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

|   | For the quarterly period ended September 30, 2009 |
|--------|---------------------------------------------------|

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

|   | For the transition period from _____________ to _____________ |
|--------|---------------------------------------------------------------|

| NEVADA                                                         | 91-1287406                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| 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 requiredto submit and post such files). | YES [ ] NO [ X ] |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|

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

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

----

| PART I FINANCIAL INFORMATION                                                                                   |      |
|----------------------------------------------------------------------------------------------------------------|-----------|
|                                                                                                           |      |
| ITEM 1.  FINANCIAL STATEMENTS (UNAUDITED)                                                            |   3  |
|      Balance Sheets                                                                   |   3  |
|      Statements of Operations                                                         |   4  |
|      Statements of Cash Flows                                                         |   5  |
|      Notes to the Financial Statements                                                |   6  |
| ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |   16 |
| ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                  |   23 |
| ITEM 4T.  CONTROLS AND PROCEDURES                                                                    |   23 |
|                                                                                                           |      |
| PART II OTHER INFORMATION                                                                                      |      |
|                                                                                                           |      |
| ITEM 1.  LEGAL PROCEEDINGS                                                                           |   24 |
| ITEM 2.  UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                 |   24 |
| ITEM 3.  DEFAULTS UPON SENIOR SECURITIES                                                             |   24 |
| ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                         |   24 |
| ITEM 5.  OTHER INFORMATION                                                                           |   24 |
| ITEM 6.  EXHIBITS                                                                                    |   25 |
|                                                                                                           |      |
| SIGNATURES                                                                                                     |   26 |

----

ITEM
1.

Balance

|                                                                  |   | September 30,                                                                                                                                                       |                                                                                                                    | December 31, |
|-----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|--------------|
|                                                                  |   | 2009                                                                                                                                                                |                                                                                                                    | 2008         |   |
| Assets                                                                |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Current assets:                                                       |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Cash and cash equivalents                                             |   | $                                                                                                                                                                   |                123,000                       |         |   | $ |                  68,000 |   |
| Accounts receivable, net                                              |   |                                                                                                                                                                |                646,000                       |         |   |   |                363,000 |   |
| Inventory                                                             |   |                                                                                                                                                                |                    6,000 |         |   |   |                  18,000 |   |
| Prepaid expenses and other assets                                     |   |                                                                                                                                                                |                  39,000            |         |   |   |                    5,000 |   |
| Total current assets                                                  |   |                                                                                                                                                                |                814,000                       |         |   |   |                454,000 |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Furniture, equipment and improvements, net                            |   |                                                                                                                                                                |                  75,000            |         |   |   |                  96,000 |   |
| Security deposits                                                     |   |                                                                                                                                                                |                    4,000 |         |   |   |                    4,000 |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Total assets                                                          |   | $                                                                                                                                                                   |                893,000                       |         |   | $ |                554,000 |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Liabilities and Stockholders' Equity                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Current liabilities:                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Accounts payable                                                      |   | $                                                                                                                                                                   |                631,000                       |         |   | $ |                282,000 |   |
| Accrued expenses                                                      |   |                                                                                                                                                                |                  91,000            |         |   |   |                134,000 |   |
| Customer deposits                                                     |   |                                                                                                                                                                |                  21,000            |         |   |   |                  20,000 |   |
| Deferred revenue                                                      |   |                                                                                                                                                                |                    8,000 |         |   |   |                  28,000 |   |
| Notes payable                                                         |   |                                                                                                                                                                |                  40,000            |         |   |   |                  58,000 |   |
| Capital Lease                                                         |   |                                                                                                                                                                |                  14,000            |         |   |   |                  17,000 |   |
| Total current liabilities                                             |   |                                                                                                                                                                |                805,000                       |         |   |   |                539,000 |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Long-term liabilities:                                                |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Capital lease - long-term portion                                     |   |                                                                                                                                                                |                    1,000 |         |   |   |                    8,000 |   |
| Total long-term liabilities                                           |   |                                                                                                                                                                |                    1,000 |         |   |   |                    8,000 |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Total liabilities                                                     |   |                                                                                                                                                                |                806,000                       |         |   |   |                547,000 |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Stockholders' equity:                                                 |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Preferred stock, $0.001 par value, 500,000 shares                     |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| authorized, no shares issued and outstanding as of September 30, 2009 |   |                            - |                                                                                                                    |         |   |                            - |   |
| Common stock, $0.001 par value, 200,000,000 shares                    |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| authorized, 130,554,124 shares issued and outstanding                 |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| as of September 30, 2009                                              |   |                                                                                                                                                                |                131,000                       |         |   |   |                128,000 |   |
| Paid-in capital                                                       |   |                                                                                                                                                                |           14,737,000                                                  |         |   |   |           14,606,000 |   |
| Subscriptions payable                                                 |   |                                                                                                                                                                |                  21,000            |         |   |   |                  21,000 |   |
| Deferred compensation                                                 |   |                                                                                                                                                                |                 (17,000)                |         |   |   |               (102,000) |   |
| Accumulated deficit                                                   |   |                                                                                                                                                                |          (14,785,000)                                                      |         |   |   |          (14,646,000) |   |
| Total stockholders' equity                                            |   |                                                                                                                                                                |                  87,000            |         |   |   |                    7,000 |   |
|                                                                  |   |                                                                                                                                                                |                                                                                                                    |         |   |   |   |   |
| Total liabilities and stockholder's equity                            |   | $                                                                                                                                                                   |                893,000                       |         |   | $ |                554,000 |   |

