|  Delaware                                                     |   |  36-3688583                           |
|--------------------------------------------------------------------|--------|--------------------------------------------|
|  State or other jurisdiction of incorporation or organization |   |  (I.R.S. Employer Identification No.) |

----

----

|  TABLE OF CONTENTS                                                                                                                                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                       |
|                                                                                                                                                       |
| Item Number and Caption                                                                                                                                    | Page |
| PART I                                                                                                                                                     |   |
|                                                                                                                                                       |   |
| Item 1.     Description of Business                                                                                               | 4 |
|                                                                                                                                                       |   |
| Item 2.     Description of Property                                                                                               | 6 |
|                                                                                                                                                       |   |
| Item 3.     Legal Proceedings                                                                                                     | 6 |
|                                                                                                                                                       |   |
| Item 4.     Submission of Matters to a Vote of Security Holders                                                                   | 7 |
|                                                                                                                                                       |   |
|                                                                                                                                                       |   |
| PART II                                                                                                                                                    |   |
|                                                                                                                                                       |   |
| Item 5.     Market for Common Equity and Related Stockholder Matters                                                              | 7 |
|                                                                                                                                                       |   |
| Item 6.     Management's Discussion and Analysis or Plan of Operations                                                            | 9 |
|                                                                                                                                                       |   |
| Item 7.      Financial Statements                                                                                            | 11 |
|                                                                                                                                                       |   |
| Item 8.      Changes in and Disagreements With Accountants on Accounting and Financial Disclosure                       | 12 |
|                                                                                                                                                       |   |
| Item 9.    Controls and Procedures                                                                                                     | 12 |
|                                                                                                                                                       |   |
| PART III                                                                                                                                                   |   |
|                                                                                                                                                       |   |
| Item 10.     Directors, Executive Officers, Promoters and Control Persons; Compliance with Section 16(a) of the Exchange Act | 13 |
|                                                                                                                                                       |   |
| Item 11.   Executive Compensation                                                                                                           | 15 |
|                                                                                                                                                       |   |
| Item 12.   Security Ownership of Certain Beneficial Owners and Management                                                                   | 16 |
|                                                                                                                                                       |   |
| Item 13.   Certain Relationships and Related Transactions                                                                                   | 17 |
|                                                                                                                                                       |   |
| Item 14.   Exhibits and Reports on Form 8-K                                                                                                 | 18 |
|                                                                                                                                                       |   |
| Item 15.   Principal Accountant Fees & Services                                                                                         | 20 |
|                                                                                                                                                       |   |

----

----

----

----

| 2009:          |   | High |   |   | Low    |   |
|----------------|--------|------|--------|--------|--------|--------|
| First Quarter  |   | $    | 0.03   |   |   | $      | 0.01 |   |
| Second Quarter |   | $    | 0.13   |   |   | $      | 0.05 |   |
| Third Quarter  |   | $    | 0.11   |   |   |   | 0,05 |   |
| Fourth Quarter |   | $    | 0.10   |   |   | $      | 0.02 |   |
|           |   |
| 2008:          |   | High |   |   | Low    |   |
| First Quarter  |   | $    | 0.05   |   |   | $      | 0.01 |   |
| Second Quarter |   | $    | 0.02   |   |   | $      | 0.01 |   |
| Third Quarter  |   | $    | 0.01   |   |   | $      | 0.01 |   |
| Fourth Quarter |   | $    | 0.01   |   |   | $      | 0.01 |   |
|           |   |

----

----

|            |             |   |             |   |   |        |   |   |       |   | Options      | Options |   |   | Term     |     |
|-----------------|------------------|--------|------------------|--------|--------|-------------|--------|--------|------------|--------|--------------|---------|--------|--------|----------|----------|
| Name            | Officer or board |   | Number of shares |   |   | Share Price |   |   | Total cost |   |  at .50 | at 1.00 | Date   |   | in years |     |
|            |             |   |             |   |   |        |   |   |       |   |         |    |   |   |     |     |
| Mike Holmes     | No               |   |             | 25000  |   |        | $      | 0.25   |       |   |         | 6,250   |   |   |     | 12/29/09 |   |   | 1 |   |
|            |             |   |             |   |   |        |   |   |       |   |         |    |   |   |     |     |   |   |   |   |
| Ray Norris      | Board            |   |             | 25,000 |   |        | $      | 0.30   |       |   |         | 7,500   |   |   |     | 1/4/2010 |   |   | 1 |   |
|            |             |   |             |   |   |        |   |   |       |   |         |    |   |   |     |     |   |   |   |   |
| Susan Williams1 | No               |   |             | 19,427 |   |        | $      | 0.30   |       |   |         | 5,828   |   |   |     | 11/6/09  |   |   |   |   |
|            |             |   |             |   |   |        |   |   |       |   |         |    |   |   |     |     |   |   |   |   |
| David Darling1  | No               |   |             | 5,000  |   |        | $      | 0.30   |       |   |         | 1,500   |   |   |     | 11/16/09 |   |   |   |   |
|            |             |   |             |   |   |        |   |   |       |   |         |    |   |   |     |     |   |   |   |   |
| FTDSP1          | No               |   |             | 80,734 |   |        | $      | 0.30   |       |   |         | 24,220  |   |   |     | 11/13/09 |   |   |   |   |

----

----

| ·   | the Company may not obtain the equity funding or short-term borrowings necessary develop Phase 2 of the Giving Cart development. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|
| ·   | the Company may not be successful in obtaining a major show case retail store in which to display its upgraded product           |

| ·   | the companies expanded technologies may take longer to implement than planned |
|--------------------|-------------------------------------------------------------------------------|

----

----

|  Director's   Name |  Age |  Office   |  Term Expires                    |
|----------------------------------------|-----------|--------------------------|---------------------------------------|
|  Paul Begum                       |  67  |  Chairman/CEO       |  Next annual shareholder meeting |
|  Robert A. Campbell               |  66  |  COO and CFO        |  Next annual shareholder meeting |
|  Jerry P. Wright                  |  57  |  Director           |  Next annual shareholder meeting |

----

|  Director's   Name |   Age |   Office     |  Date of change          |
|----------------------------------------|-----------------|------------------------|-------------------------------|
|  William C. Bailey                |  72        |  Chairman         |  Resigned as of 12/31/08 |
|  John L. Hastings III             |  45        |  Interm Pres./CEO |  Resigned as of 12/31/08 |
|  Bernadette Suckel                |  52        |  Interim COO      |  Resigned as of 12/31/08 |
|  Criag Poulton                    |  49        |  Director         |  Resigned as of 12/31/08 |
|  Michael L. Mills                 |  47        |  Director         |  Resigned as of 12/31/08 |
|  Jeremiah Cox                     |  36        |  CFO              |  Resigned as of 12/31/08 |

----

| (a)                               |   | (b)                 |   | (c)        |   |   | (d)       |   |   | (e)                           |   |   | (f)                           |   |   | (g)                                            |   |   | (h)          |   |   | (i)                    |   |
|-----------------------------------|--------|--------------------------|--------|------------|--------|--------|-----------|--------|--------|-------------------------------|--------|--------|-------------------------------|--------|--------|------------------------------------------------|--------|--------|--------------|--------|--------|------------------------|--------|
|  Name and Principal Position |   | Year Ended Dec. 31  |   | Salary ($) |   |   | Bonus ($) |   |   | Other Annual Compensation ($) |   |   | Restricted Stock Award(s) ($) |   |   | Securities Underlying Options/SAR's (no.) |   |   | LTIP Payouts |   |   | All Other Compensation |   |
|                              |   |                     |   |       |   |   |      |   |   |                          |   |   |                          |   |   |                                           |   |   |         |   |   |                   |   |
|  Paul G. Begum               |   | 2009                |   | $          | 0      |   |      | $      | 0      |                          |   | $      | 0                             |   |   | $                                              | 0      |   |         | $      | 0      |                   |   | $ | 0 |   |   | $ | 0 |   |
|                              |   |                     |   |       |   |   |      |   |   |                          |   |   |                          |   |   |                                           |   |   |         |   |   |                   |   |   |   |   |   |   |   |   |
|  Robert A. Campbell          |   | 2009                |   | $          | 0      |   |      | $      | 0      |                          |   | $      | 0                             |   |   | $                                              | 0      |   |         | $      | 0      |                   |   | $ | 0 |   |   | $ | 0 |   |

|  Name         |   |  Shares Acquiredon exercise |   |   |  Value Realized ($) |   |   |  Number of Securities UnderlyingUnexercised Options |   |   | Value of Unexercisedin-the-money options ($) |   |
|--------------------|--------|----------------------------------|--------|--------|--------------------------|--------|--------|----------------------------------------------------------|--------|--------|----------------------------------------------|--------|
|               |   |                             |   |   |                     |   |   | Exercisable                                              |   |   | Unexercisable                                |   |   | Exercisable |   |   | Unexercisable |   |
| Paul G. Begum      |   |                             | 0      |   |                     | $      | 0      |                                                     |   | $      | 0                                            |   |   | $ | 0 |   |   | $ | 0 |   |   | $ | 0 |   |
|               |   |                             |   |   |                     |   |   |                                                     |   |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Robert A. Campbell |   |                             | 0      |   |                     | $      | 0      |                                                     |   | $      | 0                                            |   |   | $ | 0 |   |   | $ | 0 |   |   | $ | 0 |   |

