UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                   FORM 10-KSB

[X]   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934 For the fiscal year ended February 29, 2008

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
      EXCHANGE ACT OF 1934

   For the transition period from ____________________to ____________________

                        COMMISSION FILE NUMBER 333-57818

                                  MODAVOX, INC.

                 (Name of small business issuer in its charter)

            DELAWARE                                     20-0122076
 (State or other jurisdiction of                       (IRS Employer
  incorporation or organization)                    Identification No.)

                         4636 E. UNIVERSITY DR, STE. 275

                                PHOENIX, AZ 80354

          (Address of principal executive offices, including zip code)

                                 (602) 648-6080

                           (Issuer's telephone number)

    SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE EXCHANGE ACT: NONE
    SECURITIES REGISTERED PURSUANT TO SECTION 12(G) OF THE EXCHANGE ACT: NONE

Check whether the issuer is not required to file reports pursuant to Section 13
or 15(d) of the Exchange Act.  [x]

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 issuer was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. [ ] Yes [x] No

Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B contained in this form, and no disclosure will be contained, to
the best of the issuer's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [x]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act

Yes[ ]  No [x]

State the issuer's revenues for the fiscal year ended February 29, 2008:
$2,817,694

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates (persons other than officers, directors, or holders of more
than 5% of the outstanding stock) computed by reference to the price at which
the common equity was sold, or the average bid and asked price of such common
equity as of a specified date within the past 60 days: $59,313,699 (computed
using the last quoted sale price of the Common Stock on June 2, 2008 on the OTC
Bulletin Board).

The number of shares outstanding of the issuer's Common Stock, $0.0001 par
value, on June 11, 2008 was 41,196,951.

                       DOCUMENTS INCORPORATED BY REFERENCE

None

Transitional Small Business Disclosure Format (Check one): [  ] Yes [x] No


<PAGE>


                                  MODAVOX, INC.

                FORM 10-KSB FOR THE YEAR ENDED FEBRUARY 29, 2008

                                TABLE OF CONTENTS

PART I

Item 1.       Description of Business
Item 2.       Description of Property
Item 3.       Legal Proceedings

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

PART II

Item 5.       Market for Common Equity and Related Stockholder Matters
Item 6.       Management's Discussion and Analysis or Plan of Operation
Item 7.       Financial Statements

Item 8.       Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure
Item 8A.      Controls and Procedures
Item 8B.      Other Information

PART III

Item 9.       Directors, Executive Officers, Promoters and Control Persons;
              Compliance with Section 16(a) of the Exchange Act

Item 10.      Executive Compensation

Item 11.      Security Ownership of Certain Beneficial Owners and Management
              and Related Stockholder Matters

Item 12.      Certain Relationships and Related Transactions
Item 13.      Exhibits
Item 14.      Principal Accountant Fees and Services


                                      -2-
<PAGE>


                                     PART I

ITEM 1. DESCRIPTION OF BUSINESS

Modavox, Inc. is the successor to SurfNet Media Group, Inc., a corporation
founded in 1999 and InnerSpace Corporation. On February 28, 2006, we acquired,
through merger, Kino Interactive LLC which owned the rights to proprietary
software ("Kino Software") utilized in the creation of platforms that distribute
audio/visual streaming over the internet ("Modavox Platforms"). Until the merger
with Kino, we produced and distributed online talk radio programming,
principally through our VoiceAmerica Network through our Patented Internet Radio
and Internet Advertising System. As a result of the merger with Kino, we have
used the Kino Software to create a new platform for VoiceAmerica to distribute
talk radio over the internet and have used the Modavox Platforms to develop
customized audio & video streaming products utilized for online applications,
destinations, geographical and database driven solutions, web sites that contain
online interactive advertising and enterprise level online interactive
communication products, website enhancements that create or upgrade audio and
video streaming. We operate our Company in two distinctive product lines, our
Interactive Agency Division and our Interactive Network Division. On March 3,
2007, Modavox purchased certain equipment and intangible assets from World Talk
Radio LLC (WTR), a San Diego based internet talk radio company, for 900,000
shares of common stock valued at $1,260,000 based upon the market price at the
date of purchase. The purchase agreement provides that another 100,000 common
shares be retained in escrow for one year. In addition, we incurred $25,138 of
fees associated with the transaction. We purchased property and equipment valued
at $35,000 and certain intangible assets, consisting of the trade name, domain
name and various archived internet radio programs valued at $1,250,138. At the
time of the purchase, WTR had two employees and minimal operating activity. In
addition, the technology, marketing, and operating activities were abandoned and
replaced with a Modavox version. As a result, we accounted for this transaction
as an asset purchase and not an acquisition of a business. On May 15, 2008,
Modavox purchased certain assets from RadioPilot (RDP), a Washington based
internet radio software developer to enhance our current BoomBox Radio offering.
We agreed to acquire the internet radio assets and enhancement platform for
250,000 shares and $50,000 of cash. The purchase provides us with all of the
intangible assets and none of the current liabilities, of RadioPilot, LLC. These
shares were valued at $1.85 per share for a share value of $462,500. The
purchase agreement provides that we will hold in escrow 100,000 common shares
for six months while we implement the software and integrate the systems. At the
time of the purchase, RDP had one employee who will provide front line support
of the system integration and texting through October 15, 2008. In addition, the
technology, marketing, and operational activities, where they exist, will be
abandoned following integration and replaced with Modavox versions. As a result,
we will account for the transaction as an asset purchase and not an acquisition
of a business.

You can learn more about us by visiting our website at www.modavox.com. Our
offices are at 4636 E University Dr., Suite 275, Phoenix, AZ 80354, telephone
(602) 648-6080. On January 30, 2002 our common stock began trading on the OTC
Bulletin Board Service. Our stock symbol is MDVX.

                                      -3-
<PAGE>


NETWORK DIVISION

INTERNET TALK RADIO

VoiceAmerica Networks & World Talk Radio

VoiceAmerica Networks and World Talk Radio have remained at the forefront of
Internet Talk Radio through our online destinations, which have been streaming
pioneering targeted Live Internet talk radio since 1999. The proven and growing
broadcast operation now features more than 300 hosts broadcasting on targeted
genre based channels, through our flagship VoiceAmerica Channel, VoiceAmerica
Health & Wellness Channel, VoiceAmerica Business Channel, 7th Wave Network and
World Talk Radio Networks.

REVENUE DRIVERS: Host Fees and Advertising/Sponsorship

The Internet Talk Radio operation derives revenue from two primary sources:

1.       Internet Talk Radio content providers - Host Fees
2.       Advertisers and Sponsors - Advertising Sponsorship Revenue

Internet Talk radio hosts purchase thirteen weeks of broadcasting production on
the BoomBox Radio(R) platform and distribution within the established and
populated #1 Internet Talk Radio destinations owned and operated by Modavox.
VoiceAmerica and World Talk Radio brands both provide targeted networks that are
organized by genre and are completely searchable, and syndication enabled.

Each show produced by Modavox is one hour in length, and broadcasts live
commercial content between six to eight minutes allocated by each show. Modavox
also creates visual real estate for its customers through the creation of
destination sites for banner, multimedia and interactive advertising sales.
Every live show generates an archive that is available for On-Demand access and
is indexed for contextual search and universally compatible playback. The system
of delivery of archived content is tracked and scalable to distribute
advertising inventory within the proven online radio environment.

After the production costs have been recovered by a host, Modavox typically
receives 60% of the advertising revenue through host fees. Customers or third
parties are provided incentives to develop advertising, and sponsorship revenues
and will work with Modavox to maximize the yield.

E-commerce host fee opportunities exist within shows marketing a product or
service that is purchased over the Internet. Modavox receives a commission that
ranges between 20% and 25% of the product or service's value upon conversion of
a listener to an e-commerce customer. First time show hosts receive professional
training from Modavox personnel. A show will debut six to eight weeks after the
host executes the contract with Modavox. All production is supported by
facilities in San Diego, Las Vegas, and Phoenix.

                                      -4-
<PAGE>


Host & Platform Fees Sales Strategy

The market strategy pertaining to the capture of new Internet Radio Show hosts
is focused around the development of Internet Radio Networks. The market
strategy allows for focused marketing efforts, as each Network generates sales
opportunities for host acquisition and the sale of complete Networks for Modavox
clients. The market size for a Modavox network is defined by the size of the
available host pool within specific network content areas. New show content is
bundled onto channels by genre and hosts are acquired within niche targeted
verticals. For example our VoiceAmerica(TM) Health and Wellness channel provides
a market for hosts from the healthcare, naturopathic medicine, patient, doctor,
and advocacy groups among many other candidates for inclusion in the Health &
Wellness channel.

o Modavox is developing a strategy to employ Network Directors and drive sales
activities through their respective Networks. Ray Ellis, a former NFL player and
broadcaster, has been retained to direct the VoiceAmerica(TM) Sports Network. o
Modavox presently employs 28 sales associates (Executive Producers) who recruit
show hosts for our Internet radio networks. o In addition to in house Executive
Producers Modavox utilizes a Network of Independent Contractors to increase our
sales reach. These Independent Contractors are paid commission on sales
contracts, advertising, and sponsorship derived through their efforts. o Initial
sales training provides VoiceAmerica(TM) & World Talk Radio Executive Producers
with tools to engage new hosts, sponsors, and advertising, all of which are
commissionable to the Executive Producer at the time of contract collection. o
Radio Hosts provide contacts and lists which allow Modavox to cross pollinate
shows, increase listenership, and unique visitation. o Sales associates are paid
one-time commissions, ranging from 20% to 28% of the initial fee the host pays
to Modavox. o Sales associates do not collect compensation in the form of
commission until contracted production, advertising, and sponsorship payments
are received by Modavox.

o Modavox will pursue a strategy to add 25 new Internet Talk Radio sales
associates (Executive Producers) during fiscal year 2009.

Modavox Talk Radio Network Destinations

Currently, Modavox has developed the following Networks within Internet Radio:

NETWORKS                                              NICHE MARKETS
--------------------------------------------------------------------------------
VoiceAmerica                                Motivational, Politics, Faith Based,
                                            E-Commerce, Etc.
VoiceAmerica Business                       Business, Financial, News,
                                            Management, Etc.
VoiceAmerica Health & Wellness              Healthcare, Fitness, Relationship,
                                            Etc.
7th Wave Network - Progressive Talk         Alternative, Environment, Etc.
VoiceAmerica SPORTS                         Sports Talk, Etc.
VoiceAmerica WOMEN                          Business, Politics, Events, Women's
                                            Issues, Etc.
World Talk Radio Studio A - Global Talk     International Talk Radio Etc.
World Talk Radio Studio B - Global Talk     International Talk, Radio Etc.

                                      -5-
<PAGE>


Advertising Revenue from Internet Talk Radio Operation

Advertising revenues obtained through the Internet Radio operation are in most
cases tied directly to the audience generated through our Internet Radio
Networks. Based on the advertising impression inventory we provide to listeners,
both visual and audio advertisements are sold on a Cost Per Thousand (CPM) basis
or sometimes through a "flat fee". The market size of this opportunity is
maximized when 100% of the available inventory is sold over our trafficked
networks, which Modavox both creates and controls. Modavox's current average
listening time on our Internet Talk Radio Networks is over 10 minutes and we are
able to deliver advertising inventory at a rate of 9 to 18 impressions per
minute to each listener.

         Cost ($) X1000 = CPM
         # of Audience - (ADVERSTING INVENTORY)

Sponsorship revenue obtained through our Internet Radio operation may be sold
for an entire network, group of networks, and also specific Internet Radio
shows. Sponsorships are sold in a "flat-rate" between $3,500 and $100,000 and
provide sponsorship delivered over specified time. The size of sponsorship
opportunities are directly or indirectly related to the content and topic area
of interest addressed within Talk Radio shows, channels and networks.

The market opportunity and size relevant to Modavox within the Internet Radio
operation is directly tied to the success of Internet Radio Networks. Audience
increase has a direct impact on the availability of advertising inventory. Once
the audience is achieved the market is abundant for the sale of advertising
inventory and conditioned to purchasing advertising on a CPM basis. Modavox owns
its own proprietary advertising delivery platform, which plays a key role in
establishing the size of the Modavox opportunity through its ability to sell all
available advertising inventories direct to advertisers which when properly
executed offers increasingly higher CPM rates and will allow us not to depend on
third parties.

INTERNET RADIO

BoomBox Radio(R)

BoomBox Radio(R) Platform is a complete solution for Internet Radio broadcast
production, distribution, and targeted advertising delivery that allow
organizations to create, manage, and monetize Internet Radio content.
VoiceAmerica, World Talk Radio, TalkZone, Unity.fm, and other third party
Internet Radio operations utilize the BoomBox Radio(R) Platform. Internet
Destinations:

www.unity.fm,
www.business.voiceamerica.com
www.health.voiceamerica.com
www.talkzone.com
www.sports.voiceamerica.com
www.odeo.com

                                      -6-
<PAGE>


Our strategic plan for BoomBox Radio(R) includes the build out and deployment of
new Internet Talk Radio Networks. We have identified the following as potential
VoiceAmerica Channels: VoiceAmerica(TM) Green Network & VoiceAmerica(TM) Comedy
Network

REVENUE CENTERS: DEVELOPMENT, PLATFORM, AND ADVERTISING

BoomBox Radio(R) is sold with an upfront development fee for the production of
branded self contained Internet radio destination, which is typically built into
an existing client owned Internet website. After the launch of the Internet
radio network Modavox charges customers a monthly platform fee based on the
amount of content and end users required for the network.

DEVELOPMENT AND PLATFORM FEES SALES STRATEGY

One strategy for capturing new BoomBox Radio(R) client accounts is graduating
VoiceAmerica(TM) and World Talk Radio hosts into completely branded third party
networks. Modavox recently helped a client parlay their VoiceAmerica(TM) Sports
Network show into a full featured private label network. Building on this
success, Executive Producers may earn commissions and capture new revenues
through the continued development of hosts and their respective shows to
complete Private Label Networks. Other sales opportunities are present with
content providers that wish to develop their own content.

Another key strategy has been to position BoomBox Radio(R) in conjunction with
the Modavox Enterprise(TM) Platform, enabling clients to provide Internet Radio
content via pay-per-view, private corporate intranet and other managed solutions
available from our Interactive Agency operation. The sales effort and execution
plan for direct sales is described under Modavox Enterprise(TM) Platform.

The leads which are generated from the Modavox Enterprise(TM) Platform for the
BoomBox Radio(R) platform are a direct result of the sales efforts of Network
Directors and their teams of Executive Producers. Executive Producers may elect
to complete the sales cycle or pass off to sales personnel of the Modavox
Interactive Agency. Commissions are adjusted accordingly and provide significant
incentive for both the prospecting and capture of BoomBox Radio (R) sales.

ADVERTISING ON BOOMBOX RADIO(R)

Advertising on third party BoomBox Radio(R) sites is identical in both the
production required and pricing models within our Internet Talk Radio operation,
thus enabling operating efficiency and scalability throughout the advertising
operation, which encompasses our entire product line. The subtle difference
between the offerings is that the client is typically the owner of the content
broadcast from the BoomBox Radio(R) destination site. This key distinction
allows Modavox to provide its patented Stream Syndicate(TM) advertising platform
and the customer's contract with Modavox on advertising and sponsorship revenue
splits. Both Modavox and its customers have sufficient incentive to generate
sales, which are realized through quality of the content and audience capture,
which dictates the amount of advertising inventory available for sale.

                                      -7-
<PAGE>


INTERNET TV

BoomBox Video(R)

BoomBox Video(R) offers a complete solution for Internet TV broadcast
production, distribution, and advertising delivery that allow organizations to
create, manage, and monetize Internet Television content. BoomBox Video(R)
delivers robust Internet TV applications which are embedded within its
customers' Internet sites, offering rapid deployment, seamless integration,
sophisticated distribution and exclusive targeting and reporting capabilities. A
number of major websites maintained by CBS, NBC, and ABC affiliates are now
among other leading Internet media destinations sites, which have already
deployed BoomBox Video(R) on their websites. Internet Destinations: West
Virginia Media Holdings , Mars Venus Wellness Coming Soon: VoiceAmerica(TM)
Comedy Network, Advanced Equities Corporation

REVENUE CENTERS: DEVELOPMENT, PLATFORM, AND ADVERTISING

BoomBox Video(R) is sold in two parts:

o Development fees
o Monthly platform fees

Internet TV destinations are typically built into an existing client owned
website. We also offer the option to have the site built out entirely by
Modavox. The BoomBox Video(R) product has a proprietary market foothold centered
on the customization, targeting, and reporting exclusively available from
Modavox. Geographic targeting offers a patented product feature which allows
users to open a new world of market opportunities. Purchasing BoomBox Video(R)
is advantageous to Modavox customers because quality content delivery, cost
effective communications, and interactive features save them money, time and in
some applications generate revenue automatically.

E-commerce, advertising and pay-per-view opportunities are always present within
destination sites once they are created and launched. All are vastly enhanced by
the customization technology owned by Modavox.

DEVELOPMENT AND PLATFORM FEES SALES STRATEGY

One strategy for capturing new BoomBox Video(R) client accounts is graduating
VoiceAmerica(TM) and World Talk Radio hosts into Internet TV hosts. Many hosts
have already begun using Internet TV in conjunction with their VoiceAmerica and
World Talk Radio talk radio shows using BoomBox Video(R). Internet TV
applications within our host's websites and broadcast pages within our Networks
are currently operating.

Another successful strategy has been to position BoomBox Video(R) in conjunction
with Modavox Enterprise(TM) Platform, enabling customers to provide Internet TV
content via pay-per-view, private corporate intranet and other managed solutions
available from our Interactive Agency operation. The sales effort and execution
plan for direct sales is described under Modavox Enterprise(TM) Platform.

                                      -8-
<PAGE>


Enterprise(TM) sales leads for BoomBox Video(R) result from the sales efforts of
Network Directors and their teams of Executive Producers. Executive Producers
may elect to complete the sales cycle or pass off to sales personnel of the
Modavox Interactive Agency.