----

Condensed

|                                         |   | For the three months ended |        |   | For the nine months ended |   |
|----------------------------------------------|--------|----------------------------|-------------|--------|---------------------------|--------|
|                                         |   | September 30,              |        |   | September 30,             |   |
|                                         |   | 2009                       |        |   | 2008                      |   |   | 2009 |   |   | 2008 |   |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |
| Revenue                                      |   |                       |        |   |                      |   |   |   |   |   |   |   |
| Radiological services                        |   | $                          | 757,000     |   |                      | $      | 336,000 |   |   | $ | 2,189,000 |   |   | $ | 357,000 |   |
| Software usage fees                          |   |                       | 89,000      |   |                      |   | 102,000 |   |   |   | 323,000 |   |   |   | 351,000 |   |
| Software hosting and maintenance             |   |                       | 53,000      |   |                      |   | 74,000 |   |   |   | 169,000 |   |   |   | 206,000 |   |
| Radiological QA services                     |   |                       | 4,000       |   |                      |   | - |   |   |   | 8,000 |   |   |   | - |   |
| Custom programming                           |   |                       | 5,000       |   |                      |   | 5,000 |   |   |   | 9,000 |   |   |   | 16,000 |   |
| Scanning services                            |   |                       | -           |   |                      |   | - |   |   |   | 21,000 |   |   |   | - |   |
| Finance charges                              |   |                       | 4,000       |   |                      |   | - |   |   |   | 17,000 |   |   |   | - |   |
| Software sales and licenses                  |   |                       | -           |   |                      |   | 2,000 |   |   |   | - |   |   |   | 16,000 |   |
| Hardware sales                               |   |                       | -           |   |                      |   | 1,000 |   |   |   | - |   |   |   | 11,000 |   |
| Gross revenues                               |   |                       | 912,000     |   |                      |   | 520,000 |   |   |   | 2,736,000 |   |   |   | 957,000 |   |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Cost of services                             |   |                       | 674,000     |   |                      |   | 384,000 |   |   |   | 2,005,000 |   |   |   | 594,000 |   |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Gross Profit                                 |   |                       | 238,000     |   |                      |   | 136,000 |   |   |   | 731,000 |   |   |   | 363,000 |   |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Operating costs and expenses:                |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| General and administrative                   |   |                       | 184,000     |   |                      |   | 157,000 |   |   |   | 610,000 |   |   |   | 544,000 |   |
| Legal expenses                               |   |                       | 81,000      |   |                      |   | 6,000 |   |   |   | 157,000 |   |   |   | 35,000 |   |
| Depreciation and amortization                |   |                       | 8,000       |   |                      |   | 8,000 |   |   |   | 25,000 |   |   |   | 26,000 |   |
| Research and development                     |   |                       | 15,000      |   |                      |   | 9,000 |   |   |   | 46,000 |   |   |   | 44,000 |   |
| Total operating costs and expenses           |   |                       | 288,000     |   |                      |   | 180,000 |   |   |   | 838,000 |   |   |   | 649,000 |   |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net operating income (loss)                  |   |                       | (50,000     | )      |                      |   | (44,000 | ) |   |   | (107,000 | ) |   |   | (286,000 | ) |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Other income (expense):                      |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Interest (expense)                           |   |                       | (8,000      | )      |                      |   | (2,000 | ) |   |   | (22,000 | ) |   |   | (5,000 | ) |
| Inventory revaluation                        |   |                       | (6,000      | )      |                      |   | - |   |   |   | (10,000 | ) |   |   | - |   |
| Total other income (expense)                 |   |                       | (14,000     | )      |                      |   | (2,000 | ) |   |   | (32,000 | ) |   |   | (5,000 | ) |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                            |   | $                          | (64,000     | )      |                      | $      | (46,000 | ) |   | $ | (139,000 | ) |   | $ | (291,000 | ) |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share - basic and fully diluted |   | $                          | (0.00       | )      |                      | $      | (0.00 | ) |   | $ | (0.00 | ) |   | $ | (0.00 | ) |
|                                         |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average number of common shares     |   |                       |        |   |                      |   |   |   |   |   |   |   |   |   |   |   |
| outstanding - basic and fully diluted        |   |                       | 130,799,259 |   |                      |   | 124,293,028 |   |   |   | 130,502,073 |   |   |   | 113,989,270 |   |

