UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





FORM 10-Q





x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended March 31, 2011


OR


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


For the transition period from              to





Commission file number: 333-99455





GEOS COMMUNICATIONS, INC.


(Exact Name of Registrant as Specified in its Charter)





Washington

91-1426372(State of other jurisdiction of incorporation or

organization)

(I.R.S. Employer Identification No.)430 North Carroll Avenue, Suite 120Southlake, Texas

76092(Address of Principal Executive Offices)

(Zip Code)





(817) 789-6000


(Registrant’s Telephone Number, including Area Code)





Not Applicable


(Former name, former address and former fiscal year, if changed since last report)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.


x  Yes      ̈  No





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Sec.232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


Yes xNo    ̈





Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer,” accelerated filer” and smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):





Large accelerated filer   ̈      Accelerated filer   ̈      Non-accelerated filer   ̈      Smaller Reporting Company  x





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


 ̈  Yes     x  No





Number of Common Shares of the issuer outstanding at May 1, 2011: 37,765,495










INDEX





Page

No.(s)PART I - FINANCIAL INFORMATIONItem 1.

Financial Statements

3Condensed Consolidated Balance Sheets as of March 31, 2011  (unaudited) and December 31, 2010

3Condensed Consolidated Statements of Operations for the three months ended March 31, 2011 and  2010 (unaudited)

4Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and  2010 (unaudited)

5Notes to  Condensed Consolidated Financial Statements

6Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

18Item 3.

Quantitative and Qualitative Disclosures About Market Risk

21Item 4.

Controls and Procedures

21PART II - OTHER INFORMATIONItem 1.

Legal Proceedings

21Item 1A.

Risk Factors

22Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

29Item 3.

Defaults Upon Senior Securities

29Item 4.

Reserved

29Item 5.

Other Information

29Item 6.

Exhibits

30SIGNATURES

32





2


PART I - FINANCIAL INFORMATION


Item 1 - Financial Statements





NOTE: These consolidated financial statements and notes reflect the Company’s Condensed Consolidated Balance Sheets at March 31, 2011 (unaudited) and December 31, 2010, the unaudited Condensed Consolidated Statements of Operations for the three months ended March 31, 2011 and 2010, and unaudited condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010.




GEOS COMMUNICATIONS, INC. AND SUBSIDIARIES


Condensed Consolidated Balance Sheets




March 31, 2011


December 31, 2010(Unaudited)ASSETSCurrent Assets:Cash and Cash Equivalents

$
476,842


$
809,489Accounts Receivable


27,223



25,489Prepaid Expenses and Other Current Assets


169,178



66,448Total Current Assets


673,243



901,376Property and Equipment, Net


757,758



684,421Other Assets:Goodwill


2,095,433



2,061,944Other Intangible Assets, Net of Amortization


2,915,430



3,016,634Deposits


82,295



118,222Assets Related to Discontinued Operations


-



14,442Total Other Assets


5,093,158



5,211,242Total Assets

$
6,524,159


$
6,797,039LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent Liabilities:Accounts Payable

$
787,156


$
605,650Accrued Expenses


2,082,301



1,678,129Convertible Bonds


50,000



50,000Notes Payable


59,000



59,000Liabilities Related to Discontinued Operations


161,347



175,632Total Current Liabilities


3,139,804



2,388,411Notes Payable


150,000



150,000Borrowings under Line of Credit


2,600,000



2,600,000Series A–D, Preferred Shares subject to mandatory redemption


10,436,616



9,925,418Total Liabilities


16,326,420



15,243,829Series F Convertible Preferred Shares, 5,000,000 Shares Authorized, and 0 shares Issued and Outstanding at March 31, 2011 and 7,570 Shares Issued and Outstanding at December 31, 2010


-



5,047,057Series G, Convertible Preferred Shares, 20,000 Shares Authorized, and 5,278 Shares Issued and Outstanding


4,192,101



4,029,233Series H Convertible Preferred Shares, 20,000 Shares Authorized, and  0 shares Issued and Oustanding at March 31,2011 and 350 Shares Issued and Outstanding at December 31, 2010


-



232,482Series I Convertible Preferred Shares, 20,000 Shares Authorized, and 8,347 Issued and Outstanding at March 31, 2011 and 427 Shares Issued and Outstanding at December 31, 2010


5,136,413



288,455Commitments And ContingenciesStockholders’ Deficit:Common Stock,  No Par Value, 500,000,000 Shares Authorized and 36,619,966 Shares Issued and Outstanding


52,491,101



51,650,077Other Comprehensive Income


76,639



19,336Accumulated Deficit


(71,774,021
)


(69,662,170
)Total Geos Communications Inc., Stockholders’ Deficit


(19,206,281
)


(17,992,757
)Non-controlling Interest in Subsidiary


75,506



(51,250
)Total Stockholders’ Deficit


(19,130,775
)


(18,044,007
)Total Liabilities and Stockholders’ Deficit

$
6,524,159


$
6,797,039





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





3


GEOS COMMUNICATIONS, INC. AND SUBSIDIARIES


Condensed Consolidated Statements of Operations


(Unaudited)




Three Months


Three MonthsEnded


EndedMarch 31, 2011


March 31, 2010Net Revenue

$
24,122


$
11,814Cost of Sales


14,588



4,074Gross Margin


9,534



7,740Selling, General and Administrative Expenses


1,909,579



1,621,735Loss From Operations


(1,900,045
)


(1,613,995
)Other Income (Expense):Other Income


2,013



(22
)Interest Expense


(595,286
)


( 527,366
)Total Other Income (Expense)


(593,273
)


(527,388
)Loss from continuing operations


(2,493,318
)


(2,141,383
)Loss from discontinued operations, net of $0 tax benefits


-



(840,101
)Net loss


(2,493,318
)


(2,981,484
)Less: Net Loss Attributable to Non-controlling Interest in Subsidiary


331,929



-Net Loss Attributable to Geos


(2,161,389
)


(2,981,484
)Gain on Exchange of Preferred Shares


431,571



-Dividends for Series F, G, H and I Preferred Shares


(382,033
)


(197,927
)Net Loss Attributable to Geos Common Shareholders

$
(2,111,851
)

$
(3,179,411
)Weighted Average Common Shares Outstanding:Basic and Diluted


37,395,270



32,647,842Basic and Diluted Loss Per Common Share:Continuing Operations

$
(0.06
)

$
(0.07
)Discontinued Operations


-



(0.03
)Net Loss Attributable to Geos Common Shareholders

$
(0.06
)

$
(0.10
)






