U. S. Securities and Exchange Commission
                         Washington, D. C.  20549

                           FORM 10-QSB-A1

[X]  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the quarter ended September 30, 2001
                           ------------------

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from               to
                                    -------------    -------------

                 Commission File No.   333-69415
                                       ---------

                   WIZZARD SOFTWARE CORPORATION
                -----------------------------------
          (Name of Small Business Issuer in its Charter)

      COLORADO                                             87-0575577
-------------------------------                     --------------------------
(State or Other Jurisdiction of                   (I.R.S. Employer I.D. No.)
 incorporation or organization)

                5525 South 900 East, Suite 110
                  Salt Lake City, Utah 84117
                   -------------------------
             (Address of Principal Executive Offices)

            Issuer's Telephone Number:  (801) 262-8844

     Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

     (1)   Yes  X    No            (2)   Yes  X    No
               ---      ---                  ---      ---


               (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                       DURING THE PAST FIVE YEARS)

     Check whether the issuer has filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution
of securities under a plan confirmed by a court.  Yes____        No ___

                 (APPLICABLE ONLY TO CORPORATE ISSUERS)

          State the number of shares outstanding of each of the Issuer's
classes of common equity, as of the latest practicable date:

                            September 30, 2001

                          Common - 16,992,934 shares

                    DOCUMENTS INCORPORATED BY REFERENCE

                              NONE.

Transitional Small Business Issuer Format   Yes  X   No
                                                ---     ---

                  PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements.

          The Consolidated Financial Statements of the Company required
to be filed with this 10-QSB Quarterly Report were prepared by management and
reviewed by independent auditors and commence on the following page, together
with related Notes.  In the opinion of management, the Consolidated Financial
Statements fairly present the financial condition of the Company.

<PAGE>


                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

             UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                              SEPTEMBER 30, 2001



<PAGE>



                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)



                                   CONTENTS

                                                                 PAGE


- Unaudited Condensed Consolidated Balance Sheet,
    September 30, 2001                                            2

- Unaudited Condensed Consolidated Statements of
    Operations, for the three and nine months ended
    September 30, 2001 and 2000                                   3

- Unaudited Condensed Consolidated Statements of Cash
    Flows, for the nine months ended September 30, 2001
    and 2000                                                  4 - 5

- Notes to Unaudited Condensed Consolidated Financial
    Statements                                               6 - 12



<PAGE>

<TABLE>
<CAPTION>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

                                    ASSETS

                                                            September 30,
                                                                 2001

<S>                                                          <C>

CURRENT ASSETS:

     Cash in bank                                            $    161,203

     Accounts receivable                                              102

     Inventory                                                    120,408

      Total Current Assets                                        281,713


PROPERTY & EQUIPMENT, net                                         144,058

OTHER ASSETS:

     Prepaid expenses                                             389,786

     Intangible assets, net                                       533,986

     Deposits                                                       2,000

      Total Other Assets                                          925,772

                                                             $  1,351,543

                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:

     Accounts payable                                        $     14,819

     Accrued expenses                                              64,507

     Loans payable - related party                                 46,076

      Total current liabilities                                   125,402


LONG -TERM OBLIGATIONS:

     Convertible Notes Payable, net of 239,500 discount            10,500

      Total long term liabilities                                  10,500

                                                                  135,902
STOCKHOLDERS' EQUITY (DEFICIT):

     Preferred stock, $.001 par value, 1,000,000 shares
      authorized, no shares issued and outstanding                     -

     Common stock, $.001 par value, 100,000,000 shares
      authorized, 16,992,934 shares issued and outstanding         16,993

     Capital in excess of par value                             4,778,529

     Retained Deficit                                          (3,579,881)

      Total Stockholders' Equity (Deficit)                      1,215,641

                                                             $  1,351,543
</TABLE>

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

<PAGE>

<TABLE>
<CAPTION>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

                                    For the Three           For the Nine
                                    Months Ended            Months Ended
                                    September 30,           September 30,
                                  2001        2000        2001        2000

<S>                       <C>          <C>        <C>         <C>

NET SALES                 $  11,119    $  26,903  $  72,265   $    158,468

COST OF GOOD SOLD            40,743        8,354     55,553         52,207

  Gross Profit (Deficit)    (29,624)      18,549     16,712        106,261

EXPENSES:

General and
 administrative             130,622      343,973    507,559        993,809

