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

                           FORM 10-QSB

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

     For the quarter ended June 30, 2002
                           -------------

[ ]  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)

                          424 Gold Way
                 Pittsburgh, Pennsylvania 15213
                 ------------------------------
             (Address of Principal Executive Offices)

            Issuer's Telephone Number:  (412) 621-0902

     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)

                                  N/A
                                  ---

                 (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:

                               June 30, 2002

                          Common - 17,150,229 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

                                JUNE 30, 2002



<PAGE>



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


                                   CONTENTS

                                                                 PAGE


- Unaudited Condensed Consolidated Balance Sheet,
    June 30, 2002                                                 2

- Unaudited Condensed Consolidated Statements of
    Operations, for the three and six months ended
    June 30, 2002 and 2001                                        3

- Unaudited Condensed Consolidated Statements of Cash
    Flows, for the three months ended June 30, 2002
    and 2001                                                  4 - 5

- Notes to Unaudited Condensed Consolidated Financial
    Statements                                               6 - 11



<PAGE>

<TABLE>
<CAPTION>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                       (Formerly Balanced Living, Inc.)
                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

                                    ASSETS

                                                               June 30,
                                                                 2002

<S>                                                          <C>

CURRENT ASSETS:

     Cash in bank                                            $     49,449
     Accounts receivable                                            5,796
     Inventory                                                     24,493
     Prepaid Expenses                                              15,788
                                                             ------------
      Total Current Assets                                         95,526
                                                             ------------
PROPERTY & EQUIPMENT, net                                         120,035
                                                             ------------
OTHER ASSETS:
     Intangible assets, net                                       447,727
     Deposits                                                       2,000
                                                             ------------
      Total Other Assets                                          449,727
                                                             ------------
                                                             $    665,288
                                                             ============
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:

     Accounts payable                                        $    123,645
     Accrued expenses                                              81,431
     Notes payable - related party                                164,116
                                                             ------------
      Total current liabilities                                   369,192
                                                             ------------
LONG-TERM OBLIGATIONS
     Loans payable-related party                                  285,000
                                                             ------------
      Total liabilities                                           654,192
                                                             ------------
NON-CONTROLLING INTEREST IN SUBSIDIARY                                  -
                                                             ------------
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, 17,150,229 shares issued and outstanding         17,150
     Capital in excess of par value                             4,929,577
     Retained Deficit                                          (4,935,631)
                                                             ------------
      Total Stockholders' Equity (Deficit)                         11,096
                                                             ------------
                                                             $    665,288
                                                             ============
</TABLE>

The accompanying notes are an integral part of these unaudited condensed
consolidated financial statement.
                                2
<PAGE>
<TABLE>
<CAPTION>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                 (Formerly Balanced Living, Inc.)

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                  For the Three           For the Six
                                  Months Ended            Months Ended
                                     June 30,               June 30,
                               ____________________  ____________________
                                 2002       2001       2002       2001
                               _________  _________  _________  _________
<S>                            <C>        <C>        <C>       <C>
NET SALES                       $44,089  $   40,354  $  98,703  $  61,146

COST OF GOOD SOLD                57,078      19,020     92,412     25,577
                              _________   _________  _________  _________
  Gross Profit                  (12,989)     21,334      6,291     35,569
                              _________   _________  _________  _________

EXPENSES:
  General and administrative    186,806     471,671    343,502    697,386
  Selling expenses                2,493      15,460      4,467     15,460
                              _________   _________  _________  _________
        Total Expenses          189,299     487,131    347,969    712,846
                              _________   _________  _________  _________
INCOME (LOSS) FROM OPERATIONS  (202,288)   (465,797)  (341,678)  (677,277)
                               ________   _________  _________  _________

OTHER INCOME (EXPENSE):
  Other income                        -           -          -      1,917
  Interest expense               (6,556)          -    (11,660)   (17,815)
                              _________   _________  _________  _________
        Total Other Income
        (Expense)                (6,556)          -    (11,660)   (15,898)
                              _________   _________  _________  _________