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





4





GEOS COMMUNICATIONS, INC. AND SUBSIDIARIES


Condensed Consolidated Statements of Cash Flows


(Unaudited)




Three months Ended

March 31, 2011


Three months Ended

March 31, 2010Cash Flows From Operations:Net Loss

$
(2,493,318
)

$
(2,981,484
)Adjustments to Reconcile Net Loss to Net Cash Used In Operating Activities:Depreciation


56,494



92,120Amortization


121,148



101,206Warrants and Common Stock Issued for Services


43,000



16,325Stock based compensation


123,862



216,925Accretion of interest and dividends on Preferred Stock Liabilities


511,198



-Change in operating assets and liabilities, net of effect of acquisitions and dispositions:Accounts Receivable


(1,734
)


(24,840
)Inventories


-



(11,684
)Prepaid Expenses, net of prepaid loan fees


(66,803
)


(29,657
)Accounts Payable


181,506



422,155Accrued Expenses


191,881



376,754Net Cash Used In Operating Activities:


(1,332,766
)


(1,822,810
)Cash Flows From Investing Activities:Acquisitions, net of cash acquired


-



123,608Capital expenditures


(129,831
)


(42,971
)Net Cash Provided by (Used in) Investing Activities


(129,831
)


80,637Cash Flows From Financing Activities:Cash proceeds from sale of subsidiary stock


1,130,000



-Proceeds from line of credit and note payable


-



1,300,000Net Cash Provided By Financing Activities


1,130,000



1,300,000Increase (Decrease) in Cash and Cash Equivalents


(332,597)



(422,173
)Balance, Beginning of period


809,439



1,041,830Balance, End of period

$
476,842


$
599,657Non-Cash Investing and Financing Activities:






-Acquisition of Shoot It! and D Mobile through the issuance of Series G preferred shares and warrants

$
-


$
3,486,340






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




5




GEOS COMMUNICATIONS, INC. AND SUBSIDIARIES


Notes to Condensed Consolidated Financial Statements





NOTE 1.  NATURE OF BUSINESS




For convenience in this quarterly report, “Geos,” “we,” “us,” and “the Company” refer to Geos Communications, Inc. and our consolidated subsidiaries, taken as a whole.




Geos Communications, Inc. (“Geos”), is a Washington corporation whose primary activities are as the operator of, and developer and distributor of mobile content and services through its subsidiary Shoot-It!, LLC (“Shoot It!”) and its investment in D Mobile, Inc. (D Mobile).




Geos was incorporated as “Transit Information Systems, Inc.” under the laws of the State of Washington on October 17, 1988.  In March 2004, the Company changed its name to “i2 Telecom International, Inc.”  In September 2009, the Company filed with the Secretary of State of the State of Washington an amendment to its Articles of Incorporation reflecting the change of the Company’s name from “i2 Telecom International, Inc.” to “Geos Communications, Inc.”




During 2010, we undertook significant changes in our business strategy. These changes resulted in the discontinuation of our Voice over Internet Protocol (VoIP) and technology development, including our MyGlobalTalk solution, and included the acquisitions of  Shoot It! and D Mobile.




Shoot It!, LLC (“Shoot It!”), provides a mobile application for sending picture postcards from smart phones.  Since the date of acquisition, we have included the financial results for Shoot It! in our results of operations.




D Mobile, Inc. (“D Mobile”), provides a platform for mobile content distribution in China. D Mobile, which operates in China under the brand name Duo Guo, is a retail channel for the discovery and download of licensed mobile content. We have included the results of operations for D Mobile since the date of acquisition in our results of operations.




The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern.  The Company has sustained substantial operating losses since commencement of operations.  The Company has also incurred negative cash flows from operating activities and the majority of the Company’s assets are intangible assets.




Geos Communications, Inc. and subsidiaries has not generated positive cash flows from operations and has accumulated losses since inception, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters also are described below. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.




LIQUIDITY AND MANAGEMENT’S PLANS





As shown in the accompanying condensed consolidated financial statements, the Company incurred a net loss of $2,493,318 during the three months ended March 31, 2011, the Company’s current liabilities exceeded its current assets by $2,466,561 and its total liabilities (which includes the Preferred Shares of Geos IP Holdings, Inc. subject to mandatory redemption of $10,436,616) exceeded its total assets by $9,802,261 as of March 31, 2011.





The accompanying condensed consolidated financial statements have been prepared in view of these matters, realization of a major portion of the assets in the accompanying condensed consolidated balance sheet is dependent upon continued operations of the Company, which is in turn dependent on the Company restructuring its financing arrangements, and/or obtaining additional financing, and achieving a positive cash flow while maintaining adequate liquidity.




We have historically reported net losses from our operations and negative cash flows.  We will need to continue to raise capital to support our operations until we reach positive cash flows.  Management believes we can continue to attract adequate capital to support the execution of our strategic plan.  The Company has undertaken a number of specific steps to meet its cash needs and provide positive cash flow in the future.




During 2010, the Company sold 30.5% of its investment in its subsidiary D Mobile for total proceeds of $3,050,000.  During the first quarter of 2011, D Mobile sold 452,000 newly issued shares for total proceeds of $1,130,000 and Geos owned 62.3% of D Mobile Common Stock as of  March 31, 2011. On April 1, 2011 D Mobile sold 20,000 newly issued shares for total proceeds of $50,000.                 .




In addition on April 4, 2011, Geos settled outstanding obligations, including accrued interest, under the Drawdown Note (as defined in Note 9 below) and a note payable to a director, of $2,910,718 and $163,710, respectively, by transferring 1,229,771 shares of D Mobile common stock to the lenders. As of April 4, 2011, Geos owned 34.6% of D Mobile.  Accordingly, as of that date, Geos will no longer consolidate D Mobile. Geos’ management team will continue to provide services to D Mobile and will be reimbursed based upon the time and expenses incurred.




6




The Company has identified several new business strategies that may enable the Company to reach its profitability goals.  First, the Company currently has a detailed plan under which it will bring in new capital for both D Mobile’s short term and long term liquidity needs.  By obtaining adequate funding for D Mobile, the Company can maximize its investment in D Mobile.  The Company is also in negotiations with several companies to enable the Company to ultimately expand the market and revenues for Shoot-It!.  In addition, the Company will continue to explore avenues to monetize its intellectual property portfolio.  Management believes that the potential for newly identified business relationships, coupled with new capital for D Mobile, should allow the Company to achieve its goal of positive cash flow within the next twelve months. There can be no assurances that such efforts will be successful.




