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

                          FORM 10-QSB

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

     For the quarter ended June 30, 2006

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

     For the transition period from      to

                 Commission File No.   000-33381

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

      COLORADO                                             87-0609860
      --------                                             ----------
(State or Other Jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                        Identification No.)

                   5001 Baum Boulevard, Suite 770
                   Pittsburgh, Pennsylvania 15213
                   ------------------------------
             (Address of Principal Executive Offices)

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

Check whether the Issuer (1) has filed all reports required to be filed by
Sections 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the Issuer 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

Indicate by check mark whether the Issuer is a shell company (as defined by
Rule 12b-2 of the Exchange Act)  Yes   No  X


APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
                      PRECEDING FIVE YEARS

                              N/A
                              ---

             (APPLICABLE ONLY TO CORPORATE ISSUERS)

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

                          June 30, 2006

                       Common   30,155,230 shares

Transitional Small Business Issuer Format   Yes      No     X

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 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 SUBSIDIARIES

          UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                         June 30, 2006
<PAGE>

         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES


                            CONTENTS

                                                                        PAGE



  Unaudited Consolidated Balance Sheet,
          June 30, 2006                                                   2

  Unaudited Consolidated Statements of Operations,
          for the three months and six months ended
          June 30, 2006 and 2005                                          3

  Unaudited Consolidated Statements of Cash Flows,
          for the six months ended June 30, 2006 and 2005             4 - 5

   Notes to Unaudited Consolidated
          Financial Statements                                       6 - 18

<PAGE>
          WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
               UNAUDITED CONSOLIDATED BALANCE SHEET

                              ASSETS
                                                                  June 30,
                                                                    2006
                                                              -----------
CURRENT ASSETS:
  Cash                                                        $ 593,959
  Accounts receivable, net of $61,738 allowance                 324,293
  Inventory, net of $59,606 allowance                            15,823
  Prepaid expenses                                              167,718
                                                              ---------
     Total current assets                                     1,101,793

LEASED EQUIPMENT, net                                           123,862

PROPERTY AND EQUIPMENT, net                                      90,156

GOODWILL                                                        896,570

OTHER ASSETS                                                      5,582
                                                             ----------
     Total asset                                             $2,217,963
                                                             ==========

             LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                           $  233,945
   Accrued expenses                                             125,907
  Capital Lease   current portion                                35,250
  Notes payable                                                 674,999
                                                             ----------
     Total current liabilities                                1,070,101

CAPITAL LEASE, less current portion                             101,908
                                                             ----------
     Total liabilities                                      $ 1,172,009
                                                             ----------
COMMITMENT & CONTINGENCIES                                            -

STOCKHOLDERS' EQUITY:
  Preferred stock, $.001 par value, 10,000,000 shares
     authorized, no shares issued and outstanding                     -
  Common stock, $.001 par value, 100,000,000 shares
     authorized, 30,155,230 shares issued and outstanding        30,155
  Additional paid-in capital                                 21,919,360
  Accumulated deficit                                       (20,903,561)
                                                            -----------
     Total stockholders' equity                               1,045,954
                                                            -----------
     Total liabilities and stockholders' equity            $  2,217,963
                                                            ===========


The accompanying notes are an integral part of this unaudited consolidated
                      financial statement.
<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
        UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS




                                   For the Three         For the Six
                                   Months Ended          Months Ended
                                     June 30,               June 30,
                                2006         2005      2006         2005
                                           RESTATED               RESTATED
NET SALES                   $ 782,046    $  291,519   $1,384,437  $  515,080

COST OF GOODS SOLD            447,700       153,380      825,238     278,719
                            ---------    ----------   ----------  ----------
  Gross Profit                334,346       138,139      559,199     236,361

OPERATING EXPENSES
  Selling expenses            134,891       124,884      225,058     220,796
  General and administrative  674,610       654,153    1,346,758   1,245,278
  Research and development     11,850        11,303       23,168      41,329
  Compensation for re-pricing
    warrants                  140,000             -      140,000           -
  Impairment of goodwill            -             -            -   1,191,967
                            ---------    ----------   ----------  ----------
   Total Expenses             961,351       790,340    1,734,984   2,699,370
                            ---------    ----------   ----------  ----------
LOSS FROM OPERATIONS         (627,005)     (652,201)  (1,175,785) (2,463,009)


OTHER INCOME (EXPENSE):
  (Loss) on disposal of assets      -             -           (9)          -
  Interest expense           (392,066)      (38,860)    (407,505) (1,452,065)
  Other income                 97,484             -      103,513           -
                            ---------    ----------   ----------  ----------
  Total Other Income
  (Expense)                  (294,582)      (38,860)    (304,001) (1,452,065)
                            ---------    ----------   ----------  ----------
LOSS BEFORE INCOME TAXES     (921,587)     (691,061)  (1,479,786) (3,915,074)

CURRENT INCOME TAX EXPENSE          -             -            -           -

DEFERRED INCOME TAX EXPENSE         -             -            -           -
                            ---------    ----------   ----------  ----------
NET LOSS                    $(921,587)   $ (691,061) $(1,479,786)$(3,915,074)
                            ---------    ----------   ----------  ----------
BASIC AND DILUTED LOSS
  PER COMMON SHARE:         $   (0.03)   $    (0.03) $     (0.05)$     (0.14)
                            ---------    ----------   ----------  ----------





The accompanying notes are an integral part of these unaudited consolidated
                      financial statements.
<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
        UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                         For the Six
                                                        Months Ended
                                                           June 30,
                                                      2006            2005
Cash Flows from Operating Activities:                              RESTATED
  Net loss                                          $(1,479,786) $(3,915,074)

  Adjustments to reconcile net loss to net cash
  used in operating activities:
     Amortization of discount on notes payable                -    1,400,000
     Compensation for extension of debt                 382,500            -
     Compensation for re-pricing warrants               140,000            -
     Stock for non cash expenses                        427,167      497,297
     Impairment of goodwill                                   -    1,191,967
     Non-cash compensation   options issued              51,600            -
     Depreciation and amortization expense               36,017       17,542
     Change in allowance for bad debt                   (13,000)           -
     Change in allowance for slow moving inventory       (2,083)
     Change in assets and liabilities:
      Accounts receivable                               (11,914)     (10,442)
      Inventory                                           3,138        4,161
      Prepaid expenses                                 (143,205)      44,654
      Accounts payable                                   18,992      100,051
      Accrued expense                                    29,541        8,216
      Deferred revenue                                  (13,311)           -
                                                    -----------   ----------
  Net Cash Used in Operating Activities                (574,344)    (661,628)
                                                    -----------   ----------
  Cash Flows from Investing Activities:
     Purchase of property & equipment                    (4,086)     (15,630)
                                                    -----------   ----------
     Net Cash Used in Investing Activities               (4,086)     (15,630)
                                                    -----------   ----------
  Cash Flows from Financing Activities:
     Proceeds from the issuance of common stock         560,004      146,228
     Proceeds from issuance of convertible note payable       -    1,400,000
     Payments on capital lease                          (17,316)           -
     Payments on note payable                          (239,576)     (25,076)
                                                    -----------   ----------
        Net Cash Provided by Financing Activities       303,112    1,521,152
                                                    -----------   ----------
 Net Increase (Decrease) in Cash                       (275,318)     843,894
                                                    -----------   ----------
Cash at Beginning of Period                             869,277      445,702
                                                    -----------   ----------
Cash at End of Period                               $   593,959   $1,289,596
                                                    ===========   ==========
Supplemental Disclosures of Cash Flow Information:
  Cash paid during the periods for:
    Interest                                        $     6,415   $    4,830
    Income taxes                                    $         -   $        -

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
        UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS


Supplemental Schedule of Non-cash Investing and Financing Activities:

For the six months ended June 30, 2006:

  On January 19, 2006, the Company issued 100,000 restricted common shares
  valued at $180,000 for consulting services.

