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 September 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:

                            October 30, 2002

                        Common - 17,165,750 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

             UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                           SEPTEMBER 30, 2002

<PAGE>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY


                                   CONTENTS

                                                                 PAGE


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

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

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

- Notes to Unaudited Condensed Consolidated Financial
    Statements                                               6 - 11



<PAGE>
<TABLE>
<CAPTION>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY

                UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

                                    ASSETS

                                                            September 30,
                                                                 2002

<S>                                                          <C>
CURRENT ASSETS:

     Cash in bank                                            $     27,123
     Accounts receivable                                           22,907
     Inventory                                                     24,480
     Prepaid Expenses                                              15,780
                                                             ------------
      Total Current Assets                                         90,290
                                                             ------------
PROPERTY & EQUIPMENT, net                                         110,774
                                                             ------------
OTHER ASSETS:
     Intangible assets, net                                       418,970
     Deposits                                                       2,000
                                                             ------------
      Total Other Assets                                          420,970
                                                             ------------
                                                             $    622,034
                                                             ============
                LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:

     Accounts payable                                        $    119,625
     Accrued expenses                                              90,257
     Notes payable - related party                                338,718
                                                             ------------
      Total current liabilities                                   548,600
                                                             ------------
LONG-TERM OBLIGATIONS
     Loans payable-related party                                  285,000
                                                             ------------
      Total liabilities                                           833,600
                                                             ------------
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, 17,204,251 shares issued and outstanding         17,204
     Capital in excess of par value                             4,970,493
     Retained (Deficit)                                        (5,199,263)
                                                             ------------
      Total Stockholders' Equity (Deficit)                       (211,566)
                                                             ------------
                                                             $    622,034
                                                             ============
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statement.
                                2
<PAGE>
<TABLE>
<CAPTION>
           WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY

    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
                                  For the Three           For the Nine
                                  Months Ended            Months Ended
                                  September 30,           September 30,
                               ____________________  ____________________
                                 2002       2001       2002       2001
                               _________  _________  _________  _________
<S>                            <C>        <C>        <C>       <C>
NET SALES                       $ 49,940  $  11,119  $ 148,643  $  72,265

COST OF GOOD SOLD                33,281      40,743    125,693     55,553
                              _________   _________  _________  _________
  Gross Profit                   16,659     (29,624)    22,950     16,712
                              _________   _________  _________  _________

EXPENSES:
  General and administrative    243,399     500,770    586,901    877,707
  Selling expenses               28,088      95,549     32,555    150,559
                              _________   _________  _________  _________
        Total Expenses          271,487     596,319    619,456  1,028,266
                              _________   _________  _________  _________
INCOME (LOSS) FROM OPERATIONS  (254,828)   (625,943)  (596,506)(1,011,554)
                               ________   _________  _________  _________

OTHER INCOME (EXPENSE):
  Other income                        -           -          -      1,917
  Interest expense               (8,804)   (251,135)   (20,464)  (268,950)
                              _________   _________  _________  _________
        Total Other Income
        (Expense)                (8,804)   (251,135)   (20,464)  (267,033)
                              _________   _________  _________  _________

INCOME (LOSS) BEFORE INCOME
TAXES                          (263,632)   (877,078)  (616,970)(1,278,587)

CURRENT TAX EXPENSE                   -           -          -          -

DEFERRED TAX EXPENSE                  -           -          -          -
                              _________   _________  _________  _________
NET (LOSS)                    $(263,632)  $(877,078) $(616,970)(1,278,587)
                              _________   _________  _________  _________

(LOSS) PER COMMON SHARE       $    (.01)  $    (.05) $    (.04) $    (.08)
                              _________   _________  _________  _________
</TABLE>
The accompanying notes are an integral part of these unaudited condensed
consolidated financial statements.
                                3
<PAGE>
<TABLE>
<CAPTION>

                 WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY

          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                      For the Nine
                                                      Months Ended
                                                      September 30,
                                                   2002           2001
<S>                                             <C>            <C>
Cash Flows from Operating Activities:
 Net loss                                       $ (616,970)    $  (1,278,587)
 Adjustments to reconcile net loss
 to net cash used by operating activities:
  Depreciation and amortization expense            115,553            69,402
  Non-cash expense                                  69,978           790,740
  Change in assets and liabilities:
    (Increase) in accounts receivable              (20,907)              314
    Decrease in Inventory                            4,061               615
    Decrease in prepaid expenses                     3,637            (2,001)
    Increase (Decrease) in accounts payable         65,643           (61,558)
    Increase in accrued expenses                    20,492                 -
                                                ----------     -------------
      Net Cash (Used) by Operating Activities     (358,508)         (481,075)