----

|  Name and Address of Beneficial Owners       |   |  Nature of Ownership |   | #of Shares Owned |       |   | Percent |   |
|---------------------------------------------------|--------|---------------------------|--------|------------------|------------|--------|---------|--------|
|                                              |   |                      |   |             |       |   |    |   |
|  Directors and Executive Officers            |   |                      |   |             |       |   |    |   |
|                                              |   |                      |   |             |       |   |    |   |
| Paul G. Begum   (through PSF Inc.) |   | Direct                    |   |             | 27,090,130 |   |    |   |   |
| P.O. Box 58045                                    |   | Preferred                 |   |             | 0          |   |    |   |   |
| Salt Lake City, UT 84158                          |   | Options/Warrants          |   |             | 0          |   |    |   |   |
|                                              |   | Total                     |   |             | 27,090,130 |   |    |   | 62.15 | % |
|                                              |   |                      |   |             |       |   |    |   |   |   |
| Robert A. Campbell                                |   | Direct                    |   |             | 4,691,000  |   |    |   |   |   |
| 7964 W. 79th Street                               |   | Preferred                 |   |             | 0          |   |    |   |   |   |
| Playa Del Rey, CA 90293                           |   | Options/Warrants          |   |             | 0          |   |    |   |   |
|                                              |   | Total                     |   |             | 4,691,000  |   |    |   | 10.76 | % |
| Principal Shareholders                       |   |                      |   |             |       |   |    |   |   |   |
| Terry Warner                                      |   | Direct                    |   |             | 4,607,262  |   |    |   |   |   |
| (through Mahalo, LLC and Zedeka, LLC)             |   | Preferred                 |   |             | 0          |   |    |   |   |   |
|                                              |   | Options/Warrants          |   |             | 0          |   |    |   |   |   |
|                                              |   | Total                     |   |             | 4,607,262  |   |    |   | 10.65 | % |

----

|  1.                                                                                                                                                 |   |  Financial Statements                                                                                                                                                                             |   |  Page |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  Report of Independent Registered Public Accountants                                                                                                |   |  F-3                                                                                                                                                                                              |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
| Balance Sheets                                                                                                                                           |   |                                                                                                                                                                                                   |
|                                                                                                                                                     |   | December 31, 2009 and 2008                                                                                                                                                                             |   |  F-4  |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
| Statement of Operations                                                                                                                                  |   |                                                                                                                                                                                                   |
|                                                                                                                                                     |   |  For the Year Ended December 31, 2009 and 2008And for the Cumulative Period from July 5, 1996 (inception of development stage)To December 31, 2009                                                |   |  F-6  |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
| Statement of Stockholders' Equity                                                                                                                        |   |                                                                                                                                                                                                   |
|                                                                                                                                                     |   |  From July 5, 1996 (inception of development stage) to December 31, 2009                                                                                                                          |   |  F-7  |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  Statements of Cash Flows                                                                                                                           |   |                                                                                                                                                                                                   |
|                                                                                                                                                     |   |  For the Years Ended December 31, 2009 and 2008And for the Cumulative Period from July 5, 1996 (inception of development stage)To December 31, 2009                                               |   |  F-11 |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  Notes to the Financial Statements                                                                                                                  |   |  F-13                                                                                                                                                                                        |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  2.                                                                                                                                                 |   |   Financial Statement Schedules                                                                                                                                                              |   |       |
|   All schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto. |   |                                                                                                                                                                                                   |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  3.                                                                                                                                       |   |   Exhibits                                                                                                                                                                              |   |       |
|   The following exhibits are included as part of this report:                                                                                  |   |                                                                                                                                                                                                   |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  Exhibit Number                                                                                                                                     |   |  Title of Document                                                                                                                                                                                |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  3.01                                                                                                                                          |   |  Restated Certificate of Incorporation of Klever Marketing, Inc. a Delaware corporation (1)                                                                                                       |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  3.02                                                                                                                                               |   |  Certificate of Designation of Rights, Privileges and Preferences: Rights of A Class Voting Preferred Stock, Series 1, of Klever Marketing, Inc., dated February 7, 2000 (2)                 |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  3.03                                                                                                                                     |   |  Bylaws, as amended (2)                                                                                                                                                                           |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  4.01                                                                                                                                          |   |  Amended Certificate of Designation of Rights, Privileges and Preferences: Rights of A Class of Voting Preferred Stock, Series 1, of Klever Marketing, Inc., Dated February 7, 2000 (3) |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  4.02                                                                                                                                          |   |  Certificate of Designation of Rights, Privileges and Preferences of Class B Voting Preferred Stock, of Klever Marketing, Inc., dated September 24, 2000 (3)                                 |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  4.03                                                                                                                                          |   |  Certificate of Designation of Rights, Privileges and Preferences of Class C Voting Preferred Stock, of Klever Marketing, Inc., dated January 2, 2001 (3)                                    |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  4.04                                                                                                                                               |   |  Certificate of Designation of Rights, Privileges and Preferences of Class D Voting Preferred Stock, of Klever Marketing, Inc., dated June 14, 2002 (5)                                           |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  4.05                                                                                                                                               |   |  Amendment to the Certificates of Designation of Rights, Privileges and  Preferences of Class A, B, and C Voting Preferred Stock, of Klever Marketing, Inc., dated June 12, 2002 (5)         |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  10.01                                                                                                                                              |   |  Separation Agreement between Paul G. Begum and the Registrant Dated January 8, 2001 (2)                                                                                                     |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  10.02                                                                                                                                              |   |  Stock Incentive Plan, effective June 1, 1998 (2)                                                                                                                                                 |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  10.03                                                                                                                                              |   |  Amended and Restated Promissory Note (Secured) of the Registrant payable to Presidio Investments, LLC, dated June 27, 2000, with Financing Statement and Exhibit “A” (2)   |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  10.04                                                                                                                                              |   |  Intercreditor Agreement between Seabury Investors III, Limited Partnership, The Olson Foundation, Presidio Investments, LLC, and the Registrant dated August 27, 2001 (4)                        |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  31.1                                                                                                                                               |   |  Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                         |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  31.2                                                                                                                                               |   |  Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                         |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  32.1                                                                                                                                               |   |  Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                         |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  32.2                                                                                                                                               |   |  Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                         |   |       |
|                                                                                                                                                     |   |                                                                                                                                                                                                   |   |       |
|  (1)                                                                                                                                                |   |  Incorporated herein by reference from Registrant’s Form 10KSB, dated June 20, 1997.                                                                                                        |   |       |
|  (2)                                                                                                                                                |   |  Incorporated herein by reference from Registrant’s Form 10KSB, dated March 29, 2001                                                                                                        |   |       |
|  (3)                                                                                                                                                |   |  Incorporated herein by reference from Registrant’s Form 10QSB, dated May 15, 2001.                                                                                                         |   |       |
|  (4)                                                                                                                                                |   |  Incorporated herein by reference from Registrant’s Form 10QSB, dated May 15, 2002.                                                                                                         |   |       |
|  (5)                                                                                                                                                |   |   Incorporated herein by reference from Registrant’s Form 10QSB, dated August 19, 2002                                                                                                 |   |       |

|      (b) | Reports Filed on Form 8-K |
|-----------------------------------|---------------------------|

----

| Service            |   | 2009   |   |   | 2008   |   |
|--------------------|--------|--------|--------|--------|--------|--------|
|               |   |   |   |   |   |   |   |   |
| Audit Fees         |   | $      | 14,300 |   |   | $      | 23,782 |   |
| Audit-Related Fees |   |   | -      |   |   |   | - |   |
| Tax Fees           |   | $      | 200    |   |   | $      | 250 |   |
| All Other Fees     |   |   | -      |   |   |   | - |   |
| Total              |   | $      | 14,500 |   |   | $      | 24,032 |   |

----

|                 | KLEVER MARKETING, INC. |                   |
|----------------------|------------------------|------------------------|
|                 |                   |                   |   |
| Date: March 31, 2010 | By:                    | /s/ Paul G. Begum |   |
|                 |                   | Paul G. Begum          |   |
|                 |                   | Chairman and CEO       |   |
|                 |                   |                   |   |

|  Signatures    |   |  Title            |   |
|------------------------------------|--------|------------------------|--------|
|                               |   |                   |   |
|  /s/ Paul C. Begum            |   |  Chairman and CEO |   |
|  Paul B. Begum                |   |                   |   |
|                               |   |                   |   |
|  /s/ Robert Campbell          |   |  COO and CFO      |   |
|  Robert Campbell              |   |                   |   |
|                               |   |                   |   |
|  /s/ Jerry P. Wright          |   |  Director         |   |
|  Jerry P. Wright              |   |                   |   |

