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

                           FORM 10-QSB-A2

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

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

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

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

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

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

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

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

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

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

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


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

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

                 (APPLICABLE ONLY TO CORPORATE ISSUERS)

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

                            September 30, 2001

                          Common - 16,992,934 shares

                    DOCUMENTS INCORPORATED BY REFERENCE

                              NONE.

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

                  PART I - FINANCIAL INFORMATION

Item 1.   Financial Statements.

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

<PAGE>



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

             UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2001



<PAGE>



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



                                  CONTENTS

                                                                 PAGE


        Unaudited Condensed Consolidated Balance Sheet,
         September 30, 2001                                       2


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


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


        Notes to Unaudited Condensed Consolidated Financial
         Statements                                               6 - 12

<PAGE>

<TABLE>
<CAPTION>

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

               UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

                                 ASSETS

                                                            September 30,
                                                               2001
                                                             ___________

<S>                                                        <C>

CURRENT ASSETS:

  Cash in bank                                             $  161,203

  Accounts receivable                                             102

  Inventory                                                    40,408

  Prepaid expenses                                             17,286
                                                             ___________
    Total Current Assets                                      218,999
                                                             ___________

PROPERTY & EQUIPMENT, net                                     144,058
                                                             ___________
OTHER ASSETS:

  Intangible assets, net                                       533,986

  Deposits                                                       2,000
                                                             ___________
    Total Other Assets                                         535,986
                                                             ___________
                                                            $  899,043
                                                             ___________

              LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:

  Accounts payable                                          $   14,819

  Accrued expenses                                              64,507

  Loans payable - related party                                 46,076
                                                             ___________
        Total current liabilities                              125,402
                                                             ___________

CONVERTIBLE NOTE PAYABLE                                       250,000
                                                             ___________
        Total Liabilities                                      375,402
                                                             ___________

STOCKHOLDERS' EQUITY (DEFICIT):
  Preferred stock, $.001 par value, 1,000,000 shares
     authorized, no shares issued and outstanding                   -

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

  Capital in excess of par value                             4,761,177

  Retained Deficit                                          (4,254,529)
                                                            ___________
        Total Stockholders' Equity (Deficit)                   523,641
                                                            ___________
                                                           $   899,043
                                                            ___________

</TABLE>

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

<PAGE>


<TABLE>
<CAPTION>


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

           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

<S>                       <C>           <C>           <C>        <C>
NET SALES                 $   11,119    $  26,903     $   72,265 $    158,468

COST OF GOOD SOLD             70,743        8,354         85,553       52,207
                           _________    _________      _________    _________

  Gross Profit (Deficit)     (59,624)      18,549        (13,288)     106,261
                           _________    _________      _________    _________

EXPENSES:
  General
   and administrative        500,770      343,973        877,707      993,809

  Selling expenses           130,549       58,444        185,559      205,996
                           _________    _________      _________    _________

        Total Expenses       631,319      402,417      1,063,266    1,199,805
                           _________    _________      _________    _________

LOSS FROM OPERATIONS        (690,943)    (383,868)    (1,076,554)  (1,093,544)
                           _________    _________      _________    _________


OTHER INCOME (EXPENSE):
  Other income                    -           189          1,917          210

  Interest expense          (251,135)     (16,010)      (268,950)     (26,411)
                           _________    _________      _________    _________

Total Other Income
  (Expense)                 (251,135)     (15,821)      (267,033)     (26,201)
                           _________    _________      _________    _________

LOSS BEFORE INCOME TAXES    (942,078)    (399,689)    (1,343,587)  (1,119,745)

CURRENT TAX EXPENSE               -            -              -            -

DEFERRED TAX EXPENSE              -            -              -            -
                           _________    _________      _________    _________

NET LOSS                  $ (942,078)  $ (399,689)   $(1,343,587) $(1,119,745)
                           _________    _________      _________    _________

LOSS PER COMMON SHARE     $     (.06)  $     (.03)   $      (.08) $      (.08)
                           _________    _________      _________    _________

</TABLE>

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

<PAGE>

<TABLE>
<CAPTION>


                         WIZZARD SOFTWARE CORPORATION
                       (Formerly Balanced Living, Inc.)

                     STATEMENT OF STOCKHOLDERS' DEFICIT

                FROM THE DATE OF INCEPTION ON JANUARY 26, 1998

                          THROUGH SEPTEMBER 30, 2001

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

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

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

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

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

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

Issuance of warrants to
 purchase 60,000 shares of
 common stock  at $1.00 per
 share February, 2001                -        -            6,441           -

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

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

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

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

Adjust for share discrepancy          9       -               -            -

Issuance of warrants to
 purchase 500,000 shares of
 common stock  at $2.00 per
 share August, 2001                   -       -           99,243           -

Issuance of stock for
 consulting services,
 September, 2001 at
 $.835 per share                 100,000     100          83,400           -

Issuance of stock for
 consulting services,
 September, 2001 at
 $.835 per share                   7,143       7           5,957           -