INCOME (LOSS) BEFORE INCOME
TAXES                          (208,844)   (465,797)  (353,338)  (693,175)

CURRENT TAX EXPENSE                   -           -          -          -

DEFERRED TAX EXPENSE                  -           -          -          -
                              _________   _________  _________  _________

NET (LOSS)                    $(208,844)  $(465,797) $(353,338) $(693,175)
                              _________   _________  _________  _________

(LOSS) PER COMMON SHARE       $    (.01)  $    (.03) $    (.02) $    (.04)
                              _________   _________  _________  _________
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
                                3
<PAGE>
<TABLE>
<CAPTION>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                 (Formerly Balanced Living, Inc.)
          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                      For the Six
                                                      Months Ended
                                                         June 30,
                                                   2002           2001
<S>                                             <C>            <C>
Cash Flows from Operating Activities:
 Net loss                                       $ (353,338)    $    (693,175)
 Adjustments to reconcile net loss
 to net cash used by operating activities:
  Depreciation and amortization expense             76,982            30,910
  Non-cash expenses                                 29,008           350,000
  Change in assets and liabilities:
    (Increase) in accounts receivable               (3,796)              103
    Decrease in Inventory                            4,048            (1,286)
    Decrease in prepaid expenses                     3,629                 -
    Increase (Decrease) in accounts payable
     and accrued expense                            81,334           (38,844)
                                                ----------     -------------
      Net Cash Provided (Used)
       by Operating Activities                    (162,133)         (352,292)

Cash Flows from Investing Activities:
     Purchase of property & equipment               (6,434)          (22,896)
     Increase in notes receivable                        -           (34,917)
                                                ----------     -------------
       Net Cash (Used) by Investing Activities      (6,434)          (57,813)
                                                ----------     -------------
Cash Flows from Financing Activities:
     Issuance of common stock                            -           671,500
     Payment of stock offering costs                                 (66,527)
     Payments on long-term obligation                    -          (255,000)
     Proceeds from long-term obligation             50,000                 -
     Proceeds from note payable
      - related party                              139,040             7,100
     Payments on note payable-related party              -                 -
                                                ----------     -------------
   Net Cash Provided by Financing Activities       189,040           357,073

                                                ----------     -------------
Net Increase (Decrease) in Cash                     20,473           (53,032)

Cash at Beginning of Period                         28,976            54,143
                                                ----------     -------------
Cash at End of Period                           $   49,449     $       1,111
                                                ==========     =============
Supplemental Disclosures of
 Cash Flow Information:
     Cash paid during the periods for:
       Interest                                 $       -      $          -
       Income taxes                             $       -      $          -
</TABLE>
                           (Continued)
                                4
<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 six months ended June 30, 2002:

The Company issued 37,145 restricted shares of common stock for services
rendered valued at $29,008.

For the six months ended June 30, 2001:

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 accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
                                5
<PAGE>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
    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 custom and packaged 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 transaction 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 June  30, 2002.  At June  30, 2002 the Company held a 96%
  ownership interest in Wizzard Software Corp.  The Company recorded no
  liability for the 4% non-contolling interest as Wizzard Software Corp. had
  a stockholders deficit at the time of merger.  Further the net loss for
  Wizzard Software Corp. for the year ended June  30, 2002 applicable to the
  4% non-controlling interest were not allocated to the non controlling
  interest as there is no obligation of the non-contolling interest to share
  in such losses.  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 June 30, 2002 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, 2001 audited financial
  statements.  The results of operations for the periods ended March 31, 2002
  and 2001 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. At June 30, 2002, the Company had no uninsured
  cash balances.

  Inventory   Inventory consists of $24,493 in raw materials at June 30, 2002
  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 thirtynine years.

  Intangible assets   Intangible assets consist of the rights, interest,
  title patents, trademarks and trade secrets of the speech recognition
  software ActiveX Voice Tools, purchased in the acquisition of Speech
  Systems, Inc., purchased rights to a Merchant Operating Understanding for
  the distribution of the Company's products and domain name registration and
  are being amortized over two to five years on a straight-line basis.
                               6
<PAGE>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY

  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
   June 30, 2002.

