzysztof Oglaza	2012		0		0		0		454,439		454,439
Chief Technical Officer	2011		0		125,000		0		864,181		989,181

Alfred Stefansky	2012		0		0		0		98,955		98,955
Chief Financial Officer and Principal Accounting Officer	2011		0		0		0		84,865		84,865

Aaron Sandler	2012		0		0		0		0		0
Chief Financial Officer	2011		0		0		0		0		0

(1)

The amounts reported in this column reflect the aggregate grant date fair value of restricted stock share or unit awards computed in accordance with FASB Topic ASC 718 for restricted stock granted to each named executive officer. The calculation of these amounts disregards any estimate of forfeitures related to time-based vesting conditions. The amounts do not reflect compensation actually received by the named executive officers.

(2)

The amounts reported in this column reflect the aggregate grant date fair value of option awards computed in accordance with FASB ASC Topic 718 for stock options granted to each named executive officer. The calculation of these amounts disregards the estimated forfeitures related to time-based vesting conditions. The amounts do not reflect compensation actually received by the named executive officers. The amounts reported in this column for Messrs. Bibelman and Ellinson reflect the grant date fair market value of option awards to purchase 250,000 shares of our common stock granted on June 4, 2010 and June 4, 2011.

(3)	Each of these individuals and their affiliates were paid consulting fees for services rendered to Voiceserve Limited and/or VoipSwitch AG.

Our executive officers are treated as independent contractors because they serve our holding company and wholly owned subsidiaries. We therefore decided that they should not be included on any one company’s payroll. Their fiduciary duties and obligations as executive officers of the Company do not change based upon the officers’ status as independent contractors versus employees. Each of our executive officers owes the same duty of loyalty and duty of care to the Company and our shareholders.

Outstanding Equity Awards At Fiscal Year-End

The following table provides information concerning unexercised options held by our named executive officers as of the fiscal year ended March 31, 2012. There were no stock awards that had not vested as of March 31, 2012 nor were there any unearned or unvested equity incentive plan awards for any named executive officer as of March 31, 2012:

Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)		Option Exercise Price Per Share ($)		Option Expiration Date
Michael Bibelman		250,000		0		250,000		0.25	6/4/2015
Michael Bibelman		250,000		0		250,000		0.2385	6/4/2016
Alexander Ellinson		250,000		0		250,000		0.25	6/4/2015
Alexander Ellinson		250,000		0		250,000		0.2385	6/4/2016
Krzysztof Oglaza		0		0		0		N/A	N/A

Employment Agreements

On June 4, 2010, we executed employment agreements with (i) our President and Chairman, Alexander Ellinson, and (ii) our Chief Executive Officer, Michael Bibelman. Each agreement has a term of five (5) years and each provides for (i) an annual base salary of $240,000, (ii) an annual bonus of up to 100% of the base salary as determined in the sole discretion of the Board of Directors, and (iii) annual grants of stock options under the Company’s Equity Incentive Stock Plan to purchase 250,000 shares of common stock at $0.25 per share for the first year, which shall occur on or before July 26, 2010, and at a 25% discount off the price on each June 4 thereafter in 2011, 2012, 2013, and 2014 (which vest at such time as approved by the Board of Directors). Annual bonuses are determined by the Board of Directors and are based on the Company’s ability to generate revenues.

Both employment agreements also provide for other employee benefits, such as an allowance for leasing a car for the Company or the Company providing one, healthcare insurance, vacation and other benefits provided in accordance with Company policy. In addition, each agreement contains provisions concerning early termination of the executive for death, disability, or with or without cause by the executive. In the event of death or disability, the Company is obligated to pay three months base salary plus accrued benefits. In the event of a termination of the executive “without cause,” the Company is obligated to pay each executive, in lieu of “severance payments,” his base pay and bonus, including percentage of profits, for the term in which the termination occurs for 36 months after the termination date in accordance with Company payroll practices, and maintain other benefits for that executive also for that 36 month period. Finally, the Company is obligated to pay the exercise price for the stock options to be granted as described in the preceding paragraph and the Company is required to issue 250,000 shares of common stock to the terminated executive with demand registration rights.