----

Statements

|                                           |   | For the nine months ended |     |
|------------------------------------------------|--------|---------------------------|----------|
|                                           |   | September 30,             |     |
|                                           |   | 2009                      |     |   | 2008 |   |
| Cash flows from operating activities           |   |                      |     |   |   |   |
| Net loss                                       |   | $                         | (139,000 | ) |   | $ | (291,000 | ) |
| Adjustments to reconcile net loss to           |   |                      |     |   |   |   |   |   |
| net cash used by operating activities:         |   |                      |     |   |   |   |   |   |
| Common stock issued for salaries               |   |                      | -        |   |   |   | 30,000 |   |
| Common stock issued for services               |   |                      | 122,000  |   |   |   | 88,000 |   |
| Inventory revaluation                          |   |                      | 12,000   |   |   |   | - |   |
| Depreciation                                   |   |                      | 25,000   |   |   |   | 26,000 |   |
| Depreciation allocated to cost of services     |   |                      | 6,000    |   |   |   | 6,000 |   |
| Changes in operating assets and liabilities:   |   |                      |     |   |   |   |   |   |
| Accounts receivable                            |   |                      | (283,000 | ) |   |   | (183,000 | ) |
| Inventory                                      |   |                      | -        |   |   |   | (2,000 | ) |
| Prepaid expenses and other assets              |   |                      | (34,000  | ) |   |   | (6,000 | ) |
| Accounts payable                               |   |                      | 349,000  |   |   |   | 168,000 |   |
| Accrued expenses                               |   |                      | (43,000  | ) |   |   | 62,000 |   |
| Interest on customer deposits                  |   |                      | 1,000    |   |   |   | - |   |
| Deferred revenue                               |   |                      | (20,000  | ) |   |   | (10,000 | ) |
| Net cash used by operating activities          |   |                      | (4,000   | ) |   |   | (112,000 | ) |
|                                           |   |                      |     |   |   |   |   |   |
| Cash flows from investing activities           |   |                      |     |   |   |   |   |   |
| Acquisition of fixed assets                    |   |                      | (10,000  | ) |   |   | (14,000 | ) |
| Capital lease                                  |   |                      | -        |   |   |   | - |   |
| Net cash used by investing activities          |   |                      | (10,000  | ) |   |   | (14,000 | ) |
|                                           |   |                      |     |   |   |   |   |   |
| Cash flows from financing activities           |   |                      |     |   |   |   |   |   |
| Proceeds from notes payable                    |   |                      | 40,000   |   |   |   | 36,000 |   |
| Repayment of note payable                      |   |                      | (58,000  | ) |   |   | - |   |
| Repayment of principle under capital lease     |   |                      | (10,000  | ) |   |   | (4,000 | ) |
| Net proceeds from the issuance of common stock |   |                      | 97,000   |   |   |   | 68,000 |   |
| Net cash provided by financing activities      |   |                      | 69,000   |   |   |   | 100,000 |   |
|                                           |   |                      |     |   |   |   |   |   |
| Net increase (decrease) in cash equivalents    |   |                      | 55,000   |   |   |   | (26,000 | ) |
| Cash equivalents - beginning                   |   |                      | 68,000   |   |   |   | 59,000 |   |
| Cash equivalents - ending                      |   | $                         | 123,000  |   |   | $ | 33,000 |   |
|                                           |   |                      |     |   |   |   |   |   |
| Supplemental disclosures:                      |   |                      |     |   |   |   |   |   |
| Interest paid                                  |   | $                         | 14,000   |   |   | $ | 1,000 |   |
| Shares issued for exercise of warrants         |   | $                         | -        |   |   | $ | 10,000 |   |
| Assets acquired under capital lease            |   | $                         | -        |   |   | $ | 34,000 |   |

