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, 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:

                                June 30, 2001

                          Common - 16,885,791 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, 2001
<PAGE>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                 (Formerly Balanced Living, Inc.)



                             CONTENTS

                                                                     PAGE


        Unaudited Condensed Consolidated Balance Sheet,
              June 30, 2001                                            2


        Unaudited Condensed Consolidated Statements of
              Operations, for the three and six months ended June 30,
              2001 and 2000                                            3


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


        Notes to Unaudited Condensed Consolidated Financial
              Statements                                          6 - 11
<PAGE>





ACCOUNTANTS' REVIEW REPORT



Board of Directors
WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
(Formerly Balanced Living, Inc.)
Pittsburgh, Pennsylvania

We have reviewed the accompanying condensed consolidated balance sheet of
Wizzard Software Corporation (Formerly Balanced Living, Inc.) and Subsidiary
as of June 30, 2001, and the related condensed consolidated statements of
operations and cash flows for the three and six months ended June, 30 2001 and
2000.  We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants.  All information included
in these financial statements is the representation of the management of
Wizzard Software Corporation and Subsidiary.

A review consists principally of inquiries of Company personnel and analytical
procedures applied to financial data.  It is substantially less in scope than
an audit in accordance with generally accepted auditing standards, the
objective of which is the expression of an opinion regarding the financial
statements taken as a whole.  Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that
should be made to the condensed consolidated financial statements reviewed by
us, in order for them to be in conformity with generally accepted accounting
principles.

The accompanying condensed consolidated financial statements have been
prepared assuming the Company will continue as a going concern.  As discussed
in Note 11 to the financial statements, the Company has incurred significant
losses in recent years and has current liabilities in excess of current
assets, raising substantial doubt about the Company's ability to continue as a
going concern.  Management's plans in regards to these matters are also
described in Note 11.  The financial statements do not include any adjustments
that might result from the outcome of these uncertainties.


/S/Pritchett, Silver & Hardy
PRITCHETT, SILER & HARDY, P.C.

August 8, 2001
Salt Lake City, Utah
<PAGE>
<TABLE>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                 (Formerly Balanced Living, Inc.)

          UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

                              ASSETS
<CAPTION>

                                                                JUNE 30,
                                                                  2001
                                                              ___________
<S>                                                          <C>
CURRENT ASSETS:
  Cash in bank                                                $     1,111
  Accounts receivable                                                 313
  Inventory                                                       122,309
  Prepaid Expenses                                                      -
                                                              ___________
        Total Current Assets                                      123,733
                                                              ___________

PROPERTY & EQUIPMENT, net                                         153,661
                                                              ___________
OTHER ASSETS:
  Prepaid expenses                                                291,952
  Intangible assets, net                                          562,771
  Deposits                                                          2,000
                                                              ___________
        Total Other Assets                                        856,723
                                                              ___________
                                                              $ 1,134,117
                                                              ___________

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
  Accounts payable                                            $    42,819
  Accrued expenses                                                 63,627
                                                              ___________
        Total current liabilities                                 106,446
                                                              ___________

LONG  TERM OBLIGATIONS:
  Loans payable   related party                                     7,100
                                                              ___________
        Total liabilities                                         113,546
                                                              ___________
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,
   16,885,791 and shares
   issued and outstanding, respectively                            16,886
  Capital in excess of par value                                4,316,136
  Retained Deficit                                             (3,312,451)
                                                              ___________
        Total Stockholders' Equity (Deficit)                    1,020,571
                                                              ___________
                                                              $ 1,134,117
                                                              ___________
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
<PAGE>
<TABLE>
           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,
                               ____________________  ____________________
                                 2001       2000       2001       2000
                               _________  _________  _________  _________
<S>                            <C>        <C>        <C>       <C>
NET SALES                       $40,354  $   82,133  $  61,146  $ 131,564

COST OF GOOD SOLD                 8,253      26,828     14,810     43,853
                              _________   _________  _________  _________
  Gross Profit                   32,101      55,305     46,336     87,711
                              _________   _________  _________  _________