To meet short term obligations and finance operations, additional capital will be needed for both Geos and D Mobile.  This could result in either the sale by D Mobile of new D Mobile shares and/or the sale of additional D Mobile shares owned by Geos.  Under either scenario, Geos ownership in D Mobile will be further diluted.  Geos and D Mobile intend to enter into an operating agreement under which executive management and general operational services will be shared between the companies based upon the time and nature of the services provided.  It is the Company’s belief that the best way to improve the value of Geos is to grow the D Mobile operation.




The Company may also finance these new business opportunities through a combination of equity and/or debt. If the Company determines to finance these opportunities by issuing additional equity, then such equity may have rights and preferences superior to the outstanding Common Stock, and the issuance of such equity will dilute the ownership percentage of the Company’s existing shareholders. If the Company determines to finance these opportunities by incurring debt, then such debt may not be available to the Company on favorable terms, if at all.




NOTE 2.  BASIS OF PRESENTATION





The consolidated financial statements of Geos Communications, Inc. have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”).




Basis of Consolidation




The consolidated financial statements include the accounts of Geos Communications, Inc. (DE), and its majority owned subsidiaries, Geos IP Holdings, Inc. Shoot It!, and D Mobile (collectively, the Company). All subsidiaries, except for D Mobile, are, directly or indirectly, wholly owned subsidiaries of the Geos.  As of March 31, 2011, Geos owned 62.3% of D Mobile.  All significant intercompany accounts and transactions have been eliminated in consolidation.




Interim Condensed Financial Statements





The condensed consolidated financial statements included herein have been prepared by Geos Communications, Inc. and are unaudited, except for the condensed consolidated balance sheet at December 31, 2010, which has been derived from audited consolidated financial statements at that date on the basis of GAAP. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the opinion of management, the unaudited condensed consolidated interim financial statements include all normal recurring adjustments necessary for a fair presentation of the financial position as of March 31, 2011, the results of operations for the three months ended March 31, 2011 and 2010, and the cash flows for the three months ended March 31, 2011 and 2010. In addition, operating results for the three months ended March 31, 2011 are not necessarily indicative of results that may be expected for the year ending December 31, 2011.





Although management believes the unaudited interim related disclosures in these condensed consolidated financial statements are adequate to make the information presented not misleading, certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, the condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2010 Annual Report on Form 10-K.




NOTE 3.  SUMMARY OF SIGNIGICANT ACCOUNTING POLICIES





Cash and Cash Equivalents





The Company considers all short-term securities purchased with an original maturity of three months or less to be cash equivalents.  At March 31, 2011 and December 31, 2010 the Company had $200,000 of cash and cash equivalents that was provided from one of its retail partners in China and is reserved for the development and deployment of kiosks under an agreement with that partner.




7





Fair Value of Financial Instruments





The Company calculates the fair value of its assets and liabilities which qualify as financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different than the carrying value of these financial instruments. The estimated fair value of accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to the relatively short maturity of these instruments. The carrying amounts and fair values for our various series of preferred stock are presented in subsequent notes below.




Exchange of Preferred Shares and Warrants





In order to determine the treatment of the exchange offer as described in Note 10 the Company’s accounting policy is as follows: If the fair value of the equity-classified preferred share issued in the exchange is significantly different (i.e., by more than 10%) from the fair value of the instrument received in before the exchange, the exchange is considered an extinguishment.  An exchange that does not meet this criterion is a modification.  The exchange offer referenced in Note 10 has met the criteria as an extinguishment.




The accounting treatment for the extinguishment of equity-classified preferred stock is addressed by Financial Accounting Standards (“FASB”) Accounting Standard Codification (“ASC”) 260-10-S99-2.  Under that guidance, when equity-classified preferred shares are extinguished, the difference between (1) the fair value of the consideration transferred to the holders of the preferred shares and (2) the carrying amount of the preferred shares are subtracted from (or added to) net income (loss) to arrive at income (loss) available to common stockholders in the calculation of earnings (loss) per share.  In addition to the effect on earnings per share, extinguishment accounting will result in adjustments within equity but will not result in recognition of any amounts in net income (loss).




When equity-classified preferred shares have been modified and extinguishment accounting is not considered appropriate, the Company will recognize the incremental fair value (the difference in fair value of the instrument the moment before and the moment after modification) from the modification as a deemed dividend reconciling net income to net income available for common shareholders to the extent the modified instrument has a higher fair value.  Modifications that result in a decrease in the fair value are not recognized.




To account for the exchange of the old warrants for the new warrants, we estimated the fair value of the old warrants versus the fair value of the new warrants before and after the date of the exchange and determined the difference.  Based on our estimates, the fair value of the new warrants was greater than the old and any decrease in fair value because of the exchange has not been recognized and would not affect net loss per share available to Geos common shareholders.




The Company evaluates the conversion option of the convertible preferred shares under ASC Topic No. 470-20, “Debt with Conversion and Other Options,” (formerly EITF Issues 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments).  A convertible financial instrument includes a beneficial conversion feature if the effective conversion price is less than the Company’s market price of common stock on the commitment date.  The effective conversion price of the Series I Preferred shares was in excess of the Company’s market price and accordingly, there was not any beneficial conversion feature as a result of the exchange.





NOTE 4.  RESULTS FROM DISCONTINUED OPERATIONS





Results from discontinued operations:





During 2010 the Company discontinued its Voice over Internet Protocal (VoIP) business. This meets the accounting criteria as being held for sale and the Company has reclassified the results of operations of this business as discontinued operations for all periods presented in its consolidated statements of operations.





The results of discontinued operations for the three months ended March 31, 2011 were $0. However, the Company did settle $14,442 of liabilities related to discontinued operations with the transfer of assets related to discontinued operations of the same amount.  The following table presents the Consolidated Statement of Operations from the Company’s discontinued operations for the three months period ended  March 31, 2010.





Three Months Ended

March 31, 2010Revenues

$
100,664Cost of Sales


185,763Gross Loss


(85,099
)General and Administrative expenses


755,002Loss from Discontinued Operations


(840,101
)Tax Benefit


-Net Loss from Discontinued Operations

$
(840,101
)





8





NOTE 5.  ACQUISITION OF SHOOT IT! AND D MOBILE




Shoot It! Acquisition




On February 19, 2010, the Company entered into and closed an Agreement and Plan of Merger (the “Shoot It! Merger Agreement)” with Shoot It!, certain security holders of Shoot It!, and Shoot It! Acquisition, Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Shoot It! Merger Sub”).  Subject to the terms and conditions of the Shoot It! Merger Agreement, Shoot It! was merged with and into Shoot It! Merger Sub (the “Shoot It! Merger”) with Shoot It! Merger Sub surviving as a wholly owned subsidiary of the Company.