Selling expenses             95,549       58,444    150,559        205,996

 Total Expenses             226,171      402,417    658,118      1,199,805

LOSS FROM OPERATIONS       (255,795)    (383,868)  (641,406)    (1,093,544)

OTHER INCOME (EXPENSE):

  Other income                   -           189      1,917            210

  Interest expense          (11,635)     (16,010)   (29,450)       (26,411)

Total Other
 Income (Expense)           (11,635)     (15,821)   (27,533)       (26,201)

LOSS BEFORE INCOME TAXES   (267,430)    (399,689)  (668,939)    (1,119,745)

CURRENT TAX EXPENSE              -            -          -              -

DEFERRED TAX EXPENSE             -            -          -              -

NET LOSS                  $(267,430)   $(399,689) $(668,939)  $ (1,119,745)

LOSS PER COMMON SHARE     $    (.02)   $    (.03) $    (.04)  $       (.08)

</TABLE>

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

<PAGE>

<TABLE>
<CAPTION>

                         WIZZARD SOFTWARE CORPORATION
                       (Formerly Balanced Living, Inc.)
                        [A Development Stage Company]

                      STATEMENT OF STOCKHOLDERS' DEFICIT

                FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001

                                                                      Deficit
                                                                   Accumulated
                          Common Stock                              During the
                                                    Paid in        Development
                     Shares         Amount           Capital          Stage

<S>                  <C>            <C>             <C>          <C>

BALANCE,
 December 31, 2000     13,620,472   $  13,620       $ 2,373,837  $ (2,910,942)

Effect of
 recapitalization
 of the subsidiary,
 January 21, 2001       1,996,951       1,997            (6,405)           -

Shares of Wizzard
 Software Corp.
 a Deleware
 corporation not
 converted in
 re-capitalization
 resulting in a non
 controlling interest    (215,641)       (215)              215            -

Issuance of 671,500
 shares common stock
 for Cash,
 February 7, 2001
 through May 23, 2001
 at $1.00 per share
 - Offering costs
 were $66,527             671,500         672           604,301            -

Issuance of 350,000
 shares common stock for
 advertising services,
 May 1, 2001 at $1.00
 per share                350,000         350           349,650            -

Issuance of 495,000
 shares upon the
 conversion of notes
 payable, at $1.00
 per share May 8, 2001    495,000         495           494,505            -

Issuance of 500,000
 shares to acquire
 all the issued
 and outstanding shares
 of Speech Systems,
 May 25, 2001 at
 $1.00 per share          500,000         500           499,500            -

Cancellation of
 532,500 shares
 common stock            (532,500)       (533)              533            -

Adjust for share
 discrepancy                    9          -                 -             -

Issuance of
 107,143 shares
 common stock for
 consulting services,
 August 30, 2001
 at $1.98 per share       107,143         107            212,393           -

Consideration for the
 beneficial conversion
 feature on the
 $250,000 convertible
 note, September
 14, 2001                      -           -             250,000           -

Net loss for the
 period ended
 September 30, 2001            -           -                  -      (668,939)

BALANCE,
 September 30, 2001    16,992,934      16,993          4,778,529   (3,579,881)

</TABLE>

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

<PAGE>


<TABLE>
<CAPTION>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                      For the Nine
                                                      Months Ended
                                                      September 30,
                                                   2001           2000




<S>                                             <C>            <C>

Cash Flows from Operating Activities:

 Net loss                                       $ (668,939)    $  (1,119,745)

 Adjustments to reconcile net loss
 to net cash used by operating activities:

  Non-cash expenses                                 10,500                -

  Depreciation and amortization expense             40,617            30,759

  Change in assets and liabilities:
    (Increase) in accounts receivable               32,197           (28,135)

    Decrease in Inventory                              615             7,731

    Increase (decrease) in accounts payable
     and accrued expense                           (94,539)           52,628

    (Increase) in prepaid expenses                 (97,834)               -

    Decrease in intangible assets                   28,785                -

      Net Cash Provided (Used)
       by Operating Activities                    (748,598)       (1,056,762)

Cash Flows from Investing Activities:

     Purchase of property & equipment              (23,001)          (46,791)

     Increase in notes receivable                  (34,917)               -

       Net Cash (Used) by Investing Activities     (57,918)          (46,791)

Cash Flows from Financing Activities:

     Issuance of common stock                      701,500          (428,759)

