----

----

| x | Annual report under Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the fiscal year ended March 31, 2011 |
|---|--------------------------------------------------------------------------------------------------------------------------|

| o | Transition report under Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the transition period   from _____________ to ____________ |
|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Delaware                                                       |   | 75-2440201                           |
|----------------------------------------------------------------|--------|--------------------------------------|
| (State or Other Jurisdiction of Incorporation or Organization) |   | (I.R.S. Employer Identification No.) |

| 6500 Greenville Avenue, Suite 330 Dallas, Texas  75206 |   | 214-368-1913                                          |
|------------------------------------------------------------------|--------|-------------------------------------------------------|
| Address of principal executive offices, including area code.)    |   | (Issuer’s telephone number, including zip code) |

|  Title of Each Class |   |  Name of Each Exchange on Which Registered |
|---------------------------|--------|-------------------------------------------------|
|  NONE                |   |  N/A                                       |

| Large accelerated filer             | o      | Accelerated filer              | o      |
|-----------------------------------------------|--------|-------------------------------------|--------|
| Non-accelerated filer               | o      | Smaller reporting company | o      |
| (Do not check if a smaller reporting company) |   |                                |   |

----

----

----

|                    |                                                                                                              |   | Page   |   |
|-------------------------|-------------------------------------------------------------------------------------------------------------------|--------|--------|--------|
| PART I                  |                                                                                                              |   |   |   |
|                    |                                                                                                              |   |   |   |
| Item 1.            | Business                                                                                                          |   |   | 3      |   |
| Item 1A.           | Risk Factors                                                                                                      |   |   | 4      |   |
| Item 1B.           | Unresolved Staff Comments                                                                          |   |   | 4      |   |
| Item 2.            | Properties                                                                                    |   |   | 4      |   |
| Item 3.            | Legal Proceedings                                                                                                 |   |   | 4      |   |
| Item 4.            | Removed and Reserved                                                                                              |   |   | 4      |   |
|                    |                                                                                                              |   |   |   |   |
| PART II                 |                                                                                                              |   |   |   |   |
| Item 5.            | Market for Registrant’s Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities |   |   | 5      |   |
| Item 6.            | Selected Financial Data                                                                                           |   |   | 5      |   |
| Item 7.       | Management’s Discussion and Analysis of Financial Condition and Results of Operations                       |   |   | 6      |   |
| Item 7A.           | Quantitative and Qualitative Disclosures About Market Risk                                                        |   |   | 9      |   |
| Item 8.            | Financial Statements and Supplementary Data                                                                       |   |   | 9      |   |
| Item 9.                 | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                              |   |   | 11     |   |
| Item 9A(T).   | Controls and Procedures                                                                                           |   |   | 11     |   |
| Item 9B.                | Other Information.                                                                                                |   |   | 11     |   |
|                    |                                                                                                              |   |   |   |   |
| PART III                |                                                                                                              |   |   |   |   |
| Item 10.                | Directors, Executive Officers and Corporate Governance                                                            |   |   | 12     |   |
| Item 11.           | Executive Compensation                                                                                            |   |   | 13     |   |
| Item 12.           | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters               |   |   | 15     |   |
| Item 13.           | Certain Relationships and Related Transactions and Director Independence                                          |   |   | 16     |   |
| Item 14.                | Principal Accountant Fees and Services                                                                            |   |   | 16     |   |
|                    |                                                                                                              |   |   |   |   |
| PART IV                 |                                                                                                              |   |   |   |   |
| Item 15.           | Exhibits, Financial Statement Schedules                                                                           |   |   | 17     |   |
|                    |                                                                                                              |   |   |   |   |
|                    | SIGNATURES                                                                                                        |   |   | 18     |   |

----

----

----

| Fiscal 2011      |   | Fiscal 2010 |   |
|------------------|--------|-------------|--------|
|             |   | HIGH        |   |   | LOW |   |   |   | HIGH |   |   | LOW |   |
| 1st Quarter      |   | $           | 0.25   |   |   | $ | 0.20 |   | 1st Quarter |   | $ | 0.17 |   |   | $ | 0.15 |   |
| 2nd Quarter      |   | $           | 0.20   |   |   | $ | 0.04 |   | 2nd Quarter |   | $ | 0.50 |   |   | $ | 0.15 |   |
| 3rd Quarter |   | $           | 0.05   |   |   | $ | 0.04 |   | 3rd Quarter |   | $ | 0.25 |   |   | $ | 0.12 |   |
| 4th Quarter      |   | $           | 0.06   |   |   | $ | 0.04 |   | 4th Quarter |   | $ | 0.50 |   |   | $ | 0.17 |   |

----

----

----

|  Gross sales price                                        |   | $      | 225,000 |   |
|----------------------------------------------------------------|--------|--------|---------|--------|
|  Less: legal fees                                    |   |   | 6,240   |   |
|  Proceeds, net of expenses                      |   |   | 218,760 |   |
|  Book value of assets sold                 |   |   | 121,431 |   |
|  Gain on sale of assets, prior to income tax effect  |   |   | 97,329  |   |
|  Income tax expense                             |   |   | -0-     |   |
|  Gain on sale of assets net of income tax effect     |   | $      | 97,329  |   |

|                                |   | 2011   |      |   | 2010   |   |
|-------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                |   |   |      |   |   |   |
| Net sales                           |   | $      | 2,428,255 |   |   | $      | 4,768,081 |   |
| Cost of sales                       |   |   | 1,111,540 |   |   |   | 2,612,265 |   |
|                                |   |   |      |   |   |   |   |   |
| Gross profit                        |   | $      | 1,316,715 |   |   | $      | 2,155,816 |   |
|                                |   |   |      |   |   |   |   |   |
| General and administrative expenses |   | $      | 379,763   |   |   | $      | 1,019,309 |   |
| Interest expense                    |   |   | 23,692    |   |   |   | 140,314 |   |
| Other income or (expense)           |   |   | -         |   |   |   | (10,706 | ) |
| Income from discontinued operations |   | $      | 913,260   |   |   | $      | 985,487 |   |

----

----

|                                                          |   |   |   |
|---------------------------------------------------------------|--------|--------|--------|
| Independent Auditors’ Report                            |   |   | F-1    |   |
|                                                          |   |   |   |   |
| Financial Statements                                          |   |   |   |   |
|                                                          |   |   |   |   |
| Balance Sheets                                           |   |   | F-2    |   |
| Statements of Operations             |   |   | F-3    |   |
| Statement of Stockholders’ Equity (Deficit)   |   |   | F-4    |   |
| Statement of Cash Flows                                  |   |   | F-5    |   |
| Notes to Financial Statements                            |   |   | F-6    |   |