The Company acquired 100% of the common stock of Shoot It! via the issuance of 2,167 shares of Geos’ newly issued Series G Preferred Stock (Series G Shares).  Shoot It! has developed a postcard messaging application that allows users to take a picture with their smart phone, create a personal message and send it as a hard copy postcard from anywhere in the world. The consolidated financial statements of the Company reflect the Shoot It! acquisition being accounted for as an Acquisition in accordance with ACS 805 Business Combinations topic.  Transaction costs associated with the acquisition have been expensed and were not significant.  The acquired goodwill is treated as non-deductible for income tax purposes.  The results of operations of Shoot It! are included in the Company’s consolidated statement of operations from the date of acquisition.  Goodwill consists of the excess of the fair value of any consideration transferred plus the fair value of any non-controlling interest in the acquiree at the acquisition date over the fair value of net identifiable assets acquired, consisting of assets acquired less liabilities assumed.





D Mobile Acquisition




As of March 5, 2010, the Company acquired 100% of the common stock of D Mobile through the issuance of 3,111 shares of Geos’ newly issued Series G Preferred Shares and warrants to purchase Series G Preferred Shares, application of a Note Receivable of $120,000 and cash of $75,000.   D Mobile currently operates a retail channel for the discovery and download of licensed mobile content under the brand name Duo Guo in China.  The purpose of the acquisition was to obtain a retail platform for the distribution of mobile content.  The consolidated financial statements of the Company reflect the D Mobile acquisition being accounted for as an acquisition in accordance with ACS 805 in the Broad Transactions-Business Combinations topic. Transaction costs associated with the acquisition have been expensed and were not significant.  The acquired goodwill is treated as non-deductible for income tax purposes.  The results of operations of D Mobile are included in the Company’s consolidated statement of operations from the date of acquisition.  Goodwill consists of the excess of the fair value of the consideration transferred over the fair value of net identifiable assets acquired, consisting of assets acquired less liabilities assumed.





The acquisitions combined as of acquisition dates are as follows:




Combined Purchase Price:




Fair value of original investment in 2009 previously presented on a cost basis

$
250,000Fair value of cash paid to one Shareholder


75,000Fair value of loan from Geos to D Mobile


120,000Fair value of preferred stock Series G transferred


3,323,222Fair value of warrants issued to purchase Series G preferred shares


163,118Total consideration

$
3,931,340




9





Combined Purchase Price Allocation:




Cash and Cash Equivalents

$
254,506Account Receivable


11,848Prepaid and Other Assets


60,448Property and Equipment


572,579Trade Name Intangible


971,000Non-Compete Agreement


82,000Trade Payables


(82,985
)Goodwill


2,061,944Total purchase price allocation

$
3,931,340




Including the combined results of Shoot It! and D Mobile as if the acquisitions occurred on January 1, 2010 the  unaudited pro-forma net loss, and net loss attributable to the common shareholders would have been $3,182,936 and $3,380,863 for the three month period ended March 31, 2010. The pro forma information is for informational purposes only and is not intended to be indicative of the actual combined results that would have been reported had the transactions occurred on the dates indicated nor does the information represent a forecast of the combined financial results of the Company, D Mobile and Shoot It! for any future period.  The actual combined operating results of Shoot It! and D Mobile contained in the accompanying condensed consolidated financial statements include net revenues of $11,814 and net losses of $164,676  since the respective dates of acquisition through March 31, 2010.




Series G Preferred Shares




The Company authorized 20,000 Series G Preferred Shares on February 12, 2010. Subsequently, 5,278 shares were issued in connection with the above acquisitions. The shares accrue dividends at 6% annually, all of which are due and payable on the third anniversary from issuance. The dividends can be paid at the option of the Company in either cash or common stock equivalents. At certain milestones related to share pricing, the Series G Preferred shares automatically convert to common shares of the Company at a conversion price of $0.50 per share.  In addition, for the D Mobile acquisition, 753 warrants were issued, which are convertible for three years after issuance date into Series G Preferred Shares at an exercise price of $0.50 per share. The holders of Series G Preferred Shares are entitled to vote with the common shareholders on an as-converted basis.




The number of shares of Common Stock issuable upon automatic conversion is determined by dividing the stated value, or $1,000, by a conversion price of $0.50.  Series G Preferred Shares will automatically convert on the first business day following the last day of a twenty day period during which all of the following milestones are met: (A) 180 days have passed from the applicable Issuance Date; (B) the Common Stock underlying the applicable Series G Preferred Shares is available for sale under Rule 144 of the Securities Act of 1933, as amended; (C) the closing bid price of the Common Stock is greater than $1.00, as adjusted for stock splits, stock dividends, recapitalizations, combinations, reverse stock splits or other similar events) for a twenty day Period, as determined in accordance with the weighted average price; and (D) the total volume of shares of Common Stock traded is in excess of 500,000 shares, as adjusted for stock splits, stock dividends, recapitalizations, combinations, reverse stock splits or other similar events) for a twenty day period; provided however, if condition (D) is not met, then the amount of Series G Preferred Shares otherwise convertible shall be pro-rated to the percentage of 500,000 shares traded during the twenty day period immediately prior to the Automatic Conversion Date.  However, dependent upon the price of common stock at that point, the Company may not have sufficient shares available to satisfy the conversion.




The fair value at date of the acquisitions was $3,323,222 and is classified as temporary equity on our balance sheet as there are events outside our control which could require redemption by the Company.  We have recorded accretion of $162,868, and dividends of $79,165 for the three month period ended March 31, 2011.  We have recorded accumulated accretion of $542,893 and dividends of $263,882 as of December 31, 2010.  Accrued dividends are considered in arriving at net loss available to common shareholders but do not affect our net loss.  The fair value of warrants of $163,118 was recorded as temporary equity.




10





NOTE 6.  PROPERTY AND EQUIPMENT





Estimated useful lives range from five to ten years. Depreciation charged to operations was $56,494 for the three months ended March 31, 2011.