----

|      KLEVER MARKETING, INC. (A Development Stage Company) Financial Statements December 31, 2009 and 2008 |
|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   C O N T E N T S                                         |
|---------------------------------------------------------------------|
|                                                                |   |   |
|  Report of Independent Registered Public Accounting Firm  |   |  3 |
|                                                                |   |   |
|  Balance Sheets                                           |   |  4 |
|                                                                |   |   |
|  Statements of Operations                                 |   |  6 |
|                                                                |   |   |
|  Statements of Stockholders’ Equity (Deficit)            |   |  7 |
|                                                                |   |   |
|  Statements of Cash Flows                                 |   |  11 |
|                                                                |   |   |
|  Notes to the Financial Statements                        |   |  13 |

----

----

| KLEVER MARKETING, INC.                         |   |
|------------------------------------------------|--------|
| (A Development Stage Company)                  |   |
| Balance Sheets                                 |   |
|                                           |   |   |   |   |   |   |
| ASSETS                                         |   |
|                                           |   | December 31, |   |
|                                           |   | 2009 |   |   | 2008 |   |
|                                           |   |   |   |   |   |   |
| CURRENT ASSETS                                 |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |
| Cash and cash equivalents (Note 1)             |   | $ | 21,041 |   |   | $ | 851 |   |
|                                           |   |   |   |   |   |   |   |   |
| Total Current Assets                           |   |   | 21,041 |   |   |   | 851 |   |
|                                           |   |   |   |   |   |   |   |   |
| FIXED ASSETS (Note 1)                          |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |
| Office equipment                               |   |   | 92,964 |   |   |   | 92,964 |   |
| Less accumulated depreciation                  |   |   | (92,964 | ) |   |   | (92,964 | ) |
|                                           |   |   |   |   |   |   |   |   |
| Total Fixed Assets                             |   |   | - |   |   |   | - |   |
|                                           |   |   |   |   |   |   |   |   |
| OTHER ASSETS                                   |   |   |   |   |   |   |   |   |
|                                           |   |   |   |   |   |   |   |   |
| Deferred stock offering costs (Notes 1 and 13) |   |   | 20,000 |   |   |   | - |   |
| Patents, net (Note 1)                          |   |   | - |   |   |   | - |   |
|                                           |   |   |   |   |   |   |   |   |
| Total Other Assets                             |   |   | 20,000 |   |   |   | - |   |
|                                           |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                                   |   | $ | 41,041 |   |   | $ | 851 |   |

----

| KLEVER MARKETING, INC.                                                           |   |
|----------------------------------------------------------------------------------|--------|
| (A Development Stage Company)                                                    |   |
| Balance Sheets (Continued)                                                       |   |
|                                                                             |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)                                   |   |
|                                                                             |   |   |   |   |   |   |
|                                                                             |   | December 31, |   |
|                                                                             |   | 2009 |   |   | 2008 |   |
|                                                                             |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |
| CURRENT LIABILITIES                                                              |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |
| Accounts payable                                                                 |   | $ | 376,365 |   |   | $ | 307,308 |   |
| Accrued liabilities                                                              |   |   | 674,252 |   |   |   | 651,898 |   |
| Line-of-credit (Note 6)                                                          |   |   | - |   |   |   | 20,423 |   |
| Related party note payable (Note 9)                                              |   |   | 9,000 |   |   |   | 9,000 |   |
| Notes payable (Note 10)                                                          |   |   | 45,000 |   |   |   | 45,000 |   |
| Stock deposits (Note 7)                                                          |   |   | 11,000 |   |   |   | 11,000 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Total Current Liabilities                                                        |   |   | 1,115,617 |   |   |   | 1,044,629 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Total Liabilities                                                                |   |   | 1,115,617 |   |   |   | 1,044,629 |   |
|                                                                             |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY (DEFICIT)                                                   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |
| Preferred stock (par value $0.01), 2,000,000 shares authorized,                  |   |   |   |   |   |   |   |   |
|    287,595 shares issued and outstanding                          |   |   | 2,876 |   |   |   | 2,876 |   |
| Common stock (par value $0.01), 250,000,000 shares authorized,                   |   |   |   |   |   |   |   |   |
|     43,590,130 and 42,248,303 shares issued and outstanding, |   |   |   |   |   |   |   |   |
|     respectively                                             |   |   | 435,901 |   |   |   | 422,483 |   |
| Subscription receivable (Note 7)                                                 |   |   | - |   |   |   | (23,000 | ) |
| Treasury stock, 100,000 shares at December 31, 2009 and 2008                     |   |   | (1,000 | ) |   |   | (1,000 | ) |
| Paid in capital in excess of par value                                           |   |   | 16,551,909 |   |   |   | 16,063,714 |   |
| Retained deficit                                                                 |   |   | (3,333,785 | ) |   |   | (3,333,785 | ) |
| Deficit accumulated during development stage                                     |   |   | (14,730,477 | ) |   |   | (14,175,066 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| Total Stockholders' Equity (Deficit)                                             |   |   | (1,074,576 | ) |   |   | (1,043,778 | ) |
|                                                                             |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS'                                              |   |   |   |   |   |   |   |   |
|  EQUITY (DEFICIT)                                                           |   | $ | 41,041 |   |   | $ | 851 |   |

----

| KLEVER MARKETING, INC.                          |   |
|-------------------------------------------------|--------|
| (A Development Stage Company)                   |   |
| Statements of Operations                        |   |
| For the Years Ended December 31, 2009 and 2008  |   |
|                                            |   |   |   |   |   |   |   | From |   |
|                                            |   |   |   |   |   |   |   | Inception of |   |
|                                            |   |   |   |   |   |   |   | Development |   |
|                                            |   |   |   |   |   |   |   | Stage On |   |
|                                            |   |   |   |   |   |   |   | July 5, 1996 |   |
|                                            |   |   |   |   |   |   |   | Through |   |
|                                            |   |   |   |   |   |   |   | December 31, |   |
|                                            |   | 2009 |   |   | 2008 |   |   | 2009 |   |
|                                            |   |   |   |   |   |   |   |   |   |
| REVENUES                                        |   | $ | - |   |   | $ | - |   |   | $ | 256,000 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| EXPENSES                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Sales and marketing                             |   |   | - |   |   |   | - |   |   |   | 163,306 |   |
| General and administrative                      |   |   | 418,757 |   |   |   | 93,223 |   |   |   | 10,863,267 |   |
| Research and development (Note 4)               |   |   | 118,149 |   |   |   | - |   |   |   | 4,647,805 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Expenses                                  |   |   | 536,906 |   |   |   | 93,223 |   |   |   | 15,674,378 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER INCOME (EXPENSE)                          |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Other income                                    |   |   | 4,908 |   |   |   | 50,000 |   |   |   | 508,751 |   |
| Interest income                                 |   |   | - |   |   |   | - |   |   |   | 18,902 |   |
| Interest expense                                |   |   | (28,250 | ) |   |   | (25,752 | ) |   |   | (2,625,250 | ) |
| Forgiveness of debt (Note 6)                    |   |   | 4,837 |   |   |   | 164,991 |   |   |   | 296,965 |   |
| Gain on sale of assets                          |   |   | - |   |   |   | - |   |   |   | 26,947 |   |
| Capital gain on sale of investments             |   |   | - |   |   |   | - |   |   |   | 191,492 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Other Income (Expense)                    |   |   | (18,505 | ) |   |   | 189,239 |   |   |   | (1,582,193 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS) BEFORE INCOME TAXES           |   |   | (555,411 | ) |   |   | 96,016 |   |   |   | (17,000,571 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME TAXES (Note 3)                           |   |   | - |   |   |   | 100 |   |   |   | 1,300 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS) BEFORE EXTRAORDINARY ITEMS    |   |   | (555,411 | ) |   |   | 95,916 |   |   |   | (17,001,871 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| EXTRAORDINARY ITEM - TROUBLED DEBT              |   |   |   |   |   |   |   |   |   |   |   |   |
|    RESTRUCTURING (Note 12)       |   |   | - |   |   |   | - |   |   |   | 2,271,394 |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME (LOSS)                               |   | $ | (555,411 | ) |   | $ | 95,916 |   |   | $ | (14,730,477 | ) |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| BASIC INCOME (LOSS) PER COMMON SHARE            |   | $ | (0.01 | ) |   | $ | 0.00 |   |   |   |   |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| FULLY DILUTED INCOME (LOSS) PER COMMON SHARE    |   | $ | (0.01 | ) |   | $ | 0.00 |   |   |   |   |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF                      |   |   |   |   |   |   |   |   |   |   |   |   |
|  COMMON SHARES OUTSTANDING - BASIC         |   |   | 42,618,936 |   |   |   | 46,530,769 |   |   |   |   |   |
|                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| WEIGHTED AVERAGE NUMBER OF                      |   |   |   |   |   |   |   |   |   |   |   |   |
|  COMMON SHARES OUTSTANDING - FULLY DILUTED |   |   | 42,618,936 |   |   |   | 56,339,704 |   |   |   |   |   |