   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.

  Revenue Recognition   Revenue is recognized when earned. The Company's
  revenue recognition policies are in compliance with the American Institute
  of Certified Public Accountants Statement of Position ("SOP") 97-2 (as
  amended by SOP 98-4 and SOP 98-9) and related interpretations, "Software
  Revenue Recognition" and the Securities and Exchange Commission Staff
  Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements"
  (SAB 101). The Company sells packaged and custom software products and
  related voice recognition product development consulting.  Software product
  revenues are recognized upon shipment of the software product only if no
  significant Company obligations remain, the fee is fixed or determinable,
  and collection is received or the resulting receivable is deemed probable.
  Revenue from package software products are recorded when the payment has
  been received and the software has been shipped.   Revenue is recognized,
  net of discount and allowances, at the time of product shipment.  For
  packaged software products the Company offers a 30 day right of return.
  Provisions are recorded for returns, concessions, and bad debts and at June
  30, 2002 amounted to $0. Revenue related to obligations, which include
  telephone support for certain packaged products, are based on the relative
  fair value of each of the deliverables determined based on vendor-specific
  objective evidence ("VSOE") when significant. The Company VSOE is
  determined by the price charged when each element is sold separately.
  Revenue from packaged software product sales to and through distributors
  and resellers is recorded when payment is received and the related products
  are shipped.  The Company's distributors or resellers do not carry packaged
  software product inventory and thus the Company does not offer any price
  protections or stock balancing rights. Revenue from non-recurring
  programming, engineering fees, consulting service, support arrangements and
  training programs are recognized when the services are provided. Such items
  are included in net revenues and amounted to $68,669 and $4,800 at June 30,
  2002 and 2001, respectively.

  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 7).
                                7
<PAGE>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

  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.

  Recently Enacted Accounting Standards - Statement of Financial Accounting
  Standards ("SFAS") No. 141, "Business Combinations", SFAS No. 143,
  "Accounting for Asset Retirement Obligations", SFAS No. 144, "Accounting
  for the Impairment or Disposal of Long-Lived Assets", and SFAS No. 145,
  "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB
  Statement No. 13, and Technical Corrections", were recently issued.  SFAS
  No. 141, 143, 144 and 145 have no current applicability to the Company or
  their effect on the financial statements would not have been significant.

  Reclassification   The financials statements for the periods ended prior to
  June 30, 2002 have been reclassified to conform to the headings and
  classifications used in the June 30, 2002 financial statements.

NOTE 2   INTANGIBLES

  The Company has classified its intangible assets as a definite-life
  intangible asset and is amortizing them on a straight-line basis over two
  to five years.  During the three months ended March 31, 2002, the Company
  completed its initial test of intangible assets for impairment in
  accordance with SFAS No. 142. The Company used the estimated future cash
  flows to test the remaining intangible assets for impairment and determined
  that the Company's intangible assets were not impaired. Amortization
  expense of $57,555 and $10,767 was recorded for the periods ended June 30,
  2002 and 2001 and has been included in cost of goods sold.The following is
  a summary of intangibles at June 30, 2002:

                                                         Life    June 30, 2002
                                                         _____   ____________
       Active X Voice Tools Software                   5 years   $  500,000
       Trademarks, patents, website registrations 2 to 5 years       10,853
       Memorandum of Understanding                     5 years       66,227
                                                                 ____________
                                                                    577,080
       Accumulated amortization                                    (129,353)
                                                                 ____________
       Intangibles, net                                          $  447,727
                                                                 ____________

  The remaining estimated aggregate amortization expense at June 30, 2002 for
  next five years is as follows:
        2002                                       $   57,594
        2003                                          114,982
        2004                                          114,898
        2005                                          114,171
        2006                                           46,082
                                                   __________
                                                   $  447,727
                                                   __________
                                8
<PAGE>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3   PROPERTY & EQUIPMENT

  The following is a summary of property and equipment:

                                                         June 30, 2002
                                                         ____________

       Furniture, fixtures and equipment                 $    207,054
       Leasehold improvements                                  36,482
       Software                                                39,441
                                                         ____________
                                                              282,977
       Accumulated Deprecation                               (162,942)
                                                         ____________
       Property & Equipment, net                         $    120,035
                                                         ____________

  Depreciation expense for the three months ended June 30, 2002 and 2001 was
  $19,427 and $20,142, respectively.

