MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Our plan of operation for the twelve months following the date of this report is to expand our business operations by:

* executing additional reseller agreements pursuant to which third parties will market our products and services to end-users;
* assembling an integration team to aid and assist resellers;
* assembling a call center support team to answer reseller and end-user inquiries;
* conducting a marketing plan to secure additional resellers and customers; and
* pursuing research and development initiatives to complete certain products in the development stage and to generate proposals for potential new products.

In order to execute additional reseller agreements, we plan to have our management travel extensively in order to introduce our products and services to telecommunications companies, cable companies, Internet service providers, VOIP service providers and marketing organizations throughout North America and Europe. Our C.E.O., Kevin Penstock, will be primarily responsible for initiating new contacts in North America, while Carmelo D'Anzi, our vice-president of business development, will initiate new contacts in Europe. Our goal is to execute and maintain a minimum of 17 new, active resellers within the next 12 months. We intend to commence this marketing effort immediately and anticipate that it will be ongoing throughout the next 12 month period.

Our management will also oversee the assembly of the integration and call center support teams. This will primarily involve hiring and training personnel to aid and assist resellers in their efforts to sell our products to their customers and to answer any questions from either the resellers or their customers. We expect to hire 12 client and customer support personnel in the next 12 months. The timing of the expansion of these teams will depend on our ability to raise funding to cover labor and related overhead expense.

Our marketing efforts will consist of a mix of new social and media viral marketing via the Internet sustained by channel marketing through our resellers.

In order to complete existing new product development, such as our Softphone suite, and Itokk social, a social VOIP for web communities, as well as to design new products, we intend to retain software developers. Our C.E.O., Kevin Penstock, and our vice-president of research and development, Ioannis Karamitsos, Ph.D., will oversee the training and management of these employees.

We intend to expand our research and development efforts by retaining five technical staff in Vancouver and another 30 developers in India, with an initial recruitment of five employees. The timing of the expansion of these teams will depend on our ability to raise funding to cover labor and related overhead expense.

In order to achieve the preceding objectives, we anticipate incurring the following approximate costs:

Management wages:                  $  915,000
Operations and overhead:           $1,268,000
Research and development:          $  402,000
Marketing:                         $  528,000
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TOTAL:                             $3,113,000
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Of this amount, we expect that in order to achieve our objectives, we will require these funds on a per quarter basis approximately as follows:

Quarter 1:                         $  256,000
Quarter 2:                         $  630,000
Quarter 3:                         $1,013,000
Quarter 4:                         $1,214,000
                                   ----------
TOTAL:                             $3,113,000
                                   ==========

As well, we anticipate spending an additional $100,000 on administrative costs such as accounting and auditing fees, legal fees and fees payable in connection with reporting obligations.

Total expenditures over the next 12 months are therefore expected to be approximately $3,213,000. Our ability to meet these objectives in the time frames indicated will be dependent on our ability to generate revenue from operations and to raise sufficient additional capital to expand operations. If we are unable to generate sufficient revenue or raise financing as required, we will delay our expansion of operations as necessary.

SOURCES AND USES OF CASH

At December 31, 2009, our current assets consisted of $20,081 in cash. Accordingly, we will have to raise additional funds in the next twelve months in order to cover our anticipated administrative costs and costs of expanding our operations as outlined above. We currently do not have a specific plan of how we will obtain such funding; however, we anticipate that additional funding will be in the form of equity financing from the sale of our common stock. Any private placement of our common stock could result in substantial dilution to existing shareholders.

We have and will continue to seek to obtain short-term loans from our directors, although no future arrangements for additional loans have been made. We do not have any agreements with our directors concerning these loans. We do not have any arrangements in place for any future equity financing.

EVENTS, TRENDS AND UNCERTAINTIES

The development of our business will depend upon our ability to attract resellers and customers for our VOIP and related products and services. Our ability to generate revenue may be affected by events and trends such as general economic conditions, technological advances and competing products from existing and new companies in the same business.

RESULTS OF OPERATIONS

We did not earn any revenues during the three-month period ended December 31, 2009. We incurred operating expenses in the amount of $59,064 for the period consisting entirely of general and administrative costs.

We have not attained profitable operations and are dependent upon obtaining financing to pursue activities. For these reasons, there is substantial doubt that we will be able to continue as a going concern.

CONTROLS AND PROCEDURES

EVALUATION OF DISCLOSURE CONTROLS

We evaluated the effectiveness of our disclosure controls and procedures as of the date of this report. This evaluation was conducted by Kevin Penstock, our chief executive officer and principal accounting officer.

Disclosure controls are controls and other procedures that are designed to ensure that information that we are required to disclose in the reports we file pursuant to the Securities Exchange Act of 1934 is recorded, processed, summarized and reported.

LIMITATIONS ON THE EFFECTIVE OF CONTROLS

Our management does not expect that our disclosure controls or our internal controls over financial reporting will prevent all error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, but no absolute, assurance that the objectives of a control system are met. Further, any control system reflects limitations on resources, and the benefits of a control system must be considered relative to its costs. These limitations also include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of a control. A design of a control system is also based upon certain assumptions about potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and may not be detected.

CONCLUSIONS

Based upon their evaluation of our controls, Kevin Penstock, our chief executive officer and principal accounting officer, has concluded that, subject to the limitations noted above, the disclosure controls are effective providing reasonable assurance that material information relating to us is made known to management on a timely basis during the period when our reports are being prepared. There were no changes in our internal controls that occurred during the quarter covered by this report that have materially affected, or are reasonably likely to materially affect our internal controls.