EXPENSES:
  General and administrative    168,105     377,343    376,937    655,244
  Selling expenses               38,127     115,701     55,010    142,143
                              _________   _________  _________  _________
        Total Expenses          206,232     493,044    431,947    797,387
                              _________   _________  _________  _________
INCOME (LOSS) FROM OPERATIONS  (174,131)   (437,739)  (385,611)  (709,676)
                               ________   _________  _________  _________

OTHER INCOME (EXPENSE):
  Other income                        -          21      1,917         21
  Interest expense                    -     (10,401)   (17,815)   (10,401)
                              _________   _________  _________  _________
        Total Other Income
        (Expense)                     -     (10,380)   (15,898)   (10,380)
                              _________   _________  _________  _________

INCOME (LOSS) BEFORE INCOME
TAXES                          (174,131)   (448,119)  (401,509)  (720,056)

CURRENT TAX EXPENSE                   -           -          -          -

DEFERRED TAX EXPENSE                  -           -          -          -
                              _________   _________  _________  _________

NET (LOSS)                    $(174,131)  $(448,119) $(401,509) $(720,056)
                              _________   _________  _________  _________

(LOSS) PER COMMON SHARE       $    (.01)  $    (.03) $    (.03) $    (.05)
                              _________   _________  _________  _________
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
<PAGE>
<TABLE>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY
                 (Formerly Balanced Living, Inc.)

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>


                                                          For the Six
                                                          Months Ended
                                                            JUNE 30,
                                                     ______________________
                                                       2001          2000
                                                     __________ ___________
<S>                                                 <C>        <C>
Cash Flows from Operating Activities:
  Net loss                                          $  (401,509) $ (720,056)
  Adjustments to reconcile net loss to net cash
  used by operating activities:
    Depreciation and amortization expense                30,909      18,786
    Change in assets and liabilities:
      (Increase) in accounts receivable                  31,986      (2,427)
      Decrease in Inventory                              (1,286)      3,767
      Increase (decrease) in accounts payable
        and accrued expense                             (67,419)    (22,101)
                                                     __________  __________
        Net Cash Provided (Used) by Operating
        Activities                                     (407,319)   (722,031)
                                                     __________  __________
Cash Flows from Investing Activities:
  Purchase of property & equipment                      (22,896)    (25,749)
  Increase in notes receivable                          (34,917)          -
                                                     __________  __________
        Net Cash (Used) by Investing Activities         (57,813)    (25,749)
                                                     __________  __________
Cash Flows from Financing Activities:
  Issuance of common stock                              489,000     428,759
  Payments on long-term obligation                     (255,000)          -
  Proceeds from long-term obligation                          -     500,000
  Proceeds from note payable   related party              7,100           -
  Payments on note payable - related party                    -        (854)
                                                      _________  __________
        Net Cash Provided by Financing Activities       241,100     927,905
                                                      _________  __________
Net Increase (Decrease) in Cash                        (224,032)    180,125

Cash at Beginning of Period                             225,143     153,665
                                                     __________  __________
Cash at End of Period                                $    1,111  $  333,790
                                                     __________  __________

Supplemental Disclosures of Cash Flow Information:
  Cash paid during the periods for:
    Interest                                         $        -  $        -
    Income taxes                                     $        -  $        -
</TABLE>
<PAGE>
(Continued)
           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 three 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.

  For the three months ended June 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 Corporation 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 June 30, 2001 and for the three and six months ended June 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 June 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 June 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.

  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.

  Revenue Recognition - The Company sells software products. Revenue is
  recognized, net of discount and allowances, at the time of product
  shipment.
<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)

  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 $11,488 and $1,446 was recorded for the periods
  ended June 30, 2001 and 2000.

  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 10).

  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 $58,423 and $10,051 for the period ending June 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 June 30, 2001 the
  Company has recorded $291,952 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.