     Payments on long-term obligation             (255,000)               -

     Proceeds from long-term obligation            250,000           550,000

     Proceeds from note payable
      - related party                               46,076                -

     Payments on note payable
      - related party                                   -               (854)

   Net Cash Provided by Financing Activities       742,576           977,905

Net Increase (Decrease) in Cash                    (63,940)         (125,648)

Cash at Beginning of Period                        225,143           153,665

Cash at End of Period                           $  161,203     $      28,017

Supplemental Disclosures of
 Cash Flow Information:

     Cash paid during the periods for:

       Interest                                 $       -      $          -

       Income taxes                             $       -      $          -

</TABLE>

(Continued)

<PAGE>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                 (Continued)

Supplemental Schedule of Noncash Investing and Financing Activities:

For the nine months ended September 30, 2001:

The Company sold a convertible note in the amount of $250,000.  Since the
conversion price was below the fair value of the common stock, a beneficial
conversion feature of $250,000 was recognized of which $10,500 was expensed as
interest expense in the current period.

The Company agreed to release Speech Solutions, Inc. of a $66,227 note and
related accrued interest for rights and benefits of a Merchant Operating
Understanding in regards to developing and distributing speech tools to be
transferred to the Company.

The Company issued 495,000 shares of stock in payment of notes payable of
$495,000.

The Company issued 500,000 shares of stock valued at $500,000 for all the
issued and outstanding shares of Speech Systems, Inc.

The Company issued 531,000 share of common stock for cash of $360,000 and
investor advances of $171,000, net of deferred stock offering cost of $66,527.

The Company issued 100,000 shares of stock, valued at $200,000 for a one year
consulting agreement.

The Company issued 7,143 shares of stock, valued at $12,500 for consulting
expenses.

For the nine months ended September 30, 2000:
     None



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

<PAGE>



                  WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization - Wizzard Software Corporation (Formerly Balance Living, Inc.)
[Parent] a Colorado corporation, was organized on July 1, 1998. The Company
has, at the present time, not paid any dividends and any dividends that may be
paid in the future will depend upon the financial requirements of the Company
and other relevant factors.

Wizzard Software Corp. [Subsidiary], was incorporated on February 29, 1996
under the laws of the State of Delaware.  The Company engages primarily in the
development, sale, and service of computer software products.

On February 7, 2001, the Company completed the Plan of Reorganization and
Stock Exchange agreement, wherein, Parents acquired 96% of the common stock of
the subsidiary.   The merger was accounted for as a recapitalization of the
Subsidiary, wherein Subsidiary became a 96% owned subsidiary of the Parent.

On May 22, 2001 the Company purchased all of the issued and outstanding shares
of Speech Systems, Inc. in a transactions accounted for as a purchase.

Consolidation - The financial statements presented reflect the accounts of
Wizzard Software Corporation, Wizzard Software Corp. and Speech Systems, Inc.
as of September 30, 2001 and for the three and nine months ended September 30,
2001. All significant inter-company transactions between the parent and
subsidiary have been eliminated in consolidation.

Unaudited Condensed Financial Statements - The accompanying financial
statements have been prepared by the Company without audit.  In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows at September 30, 2001 and for all the periods presented have been
made.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  These condensed financial
statements should be read in conjunction with the financial statements and
notes thereto included in the Company's December 31, 2000 audited financial
statements.  The results of operations for the periods ended September 30,
2001 and 2000 are not necessarily indicative of the operating results for the
full year.

Cash and Cash Equivalents - For purposes of the financial statements, the
Company considers all highly liquid debt investments purchased with a maturity
of three months or less to be cash equivalents. The Company maintains its cash
balance at one financial institution located in Pittsburgh, Pennsylvania.
Accounts at financial institutions are insured by the Federal Deposit
Insurance Corporation up to $100,000.  At September 30, 2001, the Company's
uninsured cash balance totaled $61,203.

Inventory - Inventory consists of software and related products and is carried
at the lower of cost or market.

Depreciation - Depreciation of property and equipment is provided on the
straight-line method over the estimated useful lives of the assets of five
years to thirty nine years.

Intangible assets - Intangible assets consist of the rights, interest, title
patents, trademarks and trade secrets of the speech recognition software
ActiveXvoice Tools, purchased in the acquisition of Speech Systems, Inc.,
purchased rights to a Merchant Operating Understanding for the distribution of
the Company products and domain name registration and are being amortized over
two to five years on a straight-line basis.   Amortization expense of $40,274
and $5,698 was recorded for the periods ended September 30, 2001 and 2000.