----

|   |   |                         |
|--------|--------|------------------------------|
|   |   | PHILIP VOGEL & CO. PC    |   |
|   |   |                         |   |
|   |   |                              |   |
|   |   |                         |   |
|   |   | Certified Public Accountants |   |
|   |   |                         |   |

----

|                                                               |   | 2011   |    |   | 2010   |   |
|--------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                               |   |   |    |   |   |   |
| Assets                                                             |   |   |    |   |   |   |
|                                                               |   |   |    |   |   |   |
| Current assets:                                                    |   |   |    |   |   |   |
| Cash and cash equivalents                                          |   | $      | 489,031 |   |   | $      | 600,647 |   |
| Accounts receivable, net of allowance for doubtful                 |   |   |    |   |   |   |   |   |
| accounts                                                           |   |   | 6,771   |   |   |   | 4,986 |   |
| Inventory                                                          |   |   | -       |   |   |   | 12,393 |   |
| Net current assets of discontinued operations                      |   |   | -       |   |   |   | 596,286 |   |
|                                                               |   |   |    |   |   |   |   |   |
| Total current assets                                               |   | $      | 495,802 |   |   | $      | 1,214,312 |   |
|                                                               |   |   |    |   |   |   |   |   |
| Property and equipment:                                            |   |   |    |   |   |   |   |   |
| Computer equipment                                                 |   | $      | 27,622  |   |   | $      | 74,664 |   |
| Furniture and fixtures                                             |   |   | 22,317  |   |   |   | 22,317 |   |
| Office equipment                                                   |   |   | 8,567   |   |   |   | 17,506 |   |
|                                                               |   |   |    |   |   |   |   |   |
|                                                               |   | $      | 58,506  |   |   | $      | 114,487 |   |
|                                                               |   |   |    |   |   |   |   |   |
| Less accumulated depreciation                                      |   |   | 41,224  |   |   |   | 87,008 |   |
|                                                               |   |   |    |   |   |   |   |   |
| Net property and equipment                                         |   | $      | 17,282  |   |   | $      | 27,479 |   |
|                                                               |   |   |    |   |   |   |   |   |
| Other assets:                                                      |   |   |    |   |   |   |   |   |
| Capitalized software development costs, net of accumulated         |   |   |    |   |   |   |   |   |
| amortization of $2,250 and $1,562, respectively                    |   | $      | -       |   |   | $      | 688 |   |
| Deposits                                                           |   |   | 4,485   |   |   |   | 4,485 |   |
| Patents, net of accumulated                                        |   |   |    |   |   |   |   |   |
| amortization of $-0- and $31,948, respectively                     |   |   | -       |   |   |   | 25,574 |   |
|    Net noncurrent assets of discontinued operations |   |   | -       |   |   |   | 138,613 |   |
|                                                               |   |   |    |   |   |   |   |   |
| Total other assets                                                 |   | $      | 4,485   |   |   | $      | 169,360 |   |
|                                                               |   |   |    |   |   |   |   |   |
| Total assets                                                       |   | $      | 517,569 |   |   | $      | 1,411,151 |   |
|                                                               |   |   |    |   |   |   |   |   |

|                                                 |   | 2011   |        |   | 2010   |   |
|------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
|                                                 |   |   |        |   |   |   |
| Liabilities and stockholders' equity (deficit)       |   |   |        |   |   |   |
|                                                 |   |   |        |   |   |   |
| Current liabilities:                                 |   |   |        |   |   |   |
| Accounts payable                                     |   | $      | 1,082       |   |   | $      | - |   |
| Payroll taxes payable                                |   |   | 698         |   |   |   | - |   |
| Net current portion of discontinued operations       |   |   | -           |   |   |   | 1,564,172 |   |
|                                                 |   |   |        |   |   |   |   |   |
| Total current liabilities                            |   | $      | 1,780       |   |   | $      | 1,564,172 |   |
|                                                 |   |   |        |   |   |   |   |   |
|                                                 |   |   |        |   |   |   |   |   |
| Commitments and contingencies (Note I, J and K)      |   |   |        |   |   |   |   |   |
|                                                 |   |   |        |   |   |   |   |   |
|                                                 |   |   |        |   |   |   |   |   |
| Stockholders' equity (deficit):                      |   |   |        |   |   |   |   |   |
| Common stock, $.001 par value;                       |   |   |        |   |   |   |   |   |
| 100,000,000 shares authorized; 6,130,184             |   |   |        |   |   |   |   |   |
| and 6,130,184 shares issued, respectively            |   | $      | 6,130       |   |   | $      | 6,130 |   |
| Additional paid-in capital                           |   |   | 20,481,148  |   |   |   | 20,481,148 |   |
| Accumulated deficit                                  |   |   | (19,969,983 | )      |   |   | (20,638,793 | ) |
| Treasury stock 4,500 shares at cost                  |   |   | (1,506      | )      |   |   | (1,506 | ) |
|                                                 |   |   |        |   |   |   |   |   |
| Total stockholders' equity (deficit)                 |   | $      | 515,789     |   |   | $      | (153,021 | ) |
|                                                 |   |   |        |   |   |   |   |   |
| Total liabilities and stockholders' equity (deficit) |   | $      | 517,569     |   |   | $      | 1,411,151 |   |