NOTE 4   NOTES 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. During the year ended December 31, 2001, $15,000 of the
  note with related accrued interest of $208 was converted into 30,416 shares
  of common stock. 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 was
  recorded as interest expense on September 14, 2001 as the note is
  immediately convertible. The note further calls for the Company to register
  the underlying shares into which the note can be converted and if said
  share are not register as of March 15, 2002 the Company will owe a penalty
  of $7,500 and $10,000 for every month thereafter, accordingly the Company
  has included $42,500 in accounts payable for penalties on the Note at June
  30, 2002.   As of June 30, 2002, the balance of the note is $235,000 with
  related accrued interest payable of $14,895.

  Related Party Note Payable   During the year ended December 31, 2001, a
  shareholder loaned the Company $46,076.  The demand note is unsecured and
  accrues interest at 5% per annum.  As of June 30, 2002, a balance of
  $25,076 remained outstanding on the note with related accrued interest of
  $1,226.

  During the three months ended June 30, 2002, the Company borrowed from
  shareholders of the Company's $50,000, $66,222 and $72,818, respectively.
  These notes are payable on demand and accrue interest at a rate of prime
  plus 1%.  At June 30, 2002, the Company had accrued interest of $32, $840
  and $843 on the notes respectively.  Subsequent to the three months ended
  June 30, 2002 the Company borrowed and additional $9,406 from  a
  shareholder.

NOTE 5   CAPITAL STOCK

  Preferred Stock - The Company has authorized 10,000,000 shares of preferred
  stock, $.001 par value. As of December 31, 2001, no shares were issued and
  outstanding.
                                9
<PAGE>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5   CAPITAL STOCK [Continued]

  Common Stock - During the three months ended March 31, 2002, the Company
  issued 19,067 restricted shares of the Company's common stock at $.36 to
  $.66 per share, for consulting services valued at $8,580. The restricted
  stock issued was valued at the closing bid less 50% attributable to the
  transferability restrictions of the stock.

  During the three months ended June 30, 2002, the Company issued 18,078
  restricted shares of the Company's common stock at $.90 to $1.20 per share,
  for consulting services valued at $20,440. The restricted stock issued was
  valued at the closing bid.

  In connection with the private placement of 671,500 shares of common stock
  issued during 2001, the Company is recording a 1% penalty per month,
  beginning November 26, 2001, for delays in the effectiveness of registering
  said shares.   As of March 31, 2002 the Company has included $63,575 in
  accounts payable said penalties

  Warrants   As of June 30, 2002, the Company had outstanding 1,788,076
  warrants to purchase shares of common stock at $.25 to $2.00 expiring at
  various times through May 30, 2006. During the three months ended June 30,
  2002, no warrants were granted, exercised, forfeited, or cancelled.

NOTE 6   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
  June 30, 2002 operating loss carryforwards of approximately $4,800,000
  which may be applied against future taxable income and which expires in
  various years through 2022.