The creation of complete Internet TV destinations is vastly enhanced when high
quality content is obtained by Modavox. Recent pay-per-view success with high
quality content providers, allowed for the generation of new scalable revenues
to Modavox, along with a renewed focus around capturing content to populate
complete Internet TV destinations. Growth measured in the number of millions of
unique visitors may be achieved with a single "hit" content destination.
Advertising inventory may be created and sold at premium rates within high
quality targeted media destinations.

ADVERTISING ON BOOMBOX VIDEO(R)

Advertising on third party BoomBox Video(R) sites incorporates the Steam
Syndicate(TM) advertising platform, providing operational efficiency and good
scalability throughout the advertising operation that umbrellas our entire
product line.

Both Modavox and its customers have incentive to generate sales, through quality
content and audience capture, which dictate the amount of advertising inventory
available for sale and the amount of revenue that may be generated.

The market size of this opportunity is maximized when 100% of the available
inventory is sold over highly trafficked networks Modavox creates and controls.
Modavox's current average listening time on our Internet Talk Radio Networks is
over 10 minutes and we are able to deliver advertising inventory at a rate of 9
to 18 impressions per minute to each listener.

         Cost ($) X1000 = CPM
         # of Audience - (ADVERSTING INVENTORY)

Sponsorship revenue obtained through our Internet Radio operation may be sold
for an entire network, group of networks, and also specific Internet Radio
shows. Sponsorships are sold in a "flat-rate" between $3,500 and $100,000 and
provide sponsorship delivered over specified time. The size of sponsorship
opportunity is directly related to the content and topic area of interest
addressed within Talk Radio shows, channels and networks.

INTERACTIVE PRODUCT LINE

MODAVOX HAS TWO PRODUCTS WITHIN ITS INTERACTIVE AGENCY PRODUCT LINE:

     1.   ENTERPRISE COMMUNICATIONS - MODAVOX ENTERPRISE(TM) PLATFORM

     2.   ADVERTISING - STREAM SYNDICATE(TM)

                                      -9-
<PAGE>


MODAVOX ENTERPRISE PLATFORM

The Modavox Enterprise(TM) Platform has been developed for Fortune 1000
clientele in a series of packaged services and technology products created by
Modavox. Through the utilization of our products, user may create and manage
complete targeted Internet TV & Radio Networks, "Box Office" Pay-Per-View, and
advanced E-Learning applications. The Modavox Enterprise(TM) Platform features
exclusive targeting and customization technologies only available from Modavox.

Samples: Significant Market traction has been established in key vertical
markets for the Modavox Enterprise(TM) application. Here is a partial list of
active Enterprise(TM) destination sites:

REVENUE CENTERS: HOST FEES AND ADVERTISING/SPONSORSHIP

Modavox Enterprise Solutions(R) are sold in two parts:

      o  Development fees

      o  Monthly platform fees

Development fees are calculated based on the scope of work. Monthly platform
fees are charged for technology license and platform usage.

MODAVOX ENTERPRISE(TM) PLATFORM SALES STRATEGY

Interactive Media salespeople are each paid a competitive base salary, plus a
20% sales commission after the base pay has been recaptured. Modavox is pursuing
a strategy to hire 10 qualified sales managers this year and is expanding the
organization to include New York and Los Angeles locations to support the
Modavox Enterprise(TM) Sales operations.

Packaged products allow for a traditional targeted sales effort led by a sales
organization driven by the Chief Technology Officer through the Vice President
of Interactive Agency Sales. Sales managers will be provided with support from
the organization that will include high quality collateral material, competitive
pricing, and targeted marketing approach. Modavox will identify the market need,
available budgets, and vertical approach and will provide technical sales
support and utilize a team of sales managers focused on specific vertical
markets.

MODAVOX ENTERPRISE DESTINATIONS VERTICAL MARKETS:

Multi Unit Operators/Franchise Operations
Advertising and Marketing (Product Showcase)
HR Communications
E-Learning
Investor Relations
Comedy Network
Classic Movie Network
Green Network

                                      -10-
<PAGE>


STREAMSYNDICATE ADVERTISING PLATFORM

The exclusive targeted advertising platform developed for the BoomBox Radio(R),
BoomBox Video(R), and Enterprise(TM) Platform Internet destinations have become
powerful stand-alone products when coupled with highly trafficked websites.
Stream Syndicate(TM) is currently deployed and delivering targeted advertising
on ABC O&O, NBC, CBS, Gannett, and several other leading Internet destination
sites. Our geographic targeting feature sets the Stream Syndicate(TM) apart from
our competitors and delivers unparalleled value and revenue generating
capabilities.

SALES STRATEGY

The sales efforts from the Network and Interactive Agency operation will draw
heavily from the Stream Syndicate(TM) Advertising Platform sales efforts.
Modavox is developing a marketing website and a dedicated sales operation
focused on signing up content providers with highly trafficked websites. We have
positioned the Stream Syndicate(TM) product as "more for less." Modavox charges
clients on a simple flat fee basis calculated on per ad-per month structure.

PRICE PER AD DELIVERED

Rate = $150.00 to $750.00 depending on Market for the Campaign and Targeting
Required Customer pays Rate x Number of Advertising Campaigns Each Month.

BARRIERS TO ENTRY/COMPETITIVE ADVANTAGE

Modavox, Inc. owns US Patent No. 6,594,691 and patent No. 7,269,636 resulting
from an original October, 1999 patent filing with the U.S.P.T.O. protecting our
Inventions through 2018. We have also received favorable indications from the
U.S.P.T.O on a divisional patent filing and a second continuation that could
yield, upon successful completion and acceptance of claims, a minimum of two
additional patents being issued to our company. Modavox is effectively the
"Customized Content Company", as our patents cover a technology process and a
software application system that enables any networked delivered content to be
customized based on end user criteria. In other words an end-user accessing a
website may be delivered to video, audio, and other content that is customized
based on geographic location, gender, age, or any other predetermined parameter.
This technology invention has been incorporated into the suite of Modavox
technologies which provides a healthy barrier to entry. As we were originally
created to provide audio and video content over networks, delivered affordably
to both user and creator, our advertising and platform tools provide within our
space a competitive edge over our peers from a software, infrastructure, and
delivery methodology.

The primary barrier for competitors with similar business plans to enter the
industry and engage in competition with Modavox is the robust software platforms
and technological solutions that Modavox has continued to develop, starting in
1998 with the acquisition through merger, as well as our Internet Talk Radio
operation. Our established industry leading position when combining our content
production and distribution technology systems creates a divide between Modavox
and our closest competitors, providing a barrier to adversarial entry into our
markets.

                                      -11-
<PAGE>


Modavox has established working models of our technology within leading and
highly recognizable clientele. We have established barriers to competitors
across all platforms in terms of our tenure, experience, reference accounts,
technology, and reputation.

TECHNOLOGY AND PRODUCT DEVELOPMENT

THE MODAVOX PATENTS

Modavox, Inc. owns US Patent NO. 6,594,691 and patent NO. 7,269,636 resulting
from an original October 1999 patent filing with the U.S.P.T.O. protecting our
Inventions through 2018. We have also received favorable indications from the
U.S.P.T.O on a divisional patent filing and a second continuation that could
yield, upon successful completion and acceptance of claims, a minimum of two
additional patents being issued to our company.

Modavox is effectively the "Customized Content Company," as our patents cover a
technology process and a software application system that enables any networked
delivered content to be customized based on end user criteria. In other words an
end-user accessing a website may be delivered custom video, audio, and other
content that is customized based on geographic location, gender, age, or any
other predetermined parameter. This technology invention has been used by
Modavox in applications including:

ONLINE APPLICATION                         ESTABLISHED REFERENCE ACCOUNTS
--------------------------------------------------------------------------------
E-Learning Platform                     Learners Receive Customized Content in
                                        E-Learning
Video & Audio Broadcasting Networks     Users Receive Customized Media Content
Advertising Platform                    Users Receive Advertising Content Based
                                        on Demographics
Internet Radio Platform                 Users Receive Radio Content Based on
                                        Geographic Location
Enterprise Platform                     A Politician Communicates to Voters
                                        Based on ZIP Code.

We have established application of our technology and will actively pursue and
maintain our growing book of business through relationships with existing
E-Learning clients including Merrill Lynch, Allergan, and Genentech.
Additionally, our Advertising Platform is utilized by a number of major
newspaper operations in Arizona, including Gannett's leading site azcentral.com
and many other leading news operations, including the Detroit Free Press. Our
Video & Audio Broadcasting products are used by ABC, NBC, CBS and FOX affiliates
across the United States. We also operate the largest and leading independent
Internet talk radio networks at VoiceAmerica.com and WorldTalkRadio.com. Our
invention is proven in a diverse group of Internet applications all of which we
believe have direct utility for use by clients in these and other industry
verticals.

INTELLECTUAL PROPERTY

Modavox, Inc. owns US Patent No. 6,594,691 and patent No. 7,269,636 resulting
from an original October 1999 patent filing with the U.S.P.T.O. protecting our
Inventions through 2018. We have also received favorable indications from the
U.S.P.T.O on a divisional patent filing and a second continuation that could
yield, upon successful completion and acceptance of claims, a minimum of two
additional patents being issued to our company. Modavox is effectively the
"Customized Content Company", as our patents cover a technology process and a

                                      -12-
<PAGE>

software application system that enables any networked delivered content to be
customized based on end user criteria. In other words an end-user accessing a
website may be delivered to video, audio, and other content that is customized
based on geographic location, gender, age, or any other predetermined parameter.
This technology invention has been incorporated into the suite of Modavox
technologies which provides a healthy barrier to entry. As we were originally
created to provide audio and video content over networks, delivered affordably
to both user and creator, our advertising and platform tools provide within our
space a competitive edge over our peers from a software, infrastructure, and
delivery methodology.

REGISTERED BRANDS & TRADEMARKS

Modavox is the owner of Trademark Registration No. 2,397,385 for the word-mark
BOOMBOX RADIO in connection with "entertainment services featuring music, news,
talk shows, video and computer games, movies, and television shows, provided via
a global computer network."

TRADEMARKS & BRANDING

BoomBox Radio(R)
BoomBox Video(R)

Modavox E-Learning Platform(TM)
Modavox Enterprise Platform(TM)
VoiceAmerica Networks
VoiceAmerica Business
VoiceAmerica Health & Wellness
VoiceAmerica Sports
World Talk Radio
StreamSyndicate
StreamSafe
Surfnet(R)


Hosting Agreements

Content is delivered and maintained on the internet through a series of
specialized computer servers maintained for that purpose ("Hosting Services").
Hosting Services for our Broadcast Media Division productions and the content
delivered from our Interactive Agency Division products are provided by us
through hosting agreements with Limelight Networks, Inc. ("Limelight") and
Hostway Corporation ("Hostway"). We purchase terabytes and gigabytes of Hosting
Services from these companies based upon the different needs of the content that
is being delivered to the internet. The cost of these Hosting Services is
included in fees charged to radio talk show hosts and is billed to Interactive
Agency Division customers based upon specific contracts. These relationships
with Limelight and Hostway provide a scalable, up-to-date hosting infrastructure
and a secure network of dedicated media servers that allow our customers content
to reach end users.

                                      -13-
<PAGE>


The agreement with Limelight is on an annual basis extending through November
2008. The agreement with Hostway is on a month- to-month basis. We are billed
each month by Limelight based upon our usage and our monthly commitment, and we
are billed each month by Hostway on a fixed basis. Although there are other
providers of Hosting Services, any disruption of service with Limelight or
Hostway would adversely affect our business.

Competition:

Many of our current and potential competitors have longer operating histories
and greater name recognition and resources than we do and may undertake more
extensive marketing campaigns. In addition, these competitors may adopt more
aggressive pricing policies than we do. Also, these competitors may devote
substantially more resources to developing new products than we do.

Our Network Division faces formidable competition, particularly from large
companies with Internet radio companies that provide a wide variety of
programming. We also face competition from Internet companies focused
exclusively on talk radio. The large companies include:

AOL Radio
Sirius Satellite Radio
XM Satellite Radio
Clear Channel Radio
CBS Radio
Brightcove
Kit Media

Among Internet Talk Radio companies, our top competitors are BlogTalk and
TalkZone. We believe that we compete against these companies based upon the
quality of our BoomBox Radio Platform, Patented Customization capabilities, and
our name recognition.

There are a large number of companies that produce and distribute content online
in competition with our Interactive Agency Division. Many of these companies are
much larger and have far greater resources. Companies that compete with our
Interactive Agency Division include:

Yahoo
Blue Lithium

XM Satellite Radio
CBS Radio
Brightcove
Target Spot
Simple Media
Tacoda

We believe that we compete with these companies based upon the performance of
our software and our ability to customize products for individual clients.

                                      -14-
<PAGE>


GOVERNMENTAL APPROVAL

Broadcasting over the Internet does not currently require governmental approval
in the United States. We are not aware of any foreign laws to which we are
subject that require formal governmental approval, licensing or other
authorization.

 CLIENTS

We do not rely on a few major customers. Our ten largest customers accounted for
10% of our revenue during the year ended February 29, 2008.

SOFTWARE DEVELOPMENT

We have established application of our technology, through internal and
outsourced production methods, and will actively pursue and maintain our growing
book of business through relationships with existing E-Learning clients
including Merrill Lynch, Allergan, and Genentech. Additionally, our Advertising
Platform is utilized by a number of major newspaper operations in Arizona,
including Gannett's leading site azcentral.com and many other leading news
operations, including the Detroit Free Press. Our Video & Audio Broadcasting
products are used by ABC, NBC, CBS and FOX affiliates across the United States.
We also operate the largest and leading independent Internet talk radio networks
at VoiceAmerica.com and WorldTalkRadio.com. Our invention is proven in a diverse
group of Internet applications all of which we believe have direct utility for
use by clients in these and other industry verticals. We believe that these
resources are adequate to meet our current needs and that any additional
resources that may be necessary can be obtained by hiring additional employees
or by outsourcing either domestically or on a foreign basis.

EMPLOYEES

As of June 1, 2008 Modavox employs 53 associates, 37 being sales executives and
executive producers, and 10 associates providing support services and
engineering services to our clients. Our administration and executive managers
provide the remaining team members which include accounting, technology
development, and reception. We outsource some of our development under a per
usage contract. We have no labor union contracts and believe relations with our
employees are satisfactory.

AVAILABLE INFORMATION

You can find more information about us at our Internet web site at (http://
www.modavox.com) Our Annual Report on Form 10-KSB, our Quarterly Reports on Form
10-QSB, and our current reports on Form 8-K which are available from the
Securities and Exchange Commission EDGAR web site at (HTTP://WWW.SEC.GOV). All
of these reports are available free of charge on our Internet website as soon as
reasonably practicable after we file such material electronically with the SEC.

                                      -15-
<PAGE>


FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-KSB and the documents incorporated herein by
reference contain forward-looking statements that have been made pursuant to the
provisions of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based on current expectations, estimates and
projections about our industry, management's beliefs, and certain assumptions
made by management. Words such as "anticipate," "expect," "intend" "plans,"
"believe," "seek," "estimate" and similar expressions are intended to identify
forward-looking statements. These statements are not guarantees of future
performance and actual actions or results may differ materially. These
statements are subject to certain risks, uncertainties and assumptions that are
difficult to predict, including those noted in the documents incorporated herein
by reference. Particular attention should also be paid to the cautionary
language appearing elsewhere in this report. We undertake no obligation to
update publicly any forward-looking statements as a result of new information,
future events or otherwise, unless required by law. Readers should, however,
carefully review the risk factors included in other reports or documents we file
from time to time with the Securities and Exchange Commission, particularly the
Quarterly Reports on Form 10-QSB and any Current Reports on Form 8-K.

RISK FACTORS

You should consider the following risk factors, in addition to the other
information presented herein and the documents incorporated by reference herein,
in evaluating us, our business and an investment in our common stock. Any of the
following risks, as well as other risks and uncertainties, could seriously harm
our business and financial results and cause the value of the common stock to
decline, which in turn could cause you to lose all or part of your investment.

WE CANNOT ASSURE YOU THAT WE WILL BECOME PROFITABLE SINCE WE HAVE A LIMITED
OPERATING HISTORY AND PLAN TO INCREASE OUR EXPENSES TO DEVELOP OUR BUSINESS.

We have a limited operating history and have not recorded a profit on an annual
basis. As a result of this, and the uncertainty of the market in which we
operate, we cannot reliably forecast our future results of operations. We expect
to increase our operating expenses in the future as a result of developing a
sales strategy. If our sales strategy is not successful, you may lose all of
your investment.

WE CANNOT ASSURE YOU THAT WE WILL BE ABLE TO DEVELOP THE INFRASTRUCTURE
NECESSARY TO ACHIEVE THE POTENTIAL SALES GROWTH IN OUR

INTERACTIVE AGENCY DIVISION

Achieving revenue growth in the Interactive Agency Division will require that we
develop additional infrastructure in sales, technical and client support
functions. We cannot assure you that we can develop this infrastructure or will
have the capital to do so. We have designed a plan to establish growth in our
Interactive Agency, adding Sales Executives and Sales Force development; however
this is untested at this time.

                                      -16-
<PAGE>


WE HAVE A SHORT OPERATING HISTORY AND A NEW BUSINESS MODEL IN AN EMERGING AND
RAPIDLY EVOLVING MARKET. THIS MAKES IT DIFFICULT TO EVALUATE OUR FUTURE
PROSPECTS AND INCREASES THE RISK OF YOUR INVESTMENT.

We have very little operating history for you to evaluate in assessing our
future prospects. You must consider our business and prospects in light of the
risks and difficulties we will encounter as an early-stage company in a new and
rapidly evolving market. We may not be able to successfully address these risks
and difficulties, which could materially harm our business and operating
results.