----

|                                                |   | 2011   |     |   | 2010   |   |
|-----------------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                                |   |   |     |   |   |   |
| Net sales                                           |   | $      | 24,658   |   |   | $      | 59,680 |   |
|                                                |   |   |     |   |   |   |   |   |
| Cost of sales                                       |   |   | 4,539    |   |   |   | 9,333 |   |
|                                                |   |   |     |   |   |   |   |   |
| Gross profit                                        |   | $      | 20,119   |   |   | $      | 50,347 |   |
|                                                |   |   |     |   |   |   |   |   |
| General and administrative expenses                 |   |   | 343,375  |   |   |   | 299,245 |   |
|                                                |   |   |     |   |   |   |   |   |
| Loss from operations                                |   | $      | (323,256 | )      |   | $      | (248,898 | ) |
|                                                |   |   |     |   |   |   |   |   |
| Other income (expense):                             |   |   |     |   |   |   |   |   |
| Gain or (loss) on sale of assets                    |   | $      | 11,763   |   |   | $      | - |   |
| Impairment expense                                  |   |   | (30,286  | )      |   |   | - |   |
|                                                |   |   |     |   |   |   |   |   |
| Total other income (expense)                        |   | $      | (18,523  | )      |   | $      | - |   |
|                                                |   |   |     |   |   |   |   |   |
| Loss from continuing operations before income taxes |   | $      | (341,779 | )      |   | $      | (248,898 | ) |
|                                                |   |   |     |   |   |   |   |   |
| Provision for income taxes                          |   |   | -        |   |   |   | - |   |
|                                                |   |   |     |   |   |   |   |   |
| Loss from continuing operations                     |   | $      | (341,779 | )      |   | $      | (248,898 | ) |
|                                                |   |   |     |   |   |   |   |   |
| Income from discontinued operations                 |   |   | 913,260  |   |   |   | 985,487 |   |
|                                                |   |   |     |   |   |   |   |   |
| Gain on sale of discontinued operations             |   |   | 97,329   |   |   |   | - |   |
|                                                |   |   |     |   |   |   |   |   |
| Net income                                          |   | $      | 668,810  |   |   | $      | 736,589 |   |
|                                                |   |   |     |   |   |   |   |   |
| Per share amounts:                                  |   |   |     |   |   |   |   |   |
| Net loss from continuing operations                 |   |   |     |   |   |   |   |   |
|      per common share      |   | $      | (0.06    | )      |   | $      | (0.04 | ) |
|                                                |   |   |     |   |   |   |   |   |
| Net income from discontinued operations             |   |   |     |   |   |   |   |   |
|      per common share      |   | $      | 0.16     |   |   | $      | 0.16 |   |
|                                                |   |   |     |   |   |   |   |   |
|   Net income per common share             |   | $      | 0.11     |   |   | $      | 0.12 |   |
|                                                |   |   |     |   |   |   |   |   |

----

|                                         |   | Shares of common stock |        |   |   |   |      |        |   |   | Amounts     |   |   |         |   |   |     |   |   |       |   |   |         |   |
|----------------------------------------------|--------|------------------------|-------------|--------|--------|--------|-----------|-------------|--------|--------|-------------|--------|--------|--------------|--------|--------|----------|--------|--------|------------|--------|--------|--------------|--------|
|                                         |   |                   |        |   |   |   |      |        |   |   |        |   |   | Common       |   |   |     |   |   | Additional |   |   |         |   |   | Total |   |
|                                         |   |                   |        |   |   |   |      |        |   |   |        |   |   | stock $0.001 |   |   | Treasury |   |   | paid-in    |   |   | Accummulated |   |   | stockholders' |   |
|                                         |   | Authorized             |        |   | Issued |   |      | Outstanding |   |   | In treasury |   |   | par value    |   |   | stock    |   |   | capital    |   |   | deficit      |   |   | equity |   |
| Balance - March 31, 2009                     |   |                   | 100,000,000 |   |   |   | 6,130,184 |        |   |   | 6,125,684   |   |   |         | 4,500  |   |     | $      | 6,130  |       |   | $      | (1,506       | )      |   | $ | 20,481,148 |   |   | $ | (21,375,382 | ) |   | $ | (889,610 | ) |
|                                         |   |                   |        |   |   |   |      |        |   |   |        |   |   |         |   |   |     |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income for the year ended March 31, 2010 |   |                   | -           |   |   |   | -         |        |   |   | -           |   |   |         | -      |   |     |   | -      |       |   |   | -            |   |   |   | - |   |   |   | 736,589 |   |   |   | 736,589 |   |
|                                         |   |                   |        |   |   |   |      |        |   |   |        |   |   |         |   |   |     |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance - March 31, 2010                     |   |                   | 100,000,000 |   |   |   | 6,130,184 |        |   |   | 6,125,684   |   |   |         | 4,500  |   |     | $      | 6,130  |       |   | $      | (1,506       | )      |   | $ | 20,481,148 |   |   | $ | (20,638,793 | ) |   | $ | (153,021 | ) |
|                                         |   |                   |        |   |   |   |      |        |   |   |        |   |   |         |   |   |     |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income for the year ended March 31, 2011 |   |                   | -           |   |   |   | -         |        |   |   | -           |   |   |         | -      |   |     |   | -      |       |   |   | -            |   |   |   | - |   |   |   | 668,810 |   |   |   | 668,810 |   |
|                                         |   |                   |        |   |   |   |      |        |   |   |        |   |   |         |   |   |     |   |   |       |   |   |         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance - March 31, 2011                     |   |                   | 100,000,000 |   |   |   | 6,130,184 |        |   |   | 6,125,684   |   |   |         | 4,500  |   |     | $      | 6,130  |       |   | $      | (1,506       | )      |   | $ | 20,481,148 |   |   | $ | (19,969,983 | ) |   | $ | 515,789 |   |