NOTE 2 - ACQUISITION

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

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 - INVENTORY

  Inventory consisted of the following at June 30, 2001.
                                                          June 30,
                                                           2001
                                                       ____________

       Raw Materials                                   $     49,159
       Finished Goods                                        73,150
                                                       ____________
                                                       $    122,309
                                                       ____________

NOTE 4 - PROPERTY & EQUIPMENT

  The following is a summary of property and equipment:
                                                          June 30,
                                                            2001
                                                       ____________

       Furniture, fixtures and equipment               $    200,906
       Leasehold improvements                                36,482
       Software                                              40,743
                                                       ____________
                                                            278,131
       Accumulated Deprecation                             (124,470)
                                                       ____________
           Property & Equipment, net                   $    153,661
                                                       ____________

  Depreciation expense for the three months ended June 30, 2001 and 2000 was
  $16,881 and $15,417, respectively.

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 31, 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.
  <PAGE>
            WIZZARD SOFTWARE CORPORATIONAND SUBSIDIARY
                 (Formerly Balanced Living, Inc.)

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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 June 30, 2001, the Company has accrued $63,652 in interest on
  this note payable.

  Related Party Note Payable - During the three months ended June 30, 2001, a
  shareholder loaned the Company $7,100.  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 offered to sell up to 9,000,000 shares of the Company's common
  stock at $1.00 per share under a confidential private offering of Common
  Stock.  As of June, 30, 2001, 671,500 shares were sold and issued under
  this offering.  As of June 30, 2001, the Company has offset $66,527 in
  costs against the offering.

  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 June 2001, the Company entered into a year advertising agreement
  through the issuance of 350,000 shares of common stock valued at $350,000
  for promotion of the Company advertising services.

  During May 2001, the Company received back and cancelled 532,500 shares of
  the Company common stock.
<PAGE>
            WIZZARD SOFTWARE CORPORATIONAND SUBSIDIARY
                 (Formerly Balanced Living, Inc.)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - CAPITAL STOCK (Continued)

  Warrants - During April 2001, the Company issued 100,000 warrants to
  purchase the Company's common stock at $2.00 per share for a period of 5
  years. As of June 30, 2001, the Company had issued 65,000 warrants in
  connection with obtaining debt financing (See Note 6).  The warrants are
  exercisable at $1.25 per share and expire on August 10, 2005. As of June
  30, 2001, none of these warrants had been exercised.

  The Company had issued an additional 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 June 30,
  2001, none of these warrants had been exercised.

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
  June 30, 2001 operating loss carryforwards of approximately $3,300,000
  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
  $1,120,000 as of June 30, 2001, with an offsetting valuation allowance of
  the same amount.  The change in the valuation allowance for the period
  ended June 30, 2001 is approximately $148,000.

NOTE 9 - OPERATING LEASES

  The Company leases office space under an operating lease agreement. The
  lease calls monthly payments of $2,000 and expires on June 31, 2001.  The
  Company's future minimum rental under this operating lease amounts to $0 at
  June 30, 2001.  Rent expense for the six months ended June 30, 2001 was
  $12,000.
<PAGE>
            WIZZARD SOFTWARE CORPORATIONAND SUBSIDIARY
                 (Formerly Balanced Living, Inc.)

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10   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,
                                   __________________________________________
                                      2001     2000       2001      2000
                                   ____________________ _____________________
  Earnings (loss) from continuing
  operations available to common
  shareholders (numerator)         $(174,131) $(448,119) $(401,509)$(720,056)
                                   _________  _________  _________ _________
  Weighted average number of common
  shares outstanding during the
  period used in loss per share
  (denominator)                   16,239,517 15,401,782 15,681,853 15,401,782
                                  __________ __________ __________ __________

  At June 30, 2001, the Company had 1,173,076 warrants outstanding to
  purchase common stock of the Company at $1.00 to $2.00 per share (See Note
  7), which were not included in the loss per share computation because their
  effect would be anti-dilutive.