The major components of property and equipment at March 31, 2011are as follows:





March 31, 2011


December 31, 2010Office Equipment

$
418,920


$
411,140Purchased Technology


319,000



319,000Kiosk Platform


229,621



105,532Furniture and Fixtures


46,884



46,884Software


40,432



40,432Leasehold Improvements


16,120



16,120Software Development


9,975



9,975Lab Equipment


16,530



16,530Less:  Accumulated Depreciation and Amortization


(339,724
)


(281,194
)Net Property and Equipment

$
757,758


$
684,421




NOTE 7.  INTANGIBLE ASSETS





Intangible assets at March 31, 2011, and December 31, 2010, consisted of the following, at cost:





March 31, 2011


December 31, 2010Patent Pending Technology

$
3,390,314


$
3,390,314Trademarks


1,045,620



1,045,620Non-Compete


82,000



82,000Accumulated Amortization


(1,622,448
)


(1,501,300
)Intangible Assets, net

$
2,908,259


$
3,016,634





The Company has six patents that have been granted, and thirteen patent applications pending.  The life of the technology and trademarks is estimated to be ten years and is being amortized, beginning January 1, 2007 over a ten year period. The lives of the Non Compete and Trade Name are two and ten years, respectively. As of March 31, 2011, the Company has determined there is no impairment of the intangible assets.





Amortization expense totaled $121,148 for the three months ended March 31, 2011.





NOTE 8.   CONVERTIBLE BONDS





On December 9, 2006, the Company sold $2,000,000 of 6% secured convertible debentures pursuant to a Securities Purchase. The Company received $1,625,000 in December 2006 and theremaining $375,000 in January 2007. The Debentures matured on May 9, 2007. The Debentures were convertible from time to time into 28,571,429 pre-split shares of Common Stock of the Company at the price of $.07 per share and 28,571,429  warrants exercisable for three years at the price of $.07 per share, which were partially converted in 2007.





Convertible bonds at their carrying value, which approximated fair value consisted of the following as of March 31, 2011:





Description

March 31, 2011December 2006 6% Convertible Bonds

$
50,000





These notes are past due as of March 31, 2011.  The Company intends to repay this amount at the point in time that it has sufficient funds available.




11




NOTE 9.   NOTES PAYABLE and SERIES A–D PREFERRED SHARES OF GEOS IP HOLDINGS




Notes Payable





On February 23, 2010, the Company issued a Drawdown Promissory Note (included in the Condensed Consolidated Balance Sheets under “Borrowing under Line of Credit”) in an amount up to an amended maximum of $2,600,000 (as subsequently amended, the “Drawdown Note”). The Drawdown Note accrues interest at a rate of 12% per annum and the principal and interest thereon is due and payable on the earlier of (i) the closing on at least $5,000,000 of subscriptions for newly created shares of Series I Preferred Stock of the Company; or (ii) August 23, 2010 (the “Maturity Date”) or extensions.  In addition, the note was extended to a maturity date of March 31, 2011 and as compensation for extending the maturity date on the Drawdown Note the Company issued a warrant to purchase 572,000 shares of Common Stock at a purchase price of $0.08 per share. The note holder may convert all or any portion of the principal balance of and/or accrued but unpaid interest on the Drawdown Note into the securities we anticipate offering in a private placement of equity in the form of Preferred Stock and warrants, at a conversion price equal to the purchase price paid for the Preferred Stock and warrants in the private placement. The Drawdown Note requires the issuance of a warrant to purchase 10,000 shares of Common Stock for each $100,000 drawdown there-under at a purchase price of $0.20 per share.  The term of each warrant is three years from date of issuance. At March 31, 2011, $2.6 million was outstanding. The carrying value approximated the fair value as of March 31, 2011because management believes the interest rate is comparable to the market rate.





On July 1, 2010, a director loaned the Company $150,000 to be repaid on the earlier of (i) the receipt and acceptance of $5,000,000 in subscriptions under the D Mobile Offering (as described under Item 2 below) or (ii) December 31, 2010, which date was subsequently extended to March 31, 2011. Accordingly, the notes are not classified as current liabilities as of March 31, 2011. As compensation for extending the maturity date on the loan, the Company issued the director a warrant to purchase 33,000 shares of Common Stock at a purchase price of $0.08 per share.  The note bears interests at 12%.





On April 4, 2011, the Company settled its outstanding obligations, including accrued interest, under the notes discussed above (the Drawdown Note and note payable to a director), of $2,910,718 and $163,710, respectively, by transferring ownership of 1,229,771 common shares of D Mobile to the lenders. The D Mobile common shares were valued at $2.50 and as such there was no gain or loss from the extinguishment of the debt.





On December 2, 2010 a director of D Mobile loaned D Mobile $50,000 to be repaid on the earlier of (i) the sale by the Company, subsequent to the date of the note, of $200,000 in shares held by the Company or (ii) February 28, 2011.  The note bears interest at a rate of 12% per annum.   The maturity date was extended to April 30, 2011 and subsequently extended to May 31, 2011




Series A-D Preferred Shares





On July 31, 2009, we offered to certain of our existing note holders and convertible bond holders, the opportunity to exchange some or all of the principal, interest and loan fees of all notes, including notes payable to related parties, which included all accrued interest and related fees, (the “Debt”) for different series of preferred stock of Geos IP Holdings. The issuance price of the preferred stock of IP Holdings was $1.00 for every $1.00 of each note being exchanged.  The Company exchanged an aggregate of $5,598,385 of the debts into Geos IP Holdings Series A–D Preferred Stock, with a majority of the remaining notes being repaid in cash.





With assistance from an independent third party, the Company determined the initial fair value of the Series A–D Preferred Shares to be $7,028,630. Subsequently, $511,198 and $2,044,791 has been accreted for interest and dividends for the three months ended March 31, 2011, and for the year ended December 31, 2010, respectively.





The final mandatory redemption amount is $9,784,028 which encompasses additional charges through July 31, 2011 of $681,597.





The Series A–D Preferred Stock of Geos IP Holdings provides for an accruing dividend of 12% per annum, and a special dividend for up to two years in the event that the Preferred Stock has not been redeemed.




NOTE 10.   CONVERTIBLE PREFERRED STOCK (SERIES F, H AND I)





Series F Preferred Shares





During 2009, the Company issued Series F Convertible Preferred Stock, no par value (the “Series F Preferred Shares”). Each share of the Series F Preferred Share is convertible at the option of the holder into shares of our Common Stock, no par value at a conversion price of $0.50.  Effective February 21, 2011, all of the outstanding Series F Preferred Shares and related warrants were exchanged for Series I Preferred Shares and new warrants (see Series I Preferred Shares below).





In connection with the issuance of 7,550 Series F Preferred Shares during 2009, and an additional 20 shares issued as of March 31, 2010, 7,570,000 warrants were also issued.  The proceeds of $7,570,000 were allocated based on the relative fair values of the underlying shares and warrants.  The value allocated to the multiple issuances was $5,047,057 as of December 31, 2010. The Shares are shown as temporary equity on the Consolidated Balance Sheets and are outside of stockholders’ equity because such shares are contingently redeemable since the payment of the required dividend is not within the control of the Company. The beneficial conversion feature totaled $2,870,825, and was included in Common Stock, No Par, as of December 31, 2010, and was recognized as a return on the Series F Preferred Shares in the period of issuance because the Series F Preferred Shares were immediately convertible.