----

|                                                        |   | 2011   |       |   | 2010   |   |
|-------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Cash flows from operating activities:                       |   |   |       |   |   |   |
|      Net income                    |   | $      | 668,810    |   |   | $      | 736,589 |   |
| Adjustments to reconcile net loss to net cash provided      |   |   |       |   |   |   |   |   |
|     (used) by operating activities:     |   |   |       |   |   |   |   |   |
| Income from discontinued operations, net of income taxes    |   | $      | (1,010,589 | )      |   | $      | (985,487 | ) |
| Depreciation and amortization                               |   |   | 14,005     |   |   |   | 18,212 |   |
| Impairment of patents                                       |   |   | 19,822     |   |   |   | - |   |
| Gain on sale of assets                                      |   |   | (11,763    | )      |   |   | - |   |
| Changes in operating assets and liabilities:                |   |   |       |   |   |   |   |   |
| (Increase) decrease in accounts receivable                  |   |   | (1,785     | )      |   |   | 14,897 |   |
| (Increase) decrease in inventory                            |   |   | 12,393     |   |   |   | 12,393 |   |
| (Increase) decrease in deposits                             |   |   | -          |   |   |   | 25,000 |   |
| Increase (decrease) in accounts payable                     |   |   | 1,780      |   |   |   | - |   |
|        Total adjustments |   | $      | (976,137   | )      |   | $      | (914,985 | ) |
|                                                        |   |   |       |   |   |   |   |   |
| Net cash used by continuing operating activities            |   | $      | (307,327   | )      |   | $      | (178,396 | ) |
| Net cash provided by discontinued operating activities      |   |   | 1,067,816  |   |   |   | 1,272,639 |   |
| Net cash provided by operating activities                   |   | $      | 760,489    |   |   | $      | 1,094,243 |   |
|                                                        |   |   |       |   |   |   |   |   |
| Cash flows from investing activities:                       |   |   |       |   |   |   |   |   |
| Net cash provided by continuing investing activities        |   |   |       |   |   |   |   |   |
| Proceeds from sale of assets                                |   | $      | 14,395     |   |   | $      | - |   |
| Net cash provided by discontinued investing activities      |   |   |       |   |   |   |   |   |
| Proceeds from sale of assets                                |   |   | 225,000    |   |   |   | 1,738 |   |
| Capital  Expenditures                             |   |   | -          |   |   |   | (25,521 | ) |
| Net cash provided (used) by investing activities            |   | $      | 239,395    |   |   | $      | (23,783 | ) |
|                                                        |   |   |       |   |   |   |   |   |
| Cash flows from financing activities:                       |   |   |       |   |   |   |   |   |
| Net cash used by continuing financing activities            |   | $      | -          |   |   | $      | - |   |
| Net cash used by discontinued financing activities          |   |   |       |   |   |   |   |   |
| Repayment of note payable                                   |   |   | (1,111,500 | )      |   |   | (936,000 | ) |
|                                                        |   |   |       |   |   |   |   |   |
| Net cash used by financing activities                       |   | $      | (1,111,500 | )      |   | $      | (936,000 | ) |
|                                                        |   |   |       |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents        |   | $      | (111,616   | )      |   | $      | 134,460 |   |
|                                                        |   |   |       |   |   |   |   |   |
| Cash and cash equivalents:                                  |   |   |       |   |   |   |   |   |
| Beginning of year                                           |   |   | 600,647    |   |   |   | 466,187 |   |
|                                                        |   |   |       |   |   |   |   |   |
| End of year                                                 |   | $      | 489,031    |   |   | $      | 600,647 |   |
|                                                        |   |   |       |   |   |   |   |   |
| Supplemental cash flow information:                         |   |   |       |   |   |   |   |   |
|   Cash paid for interest                          |   | $      | 58,500     |   |   | $      | 93,610 |   |
|                                                        |   |   |       |   |   |   |   |   |

----

----

----

| Product and Service     |   | 2011   |      |   | 2010   |   |
|-------------------------|--------|--------|-----------|--------|--------|--------|
|                    |   |   |      |   |   |   |
| Digital signage         |   | $      | 24,658    |   |   | $      | 59,680 |   |
| Discontinued operations |   |   | 2,428,255 |   |   |   | 4,768,081 |   |
|                    |   |   |      |   |   |   |   |   |
| Total revenue           |   | $      | 2,452,913 |   |   | $      | 4,827,761 |   |

----

----

|                                                                    |   | March 31, |   |   | March 31, |   |
|-------------------------------------------------------------------------|--------|-----------|--------|--------|-----------|--------|
|                                                                    |   | 2011      |   |   | 2010      |   |
| Current assets of dscontinued operations:                               |   |      |   |   |      |   |
|   Accounts receivable, net                                    |   | $         | -      |   |      | $      | 596,286 |   |
|            Total |   | $         | -      |   |      | $      | 596,286 |   |
|                                                                    |   |      |   |   |      |   |   |   |
| Other assets of discontinued operations:                                |   |      |   |   |      |   |   |   |
|   Property, plant and equipment, net                          |   | $         | -      |   |      | $      | 87,333 |   |
|   Other assets                                                |   |      | -      |   |      |   | 51,280 |   |
|            Total |   | $         | -      |   |      | $      | 138,613 |   |
|                                                                    |   |      |   |   |      |   |   |   |
| Current liabilities of discontinued operations:                         |   |      |   |   |      |   |   |   |
|   Accounts payable                                            |   | $         | -      |   |      | $      | 344,613 |   |
|   Deferred revenue                                            |   |      | -      |   |      |   | 56,917 |   |
|   Accrued expenses                                            |   |      | -      |   |      |   | 51,142 |   |
|   Notes payable                                               |   |      | -      |   |      |   | 1,111,500 |   |
|                                                                    |   | $         | -      |   |      | $      | 1,564,172 |   |

|                                |   | 2011   |      |   | 2010   |   |
|-------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                |   |   |      |   |   |   |
| Net sales                           |   | $      | 2,428,255 |   |   | $      | 4,768,081 |   |
| Cost of sales                       |   |   | 1,111,540 |   |   |   | 2,612,265 |   |
|                                |   |   |      |   |   |   |   |   |
| Gross profit                        |   | $      | 1,316,715 |   |   | $      | 2,155,816 |   |
|                                |   |   |      |   |   |   |   |   |
| General and administrative expenses |   | $      | 379,763   |   |   | $      | 1,019,309 |   |
| Interest expense                    |   |   | 23,692    |   |   |   | 140,314 |   |
| Other income or (expense)           |   |   | -         |   |   |   | (10,706 | ) |
| Income from discontinued operations |   | $      | 913,260   |   |   | $      | 985,487 |   |
|                                |   |   |      |   |   |   |   |   |

----

| Exercise of future grants of stock options and stock appreciation rights under the 2000 stock option plan |   |   | 179,133   |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------|-----------|--------|
| Exercise of stock warrants                                                                                |   |   | 2,807,572 |   |
|                                                                                                      |   |   | 2,986,705 |   |
|                                                                                                      |   |   |      |   |