Cash Flows from Investing Activities:
     Purchase of property & equipment               (6,905)          (22,997)
     Increase in notes receivable                        -           (34,917)
     Purchase of intangibles                           (82)                -
                                                ----------     -------------
       Net Cash (Used) by Investing Activities      (6,987)          (57,914)
                                                ----------     -------------
Cash Flows from Financing Activities:
     Proceeds from of common stock sales                 -           671,500
     Payment of stock offering costs                                 (66,527)
     Payments on long-term obligation                    -          (255,000)
     Proceeds from long-term obligation             50,000           250,000
     Proceeds from note payable
      - related party                              313,642            46,076
                                                ----------     -------------
   Net Cash Provided by Financing Activities       363,642           646,049
                                                ----------     -------------
Net Increase (Decrease) in Cash                     (1,853)          107,060
Cash at Beginning of Period                         28,976            54,143
                                                ----------     -------------
Cash at End of Period                           $   27,123     $     161,203
                                                ==========     =============
Supplemental Disclosures of
 Cash Flow Information:
     Cash paid during the periods for:
       Interest                                 $       -      $          -
       Income taxes                             $       -      $          -
</TABLE>
                           (Continued)
                                4
<PAGE>

             WIZZARD SOFTWARE CORPORATION AND SUBSIDIARY

          UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                           (Continued)

Supplemental Schedule of Noncash Investing and Financing Activities:

For the nine months ended September 30, 2002:

The Company issued 91,167 restricted shares of common stock for services
valued at $69,978, at prices ranging from $.72 to $1.20 per share.

For the nine months ended September 30, 2001:

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

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

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

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

The Company issued 531,000 share of common stock for cash of $500,500
and investor advances of $171,000, net of deferred stock offering cost
of $66,527.

The Company issued 100,000 shares of stock, valued at $83,500 for a one year
consulting agreement.

The Company issued 7,143 shares of stock, valued at $5,964 for consulting
expenses.

The Company issued 350,000 shares of stock, valued at $350,000 for public
relations service.

The Company issued warrants to purchase 60,000 shares of common stock with a
fair value of $6,441 in connection with a consulting agreement.

The Company issued warrants to purchase 500,000 shares of common stock with a
fair value of $99,243 in connection with a consulting agreement.

The Company issued warrants to purchase 540,000 shares of common stock at
$1.00 per share in exchange for 532,500 shares of common stock.  The Company
immediately cancelled these shares.

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 September  30, 2002.  At September  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 September  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 September 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 September 30, 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
September 30, 2002, the Company had no uninsured cash balances.

Inventory   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 to
thirty-nine 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 September 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 September 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 September 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. 142, "Goodwill
and Other Intangible Assets", SFAS No. 143, "Accounting for Asset Retirement
Obligations", SFAS No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets", SFAS No. 145, "Rescission of FASB Statements No. 4, 44,
and 64, Amendment of FASB Statement No. 13, and Technical Corrections", SFAS
No. 146, "Accounting for Costs Associated with Exit or Disposal Activities",
and SFAS No. 147, "Acquisitions of Certain Financial Institutions - an
Amendment of FASB Statements No. 72 and 144 and FASB Interpretation No. 9",
were recently issued.  SFAS No. 141, 142, 143, 144, 145, 146 and 147 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
September 30, 2002 have been reclassified to conform to the headings and
classifications used in the September 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 $86,313 and $57,555 was
recorded for the periods ended September 30, 2002 and 2001 and has been
included in cost of goods sold. The following is a summary of intangibles at
September 30, 2002:
                                                     Life   September 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                                    (158,110)
                                                                  _________
       Intangibles, net                                           $ 418,970
                                                                  _________

The remaining estimated aggregate amortization expense for next five years is
as follows at September:
        2003                                       $ 115,021
        2004                                         114,898
        2005                                         114,171
        2006                                          71,081
        2007                                           3,799
                                                   _________
                                                   $ 418,970
                                                   _________
                                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:
                                                       September 30,
                                                           2002
                                                       ____________

       Furniture, fixtures and equipment               $    207,544
       Leasehold improvements                                36,482
       Software                                              39,502
                                                       ____________
                                                            283,528
       Accumulated Deprecation                             (172,754)
                                                       ____________
       Property & Equipment, net                       $    110,774
                                                       ____________

Depreciation expense for the nine months ended September 30, 2002 and 2001 was
$29,240 and $19,427, 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 $67,500 in accounts payable for penalties
on the note at September 30, 2002.   As of September 30, 2002, the balance of
the note is $285,000 with related accrued interest payable of $19,634.