12





The value allocated to the warrants issued to investors, and warrants issued to pay transaction costs was $2,522,943, and was included in Common Stock, no par, as of December 31, 2010.  The warrants are exercisable at any time at $.63, for a period of three years. As of the date of the exchange, no warrants had been exercised.





During the three months ended March 31, 2011, and for the year ended December 31, 2010, the Company accrued dividends of 6% totaling $64,707 and $454,105, respectively which are due semiannually. No dividends were paid during the three month period ended March 31, 2011.  The balance of accrued dividends at March 31, 2011 was $293,625 and is included in accrued expenses on the Consolidated Balance Sheets.





Series H Preferred Shares





During April, 2010, Geos authorized 20,000 shares of Series H Convertible Preferred Stock, no par value (the “ Series H Preferred Shares “).





In connection with the issuance of 350 Series H Preferred Shares, warrants for the purchase of 875,000 shares of Common Stock were also issued.  Effective February 21, 2011, all of the outstanding Series H Preferred Shares and related warrants were exchanged for Series I Preferred Shares and new warrants (see Series I Preferred Shares below).





In connection with the issuance of 350 Series H Preferred Shares and warrants, the proceeds of $350,000 were allocated based on the relative fair values of the underlying shares and warrants.  The value allocated to the multiple issuances at date of issuance was $232,482. At December 31, 2010, the shares are shown as temporary equity on the Consolidated Balance Sheets and are outside of stockholders’ equity because such shares are contingently redeemable since payment of required dividend is not within the control of the Company. The beneficial conversion feature totaled $117,508 and was included in Common Stock, No Par, as of March 31, 2011 and December 31, 2010, and was recognized as a return on the Series H Preferred Shares in the period of issuance because the Preferred Stock was immediately convertible.





The value allocated to the warrants issued to investors was $117,518, and was included in Common Stock, no par, as of December 31, 2010.  The warrants were exercisable at any time at $.20, for a period of three years. As of February 21, 2011 the effective date of the exchange, there has been no exercise of warrants.





During the three months ended March 31, 2011, the Company accrued dividends of 6% totaling $2,992. No dividends were paid during the three month period ending March 31, 2011. The remaining balance of accrued dividends at March 31, 2011 of $13,578 is included in accrued expenses on the Consolidated Balance Sheets.





Series I Convertible Preferred Stock





In July 2010, the Board of Directors authorized the creation of Series I Preferred Stock, no par value per share (the “Series I Preferred Shares”). The shares were intended to be part of an offering of up to $8,000,000 of Series I Preferred Stock and warrants. The Company received approximately $427,000 in proceeds from subscription agreements related to the Series I Preferred Stock during the quarter ended July 31, 2010, of which $100,000 was from a director of the Company.





The Series I Preferred Shares rank pari passu with shares of the Company’s Series F, G and H Convertible Preferred Stock, but otherwise rank senior to shares of all other series of Common Stock and Preferred Stock of the Company with respect to dividends, distributions, and payments upon liquidation, dissolution, and winding up of the Company.





Each of the Series I Preferred Shares are convertible into common stock of the Company at the election of the holder beginning 6 months after the issuance date.  The Conversion Price is variable at between $0.20 and $0.10 per share.  The number of shares issued upon conversion is determined by dividing the stated value of $1,000 by the conversion price.





Holders of Series I Preferred Shares are entitled to vote on an as-converted basis with the holders of the Common Stock, except as otherwise required by law or as specifically provided in the Certificate of Designations. As further described in the Certificate of Designations, the holders of Series I Preferred Shares are entitled to elect one director to the Board of Directors.





The Company has the option to redeem all or a portion of the outstanding Series I Preferred Shares at $2,000 per share.





In connection with the issuance of 427 Series I Preferred Shares, warrants for the purchase of 1,510,330 shares of Common Stock were also issued.  The proceeds of $427,000 were allocated based on the relative fair values of the underlying shares and warrants.  The value allocated to the multiple issuances at date of issuance was $288,445. The Shares are shown as temporary equity on the Consolidated Balance Sheets and is outside of stockholders’ equity because such shares are contingently redeemable because payment of required dividend is not within the control of the Company.




13




The value allocated to the warrants issued to investors was $138,555, and was included in Common Stock, no par, as of March 31, 2011 and December 31, 2010.  For every share of Common Stock that the Series I Preferred Shares may convert into at the conversion price on the issue date, the Investor(s) will receive 50% of a warrant which will be exercisable for Common Stock at a price of $0.20 per share.  These warrants will mature three years from the issue date.   The warrants are callable for $0.01 per warrant if the shares of Common Stock trade at or above 200% of the exercise price according to the VWAP for 20 business days. As of March 31, 2011, there had been no exercise of warrants.





In October of 2010, the Company initiated a tender offer to exchange Series I Preferred Shares and warrants for all of the outstanding Series F Preferred Shares and Series H Preferred Shares in addition to all related warrants (the “Exchange Offer”).  The exchange of shares was effective February 21, 2011.  As of that date, all of the outstanding Series F Preferred Shares and Series H Preferred Shares and related warrants have been tendered for 7,920 shares of Series I Preferred Shares and warrants to purchase 39,600,000 shares of Common Stock for  $0.10 per share.




It is the Company’s intent to obtain a third party valuation of the Series F, H and I Preferred Shares as of the date of the exchange during the year ending December 31, 2011.  Based upon internal estimates, we calculated the difference in the fair value of the Old Preferred Stock and the fair value of the New Preferred stock to be greater than 10% and therefore will result in an extinguishment of equity classified as preferred stock. In estimating the fair value of the each series of Preferred Stock, the Company used a discounted cash flow model and assumed each Series was redeemed for the face value at the date stated in the original agreement and using a discount rate of 35%.  The value of the new Series I preferred shares is estimated at $4,847,968. The difference in the carrying value of the Old Preferred and the fair value of the New Preferred is $431,581 and the gain on extinguishment has been treated similar to dividends on preferred shares and recorded as non-recurring reduction in the loss attributable to Geos common shareholders as a result of the transaction.




The estimated fair value allocated of the warrants issued to in the exchange was $792,000 and was included in Common Stock, no par, as of March 31, 2011.  The difference in the carrying value of the warrants issued in connection with Series F and Series H Preferred Shares of    was included in Common Stock, no par, as of March 31, 2011, as such there is no impact to Common Stock as a result of the transaction.