----

|                               |   | 2011      |     |   | 2010     |   |
|------------------------------------|--------|-----------|----------|--------|----------|--------|
|                               |   |      |     |   | Weighted |   |   |   |   |   | Weighted |   |
|                               |   |      |     |   | average  |   |   |   |   |   | average |   |
|                               |   | Number of |     |   | exercise |   |   | Number of |   |   | exercise |   |
|                               |   | shares    |     |   | price    |   |   | shares |   |   | price |   |
| Outstanding at beginning           |   |      |     |   |     |   |   |   |   |   |   |   |
| of year                            |   |      | 814,133  |   |     | $      | 0.62 |   |   |   | 844,133 |   |   | $ | 0.62 |   |
| Granted                            |   |      | -        |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                          |   |      | -        |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                          |   |      | (635,000 | )      |     |   | 0.62 |   |   |   | (30,000 | ) |   |   | 0.60 |   |
| Cancelled                          |   |      | -        |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Expired                            |   |      | -        |   |     |   | - |   |   |   | - |   |   |   | - |   |
|                               |   |      |     |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding at end of year         |   |      | 179,133  |   |     | $      | 0.60 |   |   |   | 814,133 |   |   | $ | 0.62 |   |
|                               |   |      |     |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Options exercisable at end of year |   |      | 179,133  |   |     | $      | 0.60 |   |   |   | 814,133 |   |   | $ | 0.62 |   |
| Weighted average fair value of     |   |      |     |   |     |   |   |   |   |   |   |   |   |   |   |   |
| options granted during the year    |   |      |     |   |     | $      | - |   |   |   |   |   |   | $ | - |   |
|                               |   |      |     |   |     |   |   |   |   |   |   |   |   |   |   |   |

|                                |   | 2011      |    |   | 2010     |   |
|-------------------------------------|--------|-----------|---------|--------|----------|--------|
|                                |   |      |    |   | Weighted |   |   |   |   |   | Weighted |   |
|                                |   |      |    |   | average  |   |   |   |   |   | average |   |
|                                |   | Number of |    |   | exercise |   |   | Number of |   |   | exercise |   |
|                                |   | shares    |    |   | price    |   |   | shares |   |   | price |   |
| Outstanding at beginning            |   |      |    |   |     |   |   |   |   |   |   |   |
| of year                             |   |      | 196,000 |   |     | $      | 0.63 |   |   |   | 412,000 |   |   | $ | 0.67 |   |
| Granted                             |   |      | -       |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                           |   |      | -       |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                           |   |      | -       |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Expired                             |   |      | (45,000 | )      |     |   | 0.67 |   |   |   | (216,000 | ) |   |   | 0.72 |   |
|                                |   |      |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding at end of year          |   |      | 151,000 |   |     | $      | 0.62 |   |   |   | 196,000 |   |   | $ | 0.63 |   |
|                                |   |      |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Warrants exercisable at end of year |   |      | 151,000 |   |     | $      | 0.62 |   |   |   | 196,000 |   |   | $ | 0.63 |   |
| Weighted average fair value of      |   |      |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| warrants granted during the year    |   |      |    |   |     | $      | - |   |   |   |   |   |   | $ | - |   |
|                                |   |      |    |   |     |   |   |   |   |   |   |   |   |   |   |   |

----

|                                |   | 2011      |    |   | 2010     |   |
|-------------------------------------|--------|-----------|---------|--------|----------|--------|
|                                |   |      |    |   | Weighted |   |   |   |   |   | Weighted |   |
|                                |   |      |    |   | average  |   |   |   |   |   | average |   |
|                                |   | Number of |    |   | exercise |   |   | Number of |   |   | exercise |   |
|                                |   | shares    |    |   | price    |   |   | shares |   |   | price |   |
| Outstanding at beginning            |   |      |    |   |     |   |   |   |   |   |   |   |
| of year                             |   |      | 967,143 |   |     | $      | 0.50 |   |   |   | 1,007,143 |   |   | $ | 0.50 |   |
| Granted                             |   |      | -       |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                           |   |      | -       |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                           |   |      | -       |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Expired                             |   |      | -       |   |     |   | 0.50 |   |   |   | (40,000 | ) |   |   | 0.50 |   |
|                                |   |      |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding at end of year          |   |      | 967,143 |   |     | $      | 0.50 |   |   |   | 967,143 |   |   | $ | 0.50 |   |
|                                |   |      |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Warrants exercisable at end of year |   |      | 967,143 |   |     | $      | 0.50 |   |   |   | 967,143 |   |   | $ | 0.50 |   |
| Weighted average fair value of      |   |      |    |   |     |   |   |   |   |   |   |   |   |   |   |   |
| warrants granted during the year    |   |      |    |   |     | $      | - |   |   |   |   |   |   | $ | - |   |

|                                |   | 2011      |       |   | 2010     |   |
|-------------------------------------|--------|-----------|------------|--------|----------|--------|
|                                |   |      |       |   | Weighted |   |   |   |   |   | Weighted |   |
|                                |   |      |       |   | average  |   |   |   |   |   | average |   |
|                                |   | Number of |       |   | exercise |   |   | Number of |   |   | exercise |   |
|                                |   | shares    |       |   | price    |   |   | shares |   |   | price |   |
| Outstanding at beginning            |   |      |       |   |     |   |   |   |   |   |   |   |
| of year                             |   |      | 3,971,928  |   |     | $      | 0.56 |   |   |   | 3,971,928 |   |   | $ | 0.56 |   |
| Granted                             |   |      | -          |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                           |   |      | -          |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                           |   |      | -          |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Expired                             |   |      | (2,282,500 | )      |     |   | 0.60 |   |   |   | - |   |   |   | - |   |
|                                |   |      |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding at end of year          |   |      | 1,689,428  |   |     | $      | 0.50 |   |   |   | 3,971,928 |   |   | $ | 0.56 |   |
|                                |   |      |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Warrants exercisable at end of year |   |      | 1,689,428  |   |     | $      | 0.50 |   |   |   | 3,971,928 |   |   | $ | 0.56 |   |
| Weighted average fair value of      |   |      |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| warrants granted during the year    |   |      |       |   |     | $      | - |   |   |   |   |   |   | $ | - |   |

----

|                                |   | 2011      |       |   | 2010     |   |
|-------------------------------------|--------|-----------|------------|--------|----------|--------|
|                                |   |      |       |   | Weighted |   |   |   |   |   | Weighted |   |
|                                |   |      |       |   | average  |   |   |   |   |   | average |   |
|                                |   | Number of |       |   | exercise |   |   | Number of |   |   | exercise |   |
|                                |   | shares    |       |   | price    |   |   | shares |   |   | price |   |
| Outstanding at beginning            |   |      |       |   |     |   |   |   |   |   |   |   |
| of year                             |   |      | 5,135,071  |   |     | $      | 0.55 |   |   |   | 5,391,071 |   |   | $ | 0.56 |   |
| Granted                             |   |      | -          |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Exercised                           |   |      | -          |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Forfeited                           |   |      | -          |   |     |   | - |   |   |   | - |   |   |   | - |   |
| Expired                             |   |      | (2,327,500 | )      |     |   | 0.60 |   |   |   | (256,000 | ) |   |   | 0.68 |   |
|                                |   |      |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding at end of year          |   |      | 2,807,571  |   |     | $      | 0.51 |   |   |   | 5,135,071 |   |   | $ | 0.55 |   |
|                                |   |      |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Warrants exercisable at end of year |   |      | 2,807,571  |   |     | $      | 0.51 |   |   |   | 5,135,071 |   |   | $ | 0.55 |   |
| Weighted average fair value of      |   |      |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| warrants granted during the year    |   |      |       |   |     | $      | - |   |   |   |   |   |   | $ | - |   |

|                                   |   | 2011   |   |   | 2010   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|
|                                   |   |   |   |   |   |   |
| Current income taxes                   |   | $      | -      |   |   | $      | - |   |
| Change in deferred income taxes due to |   |   |   |   |   |   |   |   |
|  temporary differences            |   |   | -      |   |   |   | - |   |
|                                   |   |   |   |   |   |   |   |   |
|                                   |   | $      | -      |   |   | $      | - |   |