----

| KLEVER MARKETING, INC.                                                            |   |
|-----------------------------------------------------------------------------------|--------|
| Statements of Stockholders' Equity (Deficit)                                      |   |
| From Inception of the Development Stage on July 5, 1996 Through December 31, 2009 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |  Deficit |   |   |   |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Paid in |   |   |   |   |   | Accumulated |   |   |  Total |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   |   |   |   |   |   |   | Capital in |   |   |   |   |   | During |   |   | Stockholders' |   |
|                                                                              |   | Preferred Stock |   |   | Common Stock |   |   | Stock to be |   |   | Subscription |   |   | Treasury |   |   | Excess of |   |   | Retained |   |   | Development |   |   | Equity |   |
|                                                                              |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Issued |   |   | Receivable |   |   | Stock |   |   | Par Value |   |   | Deficit |   |   | Stage |   |   | (Deficit) |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 1995                                                        |   |   | 247,100 |   |   | $ | 2,471 |   |   |   | 12,210,949 |   |   | $ | 122,109 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 74,022,028 |   |   | $ | (103,351,248 | ) |   | $ | - |   |   | $ | (29,204,640 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| January 1996, shares issued in connection with merger                             |   |   | (247,100 | ) |   |   | (2,471 | ) |   |   | (3,784,905 | ) |   |   | (37,849 | ) |   |   | 5,059 |   |   |   | - |   |   |   | - |   |   |   | (70,257,358 | ) |   |   | 100,017,463 |   |   |   | - |   |   |   | 29,724,844 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.50-$3.00 per share                                   |   |   | - |   |   |   | - |   |   |   | 314,287 |   |   |   | 3,143 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 507,932 |   |   |   | - |   |   |   | - |   |   |   | 511,075 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued in exercise of options at $1.00-$1.25 per share                     |   |   | - |   |   |   | - |   |   |   | 130,000 |   |   |   | 1,300 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 136,200 |   |   |   | - |   |   |   | - |   |   |   | 137,500 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for services at $1.25 per share                                     |   |   | - |   |   |   | - |   |   |   | 14,282 |   |   |   | 143 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 17,710 |   |   |   | - |   |   |   | - |   |   |   | 17,853 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for receivable at $1.00-$3.00 per share                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 407 |   |   |   | - |   |   |   | - |   |   |   | 101,543 |   |   |   | - |   |   |   | - |   |   |   | 101,950 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued to officer and employee for patents                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,250 |   |   |   | - |   |   |   | - |   |   |   | 130,500 |   |   |   | - |   |   |   | - |   |   |   | 132,750 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss in the year ended December 31, 1996                                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (831,814 | ) |   |   | (831,814 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 1996                                                        |   |   | - |   |   |   | - |   |   |   | 8,884,613 |   |   |   | 88,846 |   |   |   | 7,716 |   |   |   | - |   |   |   | - |   |   |   | 4,658,555 |   |   |   | (3,333,785 | ) |   |   | (831,814 | ) |   |   | 589,518 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.01 - $3.00 per share                                 |   |   | - |   |   |   | - |   |   |   | 228,150 |   |   |   | 2,282 |   |   |   | 49 |   |   |   | - |   |   |   | - |   |   |   | 449,976 |   |   |   | - |   |   |   | - |   |   |   | 452,307 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued to officers for loans at $0.08 - $1.82 per share                    |   |   | - |   |   |   | - |   |   |   | 249,444 |   |   |   | 2,494 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 74,287 |   |   |   | - |   |   |   | - |   |   |   | 76,781 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issues for services at $0.50 - $2.59 per share                             |   |   | - |   |   |   | - |   |   |   | 10,398 |   |   |   | 104 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,391 |   |   |   | - |   |   |   | - |   |   |   | 7,495 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share issued to officers for patents                                              |   |   | - |   |   |   | - |   |   |   | 260,813 |   |   |   | 2,608 |   |   |   | (2,250 | ) |   |   | - |   |   |   | - |   |   |   | 1,892 |   |   |   | - |   |   |   | - |   |   |   | 2,250 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash and receivables at $1.75 - $2.00 per share                 |   |   | - |   |   |   | - |   |   |   | 58,286 |   |   |   | 583 |   |   |   | (100 | ) |   |   | - |   |   |   | - |   |   |   | 85,267 |   |   |   | - |   |   |   | - |   |   |   | 85,750 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued to Videocart creditors                                              |   |   | - |   |   |   | - |   |   |   | 97,610 |   |   |   | 976 |   |   |   | (976 | ) |   |   | - |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for research and development at par                                 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 464 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 464 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for employee compensation at $2.50 per share                        |   |   | - |   |   |   | - |   |   |   | 6,000 |   |   |   | 60 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 14,940 |   |   |   | - |   |   |   | - |   |   |   | 15,000 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 1997                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (755,594 | ) |   |   | (755,594 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 1997                                                        |   |   | - |   |   |   | - |   |   |   | 9,795,314 |   |   |   | 97,953 |   |   |   | 4,903 |   |   |   | - |   |   |   | - |   |   |   | 5,292,308 |   |   |   | (3,333,785 | ) |   |   | (1,587,408 | ) |   |   | 473,971 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $1.50 - $3.00 per share                                 |   |   |   |   |   |   |   |   |   |   | 294,059 |   |   |   | 2,941 |   |   |   | (100 | ) |   |   |   |   |   |   | - |   |   |   | 612,416 |   |   |   |   |   |   |   |   |   |   |   | 615,257 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for services at $2.00 - $7.80 per share                             |   |   | - |   |   |   | - |   |   |   | 13,648 |   |   |   | 136 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 43,590 |   |   |   | - |   |   |   | - |   |   |   | 43,726 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for employee compensation at $2.19 - $3.06 per share                |   |   | - |   |   |   | - |   |   |   | 4,363 |   |   |   | 44 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 9,954 |   |   |   | - |   |   |   | - |   |   |   | 9,998 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for accounts receivable at $1.50 - $2.12 per share                  |   |   | - |   |   |   | - |   |   |   | 129,437 |   |   |   | 1,294 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 209,671 |   |   |   | - |   |   |   | - |   |   |   | 210,965 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for 1,500 shares of Avtel stock at $3.00 per share                  |   |   | - |   |   |   | - |   |   |   | 4,125 |   |   |   | 41 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 12,334 |   |   |   | - |   |   |   | - |   |   |   | 12,375 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for research and development contract                               |   |   | - |   |   |   | - |   |   |   | 46,366 |   |   |   | 464 |   |   |   | (464 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued to officer for patent at $2.94 per share                            |   |   | - |   |   |   | - |   |   |   | 150,000 |   |   |   | 1,500 |   |   |   | 250 |   |   |   | - |   |   |   | - |   |   |   | 512,313 |   |   |   | - |   |   |   | - |   |   |   | 514,063 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares returned at $1.58 per share                                                |   |   | - |   |   |   | - |   |   |   | (42,493 | ) |   |   | (425 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (66,667 | ) |   |   | - |   |   |   | - |   |   |   | (67,092 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 1998                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,496,926 | ) |   |   | (1,496,926 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 1998                                                        |   |   | - |   |   | $ | - |   |   |   | 10,394,819 |   |   | $ | 103,948 |   |   | $ | 4,589 |   |   | $ | - |   |   | $ | - |   |   | $ | 6,625,919 |   |   | $ | (3,333,785 | ) |   | $ | (3,084,334 | ) |   | $ | 316,337 |   |