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 September 30, 2002, a balance of
$25,076 remained outstanding on the note with related accrued interest of
$1,226.

During the nine months ended September 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 September 30, 2002, the Company had accrued interest of $32, $840 and
$843 on the notes respectively.

NOTE 5   CAPITAL STOCK

Preferred Stock - The Company has authorized 10,000,000 shares of preferred
stock, $.001 par value. As of September 30, 2001, no shares were issued and
outstanding.
                                9
<PAGE>
            WIZZARD SOFTWARE CORPORATIONAND SUBSIDIARY

  NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5   CAPITAL STOCK [Continued]

Common Stock - During the nine months ended September 30, 2002, the Company
issued 90,217 shares of common stock for services rendered valued at $69,978,
at $.36 to $1.20 per share.

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 September 30, the Company has included $73,865 in accounts payable said
penalties

Warrants   As of September 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 nine months ended September 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
September 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 September 30, 2002, with an offsetting
valuation allowance of the same amount. The change in the valuation allowance
for the year ended September 30, 2002 is approximately $232,000.
                                10
<PAGE>
            WIZZARD SOFTWARE CORPORATION AND 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 Nine
                                   Months Ended             Months Ended
                                   September 30,            September 30,
                                ____________________   _____________________
                                    2002     2001          2002      2001
                                ____________________   _____________________
  Earnings (loss) from continuing
  operations available to common
  shareholders (numerator)      $(263,632) $(877,078)  $(616,970)$(1,278,587)
                                _________  _________   _________ ___________
  Weighted average number of
  common shares outstanding
  during the period used in
  loss per share  (denominator) 17,155,665 16,921,894 17,150,229  16,469,475
                                __________ __________ __________ ___________

At September 30, 2002 the Company had 1,788,076 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 570,000 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.

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

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.
                                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 corporate and commercial speech recognition
programmers and mainstream 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 50,000+
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 that 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.

     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 third quarter of 2002, the Company recorded revenues of
$49,940, a 450% increase of from $11,119 for the third quarter of 2001. The
increase in Q3 2002 was due the increase revenues from custom programming and
consulting services and the new relationship with IBM that allows the company
to sell IBM's ViaVoice runtime speech recognition and TTS engines in an
exclusive agreement with IBM to OEM customers in Europe, North America, South
America, Africa and the Middle East.  For the nine months ending September 30
of 2002 the Company recorded revenues of $148,643 a 100% increase from $72,265
in the nine months ending September 30, 2001.

     During the third quarter of 2002, the Company had a cost of goods sold of
$33,281 versus $40,743 in the third quarter of 2001.  The decrease in COGS is
attributed in most part to a decrease in the units of voice tools sold during
the quarter.  For the nine months ended September 30, 2002, the Company
recorded a cost of goods sold of $125,693 versus $55,553 for the nine months
ended September 30, 2001.  The increase in COGS is attributed in most part to
labor cost associated with custom programming and consulting services and the
non-cash amortization costs for the Speech System and Memorandum of Understand
acquisition.

     During the third quarter of 2002, the Company recorded total operating
expenses of $271,487, a 55% decrease from $596,319 in the third quarter of
2001.  This is primarily attributable to the non-cash expense of $350,000 for
stock issued for consulting services expensed during the third quarter of
2001.  General and Administrative costs were $243,399 versus $500,770 a year
ago and Selling expenses were $28,088 versus $95,549 a year ago.  For the nine
months ended September 30, 2002 the Company had total expenses of $619,456
versus $1,028,266 for the nine months ended September 30, 2001. This 40%
decrease in expenses is primarily attributable to decrease in administrative
salaries and the non-cash expense of $350,000 for stock issued for consulting
services expensed during the third 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 a 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 third quarter of 2002, the Company had a Loss from Operation
of $254,828, a 59% decrease from $625,943 in the third quarter of 2001.  The
Company attributes this decrease in losses to the decrease in non-cash
consulting services.  For the nine months ended September 30, 2002, the
company had a Loss from Operations of $619,456, a decrease of 40% versus a
Loss from Operations of $1,028,266 for the nine months ended September 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 third quarter of 2002, the Company had Other Expenses,
primarily interest expense, of $8,804, a 96% decrease versus $251,135 in the
same quarter of 2001.  For the nine months ended September 30, 2002, the
Company had Other Expenses of $20,464 versus $267,033 in the nine months ended
September 30, 2001.