----

|                                        |   | 2011   |     |   | 2010   |   |
|---------------------------------------------|--------|--------|----------|--------|--------|--------|
|                                        |   |   |     |   |   |   |
| Computed “expected” tax benefit |   | $      | 227,000  |   |   | $      | 251,000 |   |
| Nondeductible items                         |   |   | 1,000    |   |   |   | 1,000 |   |
| Temporary differences                       |   |   | (37,000  | )      |   |   | 4,000 |   |
| Net operating loss carry-forward            |   |   | (191,000 | )      |   |   | (256,000 | ) |
|                                        |   |   |     |   |   |   |   |   |
| Provision for income taxes                  |   | $      | -        |   |   | $      | - |   |

|                                       |   | 2011   |       |   | 2010   |   |
|--------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                       |   |   |       |   |   |   |
| Accumulated depreciation                   |   | $      | -          |   |   | $      | (149,000 | ) |
|                                       |   |   |       |   |   |   |   |   |
| Gross deferred tax liabilities             |   | $      | -          |   |   | $      | (149,000 | ) |
|                                       |   |   |       |   |   |   |   |   |
| Accumulated depreciation                   |   | $      | 5,000      |   |   | $      | - |   |
| Net operating loss carry-forward           |   |   | 5,878,000  |   |   |   | 6,613,000 |   |
|                                       |   |   |       |   |   |   |   |   |
| Gross deferred tax assets                  |   | $      | 5,883,000  |   |   | $      | 6,613,000 |   |
| Valuation allowance                        |   |   | (5,883,000 | )      |   |   | (6,464,000 | ) |
|                                       |   |   |       |   |   |   |   |   |
|                                       |   | $      | -          |   |   | $      | 149,000 |   |
|                                       |   |   |       |   |   |   |   |   |
| Net deferred tax assets                    |   | $      | -          |   |   | $      | - |   |
|                                       |   |   |       |   |   |   |   |   |
| The change in the deferred tax valuation   |   |   |       |   |   |   |   |   |
|    allowance is as follows: |   | $      | (581,000   | )      |   | $      | (276,000 | ) |

----

| Year ending |   |   |   |
|-------------|--------|--------|--------|
| March 31,   |   | Amount |   |
|        |   |   |   |
| 2012        |   | $      | 25,856 |   |
| 2013        |   |   | 20,160 |   |
| 2014        |   |   | -      |   |
| 2015        |   |   | -      |   |
| 2016        |   |   | -      |   |
|        |   | $      | 46,016 |   |

----

----

| Name             |   | Age    |   | Office                                                                          |   | Year First Elected Director |   |
|------------------|--------|--------|--------|---------------------------------------------------------------------------------|--------|----------------------------------|--------|
|             |   |   |   |                                                                            |   |                             |   |
| Mary G. Merritt  |   | 54     |   | Director, Chief Executive Officer, Executive VP-Finance and Secretary/Treasurer |   | 1994                             |   |
|             |   |   |   |                                                                            |   |                             |   |
| Scott V. Ogilvie |   | 57     |   | Director                                                                        |   | 2000                             |   |

----

| Name &PrincipalPosition                                   |   | Year   |     |   | Salary($) |   |            | Bonus($) |   |   | StockAwards |   |   | OptionAwards |   |   | Non-EquityIncentivePlanCompensation |   |      | Non-qualifiedDeferredCompensationEarnings |   |   | All OtherCompensation($) |   |   | Total  |   |
|---------------------------------------------------------------|--------|--------|----------|--------|-----------|--------|-----------------|----------|--------|--------|-------------|--------|--------|--------------|--------|--------|-------------------------------------|--------|-----------|-------------------------------------------|--------|--------|--------------------------|--------|--------|--------|--------|
| Mary G MerrittChief Executive Officer, EVP – Finance(1) |   |   | 20112010 |   |      | $      | 103,644$116,225 |     |   | $      | 70,000-     |   |   |         | --     |   |                                |   |   -- |                                      |   |   |   --                |   |   |   | --     |   |   |   | -- |   |   | $ | 173,644$116,225 |   |

----

| Name (a)     |   |   Number of securities underlying unexercised options(#)exercisable(b) |    |   | Number of securities underlying unexercised options(#) unexercisable(c) |   |   | Option awards Equity incentive plan awards:Number of securities underlying unexercised unearned options(#)(d) |   |   | Option exercise price($)(e) |   | Option expiration date(f) |
|--------------|--------|----------------------------------------------------------------------------------|---------|--------|-------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------|--------|---------------------------|
| Mary Merritt |   |                                                                             | 15,000  |   |                                                                    |   | 0      |                                                                                                          |   |   | 0                           |   |                      | $ | 0.60 |   | 6/12/11 |
|         |   |                                                                             | 14,133  |   |                                                                    |   | 0      |                                                                                                          |   |   | 0                           |   |                      | $ | 0.60 |   | 4/2/11 |
|         |   |                                                                             | 150,000 |   |                                                                    |   | 0      |                                                                                                          |   |   | 0                           |   |                      | $ | 0.60 |   | 1/24/12 |

|    Plan Category                          |   | Number of Securities To be Issued Upon Exercise ofOutstanding Options,Warrants and Rights (a) |           |   | Weighted-Average Exercise Price of Outstanding Options,Warrants and Rights (b) |   |     | Number of Securities Remaining Available For Future Issuance UnderEquity Compensation Plans(excluding securities in column (a)) (c) |   |
|----------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|----------------|--------|-------------------------------------------------------------------------------------|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Equity CompensationPlans Approved bySecurity Holders     |   |                                                                                                    |   179,133 |   |                                                                                | $      | 0.60     |                                                                                                                                     |   |   |   179,133 |   |
|                                                     |   |                                                                                                    |           |   |                                                                                |   |     |                                                                                                                                     |   |   |   |   |
| Equity CompensationPlans Not Approved bySecurity Holders |   |                                                                                                    |   0       |   |                                                                                |   |   0 |                                                                                                                                     |   |   |   0 |   |
|                                                     |   |                                                                                                    |           |   |                                                                                |   |     |                                                                                                                                     |   |   |   |   |
| Total                                                    |   |                                                                                                    | 179,133        |   |                                                                                | $      | 0.60     |                                                                                                                                     |   |   | 179,133 |   |