----

Notes

----

----

----

----

| • |   | A valuation technique that uses a) the quoted price of an identical liability when traded as an asset, or b) quoted prices for similar liabilities or similar liabilities when traded as assets.                                                                                                                                                                                     |
|---------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    |   |                                                                                                                                                                                                                                                                                                                                                                                 |
| • |   | Another valuation technique that is consistent with the principles of FASB ASC 820, examples include an income approach, such as a present value technique, or a market approach, such as a technique that is based on the amount at measurement date that the reporting entity would pay to transfer the identical liability or would receive toenter into the identical liability. |

----

----

| Computers                         |   | $      | 421,000  |   |
|-----------------------------------|--------|--------|----------|--------|
| Furniture, fixtures and equipment |   |   | 121,000  |   |
| Automobiles                       |   |   | 41,000   |   |
| Leasehold improvements            |   |   | 20,000   |   |
|                              |   |   | 603,000  |   |
| Accumulated depreciation          |   |   | (528,000 | )      |
|                              |   | $      | 75,000   |   |

| Number of Warrants | Exercise Price   | Expiration Date |
|--------------------|------------------|-----------------|
| 771,545            | $0.21            | July 24, 2009   |
| 700,000            | $0.15            | June 29, 2011   |
| 1,471,545          | $0.181 (average) |            |

----

|            |   |  Options Outstanding |   |                       |   |  Options Exercisable |
|-----------------|--------|---------------------------|--------|----------------------------|--------|---------------------------|
|            |   |                      |   | Weighted Average           |   | Weighted Average          |   |   |   | Weighted Average |
| Exercise Prices |   | Number Outstanding        |   | Remaining Contractual Life |   | Exercise Prices           |   | Number Exercisable |   | Exercise Price |
| $0.01-$0.049    |   | 12,500,000                |   | 7.11                       |   | $0.03                     |   | 12,500,000 |   | $0.03 |
| $0.05-$0.30     |   | 1,955,000                 |   | 2.95                       |   | $0.06                     |   | 1,955,000 |   | $0.06 |
| $0.31-$0.50     |   | 100,000                   |   | 1.50                       |   | $0.39                     |   | 100,000 |   | $0.39 |