  On January 23, 2006, the Company issued 45,755 common shares upon the
  exercise of options valued at $84,189 to employees and non-employees for
  services rendered.

  On March 23, 2006, the Company issued 50,569 common shares in payment of
  a $75,000 note payable and $854 of accrued interest.

  On March 29, 2006, the Company issued 50,611 common shares in payment of
  a $75,000 note payable and $917 of accrued interest.

  On April 20, 2006, the Company issued 88,321 common shares in payment of
  a $125,000 note payable and $7,482 of accrued interest.

  On April 20, 2006, the Company issued 41,000 common shares valued at
  $75,850 to employees and non-employees for services rendered.

  On May 12, 2006, the Company recorded a $140,000 expense for the re-pricing
  of 466,668 warrants to purchase common stock from an exercise price of
  $1.50 per share reduced to $1.20 per share.  The warrants were immediately
  exercised.

  On May 18, 2006, the Company issued 200,000 shares of common stock to the
  holders of the 5% notes payables to extend the maturity date of the 5%
  notes payable to December 28, 2006.

  On May 18, 2006, the Company issued 1,750 common shares upon the
  exercise of options valued at $2,975 to non-employees for services
  rendered.

  During May, 2006, the Company issued 49,980 restricted common shares
  valued at $84,150 for consulting services.
<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
        UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the six months ended June 30, 2005:

  The Company issued 29,500 common shares valued at $58,025 for consulting
  services.

  The Company issued 29,500 common shares valued at $64,900 for consulting
  services.

  The Company issued 160,000 common shares valued at $326,000 for investor
  relations services.

  The Company issued 20,584 common shares valued at $48,372 to 18
  employees and non-employees for the exercise of options.

  The Company issued 150,000 common shares upon conversion of $75,000 of
  the 8% convertible note payable.

  The Company issued 787,176 common shares for the purchase of the
  remaining 5% minority shares of WSC.  The resulting goodwill of
  $1,191,967 was impaired immediately.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Unaudited Consolidated Financial Statements - The accompanying financial
statements have been prepared by the Company without audit.  In the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to present fairly the financial position, results of operations and
cash flows at June 30, 2006 and 2005 and for the periods then ended have been
made.  The accompanying unaudited consolidated financial statements have been
prepared in accordance with the instructions for Form 10-QSB of the Securities
and Exchange Commission.  Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles in the United States of America have
been condensed or omitted.  These consolidated financial statements should be
read in conjunction with the financial statements and notes thereto included
in the Company's December 31, 2005 audited financial statements.  The results
of operations for the three months and six months ended June 30, 2006 and 2005
are not necessarily indicative of the operating results for the full year.

Organization Wizzard Software Corporation ["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.
The Company engages primarily in the development, sale, and service of custom
and packaged computer software products.  On September 8, 2005, Parent
purchased all of the issued and outstanding shares of Interim Healthcare of
Wyoming, Inc. ["Interim"], a Wyoming corporation, in a transaction accounted
for as a purchase.  Interim engages primarily in providing healthcare services
in Wyoming.

Consolidation - The financial statements presented reflect the accounts of
Parent, MedivoxRx and Interim.  All significant inter-company transactions
have been eliminated in consolidation.

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.

Reclassification   The financial statements for the period ended prior to June
30, 2006 have been reclassified to conform to the headings and classifications
used in the June 30, 2006 financial statements.
<PAGE>

         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Cash and Cash Equivalents - At June 30, 2006, the Company had cash balances of
$393,959 in excess of federally insured limits.

Accounts Receivable - Accounts receivable consist of trade receivables arising
in the normal course of business. At June 30, 2006, the Company has an
allowance for doubtful accounts of $61,738 which reflects the Company's best
estimate of probable losses inherent in the accounts receivable balance. The
Company determines the allowance based on known troubled accounts, historical
experience, and other currently available evidence. During the six months
ended June 30, 2006 and 2005, the Company decreased the allowance for bad debt
by $13,000 and $0, respectively.

Inventory - Inventory consists of software, health care products and supplies
and is carried at the lower of cost or market on a first in first out basis.
During the six months ended June 30, 2006 and 2005, the Company decreased the
allowance for slow moving inventory by $2,083 and $0, respectively.

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

Goodwill and Definite-life intangible assets - The Company accounts for
Goodwill and definite-life intangible assets in accordance with provisions of
Statement of Financial Accounting Standards "SFAS" No. 142, "Goodwill and
Other Intangible Assets".  Goodwill and intangible assets acquired in a
purchase business combination and determined to have an indefinite useful life
are not amortized, but instead are tested for impairment at least annually in
accordance with the provisions of SFAS No. 142.  Impairment losses arising
from this impairment test, if any, are included in operating expenses in the
period of impairment.  SFAS No. 142 requires that definite intangible assets
with estimable useful lives be amortized over their respective estimated
useful lives, and reviewed for impairment in accordance with SFAS No. 144,
Accounting for Impairment or Disposal of Long-Lived Assets.

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 require considerable judgment by management with
respect to certain external factors such as anticipated future revenue,
estimated economic life, and changes in software and hardware technologies.
Capitalizable software development costs have not been significant and
accordingly no amounts are shown as capitalized at June 30, 2006.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

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
diluted earnings per share when the effect is dilutive (see Note 10).

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

Advertising Costs - Advertising costs are expensed as incurred and amounted to
$45,282 and $67,028 for the six months ended June 30, 2006 and 2005,
respectively.

Fair Value of Financial Instruments - The fair value of cash, accounts
receivable, accounts payable and notes payable are determined by reference to
market data and by other valuation techniques as appropriate. Unless otherwise
disclosed, the fair value of financial instruments approximates their recorded
values due to their short-term maturities.

Revenue Recognition - 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 and 104.

Software - The Company sells packaged and custom software products and related
voice recognition product development consulting.

Software product revenues are recognized upon shipment of the software product
only if no significant Company obligations remain, the fee is fixed or
determinable, and collection is received or the resulting receivable is deemed
probable. Revenue from package software products are recorded when the payment
has been received and the software has been shipped.  Revenue is recognized,
net of discount and allowances, at the time of product shipment.  For packaged
software products the Company offers a 30 day right of return.  Provisions are
recorded for returns, concessions, and bad debts and at June 30, 2006 and 2005
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.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 -  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

Healthcare - The Company recognizes revenue from the providing of healthcare
services when the services are provided and collection is probable.  Revenues
for the talking pill bottle are recognized when the product is shipped and
collections are probable.