During the three months ended March 31, 2011, the Company accrued dividends of 8% totaling $72,301. The dividends are due semiannually and are included in accrued expenses on the Consolidated Balance Sheets.




NOTE 10.  COMMON STOCK AND STOCK OPTIONS AND WARRANTS





During 2004, the Company’s board of directors approved a stock option plan for its officers, directors and certain key employees.  Generally, the options vest over a period of three years. Compensation expense is based upon straight-line amortization of the grant-date fair value over the implicit vesting period of the underlying stock option. In accordance with ASC 718 and 505, the fair value of each stock option grant was estimated on the date of the grant, using the Black-Scholes option-pricing model.




The Company did not grant any stock options or warrants (other than those related to the exchange offer discussed in note 9) during the three months ended March 31, 2011.




14





Information regarding stock options and warrants outstanding as of March 31, 2011 are summarized below:





Number of

Shares


Weighted

Average

Exercise

PriceOutstanding at December 31, 2010


19,451,398


$
.71Warrants Granted


39,600,000



.25Canceled


(8,950,000
)


.61Exercised


-



-Outstanding at March 31, 2011


50,501,398



.36Exercisable at March 31, 2011


49,015,637



.35





The exercise price for options outstanding and exercisable at March 31, 2011 was as follows:





WeightedShares


Average


Weighted


Shares


WeightedUnderlying


Remaining


Average


Underlying


AverageRange of


Options


Contractual


Exercise


Options


ExerciseExercise Prices


Outstanding


Life (Years)


Price


Exercisable


Price$ .70-$1.20


3,375,000


.95


$
0.81


2,289,239


$
0.82





The exercise price for warrants outstanding at March 31, 2011 was as follows:





WeightedShares


Average


Weighted


Shares


WeightedUnderlying


Remaining


Average


Underlying


AverageRange of


Warrants


Contractual


Exercise


Warrants


ExerciseExercise Prices


Outstanding


Life (Years)


Price


Exercisable


Price$ 0.08-$1.50


46,726,398


2.69


$
0.33


46,726,398


$
0.33





During the three months ended March 31, 2011, total compensation costs recognized in expense from stock options was $123,862, and is included in general and administrative expenses on the Condensed Consolidated Statement of Operations. As of March 31, 2011, there was unrecognized compensation expense related to non-vested stock option agreements of $436,374. The intrinsic value of options exercised during three months ended March 31, 2011 is $0.





During the three months ended March 31, 2011, there was no compensation costs recognized in expense from warrants.  As of March 31, 2011, there was not any unrecognized compensation expense related to non-vested warrants.





NOTE 11.  INCOME TAXES





For the three months ended March 31, 2011, the Company had net losses from continuing operations of $2.4 million. No benefit or provision for income taxes has been recorded due to the uncertainty of the realization of any tax assets. At December 31, 2010, the Company had accumulated net losses totaling approximately $46.9 million. The net operating loss carry forwards will begin to expire in 2021 if not utilized. The Company has generated net operating loss carry forwards in each year since its inception and through March 31, 2011. Based upon all available objective evidence, including the Company’s loss history, management believes it is more likely than not that the net deferred assets will not be fully realized. Therefore, the Company has provided a valuation allowance against its deferred tax assets of approximately $21 million.





NOTE 12.  RELATED PARTY TRANSACTIONS





On July 1, 2010, a director loaned the Company $150,000 to be repaid on the earlier of (i) the receipt and acceptance of $2,000,000 in subscriptions under an offering of D Mobile stock or (ii) December 31, 2010, which date was subsequently extended to March 31, 2011.  As compensation for extending the maturity date of the loan, the Company issued the director a warrant to purchase 33,000 shares of Common Stock at a purchase price of $0.08 per share.  The note bears interest at 12%.  The outstanding obligations under the note were settled April 4, 2011.




15




On December 2, 2010, a director of D Mobile, loaned D Mobile $50,000 to be repaid on the earlier of (i) the sale by the Company, subsequent to the date of the note, of $200,000 in shares held by the Company or (ii) February 28, 2011.  The note bears interest at a rate of 12% per annum.  The maturity date was extended to April 30, 2011.




Interest expense incurred on certain notes from officers and directors for the three month periods ended March 31, 2011 and 2010, as $5,918 and $0, respectively.




On February 11, 2011, D Mobile sold 20,000 Shares of Common Stock for $50,000 to Andrew Berman, the Company’s Chief Executive Officer and a member of its Board of Directors, who also serves as D Mobile’s Chief Executive Officer and Chairman of its Board of Directors; and on February 15, 2011, D Mobile sold 20,000 Shares of Common Stock for $50,000 to a trust controlled by David Schafer, D Mobile’s Executive Vice President of Worldwide Sales.




NOTE 15.  COMMITMENTS AND CONTINGENCIES





The Company leases its office facilities in Southlake, Texas and Shanghai, China under operating leases expiring in 2011 and 2012.





Total rent expensed was $64,031 during the three months ended March 31, 2011, as compared with $25,057 during the three months ended March 31, 2010.





Future minimum lease obligations under all operating leases for each year ending December 31, are as follows:





Remainder of 2011

$
125,0522012


58,9472013 and thereafter


-





NOTE 16. SEGMENT INFORMATION







Our operations consist of two business segments: Shoot It! and D Mobile.  The business operations underlying both of these segments were acquired in the year ended December 31, 2010.




Our Shoot It! segment consists of one application for sending postcards from smart phones.  After downloading the application onto a smart phone, the consumer can select a picture on their phone and send a postcard for a fee.




Our D Mobile segment distributes mobile content and place-based advertising in China. The principal business of D Mobile, which operates in China through a wholly owned foreign entity operating under the name Duo Guo, is to serve as a distribution marketplace for the delivery of digital entertainment, information, and consumer content to mobile devices.  D Mobile generates revenues through consumer’s use of the D Mobile marketplace to purchase and download content to their smart phone and eventually through the sale of advertising within the marketplace.




Both businesses are in the early stages of distribution and development.  Accordingly revenues and direct expenses are not significant at this time.  We use gross margin less identifiable direct expenses before corporate overhead, interest and taxes to evaluate segment profitability.




Income tax information by segment has not been included as taxes are calculated at a company-wide level and not allocated to each segment and as there is no current year income tax provision due to net operating losses.




16





Selected Financial Data by Segment

As of and for the three months ended March 31, 2011

As of and for the period from acquisition to March 31, 2010Revenues:D Mobile(a)

$
21,206


$
4,934Shoot It!