----

|   Name of Beneficial Owner                                   |   | Number of Shares |      |   | Percentage |   |
|-------------------------------------------------------------------|--------|------------------|-----------|--------|------------|--------|
|                                                              |   |             |      |   |       |   |
| Mary G. Merritt(3)                                                |   |             | 506,570   |   |       |   | 7.91 | % |
| Scott Ogilvie(4)                                                  |   |             | 58,000    |   |       |   | * |   |
| Todd Parker(5)                                                    |   |             | 950,000   |   |       |   | 13.71 | % |
| JMG Capital Partners, L.P.(6)                                     |   |             | 739,388   |   |       |   | 11.79 | % |
| JMG Triton Offshore Fund Ltd.(7)                                  |   |             | 738,788   |   |       |   | 11.78 | % |
| J. Steven Emerson(8)                                              |   |             | 1,197,316 |   |       |   | 18.62 | % |
| Bristol Investment Fund, Ltd.(9)                                  |   |             | 549,028   |   |       |   | 8.65 | % |
| G. Tyler Runnels(10)                                              |   |             | 1,212,410 |   |       |   | 18.42 | % |
| All Directors and executive officers as a group (two persons)(11) |   |             | 564,570   |   |       |   | 8.85 | % |
|                                                              |   |             |      |   |       |   |   |   |

| * | Less than one percent (1%). |
|---|-----------------------------|

| 1)   | SEC rules provide that, for purposes hereof, a person is considered the “beneficial owner” of shares with respect to which the person, direxctly or indirectly, has or shares the voting or investment power, irrespective of his/her/its economic interest in the shares.  Unless otherwise noted, each person identified possesses sole voting and investment power over the shares listed, subject to community property laws. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2)   | Based on 6,130,184 shares outstanding on June 13, 2011.  Shares of common stock subject to options that are exercisable within 60 days of June 13, 2011, are deemed beneficially owned by the person holding such options for the purposes of calculating the percentage of ownership of such person but are not treated as outstanding for the purpose of computing the percentage of any other person. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3)   | Includes 93,857 shares issuable upon exercise of warrants, 179,133 issuable upon exercise of employee stock options, and 6,000 shares held by minor children. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4)   | Includes 58,000 shares issuable upon exercise of warrants. |
|----------------|------------------------------------------------------------|

| 5)   | Includes 800,000 shares issuable upon exercise of warrants held by Hidden River, LLC for which Mr. Parker has voting power over the shares. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------|

| 6)   | Includes 142,857 shares issuable upon exercise of warrants.  JMG Capital Partners’ address is 11601 Wilshire Blvd, Suite 2180, Los Angeles, California  90025.  JMG Capital Partners has advised us that Jonathan M. Glaser is the member-manager of JMG Capital Management, LLC, which is the general partner of JMG Capital Partners, and is the natural person with sole voting power over the shares held by JMG Capital Partners. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 7)   | Includes 142,857 shares issuable upon exercise of warrants.  JMG Triton Offshore Fund Ltd.’s address is Citco Building, Wickhams Cay, Road Town, Tortola, British Virgin Islands.  We have been informed by JMG Triton Offshore Fund Ltd. that Jonathan M. Glaser is the member-manager of Pacific Assets Management, LLC, which is the general partner of JMG Triton Offshore Fund Ltd., and he is the natural person who has sole voting power over the shares held by JMG Triton Offshore Fund Ltd. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 8)   | Includes 100,000 shares issuable upon exercise of warrants, 727,057 shares held in Mr. Emerson’s retirement accounts, 2,000 shares held by Emerson Partners, 100,000 shares issuable upon exercise of warrants held by Emerson Partners, for which Mr. Emerson has voting power over the shares held by Emerson Partners, 100,000 shares issuable upon exercise of warrants held by Emerson Family Foundation, for which Mr. Emerson has voting power over the shares held by Emerson Family Foundation. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 9)   | Includes 214,286 shares issuable upon exercise of warrants.  Bristol Investment Fund, Ltd’s address is Caledonian House, Jennett Street, Georgetown, Grand Cayman, Cayman Islands.  Bristol Capital Advisors, LLC ("BCA") is the investment advisor to Bristol Investment Fund, Ltd. ("Bristol").  As manager of BCA and a director of Bristol, Paul Kessler has voting and investment power over the shares held by Bristol.  Mr. Kessler disclaims beneficial ownership of such shares. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10)   | Includes 117,000 shares issuable upon exercise of warrants, 130,000 shares held by The Runnels Family Trust, 185,714 shares issuable upon exercise of warrants held by The Runnels Family Trust, 327,259 shares held by High Tide, LLC, 100,000 shares issuable upon exercise of warrants held by High Tide, LLC for which Mr. Runnels has sole voting power over the shares held by High Tide, LLC and 272,456 held by T.R. Winston & Company Incorporated  and 50,143 issuable upon exercise of warrants held by T.R. Winston & Company Incorporated for which Mr. Runnels has voting power over the shares held by T.R. Winston & Company Incorporated . |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 11)   | Includes the shares described in footnotes 3 and 4. |
|-----------------|-----------------------------------------------------|