THE MARKETS THAT WE ARE TARGETING FOR REVENUE OPPORTUNITIES MAY CHANGE BEFORE WE
CAN ACCESS THEM

The markets for online products that we are targeting for revenue opportunities
are changing rapidly and are being pursued by many other companies. We cannot
provide assurance that we will be able to realize these revenue opportunities
before they change or before other companies dominate the market.

WE MAY NEED ADDITIONAL CAPITAL TO FUND OUR OPERATIONS.

We believe that we may require additional capital to fund the anticipated
expansion of our business and to pursue targeted revenue opportunities. We
cannot assure you that we will be able to raise additional capital. If we are
able to raise additional capital, we do not know what the terms of any such
capital raising would be. In addition, any future sale of our equity securities
would dilute the ownership and control of your shares and could be at prices
substantially below prices at which our shares currently trade. Our inability to
raise capital could require us to significantly curtail or terminate our
operations.

WE FACE SIGNIFICANT COMPETITION FROM LARGE INTERNET COMPANIES, SATELLITE RADIO
COMPANIES, SMALL, INTERNET TALK RADIO COMPANIES, TERRESTRIAL RADIO COMPANIES AND
OTHER MEDIA COMPANIES.

Most of these companies have more employees than we do, significantly more cash
resources, and longer operating histories and more established relationships
with customers. They can use their experience and resources against us in a
variety of competitive ways, including by making acquisitions, investing more
aggressively in research and development and competing more aggressively for
advertisers and customers.

IF WE DO NOT CONTINUE TO INNOVATE AND PROVIDE PRODUCTS AND SERVICES THAT ARE
USEFUL TO USERS, WE MAY NOT REMAIN COMPETITIVE, AND OUR REVENUES AND OPERATING
RESULTS COULD SUFFER.

Our success depends on providing products and services that people use for a
high quality Internet experience. Our competitors are constantly developing
innovations in web searching, online advertising and providing information to
people. As a result, we must continue to invest significant resources in
research and development in order to enhance our existing products and services

                                      -17-
<PAGE>

and introduce new high-quality products and services that people will use. If we
are unable to predict user preferences or industry changes, or if we are unable
to modify our products and services on a timely basis, we may lose users,
customers and advertisers. Our operating results would also suffer if our
innovations are not responsive to the needs of our users, customers and
advertisers, are not appropriately timed with market opportunity or are not
effectively brought to market.

IF WE FAIL TO MANAGE OUR ANTICIPATED GROWTH, OUR BUSINESS AND OPERATING RESULTS
COULD BE HARMED.

If we do not effectively manage our anticipated growth, the quality of our
products and services could suffer, which could negatively affect our brand and
operating results. To effectively manage this growth, we will need to improve
our operational, financial and management controls and our reporting systems and
procedures. These systems enhancements and improvements may require significant
capital expenditures and allocation of valuable management resources. If the
improvements are not implemented successfully, our ability to manage our growth
will be impaired and we may have to make significant additional expenditures to
address these issues, which could harm our financial position.

OUR INTELLECTUAL PROPERTY RIGHTS ARE VALUABLE, AND ANY INABILITY TO PROTECT THEM
COULD REDUCE THE VALUE OF OUR PRODUCTS, SERVICES AND

BRAND.

Our patent, trademarks, trade secrets, copyrights and all of our other
intellectual property rights are important assets for us. There are events that
are outside of our control that pose a threat to our intellectual property
rights. For example, effective intellectual property protection may not be
available in every country in which our products and services are distributed or
made available through the Internet. Also, the efforts we have taken to protect
our proprietary rights may not be sufficient or effective. Any significant
impairment of our intellectual property rights could harm our business or our
ability to compete. Also, protecting our intellectual property rights is costly
and time consuming. Any increase in the unauthorized use of our intellectual
property could make it more expensive to do business and harm our operating
results.

We also seek to maintain certain intellectual property as trade secrets. The
secrecy could be compromised by third parties, or intentionally or accidentally
by our employees, which would cause us to lose the competitive advantage
resulting from these trade secrets.

WE MAY IN THE FUTURE BE SUBJECT TO INTELLECTUAL PROPERTY RIGHTS CLAIMS, WHICH
ARE COSTLY TO DEFEND, COULD REQUIRE US TO PAY DAMAGES AND COULD LIMIT OUR
ABILITY TO USE CERTAIN TECHNOLOGIES IN THE FUTURE.

Companies in the Internet, technology and media industries own large numbers of
patents, copyrights, trademarks and trade secrets and frequently enter into
litigation based on allegations of infringement or other violations of
intellectual property rights. As we face increasing competition, the possibility
of intellectual property rights claims against us grows. Our technologies may
not be able to withstand any third-party claims or rights against their use. Any
intellectual property claims, with or without merit, could be time-consuming,
expensive to litigate or settle and could divert management resources and
attention.

                                      -18-
<PAGE>


With respect to any intellectual property rights claim, we may have to pay
damages or stop using technology found to be in violation of a third party's
rights. We may have to seek a license for the technology, which may not be
available on reasonable terms and may significantly increase our operating
expenses. The technology also may not be available for license to us at all. As
a result, we may also be required to develop alternative non-infringing
technology, which could require significant effort and expense. If we cannot
license or develop technology for the infringing aspects of our business, we may
be forced to limit our product and service offerings and may be unable to
compete effectively. Any of these results could harm our brand and operating
results.

OUR ABILITY TO OFFER OUR PRODUCTS AND SERVICES MAY BE AFFECTED BY A VARIETY OF
U.S. AND FOREIGN LAWS.

The laws relating to the liability of providers of online services for
activities of their users are currently unsettled both within the U.S. and
abroad. Future regulations could affect our ability to provide current or future
programming.

PROBLEMS WITH THIRD PARTY HOSTING COMPANIES COULD HARM US.

We rely on third-party hosting companies. Any disruption in the network access
or co-location services provided by these third-party providers or any failure
of these third-party providers to handle current or higher volumes of use could
significantly harm our business.

OUR BUSINESS DEPENDS ON THE GROWTH AND MAINTENANCE OF THE INTERNET
INFRASTRUCTURE.

Our success will depend on the continued growth and maintenance of the Internet
infrastructure. This includes maintenance of a reliable network backbone with
the necessary speed, data capacity and security for providing reliable Internet
services. Internet infrastructure may be unable to support the demands placed on
it if the number of Internet users continues to increase, or if existing or
future Internet users access the Internet more often or increase their bandwidth
requirements. In addition, viruses, worms and similar programs may harm the
performance of the Internet. The Internet has experienced a variety of outages
and other delays as a result of damage to portions of its infrastructure, and it
could face outages and delays in the future. These outages and delays could
reduce the level of Internet usage as well as our ability to provide our
solutions.

OUR OPERATING RESULTS MAY FLUCTUATE.

Our operating results may fluctuate as a result of a number of factors, many of
which are outside of our control. The following factors may affect our operating
results:

o    Our ability to compete effectively.
o    Our ability to continue to attract customers.
o    Our ability to attract revenue from advertisers and sponsors.
o    The amount and timing of operating costs and capital expenditures related
     to the maintenance and expansion of our business, operations and
     infrastructure.

                                      -19-
<PAGE>

o    General economic conditions and those economic conditions specific to the
     Internet and Internet advertising.
o    Our ability to keep our web sites operational at a reasonable cost and
     without service interruptions.
o    The success of our product expansion.
o    Our ability to attract, motivate and retain top-quality employees.

OUR STOCK PRICE IS VOLATILE, AND YOU MAY NOT BE ABLE TO RESELL YOUR SHARES AT OR
ABOVE THE PRICE YOU PAID.

The trading price of our common stock is highly volatile and subject to wide
fluctuations in price in response to various factors, some of which are beyond
our control. These factors include:

o    Quarterly variations in our results of operations.
o    Disruption to our operations.
o    The emergence of new sales channels in which we are unable to compete
     effectively.
o    Commencement of, or our involvement in, litigation.
o    Any major change in our board or management.
o    Changes in governmental regulations or in the status of our regulatory
     approvals.

In addition, the stock market in general, and the market for technology
companies in particular, have experienced extreme price and volume fluctuations
that have often been unrelated or disproportionate to the operating performance
of those companies. These broad market and industry factors may seriously harm
the market price of our common stock, regardless of our actual operating
performance.

SINCE THERE IS LIMITED TRADING VOLUME IN OUR COMMON STOCK, THERE IS A HIGH
DEGREE OF VOLATILITY IN OUR STOCK PRICE AND YOU MAY NOT BE ABLE TO RESELL ANY OF
THE SHARES YOU PURCHASE OR MAY HAVE TO SELL YOUR SHARES AT A SUBSTANTIALLY
REDUCED PRICE.

Our common stock trades on the OTC Bulletin Board Trading System. The Bulletin
Board tends to be highly illiquid, in part because there is no national
quotation system by which potential investors can track the market price of
shares except through information received or generated by a limited number of
broker-dealers that make a market in particular stocks. There is a greater
chance of market volatility for securities that trade on the Bulletin Board as
opposed to a national exchange or quotation system. The trading volume in our
stock is very limited, which causes high price volatility. In addition, because
of the limited volume of trading, the last quoted sales price may not represent
a price at which you could sell a significant number of shares, and any
sustained selling of shares may dramatically reduce the price of the shares. As
a result, you may not be able to resell your shares at a favorable price, or at
all.

                                      -20-
<PAGE>


ITEM 2. DESCRIPTION OF PROPERTY

We lease 1,762 square feet and 3,700 square feet of space in two locations in
Phoenix, Arizona for administrative, sales and technical personnel under leases
that expires in 2010, approximately 1,450 square feet of office space in Tucson,
Arizona for sales and technical personnel under a lease expiring in 2011,
approximately 2,000 square feet of office space in San Diego, California for
sales and technical personnel under a lease expiring in 2011 and approximately
700 square feet of office space in Las Vegas, Nevada for sales personnel under a
lease expiring in 2007. Management believes that these facilities are adequate
for current operations.

ITEM 3. LEGAL PROCEEDINGS

On September 4, 2007, a former Chief Executive Officer and Chairman began AAA
arbitration proceedings against us in Atlanta, GA sighting breach in the
settlement agreement between both parties on March 21, 2006. The plaintiff in
this case has decided to continue with AAA arbitration proceedings, parties have
agreed to an arbitrator, and other schedule dates established.

On August 9, 2007, Modavox filed a patent infringement lawsuit against Tacoda,
Inc. in the United States District Court for the Southern District of New York
(Case No. 07 CV 7088). In the suit, we assert our claim that Tacoda is
infringing on United States Patent No. 6,594,691, "Method and System for Adding
Function to a Web Page." The Company is seeking injunctive relief and as yet
unspecified damages stemming from Tacoda's infringing activities. Tacoda, Inc.
has been subsequently acquired by AOL, LLC, a majority-owned subsidiary of Time
Warner Inc. Complete fees associated with our lawsuit and the related outcome is
unknown at this time. Cost estimates and further outcome analysis will be
obtainable upon completion of the first round of litigation and responsive
dialogue with the defendant. On September 11, 2007, the US Patent Office Issued
Patent No. 7,269,636 to Modavox. The patent refines the legal definition of our
inventions with claims that reflect how the concepts taught by the foundational
U.S. Patent No. 6,594,691 "Method and System for Adding Function to a Web Page"
are implemented in state-of-the-art delivery infrastructure and delivery
practices seen in the marketplace today. On September 12, 2007, we filed an
amended complaint to United States District Court for the Southern District of
New York (Case No. 07 CV 7088) to assert the new patent as also being infringed
upon by Tacoda, Inc. As of February 29, 2008, this matter has not been resolved.

On March 20, 2008, a former investor began AAA arbitration proceedings against
us in Maricopa County, AZ seeking enforcement of terms pursuant to the former
Chief Executive Officer and Chairman stock option assignment presumably in late
2007. The individual filed AAA proceedings following a request by Modavox to
provide a fully executed Stock Option Agreement, bona fide statement of
consideration for the assignment, and withholding taxes required by the Internal
Revenue Service. To this date, the individual has not been able and or willing
to provide the requested documentation by our corporate counsel and the case
remains unresolved.

On May 16, 2008, Modavox served a Cease and Desist letter to the AOL, LLC
President & Chief Operating Officer. We advised of the possible expansion of our
current action against Tacoda to include AOL, LLC if they intend to utilize the
Tacoda Advertising process throughout the AOL, LLC "Platform A" as described in
recent publications and news releases. We have informed AOL, LLC that a

                                      -21-
<PAGE>

non-exclusive license to the patents-in-suit are available; however in the
absence of a license AOL, LLC's published intention to make the Tacoda solution
available across the Platform-A Network will in fact infringe upon well
identified patents. As of June 1, 2008, the matter remains unresolved.

On May 23, 2008, we issued a Cease and Desist letter to AOL, LLC related to our
Trademark Registration No. 2,397,385 for the word-mark BOOMBOX RADIO in
connection with "entertainment services featuring music, news, talk shows, video
and computer games, movies, and television shows, provided via a global computer
network". The use of BOOMBOX for entertainment services is an infringement of
our rights in the BOOMBOX RADIO mark for identical services. AOL's use of the
near identical mark may cause confusion or deceive the public into thinking
AOL's services originate or are somehow related to ours, or have the sponsorship
or approval of Modavox. This falsehood is reinforced by the adoption of the
large dominant BOOMBOX cursive. The remedies available to us include an
injunction or court order prohibiting use of the mark, an award of profits from
use of the mark, monetary damages above and beyond profits, seizure, impoundment
and destruction of any infringing forms, documents, signage, literature, and
material bearing the mark, and costs of the action. As of June 1, 2008, the
matter remains unresolved.

On June 6, 2008, we issued a Cease and Desist letter to Sirius Satellite Radio
related to our Trademark Registration No. 2,397,385 for the word-mark BOOMBOX
RADIO in connection with "entertainment services featuring music, news, talk
shows, video and computer games, movies, and television shows, provided via a
global computer network". The use of BOOMBOX for entertainment services is an
infringement of our rights in the BOOMBOX RADIO mark for identical services.
Sirius Satellite Radio's use of the near identical mark may cause confusion or
deceive the public into thinking Sirius services originate or are somehow
related to ours, or have the sponsorship or approval of Modavox. This falsehood
is reinforced by the adoption of the large dominant BOOMBOX cursive. The
remedies available to us include an injunction or court order prohibiting use of
the mark, an award of profits from use of the mark, monetary damages above and
beyond profits, seizure, impoundment and destruction of any infringing forms,
documents, signage, literature, and material bearing the mark, and costs of the
action. As of June 9, 2008, the matter remains unresolved.

See also Note 8 of our Notes to our Consolidated Financial Statements included
elsewhere in this report.

If successful, these claims may materially and adversely affect our business and
may result in dilution to our shareholders.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to security holders for approval during fiscal year
2008.

                                      -22-
<PAGE>


PART II

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

During the year ended February 29, 2008, our common stock traded on the OTC
Bulletin Board Market under the symbol "MDVX". The following table sets forth
the quarterly high and low reported last bid prices for our common stock during
each quarter of fiscal year 2008 and 2007:


FISCAL YEAR 2008                                        HIGH             LOW

First Quarter ended May 31, 2007                    $     1.97        $    1.26
Second Quarter ended August 31, 2007                      1.91             1.22
Third Quarter ended November 30, 2007                     1.65             1.11
Fourth Quarter ended February 29, 2008                    1.75              .85

FISCAL YEAR 2007

First Quarter ended May 31, 2006                     $     .90        $     .44
Second Quarter ended August 31, 2006                       .96              .54
Third Quarter ended November 30, 2006                      .92              .50
Fourth Quarter ended February 28, 2007                    2.00             1.28

The foregoing quotations reflect interdealer prices, without retail markup,
markdown or commission and may not represent actual transactions.

ISSUANCE OF UNREGISTERED COMMON SHARES:

Unregistered securities sold subsequent to March 1, 2008 are:

     In May 2008, we agreed to acquire internet radio assets and enhancement
     platform for 250,000 shares to purchase all of the intangible assets and
     none of the current liabilities of RadioPilot, LLC. These shares were
     valued at $1.85 per share for a share value of $462,500.

     On March 23, 2008, the Company issued 60,000 unregistered common shares in
     connection with future services from a placement agreement dated August
     2007.

     On May 16, 2008, we issued 461,329 unregistered common shares in connection
     with the exercise of 461,329 warrants issued in 2004 at $.197 for an
     aggregate consideration of $90,882, (see note 8 to the consolidated
     financial statements).

     On May 27, 2008, we issued 100,000 unregistered common shares in connection
     with the resolution of a legal matter.

     On May 31, 2008, we issued 250,000 unregistered common shares in connection
     with the exercise of 250,000 warrants issued in 2005 at $.25 for aggregate
     consideration of $62,500.

                                      -23-
<PAGE>


WARRANTS

     In June 2007, we granted 300,000 warrants at an exercise price of $0.50 in
     connection with a common stock offering of $75,000 prior to February 28,
     2007. The warrants vest immediately and have a term of 3 years. The
     relative fair value of the warrants is $63,848. Variables used in the
     Black-Scholes option-pricing model, include (1) 5.07% risk-free interest
     rate (2) 1.5 years expected term using the simplified method pursuant to
     SAB 107, (3) expected volatility of 143%, and (4) zero expected dividends.

     In November 2007, we granted 120,000 warrants at an exercise price of $1.15
     to a former corporate consultant. The warrants vest immediately and have a
     term of 3 years. The fair value of the warrants on the grant date was
     $56,861. Variables used in the Black-Scholes option-pricing model, include
     (1) 2.92% risk-free interest rate (2) 1.5 years expected term - using the
     simplified method pursuant to SAB 107, (3) expected volatility of 81%, and
     (4) zero expected dividends.

     In November 2007, we modified certain warrants that were originally issued
     to purchasers of common stock in connection with their purchase of common
     stock by lowering the exercise price from $1.50 to $1.00. The change in the
     fair value of these warrants when measured immediately prior to and
     immediately after the modification, resulted in an increase of $73,727. No
     expense was recognized because these warrants were originally issued to
     purchasers of common stock in connection with a capital raise.