On September 30, 2010 we entered into an employment agreement with our CFO, Alfred Stefansky. The agreement has a term of five (5) years and provides for: (i) the annual compensation paid in a monthly base salary of $8,000 payable in biweekly installments; and (ii) an annual bonus of up to 100% of the base salary as determined in the sole discretion of the Board of Directors.

Equity Incentive Plan

Our Equity Incentive Plan (the “Plan”) is administered by a compensation committee, which has full and final authority with respect to the granting of options there under. Options may be granted under the Plan to such employees, officers, directors, consultants and advisors of the Company or affiliates of the Company, provided such consultants and advisors render bona fide services not in connection with the offer and sale of securities in a capital-raising transaction. A person may be granted more than one Award under the Plan (referred to as a “participant”). The committee may grant options to eligible persons and shall determine whether such Options shall be Incentive Stock Options within the meaning of the Code (“ISO”) or Nonqualified Stock Options (“NQSO”), the number of Shares subject to the Option, the Exercise Price of the Option, the period during which the Option may be exercised, and all other terms and conditions of the Option.

The exercise price shall be determined by the committee when the option is granted and may be not less than the par value of a Share on the date of grant provided that: (i) the Exercise Price of an ISO shall be not less than one hundred percent (100%) of the fair market value of the shares on the date of grant; (ii) the exercise price of any ISO granted to a ten percent shareholder shall not be less than one hundred ten percent (110%) of the fair market value of the shares on the date of grant; and (iii) the exercise price of any option granted that the committee intends to qualify under Section 162(m) of the Code, shall not be less than one hundred percent (100%) of the fair market value of the Shares on the date of grant.

The term of any options granted shall be determined by the compensation committee at the time of the grant but the term of any options granted under the plan shall not exceed ten years. If desired by the compensation committee, options granted under the Plan may be subject to vesting provisions. Options granted under the Plan are not transferable or assignable other than by will or otherwise by operation of law. In the event of death or disability of an option holder, options granted under the Plan vest immediately if unvested and expire one year from the death or disability of the option holder.

Certain restrictions contained in the Plan include:

·	no option shall be exercisable after the expiration of ten (10) years from the date the Option is granted,
·	no option granted to a person who directly or by attribution owns more than ten percent (10%) of the total combined voting power of all classes of stock of the Company (“Ten Percent Shareholder”) shall be exercisable after the expiration of five (5) years from the date the Option is granted.

Director Compensation

Except as disclosed below, no member of our board of directors received any compensation for his service as a director during the fiscal year ended March 31, 2012.

Name of Director	Fees earned or paid in cash ($)		Stock Awards ($) (1)		Total ($)
Andrew Millet		12,000		48,000		60,000

Michael Taylor		12,000		48,000		60,000

(1)

The amounts reported in this column reflect the aggregate grant date fair value of restricted stock share or unit awards computed in accordance with FASB Topic ASC 718 for restricted stock granted in fiscal 2012 to each director. The calculation of these amounts disregards any estimate of forfeitures related to time-based vesting conditions. The amounts do not reflect compensation actually received by the directors.

Director Employment Agreements

Andrew Millet and Michael Taylor have executed employment agreements with the Company. The employment agreements for our directors provide that each director will be paid a monthly retainer of $1,000, as well as a onetime restricted stock award of 300,000 shares of the Company’s common stock upon execution of the employment agreement. In the event that a change of control occurs resulting from (i) a merger of the Company into or with another person or any sale or transfer of the equity interests of the Company in any such case in which the equity holders of the Company immediately prior to such transaction possess less than 50% of the Company’s or the surviving entity's issued and outstanding equity interests immediately after such transaction; or (ii) the sale by the Company of all or substantially all of its assets, the entire 300,000 shares of the Stock Award shall immediately vest and be issued to the Director. Each director is also considered an independent contractor and is not, for any purpose, an employee or agent with authority to bind the Company in any respect. Each director’s employment agreement is for a term commencing on September 30, 2010 and terminating on the earliest of the following to occur: (a) one (1) year from September 30, 2010 subject to a one (1) year renewal term upon re-election by a majority of the shareholders of the Company;(b) the death of the director ; (c) the termination of the director from the position of member of the Board by the mutual agreement of the Company and the director;(d) the removal of the director from the Board by the shareholders of the Company; (e) the resignation by the director from the Board if after September 30, 2010 the Chief Executive Officer of his current employer determines that the director's continued service on the Board conflicts with his fiduciary obligations to his current employer; or (f) the resignation by the director from the Board if the board of directors or the Chief Executive Officer of his current employer requires the director to resign.