<PAGE>


                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Software Development Costs - Statement of Financial Accounting Standards
("SFAS") No. 86 "Accounting for the Costs of Computer Software to be Sold,
Leased or Otherwise Marketed" requires software development costs to be
capitalized upon the establishment of technological feasibility. The
establishment of technological feasibility and the ongoing assessment of the
recoverability of these costs requires considerable judgment by management
with respect to certain external factors such as anticipated future revenue,
estimated economic life, and changes in software and hardware technologies.
Capitalizable software development costs have not been significant and
accordingly no amounts are shown as capitalized at September 30, 2001.

Revenue Recognition - Revenue from licensed programs are recorded when the
software has been delivered and the customer is invoiced. Provisions are
recorded for returns, concessions, and bad debts. Costs related to
insignificant obligations, which include telephone support for certain
products, are accrued. Revenue from packaged product sales to and through
distributors and resellers is recorded when related products are shipped.
Maintenance and subscription revenue is recognized ratably over the contract
period. Revenue attributable to undelivered elements, including technical
support is based on the average sales price of the element and is recognized
ratably on a straight-line basis over the product's life cycle. When the
revenue recognition criteria required for distributor and reseller
arrangements are not met, revenue is recognized as payments are received. The
Company sells software products. Revenue is recognized, net of discount and
allowances, at the time of product shipment.

Loss Per Share - The Company computes loss per share in accordance with
Statement of Financial Accounting Standards (SFAS) No. 128 "Earnings Per
Share," which requires the Company to present basic earnings per share and
dilutive earnings per share when the effect is dilutive (see Note 11).

Income Taxes - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes."  This statement requires an asset and liability approach for
accounting for income taxes.

Advertising Costs - Advertising and marketing costs are expensed as incurred
and amounted to $145,923 and $16,735 for the period ending September 30, 2001
and 2000.  During June 2001, the Company entered into a year advertising
agreement through the issuance of 350,000 shares of common stock for $350,000
in advertising services.   As of September 30, 2001 the Company has recorded
advertising costs of $204,167 as a prepaid expense.

Accounting Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, the disclosures of contingent assets and liabilities at the date
of the financial statements, and the reported amounts of revenues and expenses
during the reporting period.  Actual results could differ from those estimated
by management.

<PAGE>


                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                     (Formerly Balanced Living, Inc.)

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - ACQUISITIONS

On February 7, 2001, the Company completed the Plan of Reorganization and
Stock Exchange agreement, through the issuance 13,404,831 shares of Parents
common stock for 96% of Subsidiary or 13,049,000 of 13,620,472 outstanding
common shares at December 31, 2000. The merger was accounted for as a
recapitalization of the Subsidiary, wherein Subsidiary became a 96% owned
subsidiary of the Parent.  In connection with the agreement, 3,725,000 shares
of the parent's common stock were contributed back and cancelled. The Company
also amended it's articles of incorporation to increase the authorized number
of common shares to 100,000,000, to effect a 1.65 to 1 forward stock split and
to change the name of the Company to Wizzard Software Corporation.

As of May 22, 2001, the Company purchased all of the issued and outstanding
shares of Speech Systems, Inc., with all of the rights, interest, title
patents, trademarks and trade secrets of the speech recognition software
ActiveXvoice Tools, through the issuance of 500,000 shares of the Company's
common stock valued at $500,000. As a result of the acquisition the Company
recorded $500,000 in intangible assets being amortized over five years.

NOTE 3 - INVENTORY

The following is a summary of inventory at:
                                                        September 30,
                                                            2001

     Raw Materials                                      $    49,159

     Finished Goods                                          71,249
                                                        $   120,408
NOTE 4 - PROPERTY & EQUIPMENT

The following is a summary of property and equipment at:
                                                         September 30,
                                                             2001

     Furniture, fixtures and equipment                   $   200,906



     Leasehold improvements                                   36,482

     Software                                                 40,848
                                                             278,236
     Accumulated Deprecation                                (134,178)

     Property & Equipment, net                           $   144,058

Depreciation expense for the nine months ended September 30, 2001 and 2000 was
$29,128 and $25,060, respectively.