     During the third quarter of 2002, the Company had a Net Loss of $263,632,
a 68% decrease from $887,078 in the third quarter of 2001.  For the nine
months ended September 30, 2002, the Company had a Net Loss of 616,970, a 51%
decrease from $1,278,587 for the nine months ended September 30, 2001.

     During the third quarter of 2002, the Company had a Loss per Common Share
of .01 versus .05 for the third quarter in 2001.  For the nine months ended
September 30, 2002, the Company had a Loss per Common Share of .04 vs. .08 in
the nine months ended September 30, 2001.  That is a 50% decrease in Loss per
Common Share.

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

       At June 30, 2002, the Company had working capital deficit of $458,310.
Management has financed current operations through shareholder loans and cash
flow.  Management plans to issue common stock to raise additional capital to
cover this deficit and ongoing operational expenses.  There is no guarantee
the company will be successful in raising additional funds.

     For the nine months ended September 30, 2002, the Company incurred
$69,887 in non-cash expenses for legal services rendered $69,978 versus
$790,740 non-cash expenses a year ago for legal and consulting services.

     For the nine months ended September 30, 2002, the Company used $358,508
in net cash for operations versus $481,075 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 nine months ended September 30, 2002, the Company raised $363,642
from debt financing activities versus a net $646,049 in debt and equity
financing for the nine months ended September 30, 2001. This is attributed to
the need for less operating capital due to lower expenses and weakness in the
economy and the tightening of the investment capital markets

     For the nine months ended September 30, 2002, the Company issued a total
of 90,217 restricted shares of common stock for $69,978 in legal services and
borrowed $363,642 to finance operations.

     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.

Item 3.   Controls and Procedures.
          ------------------------

     (a)  Evaluation of Disclosure Controls and Procedures.
          -------------------------------------------------

          As of a date that is within 90 days of the filing date of this
Quarterly Report (the "Evaluation Date"), Wizzard's President and CEO, as well
as the CFO, have carried out an evaluation of the Company's "disclosure
controls and procedures" (as defined in Rules 13a-14(c) and 15d-14(c) of the
Securities and Exchange Commission).  Based on that evaluation, these officers
have concluded that as of the Evaluation Date, the Company's disclosure
controls and procedures were adequate and designed to ensure that material
information relating to the Company and the Company's consolidated
subsidiaries would be made known to them by others within those entities.

     (b)  Changes in Internal Controls.
          -----------------------------

          There were no significant changes in the Company's internal
controls, or to the Company's knowledge, in other factors that could
significantly affect the Company's disclosure controls and procedures
subsequent to the Evaluation Date.

                   PART II - OTHER INFORMATION

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

          None; not applicable.

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

          Recent Sales of Unregistered Securities.
          ----------------------------------------

          The following table provides information about all "unregistered"
and "restricted" securities that the Company has sold during the quarterly
period ended September 30, 2002, and since then, which were not registered
under the 1933 Act:

<TABLE>                                 Number
                         Date           of         Aggregate
Name of Owner            Acquired       Shares     Consideration
-------------            --------       ------     -------------

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

Leonard W. Burningham    7-23-02           600     Legal services valued at
                                                   $270

Branden T. Burningham    7-23-02           350     Legal services valued at
                                                   $157.50

Leonard W. Burningham    8-15-02        39,803     Legal services valued at
                                                   $15,149.97

Branden T. Burningham    8-15-02        13,269     Legal services valued at
                                                   $5,174.91

</TABLE>

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.

               None.

          (b)  Reports on Form 8-K.

               Current Report on Form 8-K, dated September 16, 2002, and filed
               with the Securities and Exchange Commission on September 18,
               2002.