Compensation Committee Interlocks and Insider Participation

On May 2, 2011 our Board of Directors formed a compensation committee, comprised of Michael Taylor and Andrew Millet, each of which is an independent director.

No member of our Board of Directors, nor any member of our compensation committee, has a relationship that would constitute an interlocking relationship with our executive officers or directors or another entity.

Item 12.

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

The following table sets forth certain information as of July 9, 2012 with respect to the holdings of: (1) each person known to us to be the beneficial owner of more than 5% of our common stock; (2) each of our directors and named executive officers; and (3) all directors and executive officers as a group. To the best of our knowledge, each of the persons named in the table below as beneficially owning the shares set forth therein has sole voting power and sole investment power with respect to such shares, unless otherwise indicated. Unless otherwise specified, the address of each of the persons set forth below is in care of the Company.

Name of Beneficial Owner and Address	Amount and Nature of Beneficial Ownership of Common Stock		Percent of Common Stock (1)
5% Shareholders
Aron Sandler	5,000,000		10.50%
Lukasz Nowak	3,000,000		6.30%
Michal Kozlowski	3,000,000		6.30%
Directors and Executive Officers
Alexander Ellinson	7,593,750	(2)	15.71%
Michael Bibelman	7,560,315	(3)	15.63%
Mike Ottie	4,500,000		9.45%
Krzysztof Oglaza	3,000,000		6.30%
Andrew Millet	750,000		1.58%
Alfred Stefansky	610,714		1.28%
Michael Taylor	600,000		1.26%
All directors and officers as a group (7 people)	24,614,779		50.14%

* Less than 1%

(1)	Based on 47,585,198 shares of common stock outstanding as of July 9, 2012. For purposes of computing the percentage of outstanding shares of our common stock held by each person or group of persons named above, any shares that such person or persons has the right to acquire within 60 days of July 9, 2012 is deemed to be outstanding, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person.
(2)	Includes 750,000 shares of common stock underlying options held by Mr. Ellinson that are presently exercisable and 1,068,750 shares of the Company’s common stock held by Mr. Ellinson’s spouse.
(3)	Includes 750,000 shares of common stock underlying options held by Mr. Bibelman that are presently exercisable and 1,111,815 shares of the Company’s common stock held by Mr. Bibelman’s spouse.

The Company is not aware of any arrangements which may at a subsequent date result in a change of control of the Company.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

Transactions with Related Persons

For the years ended March 31, 2012 and 2011, consulting fees paid to officers, directors, and their affiliates totaled $1,656,686 and $1,629,058, respectively. These fees were included in cost of software license fees and support ($908, 878 and $864,181 for years ended March 31, 2012 and 2011, respectively) and selling, general, and administrative expenses ($747,808 and $764,877 for the years ended March 31, 2012 and 2011, respectively) in the accompanying statements of operations.