----

| KLEVER MARKETING, INC.                                                            |   |            |
|-----------------------------------------------------------------------------------|--------|-----------------|
| Statements of Stockholders' Equity (Deficit) (Continued)                          |   |            |
| From Inception of the Development Stage on July 5, 1996 Through December 31, 2009 |   |            |
|                                                                              |   |            |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Deficit  |   |   |   |   |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Paid in |   |   |   |   |   |   |   | Accumulated  |   |   |   | Total  |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   |   |   |   |   |   |   |   |   | Capital in |   |   |   |   |   |   | During |   |   | Stockholders' |   |
|                                                                              |   | Preferred Stock |   |   | Common Stock |   |   | Stock to be |   |   | Subscription |   |   | Treasury |   |   | Excess of |   |   | Retained |   |   | Development |   |   | Equity |   |
|                                                                              |   | Shares          |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Issued |   |   | Receivable |   |   | Stock |   |   | Par Value |   |   | Deficit |   |   | Stage |   |   | (Deficit) |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 1998                                                        |   |            | - |   |   | $ | - |   |   |   | 10,394,819 |   |   | $ | 103,948 |   |   | $ | 4,589 |   |   | $ | - |   |   | $ | - |   |   | $ | 6,625,919 |   |   | $ | (3,333,785 | ) |   | $ | (3,084,334 | ) |   | $ | 316,337 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $1.96 - $3.00 per share                                 |   |            | - |   |   |   | - |   |   |   | 701,525 |   |   |   | 7,015 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,649,949 |   |   |   | - |   |   |   | - |   |   |   | 1,656,964 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for employee compensation at $1.95 - $2.34 per share                |   |            | - |   |   |   | - |   |   |   | 2,995 |   |   |   | 30 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,187 |   |   |   | - |   |   |   | - |   |   |   | 6,217 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for exercise of options at $0.52 - $0.86 per share                  |   |            | - |   |   |   | - |   |   |   | 238,271 |   |   |   | 2,383 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 200,342 |   |   |   | - |   |   |   | - |   |   |   | 202,725 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares returned at $0.67 - $1.58 per share                                        |   |            | - |   |   |   | - |   |   |   | (62,489 | ) |   |   | (625 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (107,047 | ) |   |   | - |   |   |   | - |   |   |   | (107,672 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 1999                                     |   |            | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,734,623 | ) |   |   | (1,734,623 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 1999                                                        |   |            | - |   |   |   | - |   |   |   | 11,275,121 |   |   |   | 112,751 |   |   |   | 4,589 |   |   |   | - |   |   |   | - |   |   |   | 8,375,350 |   |   |   | (3,333,785 | ) |   |   | (4,818,957 | ) |   |   | 339,948 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $1.07 - $2.75 per share                                 |   |            | - |   |   |   | - |   |   |   | 279,742 |   |   |   | 2,798 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 532,754 |   |   |   | - |   |   |   | - |   |   |   | 535,552 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred shares issued for cash at $17-$26 per share                             |   |            | 84,576 |   |   |   | 846 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,827,529 |   |   |   | - |   |   |   | - |   |   |   | 1,828,375 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for employee compensation at $3.99 per share                        |   |            | - |   |   |   | - |   |   |   | 74,608 |   |   |   | 746 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 296,939 |   |   |   | - |   |   |   | - |   |   |   | 297,685 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for exercise of stock options at $0.86 - $1.07 per share            |   |            | - |   |   |   | - |   |   |   | 597,778 |   |   |   | 5,978 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 511,931 |   |   |   | - |   |   |   | - |   |   |   | 517,909 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for accounts payable at $2.75 - $3.00 per share                     |   |            | - |   |   |   | - |   |   |   | 9,488 |   |   |   | 95 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 26,649 |   |   |   | - |   |   |   | - |   |   |   | 26,744 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Paid-in capital from treasury stock transaction                                   |   |            | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16,180 |   |   |   | - |   |   |   | - |   |   |   | 16,180 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares canceled and converted to preferred shares at $2.75 per share              |   |            | - |   |   |   | - |   |   |   | (100,000 | ) |   |   | (1,000 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (274,000 | ) |   |   | - |   |   |   | - |   |   |   | (275,000 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Conversion of note payable to preferred shares at $26 per share                   |   |            | 9,615 |   |   |   | 96 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 249,904 |   |   |   | - |   |   |   | - |   |   |   | 250,000 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued that were paid for in 1997                                          |   |            | - |   |   |   | - |   |   |   | 23,334 |   |   |   | 233 |   |   |   | (233 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for services at $0.89 per share                                     |   |            | - |   |   |   | - |   |   |   | 2,697 |   |   |   | 27 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,373 |   |   |   | - |   |   |   | - |   |   |   | 2,400 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares returned at $1.73 - $2.12 per share                                        |   |            | - |   |   |   | - |   |   |   | (10,000 | ) |   |   | (100 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (19,150 | ) |   |   | - |   |   |   | - |   |   |   | (19,250 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2000                                     |   |            | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4,066,283 | ) |   |   | (4,066,283 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2000                                                        |   |            | 94,191 |   |   |   | 942 |   |   |   | 12,152,768 |   |   |   | 121,528 |   |   |   | 4,356 |   |   |   | - |   |   |   | - |   |   |   | 11,546,459 |   |   |   | (3,333,785 | ) |   |   | (8,885,240 | ) |   |   | (545,740 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.82 per share                                         |   |            | - |   |   |   | - |   |   |   | 4,685 |   |   |   | 47 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,795 |   |   |   | - |   |   |   | - |   |   |   | 3,842 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred shares issued for cash at $6.60 per share                               |   |            | 6,061 |   |   |   | 60 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 39,940 |   |   |   | - |   |   |   | - |   |   |   | 40,000 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred shares issued for payment of note payable at $6.60 per share            |   |            | 68,182 |   |   |   | 682 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 449,318 |   |   |   | - |   |   |   | - |   |   |   | 450,000 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares canceled for nonpayment                                                    |   |            | - |   |   |   | - |   |   |   | (4,694 | ) |   |   | (47 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (9,903 | ) |   |   | - |   |   |   | - |   |   |   | (9,950 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for research and development expenses at $1.00 per share            |   |            | - |   |   |   | - |   |   |   | 15,000 |   |   |   | 150 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 14,850 |   |   |   | - |   |   |   | - |   |   |   | 15,000 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for general and administrative expenses at $0.66 per share          |   |            | - |   |   |   | - |   |   |   | 507,048 |   |   |   | 5,070 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 329,581 |   |   |   | - |   |   |   | - |   |   |   | 334,651 |   |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares returned to Company for accounts receivable of $98,375                     |   |            | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   | (1,000 | ) |   |   | (97,375 | ) |   |   | - |   |   |   | - |   |   |   | (98,375 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2001                                     |   |            | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,342,405 | ) |   |   | (2,342,405 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2001                                                        |   |            | 168,434 |   |   | $ | 1,684 |   |   |   | 12,674,807 |   |   | $ | 126,748 |   |   | $ | 4,356 |   |   | $ | - |   |   | $ | (1,000 | ) |   | $ | 12,276,665 |   |   | $ | (3,333,785 | ) |   | $ | (11,227,645 | ) |   | $ | (2,152,977 | ) |
|                                                                              |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| KLEVER MARKETING, INC.                                                            |   |
|-----------------------------------------------------------------------------------|--------|
| Statements of Stockholders' Equity (Deficit) (Continued)                          |   |
| From Inception of the Development Stage on July 5, 1996 Through December 31, 2009 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |  Deficit |   |   |   |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Paid in |   |   |   |   |   |  Accumulated |   |   |  Total |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   |   |   |   |   |   |   | Capital in |   |   |   |   |   | During |   |   | Stockholders' |   |
|                                                                              |   | Preferred Stock |   |   | Common Stock |   |   | Stock to be |   |   | Subscription |   |   | Treasury |   |   | Excess of |   |   | Retained |   |   | Development |   |   | Equity |   |
|                                                                              |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Issued |   |   | Receivable |   |   | Stock |   |   | Par Value |   |   | Deficit |   |   | Stage |   |   | (Deficit) |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2001                                                        |   |   | 168,434 |   |   | $ | 1,684 |   |   |   | 12,674,807 |   |   | $ | 126,748 |   |   | $ | 4,356 |   |   | $ | - |   |   | $ | (1,000 | ) |   | $ | 12,276,665 |   |   | $ | (3,333,785 | ) |   | $ | (11,227,645 | ) |   | $ | (2,152,977 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares canceled for services not rendered                                         |   |   | - |   |   |   | - |   |   |   | (304,229 | ) |   |   | (3,042 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (197,749 | ) |   |   | - |   |   |   | - |   |   |   | (200,791 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash received for shares that have not yet been issued                            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,333 |   |   |   | - |   |   |   | - |   |   |   | 21,667 |   |   |   | - |   |   |   | - |   |   |   | 25,000 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2002                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,025,837 | ) |   |   | (1,025,837 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2002                                                        |   |   | 168,434 |   |   |   | 1,684 |   |   |   | 12,370,578 |   |   |   | 123,706 |   |   |   | 7,689 |   |   |   | - |   |   |   | (1,000 | ) |   |   | 12,100,583 |   |   |   | (3,333,785 | ) |   |   | (12,253,482 | ) |   |   | (3,354,605 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.05 - $0.75 per share                                 |   |   | - |   |   |   | - |   |   |   | 2,580,000 |   |   |   | 25,800 |   |   |   | (3,333 | ) |   |   | - |   |   |   | - |   |   |   | 151,033 |   |   |   | - |   |   |   | - |   |   |   | 173,500 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued to S&C Medical at $0.05 per share                               |   |   | - |   |   |   | - |   |   |   | 3,000,000 |   |   |   | 30,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 120,000 |   |   |   | - |   |   |   | - |   |   |   | 150,000 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for notes payable at $0.04 - $0.05 per share                        |   |   | - |   |   |   | - |   |   |   | 11,259,786 |   |   |   | 112,598 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 446,642 |   |   |   | - |   |   |   | - |   |   |   | 559,240 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for accounts payable at $0.01 - $0.10 per share                     |   |   | - |   |   |   | - |   |   |   | 4,200,000 |   |   |   | 42,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 96,000 |   |   |   | - |   |   |   | - |   |   |   | 138,000 