     In December 2007, we granted 50,000 warrants at an exercise price of $1.00
     that vest immediately, 50,000 warrants at an exercise price of $1.00 that
     vest March 1, 2008, 100,000 warrants at an exercise price of $1.75 that
     vest ratably over 36 months, and 100,000 warrants at an exercise price of
     $2.00 that vest ratably over 36 months all to a corporate consultant. The
     warrants have a contractual term of 3 years. The fair value of the warrants
     on the grant date was $361,078. Variables used in the Black-Scholes
     option-pricing model, include (1) 3.15% to 3.51% risk-free interest rates
     (2) 2.5 to 4 years expected terms - using the simplified method pursuant to
     SAB 107, (3) expected volatilities of 135% to 173%, and (4) zero expected
     dividends.

     In January 2008, we granted 3,000,000 warrants at an exercise price of
     $1.25 that vest immediately in connection with a placement agreement. The
     fair value of the warrants on the grant date was $1,577,302. Variables used
     in the Black-Scholes option-pricing model, include (1) 2.61% risk-free
     interest rate (2) 3 years expected term - using the simplified method
     pursuant to SAB 107, (3) expected volatility of 83.68%, and (4) zero
     expected dividends. No expense was recognized because these warrants were
     originally issued to purchasers of common stock in connection with a
     capital raise.

                                      -24-
<PAGE>


ISSUANCE OF UNREGISTERED COMMON SHARES:

     Unregistered securities sold subsequent to March 1, 2008 are:

     On April 16, 2008, we issued 400,000 unregistered common shares in
     connection with the accredited investor investment of 400,000 shares issued
     at $1.25 for aggregate consideration of $500,000.

The Company has issued all such securities in reliance on Section 4(2) of the
Securities Act of 1933, as amended.

As of June 1, 2008, the number of holders of record of our common stock was
approximately 282.

To date, we have not paid dividends and do not intend to pay dividends in the
foreseeable future.

The following sets forth information about our securities authorized for
issuance under our equity compensation plans at February 29, 2008.

EQUITY COMPENSATION PLAN INFORMATION
------------------------------------
<TABLE>
<CAPTION>

                                                                                    NUMBER OF SECURITIES
                                                                                    REMAINING AVAILABLE FOR
                                                                                    FUTURE ISSUANCE UNDER
                               NUMBER OF SECURITIES TO BE   WEIGHTED - AVERAGE      EQUITY COMPENSATION PLANS
                               ISSUED UPON EXERCISE OF      EXERCISE PRICE OF       (EXCLUDING SECURITIES
PLAN CATEGORY                  OUTSTANDING OPTIONS.         OUTSTANDING OPTIONS.    REFLECTED IN COLUMN (a))
-------------------------      --------------------------   --------------------    --------------------------
                                        (a)                        (b)                        (c)

<S>                                         <C>                     <C>                     <C>
Equity Compensation Plans                  -0-                         N/A                      N/A
Approved by Security Holders

Equity Compensation Plans      1,225,000 shares of common             $0.62                     -0-
Not Approved by Security       stock
Holders                        4,300,000 shares of common
                               stock                                  $0.25                     -0-
</TABLE>

                                      -25-
<PAGE>

BENEFIT PLANS

2001 STOCK OPTION PLAN

In February 2001, our stockholders adopted our 2001 Stock Option Plan, which
provides for the grant to employees, officers, directors and consultants of
options to purchase up to an aggregate of 40,000 shares of common stock,
consisting of both "incentive stock options" within the meaning of Section 422
of the United States Internal Revenue Code of 1986 (the "Code") and
"non-qualified" options. Incentive stock options are issuable only to employees,
while non-qualified options may be issued to non-employee directors, consultants
and others, as well as to employees. The Plan is administered by our board of
directors, which determines those individuals who are to receive options, the
time period during which the options may be partially or fully exercised, the
number of shares of common stock that may be purchased under each option, and
the option price.

The per share exercise price of the common stock subject to an incentive stock
option or non-qualified option may not be less than the fair market value of our
common stock on the date the option is granted. The per share exercise price of
our common stock subject to a non-qualified option will be established by the
board of directors. The aggregate fair market value, determined as of the date
the option is granted, of our common stock that any employee may purchase in any
calendar year pursuant to the exercise of incentive stock options may not exceed
$1,000,000. No person who owns, directly or indirectly, at the time of the
granting of an incentive stock option to him, more than 10% of the total
combined voting power of all classes of our stock is eligible to receive any
incentive stock options under the Plan unless the option price is at least 110%
of the fair market value of our common stock subject to the option, determined
on the date of grant. Non-qualified options are not subject to this limitation.

Incentive stock options may not be transferred by an optionee other than by will
or the laws of descent and distribution, and during the lifetime of an optionee,
the option will be exercisable only by him or her. In the event of termination
of employment other than by death or disability, the optionee has three months
after such termination during which he or she can exercise the option. Upon
termination of employment of an optionee by reason of death or permanent total
disability, his or her option remains exercisable for one year thereafter to the
extent it was exercisable on the date of such termination. No similar
limitations apply to non-qualified options.

Options under the Plan must be granted within ten years from the effective date
as amended of the Plan. The incentive stock options granted under the Plan
cannot be exercised more than ten years from the date of grant, and incentive
stock options issued to 10% or greater stockholders are limited to five-year
terms. Options granted under the Plan may provide for the payment of the
exercise price in cash or by delivery to us of shares of common stock already
owned by the optionee having a fair market value equal to the exercise price of

                                      -26-
<PAGE>

the options being exercised, or by a combination of such methods of payment.
Therefore, an optionee may be able to tender shares of common stock to purchase
additional shares of common stock and may possibly exercise all of his stock
options with no additional investment other than his original shares.

Any unexercised options that expire or that terminate upon an optionee ceasing
to be an officer, director or an employee become available once again for
issuance. To date, we have not granted any options under our Plan.

2002 STOCK INCENTIVE PLAN

In January 2002, our Board of Directors approved our 2002 Stock Incentive Plan,
which provides for the grant to employees, officers, directors and consultants
of options, stock appreciation rights, restricted shares, deferred shares and
other stock-based awards to purchase up to an aggregate of 400,000 shares of
common stock. The stock-based awards may consist of both incentive stock options
and non-qualified options. The Plan, which has been approved by our
stockholders, is administered by our board of directors, which determines those
individuals who are to receive awards and the terms thereof.

2004 STOCK PLAN

In March 2004, we adopted our 2004 Stock Plan pursuant to which key employees,
including officers, directors and consultants of the Company are eligible to
receive incentive stock options as well as non-qualified stock options and stock
appreciation rights ("SARs"). The Stock Plan expires in March 2014 and is
administered by the Board of Directors or the Compensation Committee thereof.
Incentive stock options granted under the Stock Plan are exercisable for a
period of up to 10 years from the date of grant at an exercise price which is
not less than the fair market value ("FMV") of the Common Stock on the date of
the grant, except that the term of an incentive stock option granted under the
Stock Plan to a stockholder owning more than 10% of the outstanding Common Stock
may not exceed five years and the exercise price of an incentive stock option
granted to such a stockholder may not be less than 110% of the FMV of the Common
Stock on the date of the grant. Non-qualified stock options may be granted on
terms determined by the Board of Directors or the Compensation Committee. SARs,
which give the holder the privilege of surrendering such rights for an amount of
stock equal to the appreciation in the Common Stock between the time of grant
and the surrender, may be granted on any terms determined by the Board of
Directors or the Compensation Committee. The Stock Plan also permits the grant
of new stock options to participants who tender shares of the Company's Common
Stock as payment of the exercise price of stock options or the payment of
withholding tax ("Reload Options"). The Reload Options will be granted at the
fair market value of a share of Common Stock on the date of the grant and will
be exercisable six months following the date of the grant. The Stock Plan also
includes limited option valuation rights upon a change of control of the
Company. 2,000,000 shares were reserved for issuance under the Stock Plan, of
which, to date, 1,800,000 shares were issued.

                                      -27-
<PAGE>


In addition, to the foregoing plans, during the year ended February 28, 2007, we
issued non-qualified options to purchase 1,228,000 shares of common stock. The
options are exercisable at .62 per share, vest over 5 years and have a life of
ten years. These options were issued to employees, officers, directors and a
consultant.

EMPLOYEE STOCK OPTIONS

During the twelve months ended February 29, 2008, we cancelled 600,000 employee
stock options. At February 29, 2008, we had 5,228,000 of these options
outstanding. For the period ended February 29, 2008, we recognized $141,796 in
expense and at February 29, 2008, we have $519,711 of unrecognized expense
related to these options. This expense is recognized over the vesting period.

ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION

The following discussion and analysis of the financial condition and results of
our operations should be read in conjunction with financial statements and the
notes to those statements included elsewhere in this report. This discussion
contains forward-looking statements reflecting our current expectations that
involve risks and uncertainties. Actual results and the timing of events may
differ materially from those contained in these forward-looking statements due
to a number of factors, including those discussed under Business- Risk Factors
above and elsewhere in this report.

OVERVIEW

During the year ended February 29, 2008, we stabilized our operating cash flow
and raised $751,353, of capital. We ended our fiscal year with cash of $657,174,
working capital of $53,942, stockholder's equity of $4,142,043 and tangible net
worth of $561,456. Although we recorded a net loss for fiscal 2008 of
$3,304,005, this net loss included depreciation and amortization expense of
$639,776, stock option expense of $141,796, and the impairment of subscription
receivables of $395,649. In addition, the company realized an increase in legal
expense over 2007 which is due to our patent strategy, internal reviews, and
legacy related matters. The legal expense to our company for fiscal 2008 was
$849,083 compared to $116,039 in 2007. The increase in legal fees brought forth
two new awarded patents and two additional filings which we are confident will
provide protection for our new inventions.

We believe that as a result of our business strategy for the Network Division,
we have the potential for sustainable growth and profitability for that
division. We believe that the recent asset purchases of RadioPilot and World
Talk Radio will enhance our ability to achieve that potential. We also believe
that we have validated our strategic assumption that our patented and
proprietary software technology may be utilized to create salable products for
the Interactive Agency Division. However, we have not, as yet, developed a sales
infrastructure and distribution strategy that will allow us to project
sustainable growth and profitability from the Interactive Agency Division.
Development and execution of an appropriate sales and distribution strategy for
our Interactive Agency Division will be required before we can achieve

                                      -28-
<PAGE>

sustainable growth and profitability for the Company. We have made strides
however with the Interactive Agency Division subsequent to February 29, 2008
with the emergence of StreamSydicate as our dedication to the product line in
Fiscal 2008 provides us with a large client base, best of breed software, and
patented infrastructure. We believe by the end of the second quarter 2009 our
efforts will be realized with increased revenues, unique visitation increases,
and additional clients to serve.

During the year ended February 29, 2008, revenues consisted of talk radio
production fees and related sponsorship revenue, and revenue from the sale of
Interactive Agency Division products and related Hosting.

Operating expenses are primarily third party software production costs, third
party hosting costs for Interactive Agency Division products and our talk radio
network operating costs. These costs are principally the cost of technical
personal and fees paid to third parties for hosting services.

Selling, general and administrative expenses consist primarily of salaries,
commissions and related expenses for sales, marketing, accounting, and
administrative personnel and other general corporate expenses such as rent
communication and legal and accounting fees. Our litigation with Tacoda, defense
of our trade names, patent related costs, internal reviews and examinations, and
other one time fees provided a large percentage of the costs associated with our
business. We feel these expenses will continue to tax the overall operation
until legacy and patent related matters are resolved.

RESULTS OF OPERATIONS

The discussion of the results of operations compares the fiscal year ended
February 29, 2008 with the fiscal year ended February 28, 2007, and is not
necessarily indicative of the results which may be expected for any subsequent
periods. Our limited operating history makes predicting future operating results
very difficult. Our prospects should be considered in light of the risks,
expenses and difficulties encountered by companies in similar positions. We may
not be successful in addressing these risk and difficulties.

2008 VERSUS 2007

For the year ended February 29, 2008, gross revenues were $2,817,694, an
increase of $157,702 or 6% over 2007 revenues of $2,659,992. Revenues increased
in the Network Division due to the production of additional talk radio programs,
a higher contract renewal rate, and an increase in average fees. In addition, we
have been able to provide for and extend the reach of our Interactive Agency
Enterprise Communication Software which is primarily our BoomBox Video product.
The product, unavailable for most of fiscal 2008, along with StreamSyndicate
2.0, also launched in 2008, accounted for new opportunities and we would
anticipate that trend to continue in 2009.

Operating expenses for 2008 was $1,468,183, compared to $1,203,071 for 2007.
Operating expenses rose due to the higher labor costs associated with greater
revenues and the integration of the assets associated with World Talk Radio.

                                      -29-
<PAGE>


Selling general and administrative expenses for the year ended February 29, 2008
was $3,443,406 and $1,615,189 for the year ended February 28, 2007.

Depreciation and amortization expenses increased to $639,776 in 2008 from
$360,012 in 2007 due principally to the increase in software amortization
expense arising from the software developed internally and acquired externally
during fiscal 2008 and 2007.

Interest expense, net of interest income was $153,995 compared to net interest
income of $3,350 in the prior year. This change was due to the interest expense
associated with shares issued for a debt offering. Impairment of Subscription
Receivable was $395,649 for the year ended Feb 29, 2008. The Impairment of
Subscription Receivable is in connection with the merger in 2003 and the Non
Recourse Notes the then In House Legal Counsel mandated each employee to sign
prior to receiving their common stock. Management determined our ability to
collect on the subscription receivables was partially impaired resulting in the
partial write off of the subscription receivable.

The net loss was $3,304,005 in 2008 compared to $554,082 in 2007 due to
increased costs associated with advancing our patent related strategies,
developing software additions to our current technology suites, one time
consulting and option expenses, and costs associated with the asset purchase and
development of World Talk Radio. Legal expenses increased to $849, 083 in 2008
from $116,039 in 2007 due to our patent strategy, increasing our patent
portfolio, and other non related matters. Our expenses associated with the asset
purchase and development of World Talk Radio rose from $0 in 2007 to $316,502 in
2007 which include commissions, office space, production, and other costs
associated with developing the new network. We experienced an increase in the
costs associated with Talk Show Commissions from $445,632 in 2007 to $643,333 in
2008 due to higher contracted sales from our Network Division. In addition to
the aforementioned increased operating and legal costs we experienced stock
option expenses of $141,796, consulting related shares for services of $468,500,
warrant expense of $289,572, bad debt expense of $121,136, loss on settlement of
accounts payable of $40,778 and write off of non recourse notes of $395,649 in
fiscal 2008. Depreciation and amortization expenses increased to $639,776 in
2008 from $360,012 in 2007 due principally to the increase in software
amortization expense arising from the software developed internally and acquired
externally during fiscal 2008 and 2007.

LIQUIDITY AND CAPITAL RESOURCES

Cash generated from revenues exceeded our cash based operating expenses. During
fiscal 2008, we raised $751,383 of capital through the issuance of unregistered
shares of common stock.

During the fiscal year ended February 29, 2008, net cash used in operations was
$1,014,825 as a result of the payment of accounts payable and accrued
liabilities of $443,132 and the increase in accounts receivable of $767,099. We
also used cash of $323,433 to fund the acquisition of property and equipment and
externally purchased. These amounts were funded from the net cash received for
the issuance of unregistered common stock aggregating $751,383.

                                      -30-
<PAGE>


At February 29, 2008, we had cash balances of $657,174 and working capital of
$53,942. We do not believe that this liquidity is adequate to fund our current
operations. However, we intend to expand our sales and marketing efforts and
expand our sales locations. This intended expansion of sales personal and sales
locations, combined with funds that may be required to support a higher level of
accounts receivable, may require that we obtain additional capital. There is no
assurance that we will be able to raise the additional capital that may be
necessary to fund this expanded sales and marketing effort.

At February 29, 2008, our only debt outstanding was a bank loan aggregating
$19,590, which is due on demand. The aforementioned bank loan has been retired
subsequent to February 29, 2008 and we do not intend to use those funds or
request an increase to the bank loan in 2009.

CRITICAL ACCOUNTING ESTIMATES

The preparation of our financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
our management to make certain estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. A summary of our
significant accounting policies are detailed in Note-2 of Notes to the
Consolidated Financial Statements. Certain of these accounting policies involve
judgments and uncertainties to such an extent that there is a reasonable
likelihood that materially different amounts would have been reported if future
events indicate that different assumptions should have been used or
uncertainties are resolved differently than currently anticipated. The following
describes the assumptions involved in these accounting policies:

Management evaluated the probability of the utilization of the deferred income
tax asset related to the net operating loss carry forwards. We have estimated a
$2,597,675 deferred income tax asset that relates to net operating loss carry
forwards at February 29, 2008. Management determined that because we have yet to
generate taxable income and that the generation of taxable income in the short
term is uncertain, it was appropriate to provide a valuation allowance for the
total deferred income tax assets.

We evaluate the impairment of long lived tangible and intangible assets in
accordance with SFAS 141 and SFAS 142 in order to determine whether a write down
of the applicable long lived asset is required. This evaluation requires that we
estimate future cash flows in order to evaluate whether any impairment has
occurred. Due to the nature of estimates, actual cash flows will vary from those
estimated.

Stock option expense is recorded in accordance with SFAS 123R. The calculation
of this expense requires certain assumptions, including the expected volatility
of our stock price. See Note 2 of Notes to the Consolidated Financial Statements
for the assumptions utilized.

Our revenue recognition policy requires that we evaluate client contracts with
multi-deliverables in accordance with EITF 00-21, and, otherwise determine the
period in which revenues are recognized. These evaluations are based upon the
interpretation of client contracts.