Stock Options - The Company has stock option plans that provide for stock-
based employee compensation, including the granting of stock options, to
certain key employees. The plans are more fully described in Note 9. Prior to
January 1, 2006, the Company applied APB Opinion No. 25, "Accounting for Stock
Issued to Employees", and related Interpretations in accounting for awards
made under the Company's stock-based compensation plans.  Under this method,
compensation expense was recorded on the date of grant only if the current
market price of the underlying stock exceeded the exercise price.

During the periods presented in the accompanying financial statements, the
Company has granted options under its 2004, 2005 and 2006 defined stock
options plans. The Company has adopted the provisions of SFAS No. 123R using
the modified-prospective transition method and the disclosures that follow are
based on applying SFAS No. 123R.  Under this transition method, compensation
expense recognized during the six months ended June 30, 2005 included:  (a)
compensation expense for all share-based awards granted prior to, but not yet
vested as of January 1, 2006, and (b) compensation expense for all share-based
awards granted on or after January 1, 2006.  Accordingly, compensation cost of
$51,600 has been recognized for grants of options to employees and directors
in the accompanying statements of operations with an associated recognized tax
benefit of $0 of which $0 was capitalized as an asset for the period ended
June 30, 2006.  In accordance with the modified-prospective transition method,
the Company's financial statements for the prior year have not been restated
to reflect, and do not include, the impact of SFAS 123R.  Had compensation
cost for the Company's stock option plans and agreements been determined based
on the fair value at the grant date for awards in 2005 consistent with the
provisions of SFAS No. 123R, the Company's net loss and basic net loss per
common share would not have changed.

Research and Development Cost - The Company expenses the cost of developing
new products as incurred as research and product development costs. Included
in general and administrative expense for the six months ended June 30, 2006
and 2005 are $23,168 and $41,329, respectively, of research and development
costs associated with the development of new products.

Restatement - The financial statements have been restated to record $44,861 in
payroll liabilities associated with stock issued to employees during 2005 and
2004.  The effect on the financial statements increased accrued expense and
the accumulated deficit by $44,861 and increased general and administrative
from $1,237,062 to $1,245,278 and increased the net loss from $3,906,858 to
$3,915,074 for the six months ended June 30, 2005. The restatement had no
effect on the stated net loss per share for the six months ended June 30,
2005.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2 - 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 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 3 - INVENTORIES

The following is a summary of inventories:
                                             June 30, 2006
  Raw materials                           $           66,303
  Finished goods                                       9,126
  Less: Allowance for obsolete inventory             (59,606)
                                          ------------------
                                          $           15,823
                                          ------------------
NOTE 4 - PROPERTY & EQUIPMENT

The following is a summary of property and equipment at:
                                                               June 30
                                              Life              2006
  Furniture, fixtures and equipment           2 - 10 yrs     $  172,109
  Production molds                             3 yrs             47,710
  Software                                    2 - 5 yrs          11,964
                                                             ----------
                                                                231,783
  (Less) Accumulated Depreciation                              (141,627)
                                                             ----------
  Property & Equipment, net                                  $   90,156
                                                             ----------


Depreciation expense for the six months ended June 30, 2006 and 2005 was
$20,035 and $17,542, respectively.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4 - PROPERTY & EQUIPMENT (Continued)

The following is a summary of leased equipment at:
                                                          June 30
                                         Life              2006
  Leased Equipment                         5.25 Yrs       223,750
  Less: Accumulated Depreciation                          (99,888)
                                                         --------
  Leased Equipment, net                                  $123,862
                                                         --------

Depreciation expense for the six months ended June 30, 2006 and 2005 was
$15,982 and $0, respectively.

NOTE 5   GOODWILL / DEFINITE-LIFE INTANGIBLE ASSETS

Intangible Assets - The Company classifies its intangible assets as definite-
life intangible assets and amortizes them on a straight-line basis over their
estimated useful lives.  Amortization expense of $0 was recorded for the six
months ended June 30, 2006 and 2005.

Goodwill - On September 8, 2005, the Company recorded goodwill of $896,570 in
connection with the acquisition of Interim Health Care of Wyoming as the
purchase price of $904,006 exceeded the $7,436 net book value of the assets
acquired.

NOTE 6 - NOTES PAYABLE

On February 8, 2005, the Company closed a Subscription Agreement by which
three institutional investors purchased promissory notes having a total
principal amount of $1,400,000, convertible into shares of the Company's
common stock at a price of $1.50 per share, and bearing an annual interest
rate of five percent; Class A Warrants to purchase a total of 466,667 shares
of common stock at a price of $2.50 per share, exercisable for three years;
and Class B Warrants to purchase a total of 933,334 shares of common stock at
a price of $1.50 per share, exercisable until 150 days after the effective
date of the Registration Statement. In December 2005, the Company repriced
466,667 of the Class B warrants from $1.50 to $1.15 exercise price and were
immediately exercised. Also in December 2005, the remaining 466,667 Class B
warrants had their life extended one year.  In May 2006, the Company re-priced
466,668 of the Class A warrants from $1.50 to $1.20 exercise price and were
immediately exercised, and the Company issued Class D warrants to purchase a
total of 466,668 shares of common stock at a price of $2.50 per share,
exercisable for three years.   On May 4, 2006, the Company issued 225,000
shares of common stock to the holders of the 5% notes payable to extend the
maturity date of the 5% notes payable to December 28, 2006.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7 - CAPITAL LEASE OBLIGATION

The Company is leasing equipment on a 63-month capital lease terminating in
August 2008.  Monthly payments of $3,750 began in June 2003 and a payment of
$54,688 is due at termination.  During the six months ended June 30, 2006 and
2005, interest expense on capital lease obligation amounted to $5,184 and $0,
respectively.

Future minimum capital lease payments are as follows for the twelve-month
periods ended:

  June 30, 2007                              $     45,000
  June 30, 2008                                    45,000
  June 30, 2009                                    61,188
                                              -----------
  Total minimum lease payments                    152,188
  Less amount representing interest               (15,030)
                                              -----------
  Present value of minimum lease payments         137,158
  Less current portion                            (35,250)
                                              -----------
                                             $    101,908
                                              ===========

NOTE 8 - CAPITAL STOCK

Preferred Stock   The Company has authorized 10,000,000 shares of preferred
stock, $.001 par value.  As of June 30, 2006, no shares were issued and
outstanding.

Common Stock   The Company has authorized 100,000,000 shares of common stock,
$.001 par value.  As of June 30, 2006, the Company had 30,155,230 common
shares issued and outstanding.

Stock for Services   On January 19, 2006, the Company issued 100,000 common
shares valued at $180,000 for consulting services.

On January 23, 2006, the Company issued 45,755 common shares upon the exercise
of options valued at $84,189 to employees and non-employees for services
rendered.

On April 20, 2006, the Company issued 41,000 common shares valued at $75,850
to employees and non-employees for services rendered.

On May 18, 2006, the Company issued 1,750 common shares upon the exercise of
options valued at $2,975 for consulting services.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - CAPITAL STOCK (Continued)

During May, 2006, the Company issued 49,980 restricted common shares valued at
$84,150 for consulting services.

Conversion of Notes Payable   On March 23, 2006, the Company issued 50,569
common shares in payment of a $75,000 note payable and $854 of accrued
interest.