<PAGE>

                  WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - NOTE RECEIVABLE

During the three months ended March 31, 2001 and December 31, 2000 the Company
signed four separate unsecured notes with Speech Solutions, Inc. totaling
$61,227, including accrued interest of $3,228.  Interest is 12.5% per annum
compounded monthly.  Principle and interest are payable to the Company on
demand. During the three months ended June 30, 2001, the Company agreed to
release Speech Solutions, Inc. of the note and related accrued interest for
rights and benefits of a Merchant Operating Understanding in regards to
developing and distributing speech tools to be transferred to the Company. The
Memorandum of Understanding was recorded as a intangible asset and will be
amortized over its estimated useful life of five years.

NOTE 6 -NOTES PAYABLE

Note Payable - On May 8, 2001 the Company issued 495,000 shares of Common
stock upon the conversion of the $495,000 remaining principal balance on a
financing agreement with Salvage Holdings, Inc.  Principal and interest are
due on August 10, 2001.  Interest is calculated at 12.5% per annum. As
additional consideration, the Company issued warrants to purchase 65,000
shares of the Company's common stock at $1.25 per share expiring August 10,
2005.  As of September 30, 2001, the Company has accrued $63,652 in interest
on this note payable.

Convertible Note Payable - On September 14, 2001, the Company sold a Series
2001-A 8% convertible Note of the Company in the amount of $250,000, with a
maturity date of August 1, 2011.  The Note is convertible in to the Company's
common stock at the lessor of $.50 per share or 75%of the closing bid price
beginning September 14, 2002.  As the conversion price was below the fair
value of the common stock on the date issued the Company has recorded the
beneficial conversion feature of the note. in accordance with the provisions
found in EITF 98-5 by recording a $250,000 discount on the note.  The discount
is being amortized over period until earliest conversion.  As of September 30,
2001, interest of $10,500 was expensed with a discount of $239,500 remaining.
As of September 30, 2001, the Company has accrued $855 of interest on the
note.

Related Party Note Payable - During the nine months ended September 30, 2001,
a shareholder loaned the Company $46,076.  The demand note is unsecured and
accrues interest at 5% per annum.


NOTE 7 - CAPITAL STOCK

Common stock - On February 7, 2001, the Company completed the Plan of
Reorganization and Stock Exchange agreement, through the issuance 13,404,831
shares of Parents common stock for 96% of Subsidiary or 13,049,000 of
13,620,472 shares outstanding at December 31, 2000. The merger was accounted
for as a recapitalization of the Subsidiary, wherein Subsidiary became a 96%
owned subsidiary of the Parent.  In connection with the agreement, 3,725,000
shares of the parent's common stock were contributed back and cancelled. The
Company also amended it's articles of incorporation to increase the authorized
number of common shares to 100,000,000, to effect a 1.65 to 1 forward stock
split and to change the name of the Company to Wizzard Software Corporation.

The Company issued 671,500 shares of the Company's common stock at $1.00 per
share under a confidential private offering of Common Stock for proceeds of
671,500 net of offering cost of $66,527

<PAGE>

                    WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                        (Formerly Balanced Living, Inc.)

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - CAPITAL STOCK (Continued)

As of May 22, 2001, the Company purchased all of the issued and outstanding
shares of Speech Systems, Inc. through the issuance of 500,000 shares of the
Company's common stock valued at $500,000.

On May 8, 2001 the Company issued 495,000 shares of Common stock upon the
conversion of the $495,000 remaining principal balance on a financing
agreement with Salvage Holdings, Inc.

During May 2001, the Company entered into a year advertising agreement through
the issuance of 350,000 shares of common stock valued at $350,000, and 100,000
warrants to purchase the Company's common stock at $2.00 per share for a
period of five years for promotion of the Company and advertising services.
No consideration was allocated to the warrants as the fair value of the
services equaled the fair value of the common stock issued.

During May 2001, the Company received back and cancelled 532,500 shares of the
Company common stock.

On August 30, 2001, the Company issued 107,143 restricted shares of the
Company's common stock for $212,500 in consulting services.

Warrants -The Company issued 1,008,076 warrants to purchase common shares of
the Company at prices ranging from $1.00 to $1.50 per share, expiring August
6, 2002 through January 1, 2004, for services rendered in connection with the
Company's private placement offering.  As of September 30, 2001, none of these
warrants had been exercised.

The Company issued 665,000 warrants to purchase common shares of the Company
at prices ranging from $1.25 to $2.00 per share, expiring through April 17,
2006 in connection with an advertising contract and obtaining debt financing.