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

Net loss for the period
 ended September 30, 2001             -       -               -    (1,343,587)
                             ___________ ____________ ___________   _________

BALANCE,
 September 30, 2001           16,992,934  16,993       4,761,177   (4,254,529)
                              __________  _______      _________    __________

</TABLE>

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

<PAGE>





<TABLE>
<CAPTION>

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

           UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS



                                                         For the Nine
                                                         Months Ended
                                                         September 30,
                                                       2001          2000
                                                   __________     ___________

<S>                                                <C>            <C>

Cash Flows from Operating Activities:
  Net loss                                         $(1,343,587)   $(1,119,745)

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

    Non-cash expenses                                  790,740             -

    Write-down of inventory                             65,000             -

    Depreciation and amortization expense               69,402         30,759

    Change in assets and liabilities:

      (Increase) in accounts receivable                    314        (28,135)

      Decrease in inventory                                615          7,731

      (Increase) in prepaid expenses                    (2,001)            -

      Increase (decrease) in accounts payable
        and accrued expense                            (61,558)        52,628
                                                    __________     __________

        Net Cash Provided (Used) by
         Operating Activities                         (481,075)    (1,056,762)
                                                    __________     __________
Cash Flows from Investing Activities:
  Purchase of property & equipment                     (22,997)       (46,791)

  Increase in notes receivable                         (34,917)            -
                                                    __________     __________

        Net Cash (Used) by Investing Activities        (57,914)       (46,791)
                                                    __________     __________

Cash Flows from Financing Activities:
  Issuance of common stock                             671,500       (428,759)

  Payment of stock offering cost                       (66,527)            -

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


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

  Proceeds from note payable - related party           46,076              -
  Payments on note payable - related party                 -             (854)
                                                    _________      __________

        Net Cash Provided by Financing Activities     646,049         977,905
                                                    _________      __________

Net Increase (Decrease) in Cash                       107,060        (125,648)

Cash at Beginning of Period                            54,143         153,665
                                                   __________      __________
Cash at End of Period                             $   161,203     $    28,017
                                                   __________      __________

Supplemental Disclosures of Cash
 Flow Information:

  Cash paid during the periods for:

    Interest                                      $        -       $        -

    Income taxes                                  $        -       $        -

</TABLE>
                                (Continued)
<PAGE>

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

         UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                (Continued)

Supplemental Schedule of Noncash Investing and Financing Activities:

  For the nine months ended September 30, 2001:

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

  For the nine months ended September 30, 2000:
     None


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

<PAGE>

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

         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

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

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

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

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

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

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

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

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

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

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

<PAGE>

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

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

  Revenue Recognition - Revenue 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 31, 2001 and 2000 amounted to $0 and $0, respectively. 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 $4,800 and $600 at September 31, 2001 and 2000, 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 11).

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

  Advertising Costs - Advertising and marketing costs are expensed as incurred
  and amounted to $90 and $16,735 for the period ending September 30, 2001 and
  2000.

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

   NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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

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

NOTE 3 - INVENTORY

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

       Raw Materials                             $    40,408
                                                  ____________
                                                 $    40,408
                                                  ____________


NOTE 4 - PROPERTY & EQUIPMENT

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

       Furniture, fixtures and equipment         $    200,906
       Leasehold improvements                          36,482
       Software                                        40,848
                                                 ____________
                                                      278,236
       Accumulated Deprecation                       (134,178)
                                                 ____________
       Property & Equipment, net                  $   144,058
                                                 ____________

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

<PAGE>

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

    NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5 - NOTE RECEIVABLE

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

NOTE 6 - NOTES PAYABLE

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

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

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


NOTE 7 - CAPITAL STOCK

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

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


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

    NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - CAPITAL STOCK (Continued)

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

  On April 8, 2001 the Company issued 495,000 restricted shares of Common
  stock upon the conversion of the $495,000 remaining principal balance of a
  bridge loan agreement with Salvage Holdings, Inc.

  During May 2001, the Company recorded $350,000 non-cash investor relations
  expense related to the Company entered into a one year investor relations
  agreement through the issuance of 350,000 restricted shares of common stock
  valued at $1.00 per share. The restricted shares were valued equal to the
  $1.00 ask price of restricted shares sold in the private placement.

  During May 2001, the Company issued warrants to purchase 540,000 shares of
  common stock at $1.00 per share, for the return of 532,500 shares of the
  common stock. The Company immediately cancelled the shares of common stock
  returned.

  During September, 2001, the Company issued 100,000 restricted shares common
  stock valued at $.835 per share and warrants to purchase 500,000 restricted
  shares of common stock at $2.00 per share with a fair value of $.1985 per
  warrant, for consulting services valued at $182,643. The restricted stock
  issued was valued at the closing bid  less 50% attributable to the
  transferability restrictions of the stock.

  During September, 2001, the Company issued 7,143 restricted shares of common
  stock at $.835 per share, for consulting services valued at $5,964. The
  restricted stock issued was valued at the closing bid less 50% attributable
  to the transferability restrictions of the stock.