On March 29, 2006, the Company issued 50,611 common shares in payment of a
$75,000 note payable and $917 of accrued interest.

On April 20, 2006, the Company issued 88,321 common shares in payment of a
$125,000 note payable and $7,482 of accrued interest.

Exercise of Warrants   On May 12, 2006, the Company issued 466,668 common
shares upon exercise of warrants at $1.20.

On May 18, 2006, the Company issued 225,000 shares of common stock to the
holders of the 5% notes payables to extend the maturity date of the 5% notes
payables to December 28, 2006.

Exercise of Warrants   On January 6, 2005, March 18, 2005, and March 28, 2005,
the Company issued 4,339, 40,000, and 50,000 common shares, respectively, upon
the exercise of warrants at $1.55 per share.

Conversion of Notes Payable   During 2005, the Company issued 150,000 common
shares upon conversion of $75,000 of the 8% convertible note payable.

Stock for Services - During 2005, the Company issued 19,500 common shares for
consulting services valued at $39,025

During 2005, the Company issued 29,500 common shares upon the exercise of
options for consulting services valued at $64,900 and the company issued an
additional 160,000 common shares valued at $326,000 for investor relations
services.

Stock for Consulting Services - On February 15, 2005, the Company issued
20,584 common shares upon the exercise of options for consulting services
valued at $48,166.  On April 11, 2005, the Company issued 10,000 common shares
for Consulting Services valued at $19,000.

Acquisition of Minority Interest - On January 19, 2005, the Company
shareholders approved the acquisition of the 5% minority interest of Wizzard
Software Corp ("WSC") wherein WSC was merged with and into the Parent through
the issuance of 787,176 common shares of the Parent for the 787,176 minority
shares of WSC.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8 - CAPITAL STOCK (Continued)

5% Convertible Notes Payable - On February 8, 2005, the Company closed a
Subscription Agreement by which three institutional investors ("Subscribers")
purchased: 5% convertible promissory notes having a total principal amount of
$1,400,000, convertible into 933,333 shares of the Company's common stock at a
price of $1.50 per share,  plus Class A Warrants to purchase a total of
466,667 shares of common stock at a price of $2.50 per share, exercisable for
three years; and Class B Warrants to purchase a total of 933,334 shares of
common stock at a price of $1.50 per share, exercisable until 150 days after
the effective date of the Registration Statement described below.

The $1,400,000 in proceeds has been recorded as paid in capital based on their
relative fair value of $574,184, $308,989 and $516,827, for the beneficial
conversion feature of the Convertible Notes Payable, Class A Warrants and
Class B Warrants, respectfully. The Company upon issuance recorded interest
expense of $1,400,000 for the discount on the note as the note is immediately
convertible.

The relative fair values of the warrants and beneficial conversion feature
were estimated using the black-scholes pricing model using the following
variable volatility of 104%, risk free interest rate of 3%, expected yield of
0% and estimated lives of one to three years.

NOTE 9   STOCK OPTIONS AND WARRANTS

2006 Stock Option Plan   During 2006, the Board of Directors adopted a Stock
Option Plan ("2006 Plan").  Under the terms and conditions of the 2006 Plan,
the Board is empowered to grant stock options to employees and officers of the
Company.  Additionally, the Board will determine at the time of granting the
vesting provisions and whether the options will qualify as Incentive Stock
Options under Section 422 of the Internal Revenue Code.  The total number of
shares of common stock available under the 2006 Plan may not exceed 125,000.
At June 30, 2006, no options were available to be granted under the 2006 Plan.
During the six months ended June 30, 2006, the Company granted 125,000
options.

2005 Stock Option Plan   During 2005, the Board of Directors adopted a Stock
Option Plan ("2005 Plan").  Under the terms and conditions of the 2005 Plan,
the Board is empowered to grant stock options to employees, officers,
directors, and consultants of the Company.  Additionally, the Board will
determine at the time of granting the vesting provisions and whether the
options will qualify as Incentive Stock Options under Section 422 of the
Internal Revenue Code.  The total number of shares of common stock available
under the 2005 Plan may not exceed 200,000.  At June 30, 2006, total options
available to be granted under the 2005 Plan totaled 77,895.  During the six
months ended June 30, 2006, the Company granted 38,255 options, respectively,
which were immediately exercised for service valued at $70,389 and $0,
respectively.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8   STOCK OPTIONS AND WARRANTS (Continued)

2004 Stock Option Plan   During 2004, the Board of Directors adopted a Stock
Option Plan ("2004 Plan").  Under the terms and conditions of the 2004 Plan,
the Board is empowered to grant stock options to employees, officers,
directors, and consultants of the Company.  Additionally, the Board will
determine at the time of granting the vesting provisions and whether the
options will qualify as Incentive Stock Options under Section 422 of the
Internal Revenue Code.  The total number of shares of common stock available
under the 2004 Plan may not exceed 200,000.  At June 30, 2006, total options
available to be granted under the 2004 Plan totaled 1,000.  During the six
months ended June 30, 2005, the Company granted 55,084 options.

The significant weighted average assumptions relating to the valuation of the
Company's Stock Options for the six months ended June 30, 2006 were as
follows:

                                   2006
        Dividend yield              0%
        Expected life             10 yrs
        Expected volatility        94.9%
        Risk-free interest rate    4.86%

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9   STOCK OPTIONS AND WARRANTS (Continued)

A summary of the status of options granted at June 30, 2006, and changes
during the period then ended are as follows:

                                      For the Six Months Ended
                                           June 30, 2006
                                                           Weighted
                                                 Weighted  Average   Aggregate
                                                 Average  Remaining  Intrinsic
                                                 Exercise Contractual  Value
                                     Shares        Price     Term

Outstanding at beginning of period          -      $   -      -             -
Granted                               206,005       1.79   6.1 years   $6,250
Exercised                             (81,005)      1.84      -             -
Forfeited                                   -          -      -             -
Expired                                     -          -      -             -
                                     --------
Outstanding at end of period          125,000       1.75   9.9 years   $6,250
                                     --------
Vested and expected to vest
in the future                         125,000       1.75   9.9 years   $6,250
                                     --------
Exercisable at end of period           20,000       1.75   9.9 years   $1,000
                                     --------
Weighted average fair value of
options granted                       125,000     $ 1.75   9.9 years   $6,250
                                     --------

The Company had no non vested options at the beginning of the period.  At June
30, 2006 the Company had 105,000 non vested options.

The total intrinsic value of options exercised during the six months ended
June 30, 2006 and 2005 was $0 and $0 respectively.  Intrinsic value is
measured using the fair market value at the date of exercise (for shares
exercised) or at June 30, 2006 and 2005 (for outstanding options), less the
applicable exercise price.