NOTE 8 - INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 "Accounting for Income Taxes".  SFAS
No. 109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards.  The Company has available at
September 30, 2001 operating loss carryforwards of approximately
$3,5000,000 which may be applied against future taxable income and which
expires in various years through 2020.

The amount of and ultimate realization of the benefits from the operating loss
carryforward for income tax purposes is dependent, in part, upon the tax laws
in effect, the future earnings of the Company, and other future events, the
effects of which cannot be determined.  Because of the uncertainty surrounding
the realization of the loss carryforward the Company has established a
valuation allowance equal to the amount of the loss carryforward and,
therefore, no deferred tax asset has been recognized for the loss
carryforward.  The net deferred tax asset is approximately $1,200,000 as of
September 30, 2001, with an offsetting valuation allowance of the same amount.
The change in the valuation allowance for the period ended September 30, 2001
is approximately $228,000.


<PAGE>

                  WIZZARD SOFTWARE CORPORATIONAND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)

        NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9 - OPERATING LEASES

The Company leases office space under an operating lease agreement. The lease
calls monthly payments of $2,040 and expires on June 30, 2003.  The Company's
future minimum rental under this operating lease amounts to $42,840 at
September 30, 2001.  Rent expense for the nine months ended September 30, 2001
was $18,120.

NOTE 10 - ACCRUED COMPENSATED LEAVE

As of September 30, 2001, the Corporation had established no policy regarding
the rate at which employees would earn vacation, sick and other similar leave.
As a result, these financial statements contain no accrual for those items.
BIt is the Company's intent that no amounts will be provided for these items
until policies governing the items are formally established.  In addition, the
Company does not intend to ever incur an expense for any amounts "earned"
prior to January 1, 2001.

NOTE 11 - LOSS PER SHARE

The following data show the amounts used in computing loss per share and the
weighted average number of shares of common stock outstanding for the periods
presented:

<TABLE>
<CAPTION>
                                     For the Three               For the Six
                                      Months Ended               Months Ended
                                     September 30,               September 30,
                           2001        2000          2001         2000
<S>                       <C>          <C>           <C>         <C>

Earnings (loss) from
 continuing operations
 available to common
 shareholders (numerator) $ (267,430) $  (399,689)  $ (668,939) $  (1,119,745)

Weighted average number
 of common shares
 outstanding during
 the period used in
 loss per share
 (denominator)             16,921,894  13,602,540   16,469,475     13,656,857

</TABLE>

At September 30, 2001, the Company had 1,673,076 warrants outstanding to
purchase common stock of the Company at $1.00 to $2.00 per share (See Note 7)
and a convertible note payable wherein the holder could convert the note into
a minimum of 500,000 shares of common stock (See Note 6), which were not
included in the loss per share computation because their effect would be
anti-dilutive.

<PAGE>

                 WIZZARD SOFTWARE CORPORATIONAND SUBSIDIARY
                     (Formerly Balanced Living, Inc.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - GOING CONCERN

The accompanying condensed financial statements have been prepared in
conformity with generally accepted accounting principles, which contemplate
continuation of the Company as a going concern.  However, the Company has
incurred significant losses in recent years and has not yet been successful in
establishing profitable operations.  These factors raise substantial doubt
about the ability of the Company to continue as a going concern.  In this
regard, management plans to mitigate this doubt by raising additional funds
through debt and/or equity offerings and by substantially increasing sales.
There is no assurance that the Company will be successful in achieving
profitable operations.  The financial statements do not include any
adjustments that might result from the outcome of these uncertainties.

NOTE 13 - SUBSEQUENT EVENTS

During October 2001, the Company issued 115,000 warrants to purchase
common shares of the Company at $0.25 to $1.00 per share and expire October
18, 2004.  The Company issued 172,000 shares of common stock for services
rendered.

During November 2001, the Company filed an SB-2 registration statement to
register 4,224,061 shares current outstanding, 100,000 shares issuable for
legal services, 500,000 shares issuable upon conversion of a series 2001-A 8%
convertible note payable and  1,788,076 warrants to purchase common stock at
$.25 to $2.00 per share.

<PAGE>

Item 2.   Management's Discussion and Analysis or Plan of Operation.