Director Independence

Because our common stock is not currently listed on a national securities exchange, we have used the definition of “independence” of The NASDAQ Stock Market to make this determination. NASDAQ Listing Rule 5605(a)(2) provides that an “independent director” is a person other than an officer or employee of the company or any other individual having a relationship which, in the opinion of the Company’s Board of Directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The NASDAQ listing rules provide that a director cannot be considered independent if:

·	the director is, or at any time during the past three years was, an employee of the company;
·	the director or a family member of the director accepted any compensation from the company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the independence determination (subject to certain exclusions, including, among other things, compensation for board or board committee service);

·	a family member of the director is, or at any time during the past three years was, an executive officer of the company;
·	the director or a family member of the director is a partner in, controlling stockholder of, or an executive officer of an entity to which the company made, or from which the company received, payments in the current or any of the past three fiscal years that exceed 5% of the recipient’s consolidated gross revenue for that year or $200,000, whichever is greater (subject to certain exclusions);

·	the director or a family member of the director is employed as an executive officer of an entity where, at any time during the past three years, any of the executive officers of the company served on the compensation committee of such other entity; or
·	the director or a family member of the director is a current partner of the company’s outside auditor, or at any time during the past three years was a partner or employee of the company’s outside auditor, and who worked on the company’s audit.

Michael Taylor and Andrew Millet are the only members of the Board of Directors that are considered independent.

Item 14.

Principal Accounting Fees and Services.

Audit Fees

For our fiscal years ended March 31, 2012 and March 31, 2011, we were billed approximately $55,000 and $55,000, respectively, for professional services rendered for the audit and reviews of our financial statements.

Audit Related Fees

For our fiscal years ended March 31, 2012 and 2011 we did not incur any audit related fees.

Tax Fees

For our fiscal years ended March 31, 2012 and 2011, we did not incur any fees for professional services rendered for tax compliance, tax advice, and tax planning.

All Other Fees

The Company did not incur any other fees related to services rendered by our principal accountant for the fiscal years ended March 31, 2012 and 2011.

Audit and Non-Audit Service Pre-Approval Policy

In accordance with the requirements of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated there under, the Board of directors has adopted an informal approval policy that it believes will result in an effective and efficient procedure to pre-approve services performed by the independent registered public accounting firm.

Audit Services. Audit services include the annual financial statement audit (including quarterly reviews) and other procedures required to be performed by the independent registered public accounting firm to be able to form an opinion on our financial statements. The Board of directors pre-approves specified annual audit services engagement terms and fees and other specified audit fees. All other audit services must be specifically pre-approved by the Board of directors. The Board of directors monitors the audit services engagement and may approve, if necessary, any changes in terms, conditions and fees resulting from changes in audit scope or other items.

Audit-Related Services. Audit-related services are assurance and related services that are reasonably related to the performance of the audit or review of our financial statements which are consistent with the SEC’s rules on auditor independence. The Board of directors pre-approves specified audit-related services within pre-approved fee levels. All other audit-related services must be pre-approved by the Board of directors.

Tax Services. The Board of directors pre-approves specified tax services that the Audit Committee believes would not impair the independence of the independent registered public accounting firm and that are consistent with SEC rules and guidance. The Board of directors must specifically approve all other tax services.

All Other Services. Other services are services provided by the independent registered public accounting firm that do not fall within the established audit, audit-related and tax services categories. The Board of directors pre-approves specified other services that do not fall within any of the specified prohibited categories of services.

Procedures. All proposals for services to be provided by the independent registered public accounting firm, which must include a detailed description of the services to be rendered and the amount of corresponding fees, are submitted to the Chairman of the Board of directors and the Chief Financial Officer. The Chief Financial Officer authorizes services that have been pre-approved by the Board of directors. If there is any question as to whether a proposed service fits within a pre-approved service, the Board of Directors chair is consulted for a determination. The Chief Financial Officer submits requests or applications to provide services that have not been pre-approved by the Board of directors, which must include an affirmation by the Chief Financial Officer and the independent registered public accounting firm that the request or application is consistent with the SEC’s rules on auditor independence, to the Board of directors (or its Chair or any of its other members pursuant to delegated authority) for approval.

PART IV

ITEM 15. Exhibits, Financial Statement Schedules.

(a) The following documents are filed as part of this report:

Financial Statements: See “Index to Consolidated Financial Statements” in Part II, Item 8 of this Report.

Exhibits: The exhibits listed in the accompanying index to exhibits are filed or incorporated by reference as part of this Report.