  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 and
  significant changes in the ownership of the Company, a valuation allowance
  has been established equal to the tax effect of the loss carryforward and,
  therefore, no deferred tax asset has been recognized for the loss
  carryforward.  The net deferred tax asset is approximately $1,632,000 as of
  June 30, 2002, with an offsetting valuation allowance of the same amount.
  The change in the valuation allowance for the year ended June 30, 2002 is
  approximately $232,000.
                                10
<PAGE>
WIZZARD SOFTWARE CORPORATIONAND SUBSIDIARY

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7   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:
                                      For the Three       For the Six
                                     Months Ended         Months Ended
                                       June 30,             June 30,
                                  ____________________  _______________
                                    2002     2001        2002      2001
                                  ____________________  _______________
  Earnings (loss) from continuing
  operations available to common
  shareholders (numerator)        $(208,844) $(465,797) $(353,338) $(693,175)
                                  __________ _________  _________  _________
  Weighted average number of common
  shares outstanding during the
  period used in loss per share
  (denominator)                   17,140,588 16,239,517 17,131,278 15,681,853
                                  __________ __________ __________ __________


  At June 30, 2002 and 2001, the Company had 1,788,076 and 1,173,076 warrants
  outstanding to purchase common stock of the Company at $.25 to $2.00 per
  share (See Note 7), and a convertible note payable wherein the holder could
  convert the note into a minimum of 470,000 and 0 shares of common stock (See
  Note 4) which were not included in the loss per share computation because
  their effect would be anti-dilutive.

NOTE 8   GOING CONCERN

  The accompanying consolidated financial statements have been prepared in
  conformity with generally accepted accounting principles of the United
  States of America, which contemplate continuation of the Company as a going
  concern.  However, the Company has incurred significant losses from
  inception, has current liabilities in excess of current assets 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 consolidated
  financial statements do not include any adjustments that might result from
  the outcome of these uncertainties.

NOTE 9   SUBSEQUENT EVENTS

  Subsequent to the three months ended June 30, 2002 the Company borrowed an
  additional $9,406 from the shareholder.  The note are payable on demand and
  accrue interest at a rate of prime plus 1%.
                                11
<PAGE>
Item 2.   Management's Discussion and Analysis or Plan of Operation.
          ----------------------------------------------------------

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

     Over the next 12 months we plan to continue on our new business direction
focusing our efforts on speech recognition programmers and businesses
interested in incorporating and utilizing speech recognition in their
companies. We plan to continue to expand our efforts in attracting speech
recognition programmers and companies to use our VoiceTools as well as our
customized programming and consulting services through the leads we generate
by distributing our Voice Tools product as a free 30 day trial. Currently, our
Voice Tools have been downloaded 45,000+ times through linking agreements we
have with CNET, Microsoft, IBM, and ZDnet as well as through sponsored links
on most popular search engines such as AOL, MSN, YAHOO, Google, Excite, Lycos,
etc. Additionally, we have recently expanded our agreement with IBM which now
names Wizzard as the Sole Distributor of IBM's ViaVoice SDK (programmer tools)
for speech recognition as well as the Sole Distributor for the IBM ViaVoice
speech recognition and text-to-speech engines.  IBM will maintain a web site
to filter leads to Wizzard for the purchase of licenses, the download of
evaluation versions as well as technical support.

We plan to grow our revenues after years through:

     * Cross selling our voice tools, custom speech recognition programming
       services, speech recognition consulting services, technical support
   packages and commercial distribution licenses to speech recognition
engines to the customers generated by lead through the download of our
Voice Tools as well as leads from our IBM relationship.

In order to do so our Company plans:

     * The expansion of our distribution of our Voice Tools

     * Adding more sales personnel to pursue speech recognition consulting
   service contracts.

     * Adding more programmers to service custom speech recognition
development contracts.

     * Growing marketing efforts for our EnvoxDevelopers.com joint venture,
       Medbuilder toolkit and IBM ViaVoice speech recognition and
       text-to-speech engines.

     Currently, we require approximately $65,000 per month to stay in
operation. This is less than the $83,000 net cash used by operating activities
in 2001, principally due to a reduction in the number of employees and related
expenses.

     Our present cash on hand will last us only through the next two months.
After that, we may have to curtail operations if we are not successful in our
fund raising efforts.  This could have an adverse effect on our future
prospects.

     In order to fund operations the company plans to raise $2.0M in equity
capital. We plan to conduct a private placement of our stock but we can not
guarantee that we will be successful in these efforts.  In addition, we 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
operations.