Plan of Operation.
------------------

     Over the next 12 months, we plan to expand our marketing efforts for our
products.  Currently, we offer our products through our own web site as well
as through resellers and a few strategic online partners.  We plan to grow our
distribution channels to include other high profile companies to expand our
products' reach and exposure.  This will include:

          *     Growing the number of distributors for our consumer products.
                We plan to use Quixtar.com's 400,000 Independent Business
                Operators, who earn commissions selling our product to their
                customers, to promote our products, expanding our presence
                nationwide. To date, about 4,000 Quixtar distributors have
                ordered our Interactive Voice Assistant product and about 90%
                of our revenues have come from that source;

          *     Acquiring additional distribution partners for our programming
                tools; and

          *     Hiring and training an internal sales force of at least 10
                highly motivated, high quality individuals who will blanket
                the U. S. market in search of companies needing speech
                recognition solutions for our customization solutions.

     We also plan to generate leads for these sales people through various
partnerships and a conservative, extremely targeted print market campaign.
Depending on general market conditions, we would like to raise at least
$1,000,000 and preferably $3,000,000 to $5,000,0000 during the next two years
to cover intended operations.  We plan to conduct a private placement of our
common stock in the near future, but we can not guarantee that we will be
successful in these efforts.  In addition, we will have to get Maricopa's
consent if we want to sell over 500,000 shares in any quarter.  We can not
assure you that Maricopa will consent.  If it does not, we may not be able to
raise sufficient funds to proceed with our plan of operation.

     Currently, we require about $50,000 per month to stay in operation.  This
is less than the approximately $83,000 net cash used by operating activities
for the nine months ended September 30, 2001, principally due to a reduction
in the number of our employees and to decreased selling expenses.

     Our present cash on hand will last us only through the next two months.
After that, we may have to curtail operations.  This could have a very adverse
effect on our future prospects.

Results of Operations.
----------------------

          At September 30, 2001, the Company had $281,713 in current assets
and $125,402 in current liabilities.  The Company had $11,119 and $26,903 in
revenues for the three months ended September 30, 2001 and 2000, and $263,300
and $402,417 in total expenses, for net losses of ($256,930) and ($399,689),
respectively.

          The Company had $72,265 and $158,468 in revenues for the nine months
ended September 30, 2001 and 2000, and $695,247 and $1,199,805 in operating
expenses, for net losses of ($658,439) and ($1,119,745), respectively.

          The Company attributes the decline in quarterly revenue as a result
of our shift in focus from consumer speech recognition applications to speech
recognition developer tools and custom speech programming services.

Liquidity.
----------

          At September 30, 2001, the Company had $281,713 in current assets,
with current liabilities of $125,402.  Total stockholder's equity was
$976,141.  On September 14, 2001, the Company received $250,000 from the sale
of a Series 2001-A 8% Convertible Note.  See the 8-K Current Report dated
September 14, 2001, and filed with the Securities and Exchange Commission on
October 1, 2001.

                   PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.

          None; not applicable.

Item 2.   Changes in Securities.

          None; not applicable.

Item 3.   Defaults Upon Senior Securities.

          None; not applicable.

Item 4.   Submission of Matters to a Vote of Security Holders.

          None; not applicable.

Item 5.   Other Information.

          During November 2001, the Company filed an SB-2 registration
Statement to register 4,224,061 shares current outstanding, 100,000 shares
issuable for legal services, 500,000 shares issuable upon conversion of a
Series 2001-A 8% convertible note payable and 1,788,076 shares underlying
warrants to purchase common stock at between $.25 to $2.00 per share.

Item 6.   Exhibits and Reports on Form 8-K.

          (a)  Exhibits.

               Annual Report for the year ended December 31, 2000.*

          (b)  Reports on Form 8-K.

               8-K Current Report dated August 28, 2001, filed with the
               Securities and Exchange Commission on September 13, 2001.*

               8-K Current Report dated September 14, 2001, filed with the
               Securities and Exchange Commission on October 1, 2001.*

         *Incorporated herein by reference.

                            SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                         WIZZARD SOFTWARE CORPORATION

Date:  2/1/02                            By /s/ Christopher J. Spencer
      --------                             ---------------------------
                                           Christopher J. Spencer, Director,
                                           CEO, President and Treasurer

Date:  2/1/02                            By /s/ Armen Geronian
      --------                             ------------------------
                                           Armen Geronian, Director
                                           Secretary

Date:  2/1/02                            By /s/ Gordon Berry
      --------                             ------------------------
                                           Gordon Berry, Director