NOTE 11 - 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 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 financial statements do not include any adjustments that
  might result from the outcome of these uncertainties.
<PAGE>

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

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

     Wizzard (sometimes referred to herein as the "Company") is based
upon the simple premise that people want more control, customization and
convenience in their daily lives.  Founded in 1996, our focus is on providing
speech recognition solutions to both business and consumer end users.  By
doing so, Wizzard believes it can increase the user's productivity by making
the computer easier to use and more adaptable to the user's needs.  The idea
is that today's computers demand too much of the user's attention, when
attention is perhaps the user's most precious commodity.  Through the proper
application of speech recognition technology, along with other intelligent
interface technologies ("IITs"), Wizzard goes beyond the keyboard and enables
smarter, more efficient relationships between people and technology.  Our
products provide technology that makes computers listen to users to get things
done faster, easier and better.  Our products make technology easier to use by
verbally communicating with the user.  Our products add intelligence to
anticipate and assist in the user's everyday needs.  Our objective is to
enable a totally new kind of relationship between user and technology, to
provide better guidance, navigation, assistance, simplicity, productivity and
even fun....one user at a time.

     Wizzard believes that the market opportunity for speech recognition and
other IIT software is immense.  From consumers who do not know how to use
computers or do not type very well, to business users whose time is their most
precious asset, IIT solutions, including speech recognition, have proven to be
an appealing addition to today's common user interface of the mouse and
keyboard.  As Bill Gates said, "speech recognition is the future of
computers."  Moreover, The Gartner Group listed speech recognition as one of
the top technologies to watch in 1999 and beyond, and predicted that by 2001
speech recognition will be part of the computer environment for more than 30%
of the office workforce.  Recent uses of speech recognition by Ford, Apple,
Motorola, E*Trade, and many Fortune 500 companies have begun to justify these
claims.  That is why Wizzard is committed to making today's keyboard obsolete.
We believe the keyboard represents the weak link to a computer's true power as
an extension of the user's thinking.  We intend to give users of technology a
better way to have technology serve them.

     From basic applications, such as e-mail and letter dictation, to
sophisticated "Personal Intelligent Assistants," to the application of speech
recognition in business software and Internet web sites, we believe that IIT's
ultimately will change the way that users interact with technology.  In fact,
it is already beginning to happen.  Nearly all software applications or
Internet web sites can be enhanced to provide a faster or easier way of
interaction through the addition of speech recognition.  Over 125 million
users of computers in the U.S. stand to see their lives enhanced once a more
intelligent and robust form of interaction with their computers is achieved.

     Historically, speech recognition applications have been limited in
their uses and have not traditionally delivered on their claims of a better,
faster or easier user interface.  This provides Wizzard with a marketplace
opportunity that we have been developing over the last four years.  By
applying speech recognition in a user-friendly, interactive and simple manner,
we have created speech recognition applications that work.  This has been done
primarily through the addition of text-to-speech and "Wizzard" intelligence.
Our objective is to be the "brain" that drives this new technology in a manner
that will make a difference, and deliver on the industry's promise.  Demand
for speech recognition applications is growing in many areas and we believe
the time has arrived to capitalize and profit from our years of hard work.

     Wizzard plans to establish market share, grow our technology and
become the "users' choice" for an easier way to interact with their
technology.  After meeting major milestones described in this Wizzard
Information, Wizzard plans to raise additional capital which will enable us to
solidify our position as a leader in the industry and become a standard in the
speech recognition industry for consumers and businesses, and a key component
in Internet software infrastructure technology.

          The Company.  Wizzard's first speech recognition product,
          VoicE-mail, was also the world's first e-mail application
          completely speech recognition enabled.  Users could send, retrieve
          and dictate e-mail sessions without ever touching their keyboard.
          Launched into the retail channel, VoicE-mail was quickly sold
          through over 2,700 retail outlets, including CompUSA, Best Buy and
          Office Depot.  Wizzard has raised over $2,500,000 in equity
          capital since it's inception to steadily grow the Company's
          product line and infrastructure to include five products, a
          sophisticated Internet/Intranet ordering system and 15 employees.
          The Company has established a strong Internet presence and initial
          penetration into several sales channels.  Wizzard's partners
          include IBM, Microsoft, speech recognition market leader Lernout &
          Hauspie, and Internet web sites Yahoo, Quixtar.com and Amazon.com.
          Current products being sold allow end users to dictate e-mail,
          letters and Internet sessions through AOL, CompuServe and MSN.
          End users can perform language translation between many different
          languages and even pay their monthly bills by speaking to their
          computer.  We have created technology which we believe allows us
          to create speech recognition-enhanced applications better and
          faster than many of our competitors and plan to use a portion of
          the proceeds of this offering to gain mass market penetration.