During the six month period ended June 30, 2006 and 2005, the Company expensed
$149,214 and $113,272 upon the exercise of awards.  The Company realized no
tax benefit due to the exercise of options as the Company had a loss for the
period and historical net operating loss carry forwards.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9   STOCK OPTIONS AND WARRANTS (Continued)

Warrants  A summary of the status of the warrants granted is presented below
for the six months ended:

                            June 30, 2006              June 30, 2005

                           Weighted Average           Weighted Average
                        Shares    Exercise Price   Shares   Exercise Price

Outstanding at
  beginning of period     1,748,280     $1.97        786,174       $1.55
  Granted                   466,668      2.50      1,400,000       $1.83
  Exercised                (466,667)     1.50       (114,339)      $1.55
  Forfeited                       -         -              -           -
  Expired                         -         -              -           -
                        -----------     -----     ----------       -----
Outstanding at end
  of period               1,748,281     $2.24      2,071,835       $1.81
                        -----------     -----     ----------       -----

NOTE 10 - LOSS PER COMMON SHARE

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

                          For the Three                 For the Six
                           Months Ended                 Months Ended
                             June 30,                     June 30,
                            2006          2005         2006          2005
                                        RESTATED                   RESTATED
Loss from continuing
operations available to
common shareholders
(numerator)               $(921,587)   $(691,061)  $(1,479,786)   $(3,915,074)
                         ----------   ----------    ----------     ----------
Weighted average number
of common shares
outstanding during the
period (denominator)     29,751,849   27,253,338    29,462,767     27,045,817
                         ----------   ----------    ----------     ----------
<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 - LOSS PER COMMON SHARE (Continued)

At June 30, 2006, the Company had 1,748,281 warrants outstanding to purchase
common stock of the Company at $1.50 to $3.75 per share, and a 5% convertible
note payable wherein the holder could convert the note into a minimum of
449,999 shares of common stock, See Note 6], which were not included in the
loss per share computation because their effect would be anti-dilutive.

At June 30, 2005, the Company had 2,071,835 warrants outstanding to purchase
common stock of the Company at $1.50 to $2.50 per share, a 8% convertible note
payable wherein the holder could convert the note into a minimum of 50,000
shares of common stock and a 5% convertible note payable wherein the holder
could convert the note into 933,333 shares, [See Note 6], which were not
included in the loss per share computation because their effect would be anti-
dilutive.

The Company has various performance agreement that if achieve would result in
the issuance of addition Common Stock, see footnote 12, Commitment and
Contingencies.

NOTE 11 - INCOME TAXES

The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes".  SFAS
No. 109 requires the Company to provide a net deferred tax asset/liability
equal to the expected future tax benefit/expense of temporary reporting
differences between book and tax accounting methods and any available
operating loss or tax credit carryforwards.  The Company has available at June
30, 2006 operating loss carryforwards of approximately $19,900,000 which may
be applied against future taxable income and which expires in various years
through 2025.

The amount of and ultimate realization of the benefits from the operating loss
carryforwards 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
carryforwards and significant changes in the ownership of the Company, a
valuation allowance has been established equal to the tax effect of the loss
carryforwards and, therefore, no deferred tax asset has been recognized for
the loss carryforwards.  The net deferred tax assets are approximately
$6,760,000 as of June 30, 2006, with an offsetting valuation allowance of the
same amount.  The change in the valuation allowance for the six months ended
June 30, 2006 approximated $470,000.

<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12 - COMMITMENTS AND CONTINGENCIES

The Company is from time to time involved in routine legal and administrative
proceedings and claims of various types.  While any proceedings or claim
contains an element of uncertainty, Management does not expect on our results
of operations or financial position.

Contingent Consideration for the Acquisition of MedivoxRx   In connection with
the acquisition of MedivoxRx, Parent will issue an additional 100,000
restricted common shares to the former stockholders of MedivoxRx if Wizzard
Merger Corp. achieves repeat sales of at least 250 units per month from at
least 15 VA sites for three consecutive months with a specified gross margin.
Parent will also issue an additional 50,000 restricted common shares to the
former stockholders of MedivoxRx if Wizzard Merger Corp. pill bottle
simultaneously loads the prescription while the label is being printed and is
approved and accepted by any Veterans Administration Hospital.  Parent will
further issue an additional 625,000 restricted common shares to the former
stockholders of MedivoxRx if Wizzard Merger Corp. meets revenue and profit
projections for the second year of operations forward from the April 23, 2004
acquisition date.  To date no additional restricted common shares have been
issued.

Agreements - In connection with the agreement with AT&T to sell to AT&T's OEM
Natural Voices desktop product licenses the Company is required to make
minimum purchase of $125,000 per each six month period beginning  July 2004
through June 2007.

In connection with the agreement with IBM to sell IBM's OEM ViaVoice desktop
products licenses the Company is required to make minimum purchases of $12,500
per quarter beginning July 2005 through June 2007.

Contingent Consideration for the Acquisition of Interim Health Care of
Wyoming, Inc.   As part of the Interim of Wyoming, Inc. acquisition, the
Company agreed to issue additional shares of common stock upon Interim
achieving certain financial results. Phase I incentives would include the
seller to receive an additional payment of two (2) times the Interim EBITDA
for the year ended September 30, 2006, based upon the amounts that exceeds the
Interim EBITDA for the year ended December 31, 2004. Twenty-five percent of
which will be paid in cash and seventy-five percent paid in stock.

Phase II incentives include the seller to receive an additional payment of two
times the EBITDA for the year ended September 30, 2007, based upon the amount
that exceeds the Interim EBITDA for the year ended September 30, 2006. Twenty-
five percent of which will be paid in cash and seventy-five percent paid in
stock.
<PAGE>
         WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
      NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - SEGMENT REPORTING

The Company's operations are divided into two independent segments   software
and healthcare. The Company does not have any inter-segment revenues and the
Company uses the same accounting principles used to prepare the consolidated
financial statements for both operating segments.

At June 30, 2006, all of the Company's assets, except approximately $19,300 of
inventory, are located within the United States of America.

Software - The Company attributes revenues from the development, sale, and
service of custom and packaged computer software products at the time the
product is shipped and collections are likely.

Healthcare - The Company attributes revenue from the development, sale, and
service of talking prescription pill bottles and healthcare services at the
time the services are rendered and collections are likely.

The following is a summary of the Company's operations by segment for the six
months ended June 30, 2006 and 2005:
                                      2006                  2005
                      Software Healthcare Total     Software Healthcare Total
Net revenues       $ 401,900 $  982,537 $1,384,437 $ 506,969 $ 8,111 $ 515,080
Cost of sales        219,157    606,081    825,238   264,747  13,972   278,719
General and
administrative       935,401    271,357  1,206,758 1,164,422  80,856 1,245,278
Selling              123,237    101,821    225,058    76,237 144,559   220,796
Research and
development           23,152         16     23,168    36,720   4,609    41,329
Compensation for
re-pricing warrants  140,000          -    140,000         -       -         -
Impairment of
goodwill/Intangibles       -          -          - 1,191,967       - 1,191,967
Other income          73,919     29,594    103,513         -       -         -
Interest expense     542,767      4,738    547,505 1,452,065       - 1,452,065
Loss on disposal of
assets                     9          -          9         -       -         -
Income tax benefit
(expense)                  -          -          -         -       -         -
                    -------- ---------- ---------- --------- ------- ---------
Net Income
(loss)           $(1,507,904) 28,118(1,479,786)(3,679,189)(235,885)(3,915,074)

<PAGE>
          WIZZARD SOFTWARE CORPORATION AND SUBSIDIARIES
       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13 - SEGMENT REPORTING (Continued)

The following is a summary of the Company's operations by segment for the
three months ended June 30, 2006 and 2005:

                                 2006                        2005
                     Software Healthcare Total  Software Healthcare Total
Net revenues     $ 259,008 $  523,039 $ 782,047 $ 288,255  $  3,264 $ 291,519
Cost of sales      134,464    313,236   447,700   146,535     6,847   153,382
General and
administrative     400,232    134,378   534,610   604,472    49,680   654,152
Selling             77,141     57,750   134,891    38,600    86,284   124,884
Research and
development         11,850          -    11,850    11,180       123    11,303
Compensation for
re-pricing
warrants           140,000          -   140,000         -         -         -
Other income        73,870     23,614    97,484         -         -         -
Interest expense   531,178        889   532,067    38,860         -    38,860
Loss on disposal
of assets                -          -         -         -         -         -
Income tax benefit
(expense)                -          -         -         -         -         -
                  --------- ---------- --------- --------- --------- ---------
Net Income (loss) $(961,987)$   40,400 $(921,587)$(551,392)$(139,670)$691,062)
                  --------- ---------- --------- --------- --------- ---------

NOTE 14 - SUBSEQUENT EVENT

On July 5, 2006, the Company announced a special common stock dividend. For
every ten (10) shares owned on the October 15, 2006, one (1) additional share
of Wizzard's common stock will be distributed on October 30, 2006.

On July 12, 2006, the Company signed an agreement to purchase the assets of
Switchpod Technology for 114,286 "unregistered" and "restricted" shares of
Wizzard's common stock.

On July 20, 2006, the Company issued 500,000 common shares valued at $855,000
for investor relations services.

On July 24, 2006, the Company issued 39,900 common shares valued at $65,835 to
employees and non-employees for services rendered.

On July 26, 2006, the Company issued 8,000 common shares to consultants valued
at $13,200 for services rendered.

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

Highlights of First Quarter, 2006.
----------------------------------

The first half of 2006 has been an exciting year of growth, team-building,
identifying opportunities and capitalizing on ideas. Everyone on Wizzard's
team has been hard at work and putting in long hours, resulting in solid
progress toward our Company's goals. We are pleased to announce that for the
sixth consecutive quarter our revenues have increased over the same period in
the previous year.  Our investments in key hires, marketing programs, product
innovation and business development are starting to show results.  Some of
these accomplishments broken down by internal business groups include:

2006 Q2 Speech Technology & Services Group

Wizzard Software's Speech Technology & Services Group sells and licenses
speech programming tools, related speech products and services and
distributable speech engines in over 13 languages worldwide.  Wizzard receives
the majority of its sales leads through arrangements with IBM and AT&T as well
as through internal internet marketing efforts with Google, Yahoo and other
major internet search engines.

The Technology & Services Group (T&S Group) is a cross divisional team within
Wizzard that consists of the Technology and Services Division (T&S), plus key
members of Wizzard's development, MIS and marketing groups. Together, we are
working to implement our strategy to increase market share and brand awareness
and become the preferred supplier of speech technologies and services for both
domestic and international business developers. The Group plans to increase
overall revenue by significantly expanding its customer base, product
portfolio and customer reach through a continued focus on three imperatives:
best technologies; best pricing; and responsive support.

We continue to advance our speech recognition and text-to-speech licensing
business through our relationships with IBM and AT&T.  Recently, we announced
the expansion of our territory to include the Asia-Pacific region for one of
our product lines, and we are beginning to see interest in our offerings
coming from this sector.  The number of quarterly reporting customers is
growing consistently, and we have several customers who have the potential to
require large volume licenses in the coming quarters. We continue to meet our
customers' needs from industry segments such as emergency telephone alerts,
ATM's, video games, e-books, podcasting, telephony IVR and the healthcare
market.  In the third quarter, we will be launching a new platform by which
multiple modes of input and output are supported for speech-based
applications, including handhelds, tablets, servers and PCs.  We expect a
strong interest from the healthcare market, specifically, and several areas of
the government as well.

In the second quarter, IBM added Wizzard Software to the IBM 306 accessibility
site with direct links to the product pages of our website.  This site should
drive customers interested in purchasing ViaVoice to deploy in their
applications, to our website.

In the third quarter, we plan to announce a significant update to our server
based text-to-speech offering which will put us in a position for the first
time to meet the needs of the large call center and other IVR specific
markets.  This is a result of almost a year of internal discussions and
planning and is one of the most strategic updates to our product offerings
we've ever made.  Another announcement we expect to make is that of an
extremely accurate, speaker-independent, server based speech recognition
engine.  With the rapid adoption of audio and video based content on the
internet (Web 2.0), we see this new speech recognition engine as a critical
component towards monetization for the audio/video businesses that are taking
hold across the internet and around the world.

2006 Q2 Speech Products Group

The objectives for the Speech Product Group is to establish successful sales
channels for select products offered directly by Wizzard Software which
incorporate speech technology offered through our Technology and Services
Group.

WizzTones for Skype - The newest Wizzard offering, WizzTones for Skype, was
released in mid-January and garnered a significant amount of press.  To
promote the product, we announced the release on Business Wire and placed the
trial version on multiple download websites.  We were also able to secure a
listing on the Skype site.  In March, we created a Google AdWords campaign for
WizzTones and almost immediately the number of visitors to the site tripled.
Management believes that once the Skype/Warner Brothers Music deal, previously
announced by Skype, is finally launched, the number of Skype users (currently
estimated at 100M) that want to have multiple music ring tones will grow
exponentially.  At this time, WizzTones is the only option for users that want
to have specific ring tones designated for specific callers. Recently, we were
able to secure a listing on CNet.com, a popular shareware website. In May, we
were invited by Skype to participate in a partner CD for eBay's Developers
Conference held in June 2006 in Las Vegas.  This CD was distributed directly
by Skype to over 800 participants at the show.

Talking Pill Bottle - Branded with the name "Rex," the Talking Prescription
Bottle allows end-users to "hear" medication instructions when reading a
medication label is not practical or possible.  There are several billion
prescriptions filled each year in the U.S. and pharmaceutical errors create
billions of dollars in additional medical spending with the number one error
being identified as labeling problems and education. Using unique
microprocessor electronics and Wizzard's advanced text-to-speech technology,
pharmacists automatically create a "talking" label while the traditional
instruction label is being printed. At the push of a button, the prescription
bottle talks to the patient, telling him or her the name of the medication,
the dosage the patient should consume, the frequency of administration, refill
instructions, warnings and other important information necessary to educate
and help people take their prescription medication properly.

Our MedivoxRx Talking Prescription Bottle business is making positive
progress.  The Speech Products Group is focusing its marketing efforts on
retail pharmacies and caregivers and is working hard towards getting Medicare
reimbursement and insurance coverage for our Talking Prescription Bottle
customers. While there are no guarantees of approval, management believes
reimbursement approval from Medicare and insurance companies is the key to
large unit sales.