(b) The following are exhibits to this Report and, if incorporated by reference, we have indicated the document previously filed with the SEC in which the exhibit was included.

Certain of the agreements filed as exhibits to this Report contain representations and warranties by the parties to the agreements that have been made solely for the benefit of the parties to the agreement. These representations and warranties:

·	may have been qualified by disclosures that were made to the other parties in connection with the negotiation of the agreements, which disclosures are not necessarily reflected in the agreements;
·	may apply standards of materiality that differ from those of a reasonable investor; and

·	were made only as of specified dates contained in the agreements and are subject to subsequent developments and changed circumstances.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date that these representations and warranties were made or at any other time. Investors should not rely on them as statements of fact.

Exhibit Number		Description
3.1		Certificate of Incorporation [incorporated by reference to Exhibit 3.1 to the Company’s Amendment No. 2 to Annual Report on Form 10-K for the period ending March 31, 2010 filed with the SEC on March 1, 2011]
3.2		Bylaws [incorporated by reference to Exhibit 3.2 to the Company’s Amendment No. 2 to Annual Report on Form 10K for the period ending March 31, 2010 filed with the SEC on March 1, 2011]
4.1		Form of Warrant for Private Offering of the Company’s Common Stock completed May 6, 2011 [incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8K filed with the SEC on May 12, 2011]
4.2		Form of Warrant for Private Offering of the Company’s Common Stock completed June 6, 2011 [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 12, 2011]
10.1		Form of Securities Purchase Agreement for Private Offering of the Company’s Common Stock completed May 6, 2011 [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8K filed with the SEC on May 12, 2011]
10.2		Form of Securities Purchase Agreement for Private Offering of the Company’s Common Stock completed June 6, 2011 [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 12, 2011]
10.3		Form of Registration Rights for Private Offering of the Company’s Common Stock completed May 6, 2011 [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on May 12, 2011]
10.4		Form of Registration Rights for Private Offering of the Company’s Common Stock completed June 6, 2011 [incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on July 12, 2011]
14.1		Code of Ethics [incorporated by reference to Exhibit 14.1 to the Company’s Amendment No. 1 to Annual Report on Form 10K/A for the period ending March 31, 2010 filed with the SEC on November 10, 2010]
31.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act.
31.2**		Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act.
32.1*		Certification of Principal Executive Officer pursuant to Rule 13a-14(b) of the Exchange Act and Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**		Certification of Principal Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS***		XBRL Instance Document
101.SCH ***		XBRL Taxonomy Extension Schema Document
101.CAL ***		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF ***		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB ***		XBRL Taxonomy Extension Label Linkbase Document
101.PRE ***		XBRL Taxonomy Extension Presentation Linkbase Document

*	Filed herewith.

**	In accordance with SEC Release 33-8238, Exhibits 32.1 and 32.2 are being furnished and not filed.

***

XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

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

Dated: July 16, 2012	VOICESERVE, INC.

	By:	/s/ Michael Bibelman
		Michael Bibelman
		Chief Executive Officer (Duly authorized officer and principal executive officer)

Dated: July 16, 2012	By:	/s/ Alfred Stefansky
		Alfred Stefansky
		Chief Financial Officer, Principal Accounting Officer (Duly authorized officer and principal financial officer)

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.

Name	Title	Date

/s/ Michael Bibelman	Chief Executive Officer and Director	July 16, 2012
Michael Bibelman

/s/ Alfred Stefansky	Chief Financial Officer and	July 16, 2012
Alfred Stefansky	Principal Accounting Officer

/s/ Alexander Ellinson	President and	July 16, 2012
Alexander Ellinson	Chairman of the Board of Directors

/s/ Mike Ottie	Chief Operational Officer and Director	July 16, 2012
Mike Ottie

/s/ Krzysztof Olgaza	Chief Technical Officer and Director	July 16, 2012
Krzysztof Oglaza

/s/ Michael Taylor	Director	July 16, 2012
Michael Taylor

/s/ Andrew Millet	Director	July 16, 2012
Andrew Millet

VOICESERVE INC 10-K