          The Industry.  Currently, the speech recognition industry is
          broken into three distinct technical segments.  They are:

               "Telephony" - Allows users to call into a speech recognition
               server where they can converse with an "automated attendant"
               to retrieve information such as stock quotes, travel
               schedules and virtual receptionists which route calls to
               final destinations.

               "Appliance" - Allows users to interact through speech
               recognition with appliances such as handheld computers,
               toys, automobiles and other non-desktop PC type products.

               "Desktop" - Allows users to interact through speech
               recognition with personal computers for general dictation of
               forms, letters, e-mail, Internet web site interaction and a
               myriad of business software applications.

     Wizzard focuses on the Desktop segment of the industry, but
envisions a time in which the combination of all of the above-mentioned
segments could create an industry powerhouse.  A Desktop speech recognition
company will be a key component of any company trying to put together a
dominant speech recognition strategy, which creates an attractive partnering
or acquisition model of which Wizzard can be the architect or benefactor.

          The Technology.  In addition to speech recognition, other key
          technologies make up what are often called IIT's.  Because these
          technologies are used in conjunction with speech recognition, they
          are often overlooked when speaking of the "speech recognition"
          industry.  They include:

               Text-To-Speech ("TTS") - Text-To-Speech is a technology that
               enables Desktop PC's, Telephony products and Appliances to
               "talk back" to the user, using computer or human generated
               audio signals that can be heard by the user.

               Natural Language Processing ("NLP") - Natural Language
               Processing allows for the processing of the user's commands
               and generates a response or action based on what is said.
               This is also commonly referred to as "Artificial
               Intelligence," "Brain Space" and "Word Spotting."

               Avatars - A picture or a character on a screen that can be
               human-like or cartoon-like and acts as a user interface.
               The Avatar interacts with the user, often through TTS and
               some form of animation.

               Other forms of IIT's are handwriting recognition, optical
               character recognition and facial and gesture recognition.

     Wizzard does not create speech recognition engines.  The Company
licenses these engines from its partners Dragon, Lernout & Hauspie, IBM and
Microsoft.  These companies license them to the Company for a royalty payment.

     Wizzard does not create TTS.  The Company licenses TTS engines
from partners Lernout & Hauspie, AccuVoice and others for a royalty payment.

     Wizzard does not create Avatars.  Wizzard contracts third party
developers to create Avatars based on the Microsoft Agent standard.  Wizzard
does own the Avatars created by these third parties.  Additionally, Wizzard
plans to create other Avatars based on technologies other than the Microsoft
Agent standard, such as Lifef/x and Haptek, giving our end users the freedom
of choice.  Currently, the Company distributes 20 Avatars of which it has
commissioned, or are provided by their owners free of charge, to distribute
with our products.

     Wizzard has created its own NLP engine.  This allows us to provide
intelligence to speech recognition based applications and perform actions
based on the user's spoken commands.  This NLP engine, or "Brain," as we like
to call it, is the key component to the future of Wizzard's intelligent speech
recognition applications and was created in our Verbal Computing Laboratories
over the past three years.  This technical component is embedded in both the
PC and Internet based software application infrastructure and positions
Wizzard as a leader in this area often referred to as "Brain Space."

     Wizzard has combined the Brain with a unique Mutiplex Development
Platform (Multiplexor), which allows us to add IITs, including speech
recognition, to almost any software application and Internet web site in a
matter of weeks.  We believe that this gives us a significant advantage over
many of our competitors and allows us to customize our software to the user's
needs.  We believe that the Multiplexor is so powerful that, some day, we
envision users of our products to be able to come to our Internet web site and
enter what they want their intelligent speech recognition application to do,
based on their defined specifications, and have it running in their computers
within minutes.  We believe the Multiplexor positions Wizzard at the forefront
of the PC and Internet-based speech recognition software infrastructure market
and allows us to provide our customers with outstanding, customized service.