|                             |   | For the nine months ended September 30, |       |
|----------------------------------|--------|-----------------------------------------|------------|
|                             |   | 2009                                    |       |   | 2008 |   |
|                             |   | Shares                                  |       |   | Weighted Average Exercise Price |   |   | Shares |   |   | Weighted Average Exercise Price |   |
| Options:                         |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Outstanding at beginning of year |   |                                    | 14,805,000 |   |   | $ | 0.04 |   |   |   | 15,835,000 |   |   | $ | 0.04 |   |
| Granted                          |   |                                    | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Cancelled                        |   |                                    | (250,000   | ) |   | $ | 0.09 |   |   |   | (900,000 | ) |   | $ | 0.06 |   |
| Exercised                        |   |                                    | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Outstanding at end of period     |   |                                    | 14,555,000 |   |   | $ | 0.04 |   |   |   | 14,935,000 |   |   | $ | 0.04 |   |

----

|                       |   | 2009   |    |   | 2008    |   |
|----------------------------|--------|--------|---------|--------|---------|--------|
|                       |   | NMS    |    |   | TRS/RQA |   |   | TOTAL |   |   | NMS |   |   | TRS/RQA |   |   | TOTAL |   |
| Revenue                    |   | $      | 538,000 |   |    | $      | 2,198,000 |   |   | $ | 2,736,000 |   |   | $ | 599,000 |   |   | $ | 358,000 |   |   | $ | 957,000 |   |
|                       |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of services           |   |   | 204,000 |   |    |   | 1,801,000 |   |   |   | 2,005,000 |   |   |   | 268,000 |   |   |   | 326,000 |   |   |   | 594,000 |   |
| General and administrative |   |   | 362,000 |   |    |   | 405,000 |   |   |   | 767,000 |   |   |   | 499,000 |   |   |   | 80,000 |   |   |   | 579,000 |   |
| Depreciation               |   |   | 21,000  |   |    |   | 4,000 |   |   |   | 25,000 |   |   |   | 26,000 |   |   |   | 0 |   |   |   | 26,000 |   |
| Research and development   |   |   | 46,000  |   |    |   | 0 |   |   |   | 46,000 |   |   |   | 44,000 |   |   |   | 0 |   |   |   | 44,000 |   |
|                       |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income (loss)    |   | $      | (95,000 | )      |    | $      | (12,000 | ) |   | $ | (107,000 | ) |   | $ | (238,000 | ) |   | $ | (48,000 | ) |   | $ | (286,000 | ) |
|                       |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets               |   | $      | 254,000 |   |    | $      | 639,000 |   |   | $ | 893,000 |   |   | $ | 245,000 |   |   | $ | 242,000 |   |   | $ | 487,000 |   |

|                     |   | 2009   |     |   | 2008   |   |
|--------------------------|--------|--------|----------|--------|--------|--------|
| Segment's operating loss |   | $      | (107,000 | )      |   | $      | (286,000 | ) |
| Other income (expense)   |   |   | (32,000  | )      |   |   | (5,000 | ) |
| Consolidated net loss    |   | $      | (139,000 | )      |   | $      | (291,000 | ) |

| Year |   | Amount              |
|------|--------|---------------------|
| 2009 |   | $  20,000 |
| 2010 |   | $  71,000 |
| 2011 |   | $  58,000 |
| 2012 |   | $  57,000 |
| 2013 |   | $  59,000 |
| 2014 |   | $  20,000 |

----

----

ITEM

|   | 1. | radiological services |
|--------|----|-----------------------|

|   | 2. | software usage fees |
|--------|----|---------------------|

|   | 3. | software hosting and maintenance services |
|--------|----|-------------------------------------------|

|   | 4. | scanning services |
|--------|----|-------------------|

----

| 2009 |    |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|---------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 912,000 |   |   | $      | 520,000 |                |   | $      | 392,000           |   |   |   | 75.38 | % |

| 2009 |      |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|-----------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 2,736,000 |   |   | $      | 957,000 |                |   | $      | 1,779,000         |   |   |   | 185.89 | % |