     Our Independent Auditor's Report contains a "going concern" qualification
because we have not yet established profitable operations, have incurred
significant losses since our inception, our current liabilities exceed our
current assets at the time of their report and we had a stockholders' deficit
at the time of their report. We still have yet to establish profitable
operations and have and continue to incur losses on our operations, along with
not having sufficient cash on hand for intended operations for the next 12
months.

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

     During the second quarter of 2002, the Company recorded revenues of
$44,089, an 8.5% increase of from $40,354 for the second quarter of 2001. The
increase in Q2 2002 was due to further market penetration of the Company's
Voice Tools product as well as the new relationship with IBM that allows the
company to sell IBM's ViaVoice runtime speech recognition and TTS engines.
For the six months ending June 30 of 2002 the Company recorded revenues of
$98,703 a 38% increase from $61,146 in the six months ending June 30, 2001.

     During the second quarter of 2002, the Company had a cost of goods sold
of $57,078 versus $19,020 in the first quarter of 2001.  The increase in COGS
is attributed in most part to $30,884 in non-cash amortization costs for the
Speech System and Memorandum of Understanding acquisition.  For the six months
ended June 30, 2002, the Company recorded a cost of goods sold of $92,412
versus $25,577 for the six months ended June 30, 2001.  The increase in COGS
is attributed in most part to $59,581 in non-cash amortization costs for the
speech System and Memorandum of Understand acquisition.

     During the second quarter of 2002, the Company recorded total operating
expenses of $189,299, a 61% decrease from $487,131 in the second quarter of
2001.  The is primarily attributable to the non cash expense of $350,000 for
stock issued for consulting services expensed during the second quarter of
2001.  General and Administrative costs were $186,806 versus $471,671 a year
ago and Selling expenses were $2,493 versus $15,460 a year ago.  For the six
months ended June 30, 2002 the Company had total expenses of $347,969 versus
$712,846 for the six months ended June 30, 2001. The is primarily attributable
to the non cash expense of $350,000 for stock issued for consulting services
expensed during the second quarter of 2001.  The company further reduced its
sales staff and sales efforts during the reorganization and acquisition
periods of 2001.  This reduction in expenses was a planned event by management
in its efforts to decrease costs and focus on potentially more profitable
segments of the speech industry, that being from the consumer market to
marketing new custom programmed software products and consulting services to
software programmers and businesses.

     During the second quarter of 2002, the Company had a Loss from Operation
of $202,288, a 57% decrease from $465,797 in the second quarter of 2001.  For
the six months ended June 30, 2002, the company had a Loss from Operations of
$341,678, a decrease of 50% versus a Loss from Operations of $677,277 for the
six months ended June 30, 2001.  The company attributes this decrease directly
to the afore mentioned $350,000 non cash expense and the change in customer
focus from marketing its IVA product to the consumer market to marketing new
products and services to software programmers and businesses.

     During the second quarter of 2002, the Company had Other Expenses,
primarily interest expense of $6,556 versus $0 in the same quarter of 2001.
For the six months ended June 30, 2002, the Company had Other Expenses of
$11,660 versus $15,898 in the six months ended June 30, 2001.

     During the second quarter of 2002, the Company had a Net Loss of
$208,844, a 55% decrease from $465,797 in the second quarter of 2001.  For the
six months ended June 30, 2002, the Company had a Net Loss of 353,338, a 49%
from $693,175 for the six months ended June 30, 2001.

     During the second quarter of 2002, the Company had a Loss per Common
Share of .01 versus .03 for the second quarter in 2001.  For the six months
ended June 30, 2002, the Company had a Loss per Common Share of .02 vs. .04 in
the six months ended June 30, 2001.

Liquidity and Capital Resources.
--------------------------------

       At June 30, 2002, the Company had working capital deficit of $273,666.
Management has financed current operations through shareholder loans and
current operations efforts. Management plans to issue common stock to raise
additional capital to cover this deficit and ongoing operations. There is no
guarantee the company will be successful in raising additional funds.