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares authorized for expense at $0.03 per share - not issued                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 9,545 |   |   |   | - |   |   |   | - |   |   |   | 19,090 |   |   |   | - |   |   |   | - |   |   |   | 28,635 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares authorized for payment of accounts payable at $0.21 per share - not issued |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 56 |   |   |   | - |   |   |   | - |   |   |   | 1,115 |   |   |   | - |   |   |   | - |   |   |   | 1,171 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2003                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,361,753 | ) |   |   | (1,361,753 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2003                                                        |   |   | 168,434 |   |   |   | 1,684 |   |   |   | 33,410,364 |   |   |   | 334,104 |   |   |   | 13,957 |   |   |   | - |   |   |   | (1,000 | ) |   |   | 12,934,463 |   |   |   | (3,333,785 | ) |   |   | (13,615,235 | ) |   |   | (3,665,812 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.036-$0.15 per share                                  |   |   | - |   |   |   | - |   |   |   | 770,000 |   |   |   | 7,700 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 57,420 |   |   |   | - |   |   |   | - |   |   |   | 65,120 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for accounts payable at $0.05-$0.23 per share                       |   |   | - |   |   |   | - |   |   |   | 391,939 |   |   |   | 3,919 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 27,306 |   |   |   | - |   |   |   | - |   |   |   | 31,225 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for expenses at $0.04-$0.23 per share                               |   |   | - |   |   |   | - |   |   |   | 1,910,604 |   |   |   | 19,106 |   |   |   | (9,203 | ) |   |   | - |   |   |   | - |   |   |   | 108,325 |   |   |   | - |   |   |   | - |   |   |   | 118,228 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Authorized shares issued                                                          |   |   | - |   |   |   | - |   |   |   | 5,571 |   |   |   | 56 |   |   |   | (56 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for settlement of liabilities                                       |   |   | - |   |   |   | - |   |   |   | 152,142 |   |   |   | 1,521 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 36,514 |   |   |   | - |   |   |   | - |   |   |   | 38,035 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2004                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (632,293 | ) |   |   | (632,293 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance of December 31, 2004                                                      |   |   | 168,484 |   |   |   | 1,684 |   |   |   | 36,640,620 |   |   |   | 366,406 |   |   |   | 4,698 |   |   |   | - |   |   |   | (1,000 | ) |   |   | 13,164,028 |   |   |   | (3,333,785 | ) |   |   | (14,247,528 | ) |   |   | (4,045,497 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.028-$0.25 per share                                  |   |   | - |   |   |   | - |   |   |   | 1,790,000 |   |   |   | 17,900 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 254,726 |   |   |   | - |   |   |   | - |   |   |   | 272,626 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for expenses at $0.25 per share                                     |   |   | - |   |   |   | - |   |   |   | 92,500 |   |   |   | 925 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 22,200 |   |   |   | - |   |   |   | - |   |   |   | 23,125 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2005                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (736,913 | ) |   |   | (736,913 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2005                                                        |   |   | 168,434 |   |   |   | 1,684 |   |   |   | 38,523,120 |   |   |   | 385,231 |   |   |   | 4,698 |   |   |   | - |   |   |   | (1,000 | ) |   |   | 13,440,954 |   |   |   | (3,333,785 | ) |   |   | (14,984,441 | ) |   |   | (4,486,659 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for general and administrative expenses at $0.25 per share          |   |   | - |   |   |   | - |   |   |   | 2,788 |   |   |   | 29 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 669 |   |   |   | - |   |   |   | - |   |   |   | 698 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.25 per share                                         |   |   | - |   |   |   | - |   |   |   | 586,000 |   |   |   | 5,860 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 140,640 |   |   |   | - |   |   |   | - |   |   |   | 146,500 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for accounts payable at $0.25 per share                             |   |   | - |   |   |   | - |   |   |   | 71,956 |   |   |   | 719 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 17,270 |   |   |   | - |   |   |   | - |   |   |   | 17,989 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense from issuance of stock options                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 43,653 |   |   |   | - |   |   |   | - |   |   |   | 43,653 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ended December 31, 2006                                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (850,440 | ) |   |   | (850,440 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2006                                                        |   |   | 168,434 |   |   | $ | 1,684 |   |   |   | 39,183,864 |   |   | $ | 391,839 |   |   | $ | 4,698 |   |   | $ | - |   |   | $ | (1,000 | ) |   | $ | 13,643,186 |   |   | $ | (3,333,785 | ) |   | $ | (15,834,881 | ) |   | $ | (5,128,259 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| KLEVER MARKETING, INC.                                                            |   |
|-----------------------------------------------------------------------------------|--------|
| Statements of Stockholders' Equity (Deficit) (Continued)                          |   |
| From Inception of the Development Stage on July 5, 1996 Through December 31, 2009 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Deficit |   |   |   |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Paid in |   |   |   |   |   | Accumulated |   |   | Total |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   | Common |   |   |   |   |   |   |   |   | Capital in |   |   |   |   |   | During |   |   | Stockholders' |   |
|                                                                              |   | Preferred Stock |   |   | Common Stock |   |   | Stock to be |   |   | Subscription |   |   | Treasury |   |   | Excess of |   |   | Retained |   |   | Development |   |   | Equity |   |
|                                                                              |   | Shares |   |   | Amount |   |   | Shares |   |   | Amount |   |   | Issued |   |   | Receivable |   |   | Stock |   |   | Par Value |   |   | Deficit |   |   | Stage |   |   | (Deficit) |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2006                                                        |   |   | 168,434 |   |   | $ | 1,684 |   |   |   | 39,183,864 |   |   | $ | 391,839 |   |   | $ | 4,698 |   |   | $ | - |   |   | $ | (1,000 | ) |   | $ | 13,643,186 |   |   | $ | (3,333,785 | ) |   | $ | (15,834,881 | ) |   | $ | (5,128,259 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for general and administrative expenses at $0.03-$0.05 per share    |   |   | - |   |   |   | - |   |   |   | 450,000 |   |   |   | 4,500 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 13,000 |   |   |   | - |   |   |   | - |   |   |   | 17,500 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.25 per share                                         |   |   | - |   |   |   | - |   |   |   | 1,090,000 |   |   |   | 10,900 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 261,600 |   |   |   | - |   |   |   | - |   |   |   | 272,500 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for accounts payable at $0.25 per share                             |   |   | - |   |   |   | - |   |   |   | 67,988 |   |   |   | 680 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 16,315 |   |   |   | - |   |   |   | - |   |   |   | 16,995 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for notes payable at $0.25 per share                                |   |   | - |   |   |   | - |   |   |   | 8,281,016 |   |   |   | 82,810 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,987,444 |   |   |   | - |   |   |   | - |   |   |   | 2,070,254 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for accrued interest at $0.25 per share                             |   |   | - |   |   |   | - |   |   |   | 62,101 |   |   |   | 621 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 14,905 |   |   |   | - |   |   |   | - |   |   |   | 15,526 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares returned to treasury and cancelled                                         |   |   | - |   |   |   | - |   |   |   | (2,416,666 | ) |   |   | (24,167 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 24,167 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense from issuance of stock options                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 19,891 |   |   |   | - |   |   |   | - |   |   |   | 19,891 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income for the year ended, December 31, 2007                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,563,898 |   |   |   | 1,563,898 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2007                                                        |   |   | 168,434 |   |   |   | 1,684 |   |   |   | 46,718,303 |   |   |   | 467,183 |   |   |   | 4,698 |   |   |   | - |   |   |   | (1,000 | ) |   |   | 15,980,508 |   |   |   | (3,333,785 | ) |   |   | (14,270,983 | ) |   |   | (1,151,695 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock issued as dividends                                               |   |   | 119,161 |   |   |   | 1,192 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,192 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock cancellation                                                                |   |   | - |   |   |   | - |   |   |   | (5,170,000 | ) |   |   | (51,700 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 51,700 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shares issued for cash at $0.05 per share                                         |   |   | - |   |   |   | - |   |   |   | 700,000 |   |   |   | 7,000 |   |   |   | - |   |   |   | (23,000 | ) |   |   | - |   |   |   | 28,000 |   |   |   | - |   |   |   | - |   |   |   | 12,000 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Authorized shares issued                                                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4,698 | ) |   |   | - |   |   |   | - |   |   |   | 4,698 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income for the year ending December 31, 2008                                  |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 95,917 |   |   |   | 95,917 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                                                        |   |   | 287,595 |   |   |   | 2,876 |   |   |   | 42,248,303 |   |   |   | 422,483 |   |   |   | - |   |   |   | (23,000 | ) |   |   | (1,000 | ) |   |   | 16,063,714 |   |   |   | (3,333,785 | ) |   |   | (14,175,066 | ) |   |   | (1,043,778 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash received from shares issued in prior year                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 23,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 23,000 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for cash at $0.30 per share                                   |   |   | - |   |   |   | - |   |   |   | 1,500,093 |   |   |   | 15,001 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 435,027 |   |   |   | - |   |   |   | - |   |   |   | 450,028 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued for services at $0.25 per share                               |   |   | - |   |   |   | - |   |   |   | 150,000 |   |   |   | 1,500 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 36,000 |   |   |   | - |   |   |   | - |   |   |   | 37,500 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock cancellation (Note 7)                                                       |   |   | - |   |   |   | - |   |   |   | (400,000 | ) |   |   | (4,000 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (11,556 | ) |   |   | - |   |   |   | - |   |   |   | (15,556 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in lieu of debt at $0.30 per share                            |   |   | - |   |   |   | - |   |   |   | 80,734 |   |   |   | 807 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 23,413 |   |   |   | - |   |   |   | - |   |   |   | 24,220 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in for services at $0.30 per share                            |   |   | - |   |   |   | - |   |   |   | 11,000 |   |   |   | 110 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 3,190 |   |   |   | - |   |   |   | - |   |   |   | 3,300 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation expense from issuance of stock options                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,121 |   |   |   | - |   |   |   | - |   |   |   | 2,121 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the year ending December 31, 2009                                    |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (555,411 | ) |   |   | (555,411 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                                        |   |   | 287,595 |   |   | $ | 2,876 |   |   |   | 43,590,130 |   |   | $ | 435,901 |   |   | $ | - |   |   | $ | - |   |   | $ | (1,000 | ) |   | $ | 16,551,909 |   |   | $ | (3,333,785 | ) |   | $ | (14,730,477 | ) |   | $ | (1,074,576 | ) |