----

|                       |   | 2011   |   |   | 2010   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|
| Audit Fees (a)   |   | $      | 29,750 |   |   | $      | 40,700 |   |
| Audit-Related Fees (b)     |   | $      | 0      |   |   | $      | 0 |   |
| Tax Fees (c)          |   | $      | 0      |   |   | $      | 0 |   |
| All Other Fees             |   | $      | 0      |   |   | $      | 0 |   |
|                       |   |   |   |   |   |   |   |   |

| (a)   | Includes fees for services related to the audits of our annual financial statements and the reviews of our interim financial statements and assistance with SEC filings. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b)   | Includes fees for services related to transaction due diligence and consultations with respect to compliance with Section 404 of the Sarbanes-Oxley Act. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| (c)   | Includes fees for services related to tax compliance, preparation and planning services (including U.S. federal, state and local returns) and tax examination assistance. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (a)   | Exhibits |
|-----------------|----------|

| Exhibit Number |   | Description of Exhibit                                                                                                                                                   |
|----------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1(1)         |   | Certificate of Incorporation, filed on August 3, 1992 with the Secretary of State of Delaware (Exhibit 3.1)                                                              |
| 3.2(1)         |   | Certificate of Amendment, filed on May 2, 1994 with the Secretary of State of Delaware (Exhibit 3.2)                                                                |
| 3.3(1)         |   | Certificate of Amendment, filed on March 21, 1995 with the Secretary of State of Delaware (Exhibit 3.3)                                                                  |
| 3.4(2)         |   | Certificate of Amendment, filed on July 27, 1995 with the Secretary of State of Delaware (Exhibit 3.5)                                                                   |
| 3.5(3)         |   | Certificate of Amendment, filed on March 7, 1997 with the Secretary of State of Delaware (Exhibit 3.5)                                                                   |
| 3.6^           |   | Certificate of Amendment, filed on April 27, 2007with the Secretary of State of Delaware (Exhibit 3.1)                                                                   |
| 3.7(1)         |   | Bylaws of the registrant (Exhibit 3.4)                                                                                                                                   |
| 10.1(4)        |   | Form of Warrant Certificate and Schedule of Warrant Certificates (Exhibit 10.1)                                                                                          |
| 10.2(6)        |   | Form of Subscription Agreement between Preferred Voice, Inc. and certain purchasers of Preferred Voice, Inc. common stock (Exhibit 10.1)                                 |
| 10.3(6)        |   | Form of Warrant Certificate (Exhibit 10.2)                                                                                                                               |
| 10.4(6)        |   | Warrant No. 122 issued to Stifel, Nicolaus & Company, Inc. (Exhibit 10.3)                                                                                            |
| 10.5(5)        |   | Second Amendment to Lease between Dallas Office Portfolio, L.P., as successor in interest to Greenville Avenue Properties, Ltd. and Preferred Voice, Inc. (Exhibit 10.3) |
| 10.6(1)        |   | Preferred/telecom, Inc. 1994 Stock Plan for Incentive and Non-Qualified Stock Options (Exhibit 10.5)                                                                |
| 10.7(7)        |   | 2000 Stock Plan for Incentive Stock Options and Other Equity Participation (Exhibit 10.1)                                                                                |
| 10.8(8)        |   | Form of Subscription Agreement by and between Preferred Voice, Inc. and certain signatories thereto (Exhibit 10.1)                                                       |
| 10.9(8)        |   | Form of Warrant Certificate, issued by Preferred Voice, Inc. pursuant to the Subscription Agreement filed as Exhibit 10.9 hereto (Exhibit 10.2)                          |
| 10.10(9)       |   | Patent License Agreement by and between Preferred Voice, Inc. and KoninKlijkePhilips Electronics N.V.*(Exhibit 10.2)                                                     |
| 10.11(10)      |   | Form of Subscription Agreement, by and between Preferred Voice, Inc. and certain signatories thereto (Exhibit 10.1)                                                 |
| 10.12(11)      |   | Form of Subscription Agreement, by and between Preferred Voice, Inc. and certain signatories thereto (Exhibit 10.1)                                                 |
| 23*            |   | Consent of Philip Vogel & Co. PC                                                                                                                                     |
| 31.1*          |   | Section 302 Certification                                                                                                                                                |
| 32.1*          |   | Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                  |

| (1) | Incorporated by reference to the exhibit shown in parenthesis to our Registration Statement on Form S-1, filed with the Securities and Exchange Commission on June 15, 1995. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Incorporated by reference to the exhibit shown in parenthesis to Amendment No. 1 to our Registration Statement, filed with the Securities and Exchange Commission on August 7, 1995. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Incorporated by reference to the exhibit shown in parenthesis to our Annual Report on Form 10-KSB for the period ended March 31, 1999, filed by us with the Securities and Exchange Commission. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4)   | Incorporated by reference to the exhibit shown in parenthesis to our Registration Statement on Form SB-2, filed with the Securities Exchange Commission on March 8, 2001 |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 15, 2000. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6)   | Incorporated by reference to the exhibit shown in parenthesis to our Quarterly Report on Form 10-QSB for the quarter ended December 31, 2000, filed by us with the Securities and Exchange Commission. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 7, 2001. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (8)   | Incorporated by reference to the exhibit shown in parenthesis to our Quarterly Report on Form 10-QSB for the quarter ended September 30, 2001, filed by us with the Securities and Exchange Commission. |
|-----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (9)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 21, 2001. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (10)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on May 18, 2004. |
|------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (11)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 24, 2005. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (12)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 5, 2005. |
|------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (13)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 1, 2005. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (14)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on January 25, 2006. |
|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (15)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on October 3, 2006. |
|------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (16)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on November 15, 2006. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (17)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on February 23, 2009. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (18)   | Incorporated by reference to the exhibit shown in parenthesis to our Current Report on Form 8-K, filed with the Securities and Exchange Commission on September 9, 2010. |
|------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                | Preferred Voice, Inc. |                |
|---------------------|-----------------------|---------------------|
|                |                  | (Registrant)        |   |
|                |                  |                |   |
| Date: June 24, 2011 | By:                   | /s/ Mary G. Merritt |   |
|                |                  | Mary G. Merritt     |   |
|                |                  | Chairman            |   |
|                |                  |                |   |

| SIGNATURE           |   | TITLE                                                                                                                                             |   | DATE          |
|---------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|
|                |   |                                                                                                                                              |   |          |
|                |   |                                                                                                                                              |   |          |
| /s/ Mary G. Merritt |   | Chairman and Chief Executive Officer                                                                                                              |   | June 24, 2011 |
| Mary G. Merritt     |   | (Principal Executive Officer) Secretary, Treasurer, Executive Vice President of Finance and Director (Principal Financial and Accounting Officer) |   |          |
|                |   |                                                                                                                                              |   |          |
| /s/ Scott Ogilvie   |   | Director                                                                                                                                          |   | June 24, 2011 |
| Scott Ogilvie       |   |                                                                                                                                              |   |          |

----