----

| 2009 |    |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|---------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 757,000 |   |   | $      | 336,000 |                |   | $      | 421,000           |   |   |   | 125.30 | % |

| 2009 |      |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|-----------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 2,189,000 |   |   | $      | 357,000 |                |   | $      | 1,832,000         |   |   |   | 513.17 | % |

| 2009 |   |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 89,000 |   |   | $      | 102,000 |                |   | $      | (13,000           | )      |   |   | (12.75 | )% |

| 2009 |    |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|---------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 323,000 |   |   | $      | 351,000 |                |   | $      | (28,000           | )      |   |   | (7.98 | )% |

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 53,000 |   |   | $      | 74,000 |                |   | $      | (21,000           | )      |   |   | (28.38 | )% |

| 2009 |    |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|---------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 169,000 |   |   | $      | 206,000 |                |   | $      | (37,000           | )      |   |   | (17.96 | )% |

----

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 4,000  |   |   | $      | 0      |                |   | $      | 4,000             |   |   |   | 100.00 | % |

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 8,000  |   |   | $      | 0      |                |   | $      | 8,000             |   |   |   | 100.00 | % |

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 0      |   |   | $      | 0      |                |   | $      | 0                 |   |   |   | 0 | % |

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 21,000 |   |   | $      | 0      |                |   | $      | 21,000            |   |   |   | 100.00 | % |

| 2009 |    |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|---------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 674,000 |   |   | $      | 384,000 |                |   | $      | 290,000           |   |   |   | 75.52 | % |

| 2009 |      |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|-----------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 2,005,000 |   |   | $      | 594,000 |                |   | $      | 1,411,000         |   |   |   | 237.54 | % |

----

| 2009 |    |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|---------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 265,000 |   |   | $      | 163,000 |                |   | $      | 102,000           |   |   |   | 62.58 | % |

| 2009 |    |   | 2008   |   |    | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|---------|--------|--------|--------|---------|---------------------|--------|--------|-------------------|--------|
| $    | 767,000 |   |   | $      | 579,000 |                |   | $      | 188,000           |   |   |   | 32.47 | % |

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 8,000  |   |   | $      | 8,000  |                |   | $      | 0                 |   |   |   | 0 | % |

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 25,000 |   |   | $      | 26,000 |                |   | $      | (1,000            | )      |   |   | (3.85 | )% |

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 15,000 |   |   | $      | 9,000  |                |   | $      | 6,000             |   |   |   | 66.67 | % |

| 2009 |   |   | 2008   |   |   | Increase (Decrease) |   |   | Percent Inc (Dec) |   |
|------|--------|--------|--------|--------|--------|---------------------|--------|--------|-------------------|--------|
| $    | 46,000 |   |   | $      | 44,000 |                |   | $      | 2,000             |   |   |   | 4.55 | % |

----

|                       |   | 2009   |    |   | 2008    |   |
|----------------------------|--------|--------|---------|--------|---------|--------|
|                       |   | NMS    |    |   | TRS/RQA |   |   | TOTAL |   |   | NMS |   |   | TRS/RQA |   |   | TOTAL |   |
| Revenue                    |   | $      | 538,000 |   |    | $      | 2,198,000 |   |   | $ | 2,736,000 |   |   | $ | 599,000 |   |   | $ | 358,000 |   |   | $ | 957,000 |   |
|                       |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cost of services           |   |   | 204,000 |   |    |   | 1,801,000 |   |   |   | 2,005,000 |   |   |   | 268,000 |   |   |   | 326,000 |   |   |   | 594,000 |   |
| General and administrative |   |   | 362,000 |   |    |   | 405,000 |   |   |   | 767,000 |   |   |   | 499,000 |   |   |   | 80,000 |   |   |   | 579,000 |   |
| Depreciation               |   |   | 21,000  |   |    |   | 4,000 |   |   |   | 25,000 |   |   |   | 26,000 |   |   |   | 0 |   |   |   | 26,000 |   |
| Research and development   |   |   | 46,000  |   |    |   | 0 |   |   |   | 46,000 |   |   |   | 44,000 |   |   |   | 0 |   |   |   | 44,000 |   |
| Operating income (loss)    |   | $      | (95,000 | )      |    | $      | (12,000 | ) |   | $ | (107,000 | ) |   | $ | (238,000 | ) |   | $ | (48,000 | ) |   | $ | (286,000 | ) |
|                       |   |   |    |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets               |   | $      | 254,000 |   |    | $      | 639,000 |   |   | $ | 893,000 |   |   | $ | 245,000 |   |   | $ | 242,000 |   |   | $ | 487,000 |   |