We continue to penetrate various sales channels for our speech enabled,
Talking Pill Bottle products. We recently entered into a distribution
agreement with MAVC in Canada and launched a pilot program with one of the top
three retail pharmacy chains in the U.S.  We expect to expand the pilot beyond
the current locations in the very near future, targeting aging population
sectors of the country.  Initial reports from the new venture with this high
profile pharmacy have been extremely positive.  We expect to add another top
national pharmacy chain to our distribution of the Talking Pill Bottle in the
third quarter of 2006.  We are also seeing increased interest in the Talking
Pill Bottle from various state legislative bodies and feel we are well
positioned to capitalize on a growing legislative movement as state officials
look to make the taking of prescription medication safer for their elderly
constituents.  We are continually challenging our sales and marketing
strategies and our delivery of product to achieve better customer
satisfaction, market share and operating results. The ability for the elderly
and visually impaired to fully comprehend their prescription medication
instructions is as necessary as ever as new drugs are constantly introduced to
the market and medication combinations make following dosage instructions
critical.

2006 Q2 Speech Services - Healthcare

Our acquisition of Interim Healthcare of Wyoming was completed in the third
quarter of 2005, and we continue to be excited about the impact our speech
technology can have on the home healthcare industry.  Based in Casper,
Wyoming, Interim Health Care of Wyoming has been serving its community for
thirteen years and is part of the fast growing home health segment of the
healthcare industry, providing a wide range of visiting nurse services to the
elderly, wounded and sick. It is one of the 300 home health agencies that
comprise Interim Health Care, the largest home healthcare franchise in the
U.S.

We believe that our speech technology (Talking Prescription Bottle, WizzScribe
transcription service, MedOasis InfoPath forms, ViaVoice speech medical
recognition, etc.) can make a significant impact on the bottom line of HHC
agencies, and we are aggressively working towards our first speech
implementation.  Both Wizzard's management and owners of our targeted home
health care agencies believe that strong synergies exist among the services
they offer, the compliances they must adhere to, the job functions of their
workers and our Talking Prescription Bottle, various talking medical devices,
WizzScribe transcription product, medical speech recognition dictation and
form-fill applications. Currently, most nurses and health aides fill out
mandatory paperwork by hand while owners of the home healthcare agencies
continuously strive for timely and accurate data.  With a 10% to 25% rejection
rate, and 25% to 50% of a worker's time spent filling out paperwork, having
the ability to quickly collect and submit accurate data for payment forms and
other aspects of the home healthcare business is a compelling proposition.  We
believe that voice is the most efficient, accurate method for entering and
retaining medical records in this thriving vertical market with almost no
competition for us in speech technology implementations.  We're starting with
the telephone as the interface device because everyone is comfortable with it
and this allows us to accurately capture data at the point of care.  We
believe we are now in position to build the best, most affordable home health
medical records solution.

Our home healthcare business continues to be a strong, strategic part of our
businesses plan as our country's population ages and new methods of patient
data capture become critical components for delivering high quality,
affordable healthcare services in a patient's home.  Although this has been a
gradual process, we believe that we are building a strong business that will
offer a complimentary package of new technology and traditional services.  Our
profits for the first half of 2006 in our home healthcare business are ahead
of 2005 profits for the same period and ahead of our own internal projections
for 2006.  Our people are our strongest asset at Interim of Wyoming, and we
will continue to invest in the development of our nurses, aids and staff while
providing them with new, speech-based applications to assist them in offering
the best possible service for our referrers and the highest quality of care to
our patients.  We are currently expanding our territory within the state of
Wyoming as a result of the state's willingness to increase Medicaid payments
by up to 30%, and we expect insurance providers within the state to follow
suit this year. In the second quarter, we completed care for our first
Medicare Part B patient and saw our staffing department grow 10% over the
first quarter of this year.  Traditionally, the medical industry is the
largest user of speech recognition, and we continue to see huge potential in
applying our speech technologies to the home healthcare market so that our
people can deliver the most cost effective, personal care possible.  Over
time, we believe our business strategy will pay off, providing robust,
balanced and steady growth.

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

Three Months Ended June 30, 2006 and 2005.
------------------------------------------

During the second quarter ended June 30, 2006, Wizzard recorded revenues of
$782,046, a 268% increase from revenues of $291,519 in the second quarter of
2005 and a 30% increase over revenues in the first quarter of 2006 ($602,391).
The increase for the second quarter of 2006 was due primarily to the expansion
of our healthcare operations.

Cost of goods sold totaled $447,700 in the second quarter of 2006, versus
$153,380 in the second quarter of 2005.  This increase of 192% is attributed
primarily to the expansion of our healthcare operations.  Wizzard posted a
gross profit of $334,346 during the second quarter of 2006, versus a gross
profit of $138,139 in the second quarter of 2005, an increase of 142%.

In the second quarter ended June 30, 2006, operating expenses totaled $961,351
which was a 22% increase from operating expenses of $790,340 in the second
quarter of 2005.  Broken down by line item our operating expenses were:

General and administrative expenses were $674,610 in 2006 versus $654,153 in
2005.  Selling expenses in the second quarter of 2006 were $134,891 versus
$124,884 in 2005.  This 8% increase was due primarily to the expansion of our
healthcare operations.  Research and Development expenses in the second
quarter were $11,850 versus $11,303 in 2005.

Other income (expenses) of $294,582 versus $38,860 in the second quarter of
2005, consisted primarily of interest expense.  This increase relates to the
issuance of a $382,500 of restricted stock to extend the due date on the
convertible notes payable to December 28, 2006, offset by other income of
$73,865, for penalties that were not claimed on the delay in registering the
underlying securities.

Wizzard's net loss was $921,587, or $0.03 per share, in the quarter ended June
30, 2006.  This represents a 33% increase from our net loss of $691,061, or
$0.03 per share, in the second quarter of 2005.

Six months ended June 30, 2006, and 2005.
-----------------------------------------

During the six month period ended June 30 2006, Wizzard recorded revenues of
$1,384,437, a 169% increase over revenues of $515,080 for the same period in
2005.  The increase in revenues in the six months ended June 30, 2006, was due
to the expansion of our healthcare operations.

In the six months ended June 30, 2006, cost of goods sold totaled $825,238, a
196% increase as compared to $278,719 in the six months ended June 30, 2005.
The increase in cost of goods sold was due to the expansion of our healthcare
operations.

Wizzard recorded total operating expenses of $1,734,984 during the six months
ended June 30, 2006, a 36% decrease as compared to operating expenses of
$2,699,370 in the same period of 2005.  General and administrative expenses
totaled $1,346,758 in the first six months of 2006 versus $1,245,278 in the
first six months of 2005, an increase of approximately 8%. This increase is
due primarily to an increase in employee and payroll related expense in excess
of the comparable six month period.  Selling expenses were relatively flat
with $225,058 in expenses in the first six months of 2006 versus $220,796 in
the first six months of 2005.  Research and Development expense fell by 44%,
from $41,329 in the first six months of 2005 to $23,168 in the first six
months of 2006.  In the first six months of 2005, Wizzard had a $1,191,967
expense for the impairment of goodwill as a result of the internal merger of
the Wizzard Delaware and Wizzard Colorado companies.

In the first six months of 2006, Wizzard recorded $140,000 of compensation for
re-pricing of warrants. In the first six months of 2005, Wizzard incurred an
interest expense of $1,452,065, primarily due to $1,400,000 interest expense
for amortization of a discount in conjunction with the $1,400,000 convertible
note sold to investors versus a $392,066 interest expense in the first six
months of 2005.