     By integrating speech recognition, TTS and, on occasion, Avatars,
with Wizzard's NLP by way of the Multiplexor, we are able to create advanced,
intelligent speech recognition applications which have interactivity and can
allow the user to get more accomplished in a personable and convenient way.
We are aware of no other company that is able to integrate these multiple
technologies into a product and bring it to market.  Wizzard has been
providing this type of advanced speech recognition applications for well over
a year.

          Our Products.  We believe that a company is defined by the
          customers it services, not by the products it creates.  By forming
          a strong relationship with our customers, we seek to provide them
          with speech recognition solutions for all aspects of their
          computing lives.  Whether it is for work or play, at home or at
          the office, we plan to be there to provide an easier to use and
          more productive way to interact with their technology.

          Interactive Voice Assistant 2.0 ("IVA")

               Wizzard's core focus at this time is our IVA product.  IVA
               is a software product which is designed to turn a computer
               into a personal talking intelligent assistant.  A user puts
               a headset microphone on and launches IVA.  An Avatar of the
               user's choice appears on the screen and greets him.  The
               user can then verbally tell the personal assistant what he
               would like to do, such as check or create an e-mail, dictate
               a letter, go to an Internet site, get a stock quote, pay
               monthly bills, chat with friends online, translate documents
               into different languages, etc.; all being done more quickly
               and easily by using his voice.  Wizzard has created over 28
               different personal assistants that plug into the core IVA
               product, and is expanding the IVA family everyday.  Using
               our Multiplexor, we can customize an assistant to just about
               any software program or web site in a matter of a few weeks.
               Our goal is to have 50 assistants by the end of 2000, giving
               our IVA customers a wide range of capabilities and services.

          Current IVA Assistants Modules -

               * Presentation Assistant for MS PowerPoint
               * Dictation Assistant for MS Word, Word Perfect and MS Works
               * Online Assistant for America Online, CompuServe and MSN
               * Internet Assistant for Netscape and Internet Explorer
               * E-mail Assistant for Eudora Pro, MS Outlook, MS Outlook
                 Express, Hotmail, Yahoo!, Netscape, Microsoft Exchange,
                 Lotus Notes, Eudora Web and Juno
               * Instant Messenger Assistant for ICQ, AOL and MSN Messenger
               * Assistant for MIRC - Relay Chat
               * Translation Assistant for Global Translator Pro
               * Conversation Assistant
               * Games Assistant
               * CoolSpeak.com Personal Voice Assistant
               * Crosswalk.com Personal Voice Assistant
               * Financial Assistant for Quicken

     The core IVA product, which ships with a headset microphone, speech
recognition engine, Avatars and a TTS engine currently sells for $75.00.  Each
plug-in module, or assistant, currently sells for $15.00 each.  Wizzard
believes it is well positioned to capitalize on the growth of the speech
recognition market if it achieves mass-market penetration.

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

          At June 30, 2001, the Company had $123,733 in current assets and
$106,446 in current liabilities.  The Company had $40,354 and $82,133 in
revenues for the three months ended June 30, 2001 and 2000, and $206,232 and
$493,044 in total expenses, for net losses of ($174,131) and ($448,119),
respectively.

          The Company had $61,146 and $131,564 in revenues for the six months
ended June 30, 2001 and 2000, and $431,947 and $797,387 in operating expenses,
for net losses of ($401,509) and ($720,056), respectively.

          The Company attributes the decline in quarterly revenue to its
recent decision to emphasize the marketing of its speech recognition developer
tools to businesses, as compared to our prior emphasis on the consumer retail
sector of our $98.00 IVA product.  The Company feels that the new direction
will result in a quicker path to increased revenues.

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

          At June 30, 2001, the Company had $123,733 in current assets,
with current liabilities of $106,446.  Total stockholder's equity was
$1,020,571.

                   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.

          None; not applicable.

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 April 17, 2001, filed with the
               Securities and Exchange Commission on May 8, 2001.*

               8-K Current Report dated May 22, 2001, filed with the
               Securities and Exchange Commission on May 25, 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: 8/14/01                            By/s/Chris Spencer
      -------                            ------------------------
                                           Chris Spencer, Director
                                             and President

Date: 8/14/01                            By/s/Armen Geronian
      -------                            ------------------------
                                           Armen Geronian, Director
                                             Secretary