                                      -31-
<PAGE>


We record a liability for contingencies when we believe that it is reasonably
possible that a liability exists and when we can estimate the potential range of
that liability. We evaluate contingencies based upon our analysis of the
contingency, which includes receiving advice from professionals, such as
attorneys.

ITEM 7. FINANCIAL STATEMENTS

                                TABLE OF CONTENTS

Report of Independent Registered Public Accounting Firm

FINANCIAL STATEMENTS:

Consolidated Balance Sheets as of February 29, 2008 and February 28, 2007.

Consolidated Statements of Operations for the years ended February 29, 2008 and
February 28, 2007.

Consolidated Statements of Stockholders' Equity for the years ended February 29,
2008 and February 28, 2007.

Consolidated Statements of Cash Flows for the years ended February 29, 2008 and
February 28, 2007.

Notes to Consolidated Financial Statements

                                      -32-
<PAGE>


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
  Modavox, Inc.

  Phoenix, AZ

We have audited the accompanying consolidated balance sheets of Modavox, Inc. as
of February 29, 2008 and February 28, 2007, and the consolidated statements of
operations, stockholders' equity, and cash flows for the years then ended. These
consolidated financial statements are the responsibility of management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. Modavox is not required
to have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of Modavox's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Modavox, Inc. as
of February 29, 2008 and February 28, 2007, and the consolidated results of its
operations and its cash flows for the years then ended, in conformity with
accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that Modavox, Inc. will continue as a going concern. As discussed in Note 3 to
the consolidated financial statements, Modavox has suffered recurring losses
from operations, which raises substantial doubt about its ability to continue as
a going concern. Management's plans regarding those matters are described in
Note 3. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.

Malone & Bailey, PC
Houston, Texas
www.malone-bailey.com

June 12, 2008

                                      -33-
<PAGE>

<TABLE>
<CAPTION>



                                  MODAVOX, INC.
                           CONSOLIDATED BALANCE SHEETS

                                                                   FEBRUARY 29,   FEBRUARY 28,
                                                                     2008             2007
                                                                  ------------    ------------
                                          ASSETS
CURRENT ASSETS:
<S>                                                               <C>             <C>
  Cash and cash equivalents                                       $    657,174    $  1,220,592
  Accounts receivable, net of allowance for
     doubtful accounts of $245,000 and $124,000                      1,120,456         474,493
  Prepaid expenses and other current assets                             18,019          14,115
                                                                  ------------    ------------
                        Total current assets                         1,795,649       1,709,200

Property and equipment net of accumulated depreciation of
   $315,267 and $146,451, respectively                                 507,514         309,950
Goodwill                                                             1,115,746       1,115,746
Software and patents,  net of accumulated amortization of
      $790,652 and $316,976, respectively                            2,464,841       1,732,467
                                                                  ------------    ------------

TOTAL ASSETS                                                      $  5,883,750    $  4,867,363
                                                                  ============    ============

                           LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                                $    672,641    $    345,179
  Accrued liabilities                                                  150,987          50,232
  Line of credit                                                        19,590          20,000
  Deferred revenue                                                     874,622         368,496
  Related party note payable                                            23,867            --
                                                                  ------------    ------------
                        Total current liabilities                    1,741,707         783,907

STOCKHOLDERS' EQUITY:
Common stock, $.0001 par value; 100,000,000 shares authorized;
   39,750,622 and 35,976,225 shares issued and
   outstanding, respectively                                             3,975           3,598
Additional paid-in capital                                          16,688,798      13,622,232
Stock subscription receivable                                         (107,159)       (402,808)
Accumulated deficit                                                (12,443,571)     (9,139,566)
                                                                  ------------    ------------

                        Total stockholders' equity                   4,142,043       4,083,456
                                                                  ------------    ------------

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                        $  5,883,750    $  4,867,363
                                                                  ============    ============

        See accompanying notes to the consolidated financial statements.
</TABLE>

                                      -34-
<PAGE>

<TABLE>
<CAPTION>

                                  MODAVOX, INC.
                      CONSOLIDATED STATEMENTS OF OPERATIONS

                                                           YEARS ENDED
                                                   FEBRUARY 29,    FEBRUARY 28,
                                                  -----------------------------
                                                      2008            2007
                                                  ------------     ------------

<S>                                               <C>              <C>
REVENUE                                           $  2,817,694     $  2,659,992

COSTS AND EXPENSES
  Operating expenses                                 1,468,183        1,203,071
  Selling, general, and administrative               3,464,096        1,654,342
  Depreciation and amortization                        639,776          360,011
                                                  ------------     ------------

Total costs and expenses                             5,572,055        3,217,424
                                                  ------------     ------------

OPERATING LOSS                                      (2,754,361)        (557,432)
                                                  ------------     ------------
OTHER INCOME (EXPENSES)
  Interest income (expense), net                      (153,995)           3,350
  Impairment of subscription  receivable              (395,649)            --
                                                  ------------     ------------

Total other income (expenses)                         (549,644)           3,350
                                                  ------------     ------------

NET LOSS                                          $ (3,304,005)    $   (554,082)
                                                  ============     ============
NET LOSS PER SHARE - basic and diluted            $      (0.09)    $      (0.02)
                                                  ============     ============
WEIGHTED AVERAGE SHARES OUTSTANDING
  Basic and diluted                                 37,979,062       31,551,573
                                                  ============     ============

        See accompanying notes to the consolidated financial statements.
</TABLE>


                                      -35-
<PAGE>

<TABLE>
<CAPTION>

                                                        MODAVOX, INC.
                                 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                                     YEARS ENDED FEBRUARY 29, 2008 AND FEBRUARY 28, 2007


                                         Common Stock             Paid-in         Stock        Accumulated     Stockholders'
                                     Shares        Amount         Capital      Subscription      Deficit          Equity
                                 -------------------------------------------------------------------------------------------
<S>                               <C>          <C>            <C>             <C>             <C>             <C>
Balances, February 28, 2006        27,780,309   $      2,778   $ 10,354,695    $   (402,808)   $ (8,585,484)   $  1,369,181
Common stock issued for:
  Cash                              4,644,667            465      1,954,035            --              --         1,954,500
  Services                             93,929             10         74,664            --              --            74,674
Common stock issued for the
  Settlement of debt                   92,857              9         66,384            --              --            66,393
Warrants granted for services            --             --          287,674            --              --           287,674
Stock options granted for
  services                               --             --           44,000            --              --            44,000
Preferred stock exchanged for
  common stock                      3,364,463            336        840,780            --              --           841,116
Net loss                                 --             --             --              --          (554,082)       (554,082)
                                 ------------   ------------   ------------    ------------    ------------    ------------

Balances, February 28, 2007        35,976,225          3,598     13,622,232        (402,808)     (9,139,566)      4,083,456
Common stock issued for
  purchase of World Talk

  Radio assets                        900,000             90      1,259,910            --              --         1,260,000
Common stock issued for:

  Cash                              2,022,376            202        851,181        (100,000)           --           751,383
  Services                            650,000             65        468,435            --              --           468,500
Common stock issued for

  warrant cashless exercise           140,140             14            (14)           --              --              --
Common shares issued for
settlement of accounts payable         61,881              6         55,687                                          55,693

Employee stock option expense            --             --          141,796            --              --           141,796
Warrants granted for services            --             --          289,571            --              --           289,571
Impairment of subscription
receivable                               --             --             --           395,649            --           395,649

Net loss                                 --             --             --              --        (3,304,005)     (3,304,005)
                                 ------------   ------------   ------------    ------------    ------------    ------------
Balances, February 29, 2008        39,750,622   $      3,975   $ 16,688,798    $   (107,159)   $(12,443,571)   $  4,142,043
                                 ============   ============   ============    ============    ============    ============

                              See accompanying notes to the consolidated financial statements.
</TABLE>


                                      -36-
<PAGE>

<TABLE>
<CAPTION>

                                      MODAVOX, INC.
                          CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                                YEARS ENDED
                                                          FEBRUARY 29,  FEBRUARY 28,
                                                          --------------------------
                                                              2008          2007
                                                          -----------    -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S>                                                       <C>            <C>
Net loss                                                  $(3,304,005)   $  (554,082)
  Adjustments to reconcile net loss to net cash used in
  operating activities:
    Depreciation and amortization                             639,776        360,011
    Common stock issued for services                          468,500         74,674
    Stock option expense                                      141,796         44,000
    Loss on the settlement of debt                               --           33,893
    Loss on settlement of accounts payable                     40,778           --
    Bad debt expense                                          121,136         74,000
    Write-off of intangible asset                              13,719           --
    Impairment of subscription receivable                     395,649           --
    Warrants granted for services                             289,571        287,674
  Changes in operating assets and liabilities:
      Receivables                                            (767,099)      (154,039)

      Prepaid expenses and other current assets                (3,904)        25,632
      Accounts payable and accrued expenses                   443,132       (431,613)
      Deferred revenue                                        506,126       (340,261)
                                                          -----------    -----------
Net cash used in operating activities                      (1,014,825)      (580,111)
                                                          -----------    -----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property and  equipment                       (296,271)      (350,041)
  Purchase of intangible assets                               (27,162)          --
                                                          -----------    -----------
Net cash used in investing activities                        (323,433)      (350,041)
                                                          -----------    -----------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Common stock issued for cash                                751,383      1,954,500
  Redemption of preferred stock                                  --         (125,000)
  Net repayment on line of credit                                (410)          --
  Net proceeds from (payments
     on) related party note payable                            23,867         (3,796)
                                                          -----------    -----------
Net cash provided by financing activities                     774,840      1,825,704
                                                          -----------    -----------

NET CHANGE IN CASH AND CASH EQUIVALENTS                      (563,418)       895,552
CASH AND CASH  EQUIVALENTS, BEGINNING OF YEAR               1,220,592        325,040
                                                          -----------    -----------
CASH AND CASH  EQUIVALENTS, END OF YEAR                   $   657,174    $ 1,220,592
                                                          ===========    ===========

SUPPLEMENTAL  CASH FLOW INFORMATION:
  Interest paid                                           $      --      $     3,657
  Income taxes paid                                              --             --

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
  Shares issued for settlements and vendor payables       $      --      $    74,674
  Conversion of preferred stock to common stock                  --          841,116
  Purchase of World Talk Radio assets with common stock     1,260,000           --
  Cashless exercise of warrants                                    14           --
  Shares issued for subscription receivable                   100,000           --
  Shares issued for settlement of accounts payable             14,915           --
  Shares issued for settlement of debt                           --           32,500


        See accompanying notes to the consolidated financial statements.
</TABLE>


                                      -37-
<PAGE>

MODAVOX, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - ORGANIZATION AND BASIS OF PRESENTATION

Modavox, Inc., a Delaware corporation, produces and distributes audio video
streaming products over the internet. Modavox has two distinctive product lines,
the Interactive Agency division and the Interactive Network Division. On March
3, 2007, Modavox acquired the assets of World Talk Radio, Inc., a producer of
online talk radio in San Diego, California. As a result, Modavox has sales,
administrative or technical support locations in Phoenix, Tucson, and San Diego.

The financial statements include the accounts of Modavox and its wholly owned
subsidiary Kino Acquisition Sub, Inc.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

RECLASSIFICATIONS

Certain prior year amounts have been reclassified to conform with the current
year presentation.

USE OF ESTIMATES

The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America necessarily requires
management to make estimates and assumptions that affect the amounts reported in
the financial statements. Modavox regularly evaluates estimates and judgments
based on historical experience and other relevant facts and circumstances.
Actual results could differ from those estimates. Significant estimates relate
to allowances for tax assets, the use of the Black-Scholes pricing model for
valuing stock option and common stock warrant issuances, estimates of future
cash flows used to evaluate impairment of long-lived assets, the period in which
revenues should be recorded, and the collectability of accounts receivable.

PRINCIPLES OF CONSOLIDATION

The consolidated financial statements include the accounts of Modavox Inc. and
its controlled subsidiaries. Equity investments in which Modavox exercises
significant influence, but does not control and is not the primary beneficiary,
are accounted for using the equity method of accounting. Investments in which
Modavox does not exercise significant influence over the investee are accounted
for using the cost method of accounting. Intercompany transactions are
eliminated.

CASH AND CASH EQUIVALENTs

Modavox considers all highly liquid investments purchased with original
maturities of three months or less to be cash equivalents.

                                      -38-
<PAGE>


REVENUE RECOGNITION

Revenue from Modavox's Interactive Agency Division is based upon the terms of
individual contracts and include revenue from the production and delivery of
online media content, revenue from the creation of custom software for online
content delivery functionality, fees for hosting websites, and fees for
producing online advertising content for third party and company websites.
Contracts may include single deliverables such as production and delivery of
media content, hosting, or fees from online advertising content, or may include
multiple deliverables such as custom software creation and production and
delivery of online media content or hosting. Revenues from single delivery
contracts for the production and delivery of online media content and hosting
are recorded pro rata over the term of the media content production and delivery
or hosting period. Revenues from the creation of custom software are generally a
component of contracts that include hosting and/or production and delivery
services. Software revenues are recorded when the software is completed and
accepted by the client if the software has free standing functionality, the fee
for the software is separately determinable and Modavox has demonstrated its
capability of completing any remaining terms under the contract. Otherwise all
revenues under the multi-deliverable contracts are recorded pro rata over the
term of the production and content delivery or hosting period. Fees for
producing interactive advertising content are based upon a fee for the
production and hosting of the advertising content and/or a percentage of the
fees paid by third party advertisers. Fees from third parties for the production
and hosting of the advertising content are recorded pro rata over the related
hosting period. Fees representing a percentage of the fees paid by third party
advertisers for advertising on third party or company websites are recorded when
the contractual criteria has been met and amounts are due from third party
advertisers.

ACCOUNTS RECEIVABLE

Modavox's accounts receivable balances are due from customers throughout the
United States. Credit is extended based on evaluation of a customer's financial
condition and, generally, collateral is not required. Accounts receivable are
due within 30 to 60 days and are stated at amounts due from customers net of an
allowance for doubtful accounts. Accounts outstanding longer than the
contractual payment terms are reviewed for collectability and after 90 days are
considered past due.

Modavox determines its allowance by considering a number of factors, including
the length of time trade accounts receivable are past due, Modavox's previous
loss history, the customer's current ability to pay its obligation to Modavox,
and the condition of the general economy and the industry as a whole. Our
allowance for doubtful accounts was $245,000 and $124,000 as of February 29,
2008 and February 28, 2007.

DEFERRED REVENUE

Amounts billed or collected in advance of the period in which the related
product or service qualifies for revenue recognition are recorded as deferred
revenue.

Modavox relieves the deferred revenue balance and records revenue when the
service has been performed in accordance with Modavox's revenue recognition
policy.

                                      -39-
<PAGE>


INCOME TAXES

Modavox computes income taxes in accordance with Financial Accounting Standards
Statement No. 109, "Accounting for Income Taxes." Under SFAS 109,
deferred taxes are recognized for the tax consequences of temporary differences
by applying enacted statutory rates applicable to future years to differences
between the financial statement carrying amounts and the tax basis of existing
assets and liabilities. Permanent differences arise as a result of the value of
stock compensation for tax purposes being lower than the book value of such
expenses. Temporary differences resulted primarily from the accrual of certain
liabilities for financial statement purposes, which were not deductible for
income tax purposes.

STOCK-BASED COMPENSATION

Modavox adopted SFAS 123R on March 1, 2006, and accordingly, the consolidated
statement of operations for the years ended February 29, 2008 and February 28,
2007 includes $141,796 and $44,000, respectively, of stock option expense,
calculated in accordance with SFAS 123R using the Black-Scholes option-pricing
model. The assumptions used in calculating the Black-Scholes option-pricing
model for the 2008 and 2007 stock option expense are as follows:

<TABLE>
<CAPTION>

------------------------------------------------------ ----------------- ----------------
                                                             2008             2007
                                                             ----             ----
------------------------------------------------------ ----------------- ----------------
<S>                                                       <C>              <C>
Expected life in years                                        -               5.00
------------------------------------------------------ ----------------- ----------------
Expected stock price volatility                               -               190%
------------------------------------------------------ ----------------- ----------------
Risk-free interest rate                                       -               3.72%
------------------------------------------------------ ----------------- ----------------
Weighted Average fair value per option/warrant                -               $0.62
------------------------------------------------------ ----------------- ----------------
</TABLE>

Modavox accounts for share based payments to non-employees in accordance with
EITF 96-18 "Accounting for Equity Instruments Issued to Non-Employees for
Acquiring, or in Conjunction with Selling, Goods or Services".

LOSS PER SHARE

Modavox computes net loss per share in accordance with SFAS No. 128 "Earnings
per Share" and SEC Staff Accounting Bulletin No. 98. Under the provisions of
SFAS No. 128, basic net loss per share is computed by dividing the net loss
available to common stockholders for the period by the weighted average number
of common shares outstanding during the period. Diluted net loss per share is
computed by dividing the net loss for the period by the

                                      -40-
<PAGE>

number of common and common equivalent shares outstanding during the period,
assuming full dilution. As of February 29, 2008, there were potentially dilutive
securities of options exercisable into 4,605,582 shares of common stock, and
warrants exercisable to purchase 6,672,937 shares of common stock. However, the
computation of diluted earnings per share does not assume conversion or exercise
of securities that would have an anti-dilutive effect on the calculation of
earnings per share as the inclusion of these outstanding warrants and stock
options would be anti-dilutive. Accordingly, diluted net loss per share and
basic net loss per share are identical for each of the periods in the
accompanying consolidated statements of operations.

FINANCIAL INSTRUMENTS

Financial instruments consist primarily of cash, accounts receivable, and
obligations under accounts payable, accrued expenses and a note payable. The
carrying amount of cash, accounts payable and accrued expenses approximates fair
value because of the short maturity of those instruments. The carrying value of
the note payable approximates fair value because it contains a market value
interest rate and is short-term. Modavox has applied certain assumptions in
estimating these fair values. The use of different assumptions or methodologies
may have a material effect on the estimates of fair values.