Wizzard's net loss was $1,479,786, or $0.05 per share, in the six months ended
June 30, 2006.  This represents a 62% decrease from our net loss of
$3,915,074, or $0.14 per share, in the first six months of 2005.  Total non-
cash expenses for the first six months of 2006 was $1,037,284, a 67% decrease
from non-cash expenses of $3,117,004 in the first six months of 2005,
primarily due to interest expense of $1,400,000 for amortization of a discount
in conjunction with our $1,400,000 note we sold to three separate
institutional investors.

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

Cash on hand was $593,959 at June 30, 2006, a decrease of $695,637 over the
$1,289,596 on hand at June 30, 2005.  Cash used in operations for the six
months ended June 30, 2006, was $574,344, a decrease of 13% over the $661,628
cash used in operations for the six months ended June 30, 2005.  Cash used in
investing activities was $4,086 for the purchase of equipment and software
during the six months ended June 30, 2006.

In the first six months of 2006, the Company received $560,004 from the
issuance of common stock.  The Company used common stock to pay $427,167 in
consulting, investor relations and employee services during the six months
ended June 30, 2006. In doing so, management believes we have conserved
Wizzard's cash liquidity for operational purposes.

The Company believes it is still in the early stages of the new and developing
speech technology market and estimates it will require approximately $130,000
per month to maintain current operations.  As mentioned in Note 2 to the
accompanying unaudited financial statements, the Company has not yet been able
to establish profitable operations and has not generated sufficient cashflows
from operations, thus raising substantial doubt about its ability to continue
as a going concern.  The Company has been successful over the past ten years
in obtaining working capital and will continue to seek to raise additional
capital from time to time as needed and until profitable operations can be
established.

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", "tend" 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 Securities and Exchange Commission:
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 speech recognition technology industry, the
development of products that may be superior to the products offered by the
Company, 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.
         ------------------------

In connection with the completion of its audit of, and the issuance of its
report on our consolidated financial statements for the year ended December
31, 2005, Gregory & Associates, LLC identified deficiencies that existed in
the design or operation of our internal control over financial reporting that
it considered to be "material weaknesses."  The Public Company Accounting
Oversight Board had defined a material weakness as a "significant deficiency
or combination of significant deficiencies that results in more than a remote
likelihood that a material misstatement of the annual or interim financial
statements will not be prevented or detected."

The material weakness identified relate to:

* the lack of sufficient knowledge and experience among the internal
accounting personnel regarding the application of US GAAP and SEC
requirements;

* segregation of duties, in that we had only one person performing all
accounting-related duties

* insufficient written policies and procedures for accounting and financial
reporting with respect to the current requirements and application of US GAAP
and SEC disclosure requirements; and

We believe that each of these material weaknesses existed at December 31,
2005.  The following changes in our internal controls over financial reporting
occurred during the first quarter of 2006 (unless indicated otherwise):

* the hiring of John L. Busshaus as our Controller on April 3, 2006, and the
education of Christopher J. Spencer and Armen Geronian and our accounting
staff about GAAP and Securities and Exchange Commission requirements;

* the segregation of accounting duties that had formerly been performed by one
person among three persons, including Mr. Busshaus.  As we continue to
incorporate written policies and procedures for accounting and financial
reporting, we will continue to implement additional segregation of duties.

We believe that these steps have fully addressed the first two material
weakness identified above.  We are actively working on implementing written
policies and procedures that will fully address the second material weakness,
which we also believe still exists.  We expect that this process may take 9-12
months.  As we continue to refine our internal workflow system and our written
policies and procedures, we believe that we will identify other areas in which
we can further segregate our employees' duties.  Although we have taken
significant steps to address this material weakness, we believe that it will
continue to exist until we have fully addressed the written policies and
procedures material weakness.

As required by Rule 13a-15(b) of the Securities and Exchange Commission, and
as of the end of the period covered by this Report, we carried out an
evaluation under the supervision and with the participation of our management,
including our Chief Executive Officer and acting Chief Financial Officer, or
the persons performing similar functions, of the effectiveness of the design
and operation of our disclosure controls and procedures as of June 30, 2006.
Based on this evaluation, our Chief Executive Officer has concluded that the
Company's controls and procedures as of June 30, 2006, are not effective. This
is management's conclusion, despite the compensating control provided by the
significant day-to-day involvement of the Company's Chief Executive Officer in
all aspects of the Company's operations in a small company atmosphere, and the
Company's engagement of an outside professional with sufficient expertise in
the application of US GAAP and SEC requirements.

The significant day-to-day involvement of our Chief Executive Officer
includes:

* his approval of all new hires and all Company purchases over the amount of
$500;

* the requirement that all checks over the amount of $2,500 bear two
signatures, one of which must be an Officer's signature;

* his approval of all transactions requiring credit approval; and

* his involvement in the analysis and approval of all acquisitions and
dispositions of assets.

These policies have been in place since Wizzard's inception.

The Company will continue to monitor, assess and work to improve the
effectiveness of our internal control procedures related to internal controls,
financial reporting and certain entity-wide controls related to corporate
governance in order to comply with Section 404 of the Sarbanes Oxley Act of
2002.

                   PART II - OTHER INFORMATION

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

None; not applicable.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.
----------------------------------------------------------------------

The following table provides information about all "unregistered" and
"restricted" securities that Wizzard has sold during the six month period
ended June 30, 2006, which were not registered under the Securities Act of
1933, as amended (the "Securities Act"):

Name                Date        Shares            Amount
-----------------------------------------------------------------------

Lane Ventures      1/9/06      100,000         Services valued at $180,000
Bruce Phifer      1/23/06        7,500         Services valued at $13,800
Mary Dvorsky      5/25/06          700         Services valued at $1,177
J. David Cepicka  5/25/06        3,140         Services valued at $5,297
Susan Sisk        5/25/06        3,140         Services valued at $5,297
Lane Ventures      6/7/06       36,000         Services valued at $60,480

We issued all of these securities to persons who were either "accredited
investors," or "sophisticated investors" who, by reason of education, business
acumen, experience or other factors, were fully capable of evaluating the
risks and merits of an investment in our Company; and each had prior access to
all material information about us.  We believe that the offer and sale of
these securities were exempt from the registration requirements of the
Securities Act, pursuant to Sections 4(2) and 4(6) thereof, and Rule 506 of
Regulation D of the Securities and Exchange Commission and from various
similar state exemptions.

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.

  31.1 - 302 Certification of Christopher J. Spencer

  31.2 - 302 Certification of Gordon Berry

  32 - 906 Certification.

   (b)  Reports on Form 8-K.

     None; not applicable.

                             SIGNATURES

In accordance with the requirements of the Exchange Act, the Registrant caused
this Quarterly Report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                         WIZZARD SOFTWARE CORPORATION

Date:  8/14/06                           /s/ Christopher J. Spencer
      ---------                          -----------------------------------
                                         Christopher J. Spencer, Director,
                                         CEO, President and Treasurer

Date:  8/14/06                           /s/ Armen Geronian
     ---------                           ----------------------------------
                                         Armen Geronian, Director
                                         Secretary

Date:  8/14/06                           /s/ Gordon Berry
     ---------                           ----------------------------------
                                         Gordon Berry, Director and Acting
                                         Chief Financial Officer

Date:  8/14/06                           /s/ Alan Costilo
     ---------                           ----------------------------------
                                         Alan Costilo, Director