     For the six months ended June 30, 2002, the Company incurred $29,008 in
non-cash expenses for legal services rendered versus $350,000 non-cash
expenses a year ago for consulting services.

     For the six months ended June 30, 2002, the Company used $162,133 in net
cash for operations versus $352,292 for the same period a year ago. This was
due to a reduction in operational expenses as well as the ability for the
company to use its stock to pay for services.

     For the six months ended June 30, 2002, the Company raised $189,040 from
financing activities versus $357,073 in the six months ended June 30, 2001.

     For the six months ended June 30, 2002, the Company borrowed an
additional $189,040 to finance operations and issued 37,145 restricted shares
of common stock for $29,008 in legal services.

     Safe Harbor Statement.
     ----------------------

     Statements made in this Form 10-QSB which are not purely historical are
forward-looking statements with respect to the goals, plan objectives,
intentions, expectations, financial condition, results of operations, future
performance and business of the Company, including, without limitation, (i)
our ability to gain a larger share of the speech recognition software
industry, our ability to continue to develop products acceptable to that
industry, our ability to retain our business relationships, and our ability to
raise capital and the growth of the speech recognition software industry, and
(ii) statements preceded by, followed by or that include the words "may",
"would", "could", "should", "expects", "projects", "anticipates", "believes",
"estimates", "plans", "intends", "targets" or similar expressions.

     Forward-looking statements involve inherent risks and uncertainties, and
important factors (many of which are beyond the Company's control) that could
cause actual results to differ materially from those set forth in the
forward-looking statements, including the following, in addition to those
contained in the Company's reports on file with the SEC: general economic or
industry conditions, nationally and/or in the communities in which the Company
conducts business, changes in the interest rate environment, legislation or
regulatory requirements, conditions of the securities markets, changes in the
casino industry, the development of products that may be superior to the
products offered by the Company, demand for financial services, competition,
changes in the quality or composition of the Company's products, our ability
to develop new products, our ability to raise capital, changes in accounting
principals, policies or guidelines, financial or political instability, acts
of war or terrorism, other economic, competitive, governmental, regulatory and
technical factors affecting the Company's operations, products, services and
prices.

     Accordingly, results actually achieved may differ materially from
expected results in these statements.  Forward-looking statements speak only
as of the date they are made.  The Company does not undertake, and
specifically disclaims, any obligation to update any forward-looking
statements to reflect events or circumstances occurring after the date of such
statements.

                   PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.
          ------------------

          None; not applicable.

Item 2.   Changes in Securities and Use of Proceeds.
          ------------------------------------------

          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.
          ------------------

          None; not applicable.

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

          (a)  Exhibits.

               Annual Report for the year ended December 31, 2001.*

          (b)  Reports on Form 8-K.

               None.

         *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:  8/19/02                           By /s/ Christopher J. Spencer
      --------                             ---------------------------
                                           Christopher J. Spencer, Director,
                                           CEO, President and Treasurer

Date:  8/19/02                           By /s/ Armen Geronian
      --------                             ------------------------
                                           Armen Geronian, Director
                                           Secretary

Date:  8/19/02                           By /s/ Gordon Berry
      --------                             ------------------------
                                           Gordon Berry, Controller and
                                           Director

Date:  8/19/02                           By /s/ Alan Costilo
      --------                             ------------------------
                                           Alan Costilo, Director
<PAGE>

                    CERTIFICATION PURSUANT TO
                     18 U.S.C. SECTION 1350,
                      AS ADOPTED PURSUANT TO
          SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly report of Wizzard Software Corporation (the
"Company") on Form 10-QSB for the period ending June 30, 2002, as filed with
the Securities and Exchange Commission on the date hereof (the "Report"), I,
Christopher J. Spencer, CEO, President, Treasurer and director of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and
belief:

     (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

     (2)  The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.

Dated: 8/19/02                               /s/ Christopher J. Spencer
      ---------------                       -------------------------------
                                            CEO, President, Treasurer and
                                            director