  Warrants - As of December 31, 2001, the Company had outstanding 1,673,076
  warrants to purchase shares of common stock, which consisted of the
  following:

  The Company granted warrants to purchase 408,076 shares of common stock at
  $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 December 31, 2001, none of these warrants have been
  exercised. The fair value of these warrants has been offset against
  additional paid in capital.

  The Company granted warrants to purchase 540,000 shares of common stock at
  $1.00 per share, expiring through August 6, 2003 in connection with the
  return of 532,500 shares of common stock, which was cancelled by the
  Company.

  The Company granted warrants to purchase 60,000 share of common stock for
  legal services valued at $6,441, at $1.00 per share.

  The Company granted warrants to purchase 600,000 shares of common shares of
  the Company at $2.00 per share, in connection with an public relations and
  consulting contracts and recorded $99,243 in consulting expense

  In August 2000, the Company granted warrants to purchase 65,000 shares of
  common stock at $1.25 per share.


<PAGE>

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

    NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - INCOME TAXES

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

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

NOTE 9 - OPERATING LEASES

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

NOTE 10 - ACCRUED COMPENSATED LEAVE

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

<PAGE>


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

    NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11 - LOSS PER SHARE

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

<TABLE>
<CAPTION>

                                   For the Three         For the Six
                                   Months Ended          Months Ended
                                   September 30          September 30,
                              ______________________   ______________________
                                2001          2000      2001          2000
                            ___________   __________  __________  ___________

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

Earnings (loss) from
continuing operations
available to common
shareholders (numerator)  $  (942,078) $ (399,689) $(1,343,587) $ (1,119,745)
                          ___________  __________  ___________   ___________

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

</TABLE>

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

NOTE 12 -  GOING CONCERN

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

NOTE 13 - SUBSEQUENT EVENTS

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

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

NOTE 14   RESTATEMENT OF FINANCIAL STATEMENTS

 The Company previously issued September 30, 2001 financial statements which
 have been restated to reflect that the Company writing off obsolete
 inventory and promotional material carried as inventory, to record the fair
 value of warrants issued, to reduce the value of restricted stock issued
 for consulting services, to fully amortize the discount of the beneficial
 conversion feature of notes payable, to write off consulting and
 promotional services to be provided as stock issued was fully vested upon
 issuance. The following schedule provides disclosure of the effects of the
 restatement.

                             For the Three          For The Nine
                               Months Ended         Months Ended
                           September 30, 2001     September 30, 2001
Previously reported
Total Assets                                            $1,351,543
Net Loss                           $ (267,430)          $ (668,939)
Loss Per Common Share              $(.02)               $(.04)

Restated
Total Assets                                            $  899,043
Net Loss                      $(942,078)                $(1,343,587)
Loss Per Common Share         $(.06)                    $(.08)

  <PAGE>

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

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

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

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

          *     Acquiring additional distribution partners for our programming
                tools; and

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

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

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

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

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

          At September 30, 2001, the Company had $218,999 in current assets
and $125,402 in current liabilities.  The Company had $11,119 and $26,903 in
revenues for the three months ended September 30, 2001 and 2000, and $631,319
and $402,417 in total expenses, for net losses from operations of ($690,943)
and ($383,868), respectively.

          The Company had $72,265 and $158,468 in revenues for the nine months
ended September 30, 2001 and 2000, and $1,063,266 and $1,199,805 in operating
expenses, for net losses from operations of ($1,076,554) and ($1,093,544),
respectively.

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

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

          At September 30, 2001, the Company had $218,999 in current assets,
with current liabilities of $125,402.  Total stockholder's equity was
$523,641.  On September 14, 2001, the Company received $250,000 from the sale
of a Series 2001-A 8% Convertible Note.  See the 8-K Current Report dated
September 14, 2001, and filed with the Securities and Exchange Commission on
October 1, 2001.

                   PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.

          None; not applicable.

Item 2.   Changes in Securities.

          None; not applicable.

Item 3.   Defaults Upon Senior Securities.

          None; not applicable.

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

          None; not applicable.

Item 5.   Other Information.

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

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

          (a)  Exhibits.

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

          (b)  Reports on Form 8-K.

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

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

         *Incorporated herein by reference.

                            SIGNATURES

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

                                         WIZZARD SOFTWARE CORPORATION

Date:  7/3/02                            By /s/ Christopher J. Spencer
      --------                             ---------------------------
                                           Christopher J. Spencer, President

Date:  7/3/02                            By /s/ Christopher J. Spencer
      --------                             ---------------------------
                                           Christopher J. Spencer, Treasurer

Date:  7/3/02                            By /s/ Christopher J. Spencer
      --------                             ---------------------------
                                           Christopher J. Spencer, Director

Date:  7/3/02                            By /s/ Armen Geronian
      --------                             ------------------------
                                           Armen Geronian, Director


Date:  7/3/02                            By /s/ Gordon Berry
      --------                             ------------------------
                                           Gordon Berry, Director