PROPERTY AND EQUIPMENT

Property and equipment consists primarily of office equipment and furnishings
and is stated at cost less accumulated depreciation. Depreciation is recorded on
a straight-line basis over the estimated useful lives of the assets ranging from
3 to 4 years. Depreciation expense was $168,816 and $43,035 for the years ended
February 29, 2008 and February 28, 2007, respectively.

Property and equipment consisted of the following at February 29, 2008 and
February 28, 2007:

                                                       2008           2007
                                                  --------------  --------------
    Furniture                                        $   44,956      $   45,268
    Computers, software,  production equipment          708,677         343,152
    Phone systems                                        30,688          29,521
    Leasehold improvements                               38,460          38,460
                                                  --------------  --------------
         Total                                          822,781         456,401
    Accumulated depreciation                          (315,267)       (146,451)
                                                  --------------  --------------
         Net                                         $  507,514      $  309,950
                                                  ==============  ==============

Modavox capitalizes the costs of developing software for internal use in
accordance with SOP 98-1, and the cost of developing software to be sold, leased
or otherwise marketed in accordance with FASB No. 86. These costs include both
purchased software and internally developed software. Costs of developing
software are expensed until technological feasibility has been established.
Thereafter, all costs are capitalized and are carried at the lower of
unamortized cost or net realizable value. Internally developed and purchased
software costs are generally amortized over three years. The cost assigned to
the software acquired in the Kino acquisition is being amortized over 7 years.

                                      -41-
<PAGE>


GOODWILL, INTANGIBLE ASSETS, AND LONG-LIVED ASSETS

Goodwill represents costs in excess of fair values assigned to the underlying
net assets acquired. Modavox has adopted the provisions of Statement of
Financial Accounting Standards No. 141, "BUSINESS COMBINATIONS," and SFAS No.
142, "GOODWILL AND OTHER INTANGIBLE ASSETS." These standards require the use of
the purchase method of accounting for business combinations, set forth the
accounting for the initial recognition of acquired intangible assets and
goodwill and describe the accounting for intangible assets and goodwill
subsequent to initial recognition. Under the provisions of these standards,
goodwill is not subject to amortization and annual review is required for
impairment. The impairment test under SFAS No. 142 is based on a two-step
process involving (i) comparing the estimated fair value of the related
reporting unit to its net book value and (ii) comparing the estimated implied
fair value of goodwill to its carrying value. Impairment losses are recognized
whenever the implied fair value of goodwill is less than its carrying value.
Modavox's annual impairment testing date is February 28.

Modavox recognizes an acquired intangible asset apart from goodwill whenever the
intangible asset arises from contractual or other legal rights, or when it can
be separated or divided from the acquired entity and sold, transferred,
licensed, rented or exchanged, either individually or in combination with a
related contract, asset or liability. Such intangibles are amortized over their
useful lives. Impairment losses are recognized if the carrying amount of an
intangible asset subject to amortization is not recoverable from expected future
cash flows and its carrying amount exceeds its fair value.

Modavox reviews its long-lived assets, including property and equipment,
identifiable intangibles, and goodwill annually or whenever events or changes in
circumstances indicate that the carrying amount of the assets may not be fully
recoverable. To determine recoverability of its long-lived assets, Modavox
evaluates the probability that future undiscounted net cash flows will be less
than the carrying amount of the assets.

Software and patents consisted of the following at February 29, 2008 and
February 28, 2007:

                              Useful Life in
                                  Months         2008              2007
                                             -----------       -----------
Software                         36 to 84    $ 3,095,197       $ 2,043,469
Trademarks                          55           160,296              --
Patents                             36              --               5,974
                                             -----------       -----------
    Total                                      3,255,493         2,049,443
Accumulated amortization                        (790,652)         (316,976)
                                             -----------       -----------
    Net                                      $ 2,464,841       $ 1,732,467
                                             ===========       ===========



NEW ACCOUNTING PRONOUNCEMENTS

In June 2006, the Financial Accounting Standards Board issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an
interpretation of FASB Statement No. 109" (FIN 48). This Interpretation provides
guidance on recognition, classification and disclosure concerning uncertain tax
liabilities. The evaluation of a tax position requires recognition of a tax
benefit if it is more likely than not it will be sustained upon examination. The
Company adopted this Interpretation effective January 1, 2007. The adoption did
not have a material impact on its financial statements.

                                      -42-
<PAGE>


In December 2007, the FASB issued Statement SFAS No. 141, Business Combinations
(SFAS 141R), and Statement of Financial Accounting Standards No. 160, Accounting
and Reporting of Noncontrolling Interest in Consolidated Financial Statements,
an amendment of ARB No. 51 (SFAS 160). SFAS 141R and SFAS 160 will significantly
change the accounting for and reporting of business combination transactions and
noncontrolling (minority) interests in consolidated financial statements. SFAS
141R retains the fundamental requirements in Statement 141, Business
Combinations, while providing additional definitions, such as the definition of
the acquirer in a purchase and improvements in the application of how the
acquisition method is applied. SFAS 160 will change the accounting and reporting
for minority interests, which will be recharacterized as noncontrolling
interests, and classified as a component of equity. These Statements become
simultaneously effective January 1, 2009. Early adoption is not permitted. The
Company is currently assessing the impact, if any, that the adoption of this
pronouncement will have on the Company's operating results financial position or
cash flows.

In May 2007, the FASB issued FSP No. FIN 48-1, Definition of Settlement in FASB
Interpretation No. 48, (FIN 48-1) which amends FIN 48 and provides guidance
concerning how an entity should determine whether a tax position is
"effectively," rather than the previously required "ultimately," settled for the
purpose of recognizing previously unrecognized tax benefits. In addition, FIN
48-1 provides guidance on determining whether a tax position has been
effectively settled. The guidance in FIN 48-1 is effective upon the initial
January 1, 2007 adoption of FIN 48. Companies that have not applied this
guidance must retroactively apply the provisions of this FSP to the date of the
initial adoption of FIN 48. The Company has adopted FIN 48-1 and no retroactive
adjustments were necessary.

In February 2007, the FASB issued SFAS 159, The Fair Value Option for Financial
Assets and Financial Liabilities Including an Amendment of FASB Statement No.
115 (SFAS 159), which permits entities to choose to measure many financial
instruments and certain other items at fair value (the Fair Value Option).
Election of the Fair Value Option is made on an instrument-by-instrument basis
and is irrevocable. At the adoption date, unrealized gains and losses on
financial assets and liabilities for which the Fair Value Option has been
elected would be reported as a cumulative adjustment to beginning retained
earnings. If the Company elects the Fair Value Option for certain financial
assets and liabilities, the Company will report unrealized gains and losses due
to changes in fair value in earnings at each subsequent reporting date. The
provisions of SFAS 159 are effective January 1, 2008. The Company is currently
assessing the impact, if any, that the adoption of this pronouncement will have
on the Company's operating results, financial position or cash flows.

In September 2006, the FASB issued SFAS 157, Fair Value Measurements (SFAS 157),
which defines fair value, establishes a framework for measuring fair value, and
expands disclosures about fair value measurements. This pronouncement applies to
other standards that require or permit fair value measurements. Accordingly,
this statement does not require any new fair value measurement. The provisions
of SFAS 157 are effective for the Company on January 1, 2008. The Company is
currently assessing the impact, if any, that the adoption of this pronouncement
will have on the Company's operating results, financial position or cash flows.

                                      -43-
<PAGE>


NOTE 3 - GOING CONCERN

Modavox incurred operating losses since inception, which losses aggregated
$12,443,571 at February 29, 2008, including a loss of $3,304,005 in 2008.
Modavox believes that additional losses may be incurred as it develops and
executes a sales and distribution strategy for its products and expands the
number of sales locations. These potential losses and capital expenditures
needed for Modavox to expand its sales locations and fund increases in accounts
receivable may require Modavox to raise additional capital. There can be no
assurance that Modavox will be able to raise the additional capital that may be
needed. These conditions raise substantial doubt as to Modavox's ability to
continue as a going concern. Management is trying to raise additional capital
through sales of common stock. The financial statements do not include any
adjustments that might be necessary if Modavox is unable to continue as a going
concern.

NOTE 4 - WTR ASSET PURCHASE

On March 3, 2007, Modavox purchased certain equipment and intangible assets from
World Talk Radio, LLC (WTR), a San Diego based internet talk radio company, for
900,000 shares of common stock valued at $1,260,000 based upon the market price
at the date of purchase. The purchase agreement provides that another 100,000
common shares be retained in escrow for one year which as of February 29, 2008
and subsequent to February 29, 2008 have not been released. In addition, Modavox
incurred $25,138 of fees associated with the transaction. Modavox valued the
purchased property and equipment at $35,000 and certain intangible assets,
consisting of the trade name, domain name and various archived internet radio
programs at $1,250,138. At the time of the purchase, WTR had two employees and
minimal operating activity. In addition, the technology, marketing, and
operating activities were abandoned and replaced with a Modavox version. As a
result, Modavox accounted for this transaction as an asset purchase and not an
acquisition of a business.

NOTE 5 - LINE OF CREDIT

At February 29, 2008, Modavox had a line of credit with an unpaid balance of
$19,590, which is due on demand and bears interest at prime plus 4.25%.
Subsequent to the February 29, 2008 Modavox retired the bank note.

NOTE 6 - RELATED PARTY DEBT

On February 29, 2008, Modavox borrowed $23,867 from one of its officers. The
loan is unsecured and due on demand with no stated interest rate.

NOTE 7 - CAPITAL STOCK

                             SUBSRIPTION RECEIVABLE

During fiscal 2008, Modavox wrote off as uncollectible $395,649 of the $402,808
subsription receivable from prior periods.

                                      -44-
<PAGE>


COMMON STOCK

During fiscal year 2008, Modavox completed the following equity transactions:

In March, Modavox issued 390,376 shares in connection with the exercise of
warrants for cash of $80,883.

In March, Modavox issued 900,000 shares to purchase all of the intangible assets
and none of the current assets or any liabilities, of World Talk Radio LLC, a
San Diego based internet talk radio company. These shares were valued at
$1,260,000 based upon the market price at the date of purchase (see Note 4 for
details).

In April, Modavox issued 252,000 shares in connection with the exercise of
warrants for cash of $125,500.

In June, Modavox issued 140,000 shares in connection with the exercise of
warrants for cash of $35,000.

In June, Modavox issued 41,127 shares in connection with the cashless exercise
of 48,000 warrants at $1.74 per share.

In July, Modavox issued 25,000 shares in connection with the exercise of
warrants for cash of $6,250.

In September, Modavox issued 125,000 shares in connection with the exercise of
warrants for cash of $31,250.

In September, Modavox issued 28,465 shares in connection with the cashless
exercise of a warrant at $1.71 per share.

In October, Modavox issued 50,000 shares in connection with the exercise of
warrants for cash of $12,500.

In November, Modavox issued 500,000 shares in connection with the exercise of
warrants for cash of $25,000 and subscription receivable of $100,000.

In November, Modavox issued 400,000 shares in connection with the exercise of
warrants for cash of $400,000.

In November, Modavox issued 70,548 shares in connection with the cashless
exercise of a warrant at $1.46 per share.

In December, Modavox issued 650,000 shares for services valued at $468,500.

In January, Modavox issued 30,000 shares in connection with the exercise of
warrants for cash of $7,500.

                                      -45-
<PAGE>


In February, Modavox issued 110,000 shares in connection with the exercise of
warrants for cash of $27,500.

In fiscal 2008, Modavox issued 61,881 shares with a fair value of $55,693 to
settle accounts payable totaling $14,915 resulting in a loss of $40,778 on the
settlement.

During fiscal year 2007, Modavox completed the following equity transactions:

In April, Modavox issued 64,000 shares for $16,000 cash.

In May, Modavox issued 1,114,000 shares for $253,500 cash.

In May, Modavox issued 92,857 shares with a fair value of $66,393 for the
settlement of $32,500 in debt. A loss of $33,893 was recorded on the settlement.

In May, Modavox issued 10,000 shares for services valued at $7,000.

In June, Modavox issued 83,929 for services valued at $67,674.

In July, Modavox issued 400,000 shares in connection with the exercise of
warrants for cash of $100,000.

In August, Modavox issued 116,667 shares for $35,000 cash.

In September, Modavox issued 300,000 shares in connection with the exercise of
options for cash of $75,000.

In October, Modavox issued 375,000 shares in connection with exercise of
warrants for cash of $93,750.

In October, Modavox issued 400,000 shares for $100,000 cash.

In November, Modavox issued 350,000 shares for $100,000 cash.

In November, Modavox issued 400,000 shares in connection with the exercise of
warrants for cash of $100,000.

On December 5, 2006, Modavox issued 100,000 shares of common stock in connection
with the exercise of a warrant issued in 2006 at $.25 per share for aggregate
consideration of $25,000. On December 31, 2006, Modavox issued, to an existing
shareholder, 800,000 shares of unregistered common stock and warrants to acquire
800,000 shares of unregistered common stock at $1.50 per share for aggregate
consideration of $1,000,000.

On February 7, 2007, Modavox issued 200,000 shares of common stock in connection
with the exercise of a warrant issued in 2005 at $.25 per share for aggregate
consideration of $50,000.

                                      -46-
<PAGE>


On February 28, 2007, Modavox issued 25,000 shares of common stock in connection
with the exercise of a warrant issued in 2005 at $.25 per share for aggregate
consideration of $6,250.

STOCK OPTIONS

Modavox maintains a stock incentive plans and a stock option plans for its
employees.

The 2001 Stock Option Plan provides for the grant to employees, officers,
directors and consultants of options to purchase up to an aggregate of 40,000
shares of common stock. The stock based awards may consist of both incentive
stock options and non-qualified options. To date, Modavox has not granted any
options under this Plan.

The 2002 Stock Incentive Plan provides for the grant to employees, officers,
directors and consultants of options, stock appreciation rights, restricted
shares, deferred shares and other stock based awards to purchase up to an
aggregate of 400,000 shares of common stock. The stock based awards may consist
of both incentive stock options and non-qualified options. To date, Modavox
issued 381,129 shares of common stock and no stock options under this Plan.

The 2004 Stock Plan provides for the grant to employees, including officers,
directors and consultants of incentive stock options as well as non-qualified
stock options and stock appreciation rights. The Stock Plan expires in March
2014 and is administered by the Board of Directors or the Compensation Committee
thereof. A total of 2,000,000 shares are reserved for issuance under the Stock
Plan. To date, Modavox issued 1,800,000 shares of common stock and no stock
options under this Plan.

No options were granted and 600,000 prior period options were cancelled during
the year ended February 29, 2008.

During the year ended February 28, 2007, Modavox granted 1,228,000 options
exercisable into unregistered shares of common stock at $.62 per share. These
options vest over 5 years and have a term of 10 years. Modavox recognized
$44,000 of expense in the year ended February 28, 2007.

For the year ended February 29, 2008, Modavox recognized $141,796 of expense
related to prior period option grants and at February 29, 2008 Modavox has
$519,711 of future unrecognized expense related to prior period option grants
that will be expensed over their vesting periods.

                                      -47-
<PAGE>


The summary of activity for Modavox's stock options is presented below:

<TABLE>
<CAPTION>

                                                                           Weighted Average
                                                                            Exercise Price
                                                                       ----------------------
                                               2008          2007         2008        2007
                                            ---------    ----------    ----------  ----------
<S>                                         <C>           <C>          <C>         <C>
Options outstanding at beginning of year    5,828,000     4,900,000    $   0.33    $   0.31

Granted                                          --       1,228,000    $   --      $   0.62

Exercised                                        --        (300,000)   $   --      $   0.25

Terminated/Expired                           (600,000)         --      $   0.31    $    --
Options outstanding at end of year          5,228,000     5,828,000    $   0.33    $   0.33
Options exercisable at end of year          4,605,582     4,600,000    $   0.27    $   0.25

Options available for grant at end of year       --            --

Price per share of options outstanding    $0.25 - $0.62  $0.25 - $0.62

Weighted average remaining contractual lives  6.75 years    9.0 years

Weighted average fair value of options granted
during the year                               $   --        $   0.62
</TABLE>

The intrinsic value of the options that were exercisable at February 29, 2008
was $6,795,990.

WARRANTS

In fiscal 2008, Modavox granted 500,000 warrants at an exercise price of $0.25
to a former corporate consultant. The warrants vest immediately and have a term
of 5 years. The fair value of the warrants on the grant date was $110,036 all of
which was expensed in fiscal 2008. Variables used in the Black-Scholes
option-pricing model, include (1) 2.95% risk-free interest rate (2) 2.5 years
expected term - using the simplified method pursuant to SAB 107, (3) expected
volatility of 256%, and (4) zero expected dividends.

In June 2007, Modavox granted 300,000 warrants at an exercise price of $0.50 in
connection with a common stock offering of $75,000 prior to February 28, 2007.
The warrants vest immediately and have a term of 3 years. The relative fair
value of the warrants is $63,848. Variables used in the Black-Scholes
option-pricing model, include (1) 5.07% risk-free interest rate (2) 1.5 years
expected term using the simplified method pursuant to SAB 107, (3) expected
volatility of 143%, and (4) zero expected dividends.

In November 2007, Modavox granted 120,000 warrants at an exercise price of $1.15
to a former corporate consultant. The warrants vest immediately and have a term
of 3 years. The fair value of the warrants on the grant date was $56,861 all of
which was expensed in fiscal 2008. Variables used in the Black-Scholes
option-pricing model, include (1) 2.92% risk-free interest rate (2) 1.5 years
expected term - using the simplified method pursuant to SAB 107, (3) expected
volatility of 81%, and (4) zero expected dividends.

In November 2007, Modavox modified certain warrants that were originally issued
to purchasers of common stock in connection with their purchase of common stock
by lowering the exercise price from $1.50 to $1.00. The change in the fair value
of these warrants when measured immediately prior to and immediately after the
modification, resulted in an increase of $73,727. No expense was recognized
because these warrants were originally issued to purchasers of common stock in
connection with a capital raise.