----

| KLEVER MARKETING, INC.                           |   |
|--------------------------------------------------|--------|
| (A Development Stage Company)                    |   |
| Statements of Cash Flows                         |   |
|                                             |   |
|                                             |   |   |   |   |   |   |   | From |   |
|                                             |   |   |   |   |   |   |   | Inception of |   |
|                                             |   |   |   |   |   |   |   | Development |   |
|                                             |   |   |   |   |   |   |   | Stage On |   |
|                                             |   |   |   |   |   |   |   | July 5, 1996 |   |
|                                             |   | For the Year Ended |   |   | Through |   |
|                                             |   | December 31, |   |   | December 31, |   |
|                                             |   | 2009 |   |   | 2008 |   |   | 2009 |   |
|                                             |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:            |   |   |   |   |   |   |   |   |   |
|                                             |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                |   | $ | (555,411 | ) |   | $ | 95,916 |   |   |   | (14,730,477 | ) |
| Adjustments to reconcile net loss to net cash    |   |   |   |   |   |   |   |   |   |   |   |   |
| used by operating activities:                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock issued for general and administrative      |   |   | 40,800 |   |   |   | - |   |   |   | 1,045,782 |   |
| Stock issued for research and development        |   |   | - |   |   |   | - |   |   |   | 62,850 |   |
| Stock returned for services not rendered         |   |   | (15,556 | ) |   |   | - |   |   |   | (216,346 | ) |
| Loss on sale/disposal of assets                  |   |   | - |   |   |   | - |   |   |   | 486,536 |   |
| Compensation expense from stock options          |   |   | 2,121 |   |   |   | - |   |   |   | 91,912 |   |
| Stock issued for interest                        |   |   | - |   |   |   | - |   |   |   | 135,226 |   |
| Stock issued for accounts payable                |   |   | - |   |   |   | - |   |   |   | 243,458 |   |
| Deferred income                                  |   |   | - |   |   |   | - |   |   |   | (214,000 | ) |
| Depreciation and amortization                    |   |   | - |   |   |   | - |   |   |   | 1,912,883 |   |
| Write-off bad debts                              |   |   | - |   |   |   | - |   |   |   | 15,000 |   |
| Debt forgiveness                                 |   |   | (4,837 | ) |   |   | - |   |   |   | (4,837 | ) |
| Changes in operating assets and liabilities:     |   |   |   |   |   |   |   |   |   |   |   |   |
| (Increase) decrease in accounts receivable       |   |   | - |   |   |   | 25,000 |   |   |   | 62,281 |   |
| (Increase) decrease in other assets and prepaids |   |   | - |   |   |   | - |   |   |   | 89,238 |   |
| (Increase) in deferred stock offering costs      |   |   | (20,000 | ) |   |   | - |   |   |   | (20,000 | ) |
| Increase (decrease) in accounts payable          |   |   | 93,277 |   |   |   | (2,229 | ) |   |   | 307,381 |   |
| Increase (decrease) in accrued liabilities       |   |   | 22,354 |   |   |   | (138,611 | ) |   |   | 581,026 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Cash Used by Operating Activities            |   |   | (437,252 | ) |   |   | (19,924 | ) |   |   | (10,152,087 | ) |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:            |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition/sale of equipment, net               |   |   | - |   |   |   | - |   |   |   | (587,801 | ) |
| Acquisition/sale of patents                      |   |   | - |   |   |   | - |   |   |   | 25,089 |   |
| Acquisition/sale of stock, net                   |   |   | - |   |   |   | - |   |   |   | 12,375 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Cash Used by Investing Activities            |   | $ | - |   |   | $ | - |   |   | $ | (550,337 | ) |

----

| KLEVER MARKETING, INC.                    |   |
|-------------------------------------------|--------|
| (A Development Stage Company)             |   |
| Statements of Cash Flows (Continued)      |   |
|                                      |   |
|                                      |   |   |   |   |   |   |   | From |   |
|                                      |   |   |   |   |   |   |   | Inception of |   |
|                                      |   |   |   |   |   |   |   | Development |   |
|                                      |   |   |   |   |   |   |   | Stage On |   |
|                                      |   |   |   |   |   |   |   | July 5, 1996 |   |
|                                      |   | For the Year Ended |   |   | Through |   |
|                                      |   | December 31, |   |   | December 31, |   |
|                                      |   | 2009 |   |   | 2008 |   |   | 2009 |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:     |   |   |   |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |   |   |   |
| Stock deposit                             |   | $ | - |   |   | $ | 11,000 |   |   | $ | 11,000 |   |
| Stock subscription received               |   |   | 23,000 |   |   |   | - |   |   |   | 23,000 |   |
| Proceeds from capital stock issued        |   |   | 450,028 |   |   |   | 12,000 |   |   |   | 7,500,201 |   |
| Proceeds from loans                       |   |   | - |   |   |   | - |   |   |   | 3,473,252 |   |
| Change in line-of-credit                  |   |   | (15,586 | ) |   |   | (2,600 | ) |   |   | 4,837 |   |
| Loan receivables                          |   |   | - |   |   |   | - |   |   |   | (15,000 | ) |
| Principal payments on lease obligations   |   |   | - |   |   |   | - |   |   |   | (18,769 | ) |
| Cash payments on note payable             |   |   | - |   |   |   | - |   |   |   | (279,730 | ) |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Cash Provided by Financing Activities |   |   | 457,442 |   |   |   | 20,400 |   |   |   | 10,698,791 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH           |   |   | 20,190 |   |   |   | 476 |   |   |   | (3,633 | ) |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH AT BEGINNING OF PERIOD               |   |   | 851 |   |   |   | 375 |   |   |   | 24,674 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH AT END OF PERIOD                     |   | $ | 21,041 |   |   | $ | 851 |   |   | $ | 21,041 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES                  |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash Paid For:                            |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                                  |   | $ | 3,326 |   |   | $ | - |   |   | $ | 3,326 |   |
| Income taxes                              |   | $ | - |   |   | $ | 100 |   |   | $ | 1,300 |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-Cash Transactions for Investing and   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Financing Activities:               |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Common stock issued in lieu of debt       |   | $ | 24,220 |   |   | $ | - |   |   |   |   |   |

----

| a.   | Accounting Method |
|----------------|-------------------|

| b.   | Use of Estimates |
|----------------|------------------|

| c.   | Cash and Cash Equivalents |
|----------------|---------------------------|

| d.   | Intangibles |
|----------------|-------------|

----

| NOTE 1 - | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----------|-------------------------------------------------------------------------|

| e.   | Recent Accounting Pronouncements |
|----------------|----------------------------------|

----

| NOTE 1 - | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----------|-------------------------------------------------------------------------|

| f.   | Stock Options |
|----------------|---------------|

| g.   | Fixed Assets |
|----------------|--------------|

|  Computer equipment                  |  3 years                |   |
|-------------------------------------------|------------------------------|--------|
|  Office furniture and fixtures  |    5-10 years |   |

----

| NOTE 1 - | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----------|-------------------------------------------------------------------------|

| h.   | Fair Value of Financial Instruments |
|----------------|-------------------------------------|

| i.   | Basic and Fully Diluted Income (Loss) Per Share |
|----------------|-------------------------------------------------|