                            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: 11/19/02                             /s/ Christopher Spencer
      --------                             ---------------------------
                                           Christopher J. Spencer, Director,
                                           CEO, President and Treasurer


Date: 11/19/02                             /s/ Armen Geronian
      --------                             ------------------------
                                           Armen Geronian, Director
                                           Secretary


Date: 11/19/02                             /s/ Gordon Berry
      --------                             ------------------------
                                           Gordon Berry, Controller and
                                           Director


Date: 11/19/02                             /s/ Alan Costilo
      --------                             ------------------------
                                           Alan Costilo, Director
<PAGE>

                   CERTIFICATION PURSUANT TO
         SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

     I, Christopher J. Spencer, Chief Executive Officer, President and
Treasurer of Wizzard Software Corporation (the "Registrant"), certify that:

     1.   I have reviewed this Quarterly Report on Form 10-QSB of the
Registrant;

     2.   Based on my knowledge, this Quarterly Report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Quarterly Report;

     3.   Based on my knowledge, the financial statements, and other
financial information included in this Quarterly Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
Quarterly Report;

     4.   The Registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the Registrant, including its
          consolidated subsidiaries, is made known to us by others within
          those entities, particularly during the period in which this
          Quarterly Report is being prepared;

     b)   evaluated the effectiveness of the Registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this Quarterly Report (the "Evaluation Date"); and

     c)   presented in this Quarterly Report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;

     5.   The Registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Registrant's auditors and the
audit committee of Registrant's board of directors (or persons performing the
equivalent function);

     a)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the Registrant's
          ability to record, process, summarize and report financial data
          and have identified for the Registrant's auditors any material
          weaknesses in internal controls; and

     b)   any fraud, whether or not material, that involves management or
          other employees who have a significant role in the Registrant's
          internal controls; and

     6.     The Registrant's other certifying officer and I have indicated in
this Quarterly Report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

Dated: 11/19/02                      Signature: /s/ Christopher Spencer
                                               ---------------------------
                                               Christopher J. Spencer
                                               Chief Executive Officer,
                                               President and Treasurer
<PAGE>
                   CERTIFICATION PURSUANT TO
         SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

  I, Gordon Berry, Controller of Wizzard Software Corporation (the
"Registrant"), certify that:

     1.   I have reviewed this Quarterly Report on Form 10-QSB of the
Registrant;

     2.   Based on my knowledge, this Quarterly Report does not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this Quarterly Report;
     3.   Based on my knowledge, the financial statements, and other
financial information included in this Quarterly Report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the Registrant as of, and for, the periods presented in this
Quarterly Report;

     4.   The Registrant's other certifying officer and I are responsible
for establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and we
have:

     a)   designed such disclosure controls and procedures to ensure that
          material information relating to the Registrant, including its
          consolidated subsidiaries, is made known to us by others within
          those entities, particularly during the period in which this
          Quarterly Report is being prepared;

     b)   evaluated the effectiveness of the Registrant's disclosure
          controls and procedures as of a date within 90 days prior to the
          filing date of this Quarterly Report (the "Evaluation Date"); and

     c)   presented in this Quarterly Report our conclusions about the
          effectiveness of the disclosure controls and procedures based on
          our evaluation as of the Evaluation Date;

     5.   The Registrant's other certifying officer and I have disclosed,
based on our most recent evaluation, to the Registrant's auditors and the
audit committee of Registrant's board of directors (or persons performing the
equivalent function);

     a)   all significant deficiencies in the design or operation of
          internal controls which could adversely affect the Registrant's
          ability to record, process, summarize and report financial data
          and have identified for the Registrant's auditors any material
          weaknesses in internal controls; and

     b)   any fraud, whether or not material, that involves management or
          other employees who have a significant role in the Registrant's
          internal controls; and

     6.   The Registrant's other certifying officer and I have indicated in
this Quarterly Report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies
and material weaknesses.

Dated: 11/19/02                      Signature: /s/ Gordon Berry
                                               ---------------------
                                               Gordon Berry
                                               Controller
<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 "Registrant") on Form 10-QSB for the period ending September 30, 2002, as
filed with the Securities and Exchange Commission on the date hereof (the
"Quarterly Report"), we, Christopher J. Spencer, CEO, President, Treasurer and
director of the Registrant, and Gordon Berry, Controller of the Registrant,
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 our knowledge and
belief:

     (1) The Quarterly 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 Quarterly Report fairly presents, in
all material respects, the financial condition and result of operations of the
Registrant.

Dated: 11/18/02                             /s/ Christopher Spencer
      ---------------                       -------------------------------
                                            Christopher J. Spencer
                                            CEO, President, Treasurer and
                                            director


Dated: 11/19/02                             /s/ Gordon Berry
      ---------------                       -------------------------------
                                            Gordon Berry
                                            Controller