                                      -48-
<PAGE>


In December 2007, Modavox granted 50,000 warrants at an exercise price of $1.00
that vest immediately, 50,000 warrants at an exercise price of $1.00 that vest
March 1, 2008, 100,000 warrants at an exercise price of $1.75 that vest ratably
over 36 months, and 100,000 warrants at an exercise price of $2.00 that vest
ratably over 36 months all to a corporate consultant. The warrants have a
contractual term of 3 years. The fair value of the warrants on the grant date
was $361,078 of which $122,674 was expensed in fiscal 2008. Variables used in
the Black-Scholes option-pricing model, include (1) 3.15% to 3.51% risk-free
interest rates (2) 2.5 to 4 years expected terms - using the simplified method
pursuant to SAB 107, (3) expected volatilities of 135% to 173%, and (4) zero
expected dividends.

In January 2008, Modavox granted 3,000,000 warrants at an exercise price of
$1.25 that vest immediately in connection with an equity placement agent
agreement. The fair value of the warrants on the grant date was $1,577,302.
Variables used in the Black-Scholes option-pricing model, include (1) 2.61%
risk-free interest rate (2) 3 years expected term - using the simplified method
pursuant to SAB 107, (3) expected volatility of 83.68%, and (4) zero expected
dividends. No expense was recognized because these warrants were originally
issued to purchasers of common stock in connection with a capital raise.

During the year ended February 28, 2007, Modavox granted 340,000 warrants
exercisable into common stock at prices ranging from $.25 to $1.50 per share.
These warrants were granted for services provided. These warrants were valued
using the Black-Scholes Model, which resulted in a charge to expense of
$287,674.

During the year ended February 28, 2007, Modavox granted 2,846,000 warrants, in
three separate transactions, at exercise prices of $0.25, $0.50, and $1.50 to
brokers for financing costs and services that the broker provided in connection
with common stock issuances throughout fiscal 2006 and 2007. These warrants vest
immediately and have a relative fair value of $917,936.

                                      -49-
<PAGE>


The summary of activity for Modavox's warrants is presented below:

 <TABLE>
<CAPTION>
                                                                         Weighted Average
                                                                          Exercise Price
                                                                      ---------------------
                                              2008          2007         2008        2007
                                            ----------    ----------  ----------   --------

<S>                                          <C>           <C>          <C>         <C>
Warrants outstanding at beginning of year    4,841,304     3,871,304    $ 0.58      $ 0.39
Granted                                      4,220,000     3,186,000    $ 1.10      $ 0.60
Exercised                                   (2,162,516)   (1,100,000)   $ 0.44      $ 0.25
Terminated/Expired                             (41,193)   (1,116,000)   $ 0.38      $ 0.41
Warrants outstanding at end of year          6,857,595     4,841,304    $ 0.87      $ 0.56
Warrants exercisable at end of year          6,672,937     4,841,304    $ 0.84      $ 0.56

Price per share of warrants outstanding   $0.20 - $2.00 $0.25 - $1.50

Weighted average remaining contractual lives  2.24 years   8.0 years

Weighted average fair value of warrants granted
during the year                               $   1.10     $   0.60
</TABLE>

The intrinsic value of the exercisable warrants at February 29, 2008 was
$6,051,567.

NOTE 8 - COMMITMENTS AND CONTINGENCIES

During the year ended February 29, 2008, Modavox received several demands from
former employees and consultants requesting that Modavox issue common stock
and/or common stock warrants that purportedly were due based upon formal and
informal agreements made by previous management for services allegedly rendered
in 2005 and previous years. Modavox has reviewed each demand as received and has
either rejected such requests or requested additional support for the demands as
follows:

On June 23, 2006, Douglas W. Johnson, a former executive of a predecessor of
Modavox, sued, claiming he is entitled to receive 314,325 shares as merger
consideration from the June 2003 merger of SurfNet Media Group, Inc. into a
subsidiary of Modavox. On May 16, 2008 this matter was settled for 100,000
common shares.

In early 2007, a former consultant of Modavox demanded 411,765 shares and
warrants to purchase additional 500,000 shares under his 2004 consulting
agreement. This matter was settled by issuing 375,000 common shares and 500,000
warrants to the former consultant both of which were accounted for in fiscal
2008 (see note 7).

In early 2007, a former employee of Modavox demanded that Modavox acknowledge
that the reduction in a previously issued option from 1,500,000 options to
500,000 options is not effective due to Modavox's alleged failure to timely
register for resale certain shares held by the employee, as provided in his
Severance Agreement and General Release. This matter was settled by parties.

                                      -50-
<PAGE>



In March 2007, another former consultant claimed that he is entitled to receive
250,000 shares and warrants to purchase 300,000 shares pursuant to a consulting
agreement. Modavox rejected the consultant's demand on the grounds that he
failed to provide the required full-time services. To date, the matter remains
unresolved.

On September 4, 2007, a former Chief Executive Officer and Chairman began AAA
arbitration proceedings against Modavox in Atlanta, GA citing breach in the
settlement agreement between both parties on March 21, 2006.

On March 20, 2008 a former investor began AAA arbitration proceedings seeking
enforcement of terms pursuant to the former Chief Executive Officer and Chairman
stock option assignment presumably in late 2007. To date, the individual has not
provided the requested documentation by our corporate counsel, and the matter
remains unresolved.

At February 29, 2008, Modavox had entered into five office leases with remaining
periods of one to four years. Rent expense for the two years ended February 29,
2008 was $196,367 and $83,646, respectively. Our office lease with The Arizona
Corporate Broadcast Center is month to month.

FIVE YEAR LEASE COMMITMENTS SCHEDULE

    2/28/2009         2/28/2010      2/28/2011       2/29/2012     2/28/2013
------------------- -------------- --------------- -------------- ------------


          144,899      144,965        110,150         94,231           -
=================== ============== =============== ============== ============



NOTE 9 - INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

A deferred tax asset of $2,597,675 existed as of February 29, 2008, related to
differences in book and tax bases of deferred revenue, accounts receivable
reserve and stock based compensation and net operating loss carry forwards. The
deferred tax asset is offset by an equal valuation allowance of $2,597,675. The
valuation allowance was principally provided due to the uncertainty of future
realization of federal and state net operating loss carry forwards that give
rise to approximately $2,597,675 of the net deferred income tax asset. Modavox
has federal and state net operating loss carry forwards of $7,421,929 and
$5,575,354 as of February 29, 2008 and February 28, 2007, respectively. The
federal net operating loss carry forwards expires in 2021 through 2028 and state
loss carry forwards expire in 2008 through 2012.

Income taxes for years ended February 29, 2008 and February 28, 2007 were as
follows:

                                               2008             2007
                                         ----------------- ----------------

Current benefit                               $ 2,597,675       $1,951,374
Deferred benefit (provision)                   (2,597,675)      (1,951,374)
  Net income tax provision                              -                -

NOTE 10 - SUBSEQUENT EVENTS

In March, Modavox issued 60,000 shares to a placement agent for future services.

In April, Modavox issued 400,000 shares in connection with subscription
agreements for cash of $500,000.

                                      -51-
<PAGE>


In April, Modavox issued 275,000 shares in connection with the exercise of
warrants for cash of $68,750.

In May, Modavox issued 461,329 shares in connection with the exercise of 461,329
warrants, granted in 2004, for cash of $90,882.

In April, Modavox approved the addition of 1 million additional shares to the
employee stock option plan for current and future employees.

On May 15, 2008, Modavox purchased certain assets from RadioPilot (RDP), a
Washington based internet radio software developer to enhance Modavox's current
BoomBox Radio offering. Modavox acquired the internet radio assets and
enhancement platform for 250,000 shares and $50,000 of cash. The purchase
provides Modavox with all of the intangible assets and none of the current
liabilities, of RDP. These shares were valued at $1.85 per share for a share
value of $462,500. The purchase agreement provides that Modavox will hold in
escrow 100,000 common shares for six months while Modavox implements the
software and integrate the systems. At the time of the purchase, RDP had one
employee who will provide front line support of the system integration and
texting through October 15, 2008. In addition, the technology, marketing, and
operational activities, where they exist, will be abandoned following
integration and replaced with Modavox versions. As a result, Modavox will
account for the transaction as an asset purchase and not an acquisition of a
business.

On May 16, 2008, Modavox issued 100,000 shares in connection with a settlement
to a legal claim by a former officer.

ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

ITEM 8A. CONTROLS AND PROCEDURES.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures include, without limitation, controls and
procedures designed to ensure that information required to be disclosed by an
issuer in the reports that it files or submits under the Securities Exchange Act
of 1934, as amended (the "Act") is accumulated and communicated to the issuer's
management, including its principal executive and principal financial officers,
or persons performing similar functions, as appropriate to allow timely
decisions regarding required disclosure. It should be noted that the design of
any system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote. As of the end of the period covered by this Annual
Report, we carried out an evaluation, under the supervision and with the
participation of our Chief Executive Officer and Corporate Controller, both
serving as our Principal Financial entities, of the effectiveness of the design
and operation of our disclosure controls and procedures. Based on this

                                      -52-
<PAGE>

evaluation, our Chief Executive Officer has concluded that the Company's
disclosure controls and procedures are not effective because of the
identification of a material weakness in our internal control over financial
reporting which is identified below, which we view as an integral part of our
disclosure controls and procedures.

Changes in Internal Controls over Financial Reporting

We have not yet made any changes in our internal controls over financial
reporting that occurred during the period covered by this report on Form 10-KSB
that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.


Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal
control over financial reporting, as such term is defined in Rules 13a-15(f) and
15d-15(f) of the Exchange Act. Our internal control system was designed to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes, in accordance
with generally accepted accounting principles. Because of inherent limitations,
a system of internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become inadequate due to
change in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.

Our management conducted an evaluation of the effectiveness of our internal
control over financial reporting using the criteria set forth by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO) in Internal
Control--Integrated Framework. Based on its evaluation, our management concluded
that there is a material weakness in our internal control over financial
reporting. A material weakness is a deficiency, or a combination of control
deficiencies, in internal control over financial reporting such that there is a
reasonable possibility that a material misstatement of the Company's annual or
interim financial statements will not be prevented or detected on a timely
basis.

The material weakness relates to the lack of segregation of duties in financial
reporting, as our financial reporting and all accounting functions are performed
by an internal employee with no oversight by a professional with accounting
expertise. Our Chief Executive Officer is not a Certified Public Accountant nor
is the Company's Corporate Controller. This weakness is due to the company's
lack of working capital to hire additional staff. To remedy this material
weakness, we intend to pursue another accountant, preferably to fill the role of
Chief Financial Officer, to assist with financial reporting as soon as our
finances will allow.

This annual report does not include an attestation report of the Company's
registered public accounting firm regarding internal control over financial
reporting. Management's report was not subject to the attestation by the
Company's registered public accounting firm pursuant to temporary rules of the
SEC that permit the Company to provide only management's report in this annual
report.

                                      -53-
<PAGE>


The Company's management carried out an assessment of the effectiveness of the
Company's internal control over financial reporting as of February 29, 2008. The
Company's management based its evaluation on criteria set forth in the framework
in Internal Control--Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on that assessment, management
has concluded that the Company's internal control over financial reporting was
not effective as of February 29, 2008.

CHANGES IN INTERNAL CONTROLS

There have been no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of the last evaluation thereof, including any corrective actions with
regard to significant deficiencies and material weaknesses.

ITEM 8B. OTHER INFORMATION

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT

The following table sets forth information regarding our executive officers and
directors as of February 29, 2008:

   OFFICERS AND DIRECTORS     AGE     POSITION

   David Ide                   34     Chief Executive Officer and Director

   Jeff Spenard                38     President-VoiceAmerica and Director

   Jay Stulberg                59     Director and Chairman-Compensation
                                      Committee

   Hubert Glover               52     Director and Chairman-Audit Committee

   Jim Crawford                33     Director and Vice President



DAVID IDE is one of the original founders of Kino Communications and Kino
Interactive, LLC. David J. Ide has a proven record in Executive Management
spanning ten years of service with Fortune 500 Companies. He has directed the
newest venture of Kino in transitioning the management and service
infrastructure of Surfnet Media Group into the new Modavox, Inc. operation. In
doing so David has exhibited his capabilities to manage the expectations of
share holders, customers, and employees with a complete command of the
operation. Terminating numerous legacy issues, retiring over bad debts of
Surfnet Media Group, Inc. and providing financial stability to the operation,

                                      -54-
<PAGE>

while growing sales to record levels, taking the company to sustained positive
operational cash position are all factual benchmarks of his tenure as CEO. From
2000 - 2004, prior to the engagement with Modavox, David directed the operations
of two separate private companies with combined annual revenues exceeding
thirty-six million dollars. David also spent time as an Operations Manager for
Westin Hotels & Resorts (NYSE: HOT), Omni Hotel & Resorts, and an Executive
Manager for Avatar Holdings (NASDAQ:AVTR) subsidiary Rio Rico Resort & Country
Club. A strong foundation in no-nonsense executive management, finance, and
marketing give David a strong set of skills to call on as he leads Modavox, Inc.

JAY STULBERG has served on our Board of Directors since December 2004, and is a
member of the audit committee. Since August 2002, Jay has been the Chief
Operating Officer of Meritsoft Corporation. From February 1998 to present, Jay
served as the sole shareholder, director and officer of Global Tracker Corp.
From February 1998 to June 2005, Jay was the President, Chief Operating Officer
and Chief Financial Officer, and a director of The Tracker Corporation of
America. Since approximately 1984, Jay has served on the board of directors of
two privately held family holding companies. Jay is a Chartered Accountant and
began his career at Ernst and Young.

HUBERT GLOVER has served on our Board of Directors and Chairman of our Audit
Committee since October 2003. Since August 2004, Hubert has served as Professor
and Chairman of the Accounting Department in the School of Business at Howard
University. From the fall 2002 until July 2004, Hubert served as Visiting
Assistant Professor School in the J. Mack Robinson College of Business at
Georgia State University where he taught in the MBA program specializing in
auditing and managerial accounting. Since 1998, Hubert has also served as
President of Rede Inc., a consulting and outsourcing firm established to provide
management and operation services to small companies needing leadership and
management services to sustain rapid growth. Rede Inc. received the SBA 8a
Business Development certification in January 2003. From 2000 to 2002, Hubert
also provided business process outsourcing services for the Atlanta, Georgia
office of the PricewaterhouseCoopers LLP Business Process Outsourcing division.
Hubert has authored more than 35 professional articles and books on auditing,
management, and organizational development. He is a member of and frequent
presenter for the American Institute of Certified Public Accountants, the
Institute of Internal Auditors and the Institute of Management Accountants. He
has presented and conducted various workshops on the relevance of Sarbanes
Oxley, and corporate governance, role of the CFO and the role of the audit
committee. Hubert received a Ph.D. in Accounting from Texas A&M University, an
MBA from Clark Atlanta University and a BA in Broadcast Journalism from the
University of Southern California. Hubert is a Certified Internal Auditor from
the Institute of Internal Auditors, Certified Management Accountant from the
Institute of Management Accounting and Certified Public Accountant.

                                      -55-
<PAGE>


JAMES G. CRAWFORD, DIRECTOR

Jim has served on the Board and as a Vice President of the Company since April
2006. In the prior 5 years, Jim was a founding member of both AudioEye, Inc. and
Kino Communications, LLC. Jim received a B.S. from the University of Phoenix.

JEFF SPENARD, DIRECTOR

Mr. Spenard has nearly 15 years of broadcast media experience and is currently
the president of Modavox's Internet Radio division for its VoiceAmerica and
World Talk Radio Networks.

BOARD OF DIRECTORS

Our directors hold office until the next annual meeting of stockholders and the
election and qualification of their successors.

The Board of Directors held telephonic and met in person for their scheduled
board meetings during the fiscal year ending February 29, 2008. All members of
the Board of Directors participated in these meetings. The Board of Directors
accepted the resignation of Mr. Nathaniel Bradley during the fiscal year and
nominated Mr. Jeffery Spenard to the vacated position. The Board currently
provides independence through two outside directors, Dr. Glover and Mr. Stulberg
, who also provide leadership on our Compensation Committee and Audit Committee.
During the year ended February 29, 2008 the Company adopted an Audit Committee
Charter, Board of Director Guideline Agreement, Compensation Committee Charter,
and Insider Trading Policy.

COMMITTEES OF THE BOARD OF DIRECTORS

Our Board of Directors has an audit committee and compensation committee which
provided guidance during the fiscal year ending February 29, 2008. We expect in
the near future to add a committee with oversight into corporate governance and
nominating as well.

AUDIT COMMITTEE

The Audit Committee is comprised of Jay Stulberg and Hubert Glover. Our audit
committee's main function is to oversee our accounting and financial reporting
processes, internal systems of control, independent auditor relationships and
the audits of our financial statements. The Company has determined that Hubert
Glover, an independent Director, is an audit committee financial expert.

COMPENSATION COMMITTEE

The purpose of the Compensation Committee is to aid the Board of Directors in
meeting its responsibilities with regard to oversight and determination of
executive compensation. Among other things, the Committee reviews, recommends
and approves salaries and other compensation of Modavox's executive officers,
administers Modavox's equity incentive plans (including reviewing, recommending
and approving stock option and other equity incentive grants to executive
officers), and administers the executive officer incentive plans.

                                      -56-
<PAGE>


CODE OF ETHICS

The Company has not yet adopted a code of ethics because all of its efforts have
been focused on current business activities. The Company intends to adopt a code
of ethics in the future.

CORPORATE GOVERNANCE AND NOMINATING COMMITTEE

Our corporate governance and nominating committee's purpose will be to assist
our board by identifying individuals qualified to become members of our board of
directors consistent with criteria set by our board and to develop our corporate
governance principles.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

None of the members of our compensation committee will be one of our officers or
employees. None of our executive officers currently serves, or in the past year
has served, as a member of the board of directors or compensation committee of
any entity that has one or more executive officers serving on our board of
directors or compensation committee.