----

| NOTE 1 - | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----------|-------------------------------------------------------------------------|

| i.   | Basic and Fully Diluted Income (Loss) Per Share (Continued) |
|----------------|-------------------------------------------------------------|

|                                        |   | December 31, |       |
|---------------------------------------------|--------|--------------|------------|
|                                        |   | 2009         |       |   | 2008 |   |
| Numerator:                                  |   |         |       |   |   |   |
|                                        |   |         |       |   |   |   |
| Income (loss) before extraordinary items    |   | $            | (555,411   | ) |   | $ | 95,917 |   |
| Income from extraordinary items, net of tax |   |         | -          |   |   |   | - |   |
|                                        |   |         |       |   |   |   |   |   |
| Net income (loss)                           |   | $            | (555,411   | ) |   | $ | 95,917 |   |
|                                        |   |         |       |   |   |   |   |   |
| Denominator:                                |   |         |       |   |   |   |   |   |
| Weighted-average common shares outstanding  |   |         |       |   |   |   |   |   |
| Basic                                       |   |         | 42,618,936 |   |   |   | 46,530,769 |   |
| Conversion of preferred rights              |   |         | -          |   |   |   | 9,808,935 |   |
| Diluted                                     |   |         | 42,618,936 |   |   |   | 56,339,704 |   |
|                                        |   |         |       |   |   |   |   |   |
| Income (loss) per share                     |   |         |       |   |   |   |   |   |
| Basic                                       |   |         |       |   |   |   |   |   |
| Income (loss) before extraordinary items    |   | $            | (0.01      | ) |   | $ | 0.00 |   |
| Income from extraordinary items, net of tax |   |         | -          |   |   |   | - |   |
| Net income (loss)                           |   | $            | (0.01      | ) |   | $ | 0.00 |   |
|                                        |   |         |       |   |   |   |   |   |
| Diluted                                     |   |         |       |   |   |   |   |   |
| Income (loss) before extraordinary items    |   | $            | (0.01      | ) |   | $ | 0.00 |   |
| Income from extraordinary items, net of tax |   |         | -          |   |   |   | - |   |
| Net income (loss)                           |   | $            | (0.01      | ) |   | $ | 0.00 |   |

----

| NOTE 1 - | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) |
|----------|-------------------------------------------------------------------------|

| j.   | Concentration of Credit Risk |
|----------------|------------------------------|

| k.   | Deferred Stock Offering Costs |
|----------------|-------------------------------|

----

----

| The deferred income tax asset and the valuation account are as follows at December 31, 2009 and 2008, respectively: |   |
|---------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                |   | December 31, |   |
|                                                                                                                |   | 2009 |   |   | 2008 |   |
|                                                                                                                |   |   |   |   |   |   |
| Deferred tax asset:                                                                                                 |   |   |   |   |   |   |
| NOL carryforward                                                                                                    |   | $ | 2,796,553 |   |   | $ | 2,608,279 |   |
| Valuation allowance                                                                                                 |   |   | (2,796,553 | ) |   |   | (2,608,279 | ) |
|                                                                                                                |   |   |   |   |   |   |   |   |
| Total                                                                                                               |   | $ | - |   |   | $ | - |   |

| The components of income tax expense are as follows for the year ended December 31, 2009 and 2008, respectively: |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                  |   |   |   |   |   |   |
|                                                                                                                  |   | December 31, |   |
|                                                                                                                  |   | 2009 |   |   | 2008 |   |
|                                                                                                                  |   |   |   |   |   |   |
| Current income tax expense (benefit):                                                                                 |   |   |   |   |   |   |
| Federal                                                                                                               |   | $ | - |   |   | $ | - |   |
| State                                                                                                                 |   |   | - |   |   |   | 100 |   |
| Current tax expense                                                                                                   |   | $ | - |   |   | $ | 100 |   |
|                                                                                                                  |   |   |   |   |   |   |   |   |
|                                                                                                                  |   |   |   |   |   |   |   |   |
| Deferred tax expense (benefit) arising from:                                                                          |   |   |   |   |   |   |   |   |
| Valuation allowance                                                                                                   |   | $ | (188,274 | ) |   | $ | (14,388 | ) |
| Net operating loss carryforward                                                                                       |   |   | 188,274 |   |   |   | 14,388 |   |
| Net deferred tax assets                                                                                               |   | $ | - |   |   | $ | - |   |
|                                                                                                                  |   |   |   |   |   |   |   |   |
| Income tax provision                                                                                                  |   | $ | - |   |   | $ | 100 |   |

----

| A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows for the years ended December 31, 2009 and 2008, respectively. |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                         |   |
|                                                                                                                                                         |   | December 31, |   |
|                                                                                                                                                         |   | 2009 |   |   | 2008 |   |
|                                                                                                                                                         |   |   |   |   |   |   |
| Beginning balance                                                                                                                                            |   | $ | - |   |   | $ | - |   |
| Addition based on tax positions related to                                                                                                                   |   |   |   |   |   |   |   |   |
|  current year                                                                                                                                           |   |   | - |   |   |   | - |   |
| Addition for tax positions of prior years                                                                                                                    |   |   | - |   |   |   | - |   |
| Reductions for tax positions of prior years                                                                                                                  |   |   | - |   |   |   | - |   |
| Deductions in benefit due to income tax                                                                                                                      |   |   |   |   |   |   |   |   |
|  expense                                                                                                                                                |   |   | - |   |   |   | - |   |
|                                                                                                                                                         |   |   |   |   |   |   |   |   |
| Ending balance                                                                                                                                               |   | $ | - |   |   | $ | - |   |

----

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|             |   | 2009   |   |   | 2008   |   |
|------------------|--------|--------|--------|--------|--------|--------|
| Principal        |   | $      | 45,000 |   |   | $      | 45,000 |   |
| Accrued interest |   |   | 34,936 |   |   |   | 31,336 |   |
| Total            |   | $      | 79,936 |   |   | $      | 76,336 |   |

----

|  Risk-free interest rate |   |   | 0.47   | % |
|-------------------------------|--------|--------|--------|---|
|  Expected life      |   | 1 year |   |
|  Expected volatility     |   |   | 358.52 | % |
|  Dividend yield     |   |   | 0.0    | % |

|                                                  |   |     |    |   | Weighted |   |   |       |   |
|-------------------------------------------------------|--------|----------|---------|--------|----------|--------|--------|------------|--------|
|                                                  |   | Option / |    |   | Average  |   |   | Weighted   |   |
|                                                  |   | Warrants |    |   | Exercise |   |   | Average    |   |
|                                                  |   | Shares   |    |   | Price    |   |   | Fair Value |   |
|                                                  |   |     |    |   |     |   |   |       |   |
| Options & warrants outstanding,                   |   |     |    |   |     |   |   |       |   |
|       December 31, 2008 |   |     | 748,800 |   |     | $      | 0.75   |       |   | $ | 0.03 |   |
| Granted                                               |   |     | 50,000  |   |     |   | 0.25   |       |   |   | 0.04 |   |
|   Expired                                   |   |     | (25,000 | )      |     | $      | (0.10  | )          |   |   | (0.00 | ) |
| Options & warrants outstanding                    |   |     |    |   |     |   |   |       |   |   |   |   |
|       December 31, 2009 |   |     | 773,800 |   |     | $      | 0.70   |       |   | $ | 0.03 |   |

|        |   |   |        |   |    |      |   |   |        |   |   | Weighted-      |    |   | Weighted-   |   |
|-------------|--------|--------|-------------|--------|---------|-----------|--------|--------|-------------|--------|--------|----------------|---------|--------|-------------|--------|
|        |   |   |        |   |    |      |   |   |        |   |   | Average        |    |   | Average     |   |
|        |   |   |        |   |    | Weighted- |   |   | Shares/     |   |   | Exercise Price |    |   | Contractual |   |
|        |   |   | Shares /    |   |    | Average   |   |   | Warrants    |   |   | Price          |    |   | Remaining   |   |
| Exercise    |   |   | Warrants    |   |    | Exercise  |   |   | Currently   |   |   | Currently      |    |   | Life        |   |
| Price Range |   |   | Outstanding |   |    | Price     |   |   | Exercisable |   |   | Exercisable    |    |   | (months)    |   |
|        |   |   |        |   |    |      |   |   |        |   |   |           |    |   |        |   |
| $           | 0.50   |   |        |   | 391,900 |      |   | $      | 0.50        |   |   |           | 391,900 |   |        | $      | 0.50 |   |   |   | 2 |   |
|        |   |   |        |   |    |      |   |   |        |   |   |           |    |   |        |   |   |   |   |   |   |   |
| $           | 1.00   |   |        |   | 331,900 |      |   | $      | 1.00        |   |   |           | 331,900 |   |        | $      | 1.00 |   |   |   | 2 |   |
|        |   |   |        |   |    |      |   |   |        |   |   |           |    |   |        |   |   |   |   |   |   |   |
| $           | 0.25   |   |        |   | 50,000  |      |   | $      | 0.25        |   |   |           | 50,000  |   |        | $      | 0.25 |   |   |   | 12 |   |
|        |   |   |        |   |    |      |   |   |        |   |   |           |    |   |        |   |   |   |   |   |   |   |
|        |   |   |        |   | 773,800 |      |   |   |        |   |   |           | 773,800 |   |        |   |   |   |   |   |   |   |

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