|                     |   | 2009   |     |   | 2008   |   |
|--------------------------|--------|--------|----------|--------|--------|--------|
| Segment's operating loss |   | $      | (107,000 | )      |   | $      | (286,000 | ) |
| Other income (expense)   |   |   | (32,000  | )      |   |   | (5,000 | ) |
| Consolidated net loss    |   | $      | (139,000 | )      |   | $      | (291,000 | ) |

| 2009          | 2008            | Inc (Dec) in available cash |
|---------------|-----------------|-----------------------------|
| used $(4,000) | used $(112,000) | $108,000                    |

| 2009           | 2008           | Inc (Dec) in available cash |
|----------------|----------------|-----------------------------|
| used $(10,000) | used $(14,000) | $4,000                      |

----

| 2009             | 2008              | Inc (Dec) in available cash |
|------------------|-------------------|-----------------------------|
| provided $69,000 | provided $100,000 | $(31,000)                   |

|   | · | Rapid changes in technology relating to the Internet |
|--------|--------|------------------------------------------------------|

|   | · | Continued growth and use of the Internet |
|--------|--------|------------------------------------------|

|   | · | Changes in government regulations |
|--------|--------|-----------------------------------|

|   | · | Changes in our business strategies |
|--------|--------|------------------------------------|

|   | · | Hardware failure of a catastrophic proportion |
|--------|--------|-----------------------------------------------|

|   | · | Terrorist interference with the operation of the Internet or effects of terrorist activities on the economy |
|--------|--------|-------------------------------------------------------------------------------------------------------------|

|   | · | Difficulty recruiting and retaining staff of sufficient technical caliber to provide adequate and on-going customer support and product maintenance and development |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Failure to successfully market our products through the Internet and our representatives |
|--------|--------|------------------------------------------------------------------------------------------|

|   | · | Inability to locate sources to retire our line of credit or to obtain alternative lending sources |
|--------|--------|---------------------------------------------------------------------------------------------------|

|   | · | Inability to solve cash flow problems |
|--------|--------|---------------------------------------|

----

Item

Item

----

PART

ITEM

ITEM

| Class of Purchaser |   | Aggregate Number of Shares |      |
|--------------------|--------|----------------------------|-----------|
| Contractors (1)    |   |                       | 724,938   |   |
| Investors (2)      |   |                       | 747,200   |   |
| Directors (3)      |   |                       | 1,133,725 |   |

ITEM

ITEM

ITEM

----

ITEM

|   | 31.2 | Rule 15d-14 (a)  Certification by Principal Financial Officer |
|--------|------|-------------------------------------------------------------------------|

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SIGNATURES

|                               | NEW MEXICO SOFTWARE, INC.                         |
|------------------------------------|---------------------------------------------------|
|                               |                                              |
|                               |                                              |
|                               |                                              |
|                               |                                              |
| Date:  November 13, 2009 | By  /s/  Richard F. Govatski  |
|                               | Richard F. Govatski, President                    |
|                               |                                              |
|                               |                                              |
|                               |                                              |
| Date:  November 13, 2009 | By  /s/  Teresa B. Dickey     |
|                               | Teresa B. Dickey, Treasurer  (Principal |
|                               | Financial Officer)                                |

----