ITEM 10 - EXECUTIVE COMPENSATION

THE FOLLOWING TABLE SETS FORTH THE TOTAL COMPENSATION EARNED BY NEOS IN THE YEAR
ENDED FEBRUARY 29, 2008.
<TABLE>
<CAPTION>

                                                SUMMARY COMPENSATION TABLE

--------------------------------------------------------------------------------------------------------------------

     Name         Year    Salary    Bonus     Stock      Option    Non-Equity    Change in       All       Total
                           ($)       ($)     Awards      Awards  Incentive Plan   Pension       Other       ($)
                                              ($)         ($)     Compensation   Value and  Compensation
                                                                     ($)       Nonqualified     ($)
                                                                                 Deferred
                                                                               Compensation
                                                                                  Earnings
                                                                                     ($)


      (a)          (b)      (c)      (d)       (e)        (f)          (g)          (h)          (i)            (j)
---------------- -------- -------- -------- ---------- ----------- ------------ ------------ ------------ -----------
<S>               <C>      <C>        <C>       <C>        <C>          <C>          <C>       <C>         <C>
                  2008     $180,000  -0-       -0-        -0-          -0-          -0-       -$23,867     156,133
 David Ide,CEO

---------------- -------- -------- -------- ---------- ----------- ------------ ------------ ------------ -----------
                 2008     $159,600   -0-       -0-        -0-          -0-          -0-          -0-       159,600
Nathan Bradley
      CTO

---------------- -------- -------- -------- ---------- ----------- ------------ ------------ ------------ -----------
                 2008     $165,303                                                                          165,303
 Jeff Spenard
    iRadio
   President

--------------- ------- ---------------------------- ---------------------------- --------- --------- --------- -----
</TABLE>


                                      -57-
<PAGE>

<TABLE>
<CAPTION>

                Grant    Estimated Future Payouts     Estimated Future Payouts     All       All    Exercise   Grant
                 Date              Under               Under Equity Incentive      Other    Other   or Base     Date
                         Non-Equity Incentive Plan           Plan Awards           Stock    Option   Price     Fair
                                  Awards                                          Awards:   Awards:   of        Value
                      Threshold Target   Maximum   Threshold Target   Maximum     Number    Number   Option      of
                        ($)      ($)       ($)       (#)       (#)      (#)         of        of     Awards     Stock
                                                                                   Shares   Securities ($/Sh)   and
                                                                                  of Stock  Underlying         Option
                                                                                  or Units  Options            Awards
                                                                                    (#)       (#)




                (b)     (c)        (d)       (e)       (f)      (g)        (h)        (i)       (j)     (k)      (l)

--------------- ------- -------- --------- --------- --------- -------- --------- --------- --------- --------- ---------
                                                                                                                October
<S>               <C>      <C>      <C>       <C>       <C>       <C>      <C>       <C>    <C>         <C>     <C>
  David Ide      -0-      -0-      -0-       -0-       -0-       -0-      -0-       -0-     300,000     $.62    22,2006
                                                                                                                  $.62
--------------- ------- -------- --------- --------- --------- -------- --------- --------- --------- --------- ---------
                                                                                                                October
Nathan Bradley   -0-      -0-      -0-       -0-       -0-       -0-      -0-       -0-     250,000     $.62    22, 2006
                                                                                                                  $.62
--------------- ------- -------- --------- --------- --------- -------- --------- --------- --------- --------- ---------
</TABLE>




The employment agreements for Mr. David Ide, Mr. Nathan Bradley, Mr. Sean
Bradley, and Mr. James Crawford have all been extended an additional term by the
Board of Directors subsequent to February 29, 2008. The extended terms provide
for the salaries, compensation, and benefits previously filed by the Company in
prior year reviews.
<TABLE>
<CAPTION>

(2)                                     OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
                                 (3)
---------------- ---------------------------------------------------------- -----------------------------------------------
                                       Option Awards                                         Stock Awards


 Name        Number       Number of       Equity    Option    Option    Number of    Market     Equity       Equity
               of          Securities   Incentive   Exercise  Expiration Shares or   Value of   Incentive    Incentive
            Securities  Underlying         Plan       Price     Date     Units of    Shares      Plan          Plan
            Underlying  Unexercised       Awards:      ($)                 Stock       or        Awards:      Awards:
            Unexercised   Options        Number of                       That Have  Units of    Number of    Market or
             Options        (#)         Securities                          Not       Stock      Unearned     Payout
               (#)      Unexercisable   Underlying                        Vested      That        Shares,      Value
            Exercisable                 Unexercised                         (#)      Have Not    Units or    of Unearned
                                         Unearned                                     Vested      Other       Shares,
                                         Options                                       ($)        Rights      Units or
                                            (#)                                                  That Have      Other
                                                                                                    Not        Rights
                                                                                                  Vested      That Have
                                                                                                   (#)          Not
                                                                                                               Vested
                                                                                                                ($)
 (a)          (b)           (c)            (d)         (e)       (f)        (g)       (h)           (i)         (j)
---------------- ----------- ------------ ------------ --------- ---------- ----------- --------- ------------ ------------

<S>               <C>        <C>     <C>   <C>         <C>       <C>         <C>         <C>       <C>          <C>
   David Ide     -0-         300,000 (1)  -0-          $.62      2116       -0-         -0-       -0-          -0-

---------------- ----------- ------------ ------------ --------- ---------- ----------- --------- ------------ ------------

Nathan Bradley   -0-         250,000 (1)  -0-          $.62      2116       -0-         -0-       -0-          -0-

---------------- ----------- ------------ ------------ --------- ---------- ----------- --------- ------------ ------------
</TABLE>

                                      -58-
<PAGE>


(1)  Stock options vest over a five year period beginning October 2006, but
     become fully vested upon a sale of the Company or a change in control.

The following table shows the compensation we paid to our non-employee directors
during fiscal year 2007. Messrs. Ide, Bradley, and Crawford, who are employees
of Modavox, are not separately compensated for service as a director.

<TABLE>
<CAPTION>

 DIRECTOR COMPENSATION

---------------------------- ------------ ----------- ---------- -------------- -------------- ------------ -----------

           Name                 Fees        Stock      Option     Non-Equity      Change in     All Other     Total
                              Earned or     Awards     Awards      Incentive       Pension     Compensation    ($)
                               Paid in       ($)         ($)         Plan         Value and        ($)
                                Cash                             Compensation   Nonqualified
                                 ($)                                  ($)         Deferred
                                                                                Compensation
                                                                                  Earnings
                                                                                     ($)

            (a)                  (b)         (c)         (d)          (e)            (f)           (g)         (h)

---------------------------- ------------ ----------- ---------- -------------- -------------- ------------ -----------

<S>                           <C>          <C>        <C>         <C>            <C>            <C>         <C>
    Hubert Glover            -0-          -0-         $4,092     -0-            -0-            -0-          $4092
                                       (2)
---------------------------- ------------ ----------- ---------- -------------- -------------- ------------ -----------

    Jay Stulberg             $7,162 (3)   -0-         $4,092     -0-            -0-            -0-          $11,254
                                       (1)
---------------------------- ------------ ----------- ---------- -------------- -------------- ------------ -----------
</TABLE>

1.       Jay Stulberg has 300,000 fully vested stock options to purchase common
         stock at $.25 and 100,000 stock options to purchase common stock at
         $.62 that will vest over five years, but will vest immediately upon
         sale of the Company or change of control.

2.       Hubert Glover has 100,000 stock options to purchase common stock at
         $.62 that will vest over five years, but will vest immediately upon
         sale of the Company or change in control.

3.       Fees paid in Fiscal 2007 for consulting services rendered in fiscal
         2006.


                                      -59-
<PAGE>

LIABILITY AND INDEMNIFICATION OF OFFICERS AND DIRECTORS

Our Bylaws provide that our directors will not be liable for breach of their
fiduciary duty as directors, other than the liability of a director for:

     -    An intentional breach of the director's fiduciary duty to our company
          or our stockholders;

     -    Acts or omissions by the director which involve intentional
          misconduct, fraud or a knowing violation of law; or

     -    The payment of an unlawful dividend, stock purchase or redemption.

Our Bylaws also require us to indemnify all persons whom we may indemnify
pursuant to the full extent permitted by Delaware law.

Our bylaws require us to indemnify our officers and directors and other persons
against expenses, judgments, fines and amounts incurred or paid in settlement in
connection with civil or criminal claims, actions, suits or proceedings against
such persons by reason of serving or having served as officers, directors, or in
other capacities, if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to our best interests and, in a
criminal action or proceeding, if he had no reasonable cause to believe that
his/her conduct was unlawful. The termination of any action, suit or proceeding
by judgment, order, settlement, conviction or upon a plea of no contest or its
equivalent shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he or she reasonably believed to be in
or not opposed to our best interests or that he or she had reasonable cause to
believe his or her conduct was unlawful. Indemnification as provided in our
bylaws shall be made only as authorized in a specific case and upon a
determination that the person met the applicable standards of conduct. Insofar
as the limitation of, or indemnification for, liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling us pursuant to the foregoing, or otherwise, we have been advised
that, in the opinion of the Commission, such limitation or indemnification is
against public policy as expressed in the Securities Act of 1933 and is
therefore, unenforceable.

                                      -60-
<PAGE>


ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth information with respect to the beneficial
ownership of our common stock as of June 1, 2008. All stockholders have sole
voting and investment power over the shares beneficially owned.

Included within this table is information concerning each stockholder who owns
more than 5% of any class of our securities, including those shares subject to
outstanding options, and each Officer and Director.

NAME AND ADDRESS OF BENEFICIAL OWNER   AMOUNT AND NATURE OF    PERCENT OF
                                       BENEFICIAL OWNERSHIP      CLASS

C&H Capital (1)                                2,601,789           6.2 %
Robert Arkin (2)                               3,000,000           7.2 %

Jay Stulberg (3)                                 652,000           1.3 %
Arlan Van Wyck (4)
Hubert Glover (5)                                100,000           .003%

Nathan Bradley (6)                             2,370,833           6.0 %

David Ide (7)                                  2,080,395           5.3 %

Jim Crawford (8)                               1,905,390           4.8 %

All Officers and Directors
as a group (5 persons)                         7,108,618          14.9 %


     (1)  Shares owned by C&H Capital include 500,000 warrants to purchase
          common stock at $.25 per share. The amount also includes 400,000
          shares of common stock owned by the principle of C&H Capital

     (2)  Includes 3,000,000 presumed options to acquire common stock at $.25
          per share

     (3)  Includes 1,484,000 warrants to acquire common stock at $.25 to $1.50
          per share. The amount also includes 1,100,000 shares and 1,300,000
          warrants owned directly by the principles of Dana LLC, including
          1,000,000 shares and 800,000 warrants owned by Arlan Van Wyk

     (4)  Includes 300,000 stock options to acquire common stock at $.25 per
          share

     (5)  Includes 848,000 common shares and 184,000 warrants to acquire common
          shares at $.50 per share owned by Dana LLC

     (6)  Includes 100,000 options to acquire common stock at $.62 per share
          vesting over five years

     (7)  Includes 250,000 options to acquire common stock at $.62 per share
          vesting over five years

     (8)  Includes 300,000 options to acquire common stock at $.62 per share
          vesting over five years

                                      -61-
<PAGE>



ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

During the fiscal year ending February 29, 2008, the following related party
transactions occurred:

The Company borrowed $23,567 from one of its officers during the year ended
February 29,2008.

Since March 1, 2008, the following related party transaction occurred:

There have been no related party transactions subsequent to the fiscal year
ending February 29, 2008.

Our certificate of incorporation and bylaws require us to indemnify our
directors and officers to the fullest extent permitted by Delaware law.

ITEM 13. EXHIBITS

See the Exhibit Index following the signature page of this report, which Index
is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The aggregate fees billed for each of the last two fiscal years for professional
services rendered by the principal accountant for the audit of the Company's
annual financial statements and review of financial statements included in the
Company's Forms10-QSB are as follows:

                                                          Fiscal Year

                                                    2008                2007
                                                    ----                ----

              Audit fees                           $110,000             $99,420
              Audit-related fees                        --                   --
              Tax Fees                                  --                   --
                                                 -----------        ------------
              All other fees

              Total                                $110,000             $99,420
                                                 ===========        ============

The Company did not incur any fees for tax or other services for each of the
last two fiscal years from its principal accountant.


                                      -62-
<PAGE>



                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

MODAVOX, INC.

By: /s/ David J. Ide

---------------------------------
David J. Ide
Chief Executive Officer

Date: June 13, 2008

In accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.

/s/ Hubert Glover                         Audit Committee Chairman and Director
---------------------------------
Hubert Glover

/s/ Jay Stulberg                          Compensation Committee Chairman and
---------------------------------         Director
Jay Stulberg

/s/ David J. Ide                          Chief Executive Officer
---------------------------------         Principle Financial and Accounting
David J. Ide                              Officer

/s/ Jim Crawford                          Chief Information Officer and Director
---------------------------------
Jim Crawford

/s/ Jeff Spenard                          President Internet Radio and Director
---------------------------------
Jeff Spenard

                                      -63-
<PAGE>
<TABLE>
<CAPTION>


                                  MODAVOX, INC.

                  EXHIBIT INDEX TO ANNUAL REPORT ON FORM 10-KSB

                      FOR THE YEAR ENDED FEBRUARY 29, 2008

  EXHIBIT                    DESCRIPTION                               INCORPORATED BY                    FILED
  NUMBER                                                                REFERENCE TO                    HEREWITH

<C>             
                                        <C>
2.1            Agreement and Plan of Merger dated as      Exhibit 2.1 to Issuer's Report on Form
               of May 23, 2003 with SurfNet New Media,    8-K filed on July 18, 2003 (File No.
               Inc. and SurfNet Media Group, Inc.         333-577818)

2.2            Agreement and Plan of Reorganization

2.3            Waiver of Merger Conditions

3.1            Certificate of Incorporation)              Exhibit 3.1 to Issuer's Registration
                                                          Statement on Form SB-2, filed on March
                                                          28, 2001 and amended on March 29, 2001,
                                                          May 4, 2001, June 15, 2001 and July 5,
                                                          2001 (File No. 333-577818)

3.2            Certificate of Amendment of Certificate    Exhibit 3.2 to Issuer's Registration
               of Incorporation                           Statement on Form SB-2, filed on March
                                                          28, 2001 and amended
                                                          on March 29, 2001, May
                                                          4, 2001, June 15, 2001
                                                          and July 5, 2001 (File
                                                          No. 333-577818)
</TABLE>


3.4            Amended and Restated Bylaws

4.16           Registration Rights Agreement dated as
               of the Effective Date with Sundance
               Capital Partners, LLC (incorporated by
               reference to Exhibit 4.8 on Issuer's
               Report on Form 8-K filed on July 18,
               2003 (File No. 333-577818))


10.1           2001 Stock Option Plan on issuer's
               Registration Statement on Form SB-2,
               filed on March 28, 2001 and amended on
               March 29, 2001, May 4, 2001, June 15,
               2001 and July 5, 2001

10.4           2002 Stock Incentive Plan (incorporated
               by reference to Exhibits 4.1 on
               Issuer's Registration Statement on Form
               S-8, filed on January 10, 2002(File No.
               333-76528))

                                      -64-
<PAGE>


10.8           Consulting Agreement with Jay Stulberg
               dated as of December 1, 2001
               (incorporated by reference to Exhibit
               10.8 on Issuer's Report on Form 10-KSB
               for the annual period ended February
               28, 2002 filed on July 5, 2002 (File
               No. 333-577818))

10.28          SurfNet Media Group, Inc. 2004 Stock
               Plan (incorporated by reference to
               Exhibit 10.28 to the Company's Annual
               Report on Form 10-KSB/A for the fiscal
               year ended February 29, 2004, filed on
               June 21, 2004 (File No. 333-577818))

10.29          Form of Stock Option Award Agreement
               dated as of March 17, 2004
               (incorporated by reference to Exhibit
               10.29 on Issuer's Report on Form
               10-KSB/A for the annual period ended
               February 29, 2004 filed on June 21,
               2004 (File No. 333-577818))

10.30          Stock Option Award Agreement dated as
               of March 17, 2004 with Hubert Glover
               (incorporated by reference to Exhibit
               10.30 on Issuer's Report on Form
               10-KSB/A for the annual period ended
               February 29, 2004 filed on June 21,
               2004 (File No. 333-577818))

10.31          Stock Option Award Agreement dated as
               of March 17, 2004 with Robert Arkin
               (incorporated by reference to Exhibit
               10.31 on Issuer's Report on Form
               10-KSB/A for the annual period ended
               February 29, 2004 filed on June 21,
               2004 (File No. 333-577818))

10.32          Stock Option Award Agreement dated as
               of March 17, 2004 with Eric Schedeler
               (incorporated by reference to Exhibit
               10.32 on Issuer's Report on Form
               10-KSB/A for the annual period ended
               February 29, 2004 filed on June 21,
               2004 (File No. 333-577818))


                                      -65-
<PAGE>



10.43          David J. Ide Employment Agreement

10.44          Nathan Bradley Employment Agreement

10.45          Sean Bradley Employment Agreement

10.46          Jim Crawford Employment Agreement

10.47          Eric Schedeler Separation Agreement

10.48          Audioeye.Modavox Service Contract

10.49          Robert D. Arkin Settlement Agreement
               and General Release

31.1           Certification of Chief Executive
               Officer pursuant to Securities Exchange

               Act Rule 15d-14

31.2           Certification of Chief Financial
               Officer pursuant to Securities Exchange

               Act Rule 15d-14

32             Certification of Chief Executive
               Officer and Chief Financial Officer
               pursuant to 18 U.S.C. Section 1350 (2)







(1) Management contract or compensatory plan or arrangement.
(2) Furnished herewith.

                                      -66-