2,916



6,880Total revenues

$
24,122


$
11,814Depreciation and amortization:D Mobile(a)

$
44,156


$
11,349Shoot It!


37,958



18,980All Other


95,528



162,987Total depreciation and amortization

$
177,642


$
193,326Net Loss from Operations (b)D Mobile(a)

$
(1,000,665
)

$
(74,591
)Shoot It!


(85,488
)


(90,085
)Unallocated


(1,407,165
)


(1,976,347
)Total Loss from Operations

$
(2,493,318
)

$
(2,141,383
)Assets (c):D Mobile(a)

$
2,014,537


$
2,142,694Shoot It!


1,437,509



1,589,943Unallocated


3,072,113



4,599,424Total assets

$
6,524,159


$
8,332,061Capital expenditures:D Mobile(a)

$
129,831


$
5,668Shoot It!


-



37,303Total capital expenditures

$
129,831


$
42,971





(a)  Represents amounts generated by D Mobile’s foreign operations in China.




(b)  Net loss from operations represents revenues less cost of sales and selling expenses for each segment, but excludes corporate overhead expenses such as employee related costs, administrative expenses and amortization of certain intangibles.




(c) Assets allocated to segments include fixed assets, intangible assets and goodwill. Unallocated assets include cash, prepaid assets such as rent, corporate office improvements and technology infrastructure.




NOTE 17.   SUBSEQUENT EVENTS




On April 4, 2011, the Company settled its outstanding obligations, including accrued interest, under the Drawdown Note and a note payable to a director, of $2,910,718 and $163,710, respectively, by transferring ownership of 1,229,771 common shares of D Mobile to the lenders.  As of April 4, 2011, Geos owned 34.6% of D Mobile. Accordingly, as of that date, Geos will no longer consolidate D Mobile.




17




Item 2 - Management’s Discussion and Analysis of Financial Condition and Results of Operations





The following discussion should be read in conjunction with the information contained in our consolidated financial statements, including the notes thereto. Statements regarding future economic performance, management’s plans and objectives, and any statements concerning assumptions related to the foregoing contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations constitute forward-looking statements. Certain factors, which may cause actual results to vary materially from these forward-looking statements, accompany such statements or appear in our Annual Report on Form 10-K for the fiscal year ended December 31, 2010 filed with the Securities and Exchange Commission (the “SEC”) on May 7, 2011 (the “Form 10-K”), including the factors disclosed under “Item 1A. Risk Factors.”





Forward-Looking Statements





This Quarterly Report on Form 10-Q and the exhibits attached hereto contain certain statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements concern our anticipated results and developments in our operations in future periods, planned exploration and development of our properties, plans related to our business and matters that may occur in the future. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects” or “does not expect”, “is expected”, “anticipates” or “does not anticipate”, “plans”, “estimates” or “intends”, or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. There are a number of important factors that could cause the results of the Company to differ materially from those indicated herein. The cautionary statements made in this report should be read as being applicable to all related forward-looking statements wherever they appear in this report.





Overview





During 2010 we undertook significant changes in our business strategy. These changes resulted in the discontinuation of our Voice over Internet Protocol (VoIP) technology development, including our MyGlobalTalk solution and included two acquisitions: Shoot It! LLC  and  D Mobile, Inc.




On February 19, 2010, we acquired Shoot It!, LLC (“Shoot It!”), which provides a mobile application for sending picture postcards from smart phones.  Since the date of acquisition, we have included the financial results for Shoot It! in our results of operations.




On March 1, 2010, we acquired D Mobile, Inc. (“D Mobile”), which provides us with a platform for mobile content distribution in China, the world’s largest mobile communications market. D Mobile, which operates in China under the brand name Duo Guo, is a retail channel for the discovery and download of licensed mobile content. We have included the results of operations for D Mobile since the date of acquisition in our results of operations. Transfers of D Mobile shares in Common Stock in exchange for cash and settlement of debt reduced our ownership of D Mobile below 50% as of April 4, 2011. Accordingly, as of that date we will no longer consolidate D Mobile.




Our products allow our customers to improve the experience and usefulness of their mobile phones.  Our corporate headquarters is based in Southlake, Texas.




18





Critical Accounting Policies





Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and do not include all disclosures required under GAAP for complete financial statements. Preparation of these statements requires management to make judgments and estimates. Some accounting policies have a significant impact on amounts reported in these financial statements. For a summary of significant accounting policies and the means by which we develop estimates thereon, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2010 Annual Report on Form 10-K.  During the three months ended March 31, 2011, the following were also identified as critical:





Fair Value of Financial Instruments





The Company calculates the fair value of its assets and liabilities that qualify as financial instruments and includes this additional information in the notes to consolidated financial statements when the fair value is different than the carrying value of these financial instruments. The estimated fair values of accounts receivable, accounts payable and accrued liabilities approximate their carrying amounts due to the relatively short maturity of these instruments. The carrying amounts and fair values for our various series of preferred stock are presented in subsequent notes.





Exchange of Preferred Shares and Warrants





In order to determine the treatment of the exchange offer the Company’s accounting policy is as follows: If the fair value of the equity-classified preferred share issued in the exchange is significantly different (i.e., by more than 10%)  from the fair value of the instrument received in the exchange, the exchange is considered and extinguishment.  An exchange that does not meet this criterion is a modification.




The accounting treatment for the extinguishment of equity-classified preferred stock is addressed by ASC 260-10-S99-2.  Under that guidance, when equity-classified preferred shares are extinguished, the difference between (1) the fair value of the consideration transferred to the holders of the preferred shares and (2) the carrying amount of the preferred shares are subtracted from (or added to) net income to arrive at income available to common stockholders in the calculation of earnings per share.  In addition to the effect on earnings per share, extinguishment accounting will result in adjustments within equity but will not result in recognition of any amounts in net income.




When equity-classified preferred shares have been modified and extinguishment accounting is not considered appropriate, the Company will recognize the incremental fair value (the difference in fair value of the instrument the moment before and the moment after modification) from the modification as a deemed dividend reconciling net income to net income available for common shareholders to the extent the modified instrument has a higher fair value.  Modifications that result in a decrease in the fair value are not recognized.




To account for the exchange of the old warrants for the new warrants, we estimated the fair value of the old warrants versus the fair value of the new warrants before and after the date of the exchange and determine the difference.  Based on our estimates, the fair value of the new warrants is greater than the old and any decrease in fair value because of the exchange would not be recognized and would not affect net loss per share available to Geos common shareholders.




The Company evaluates the conversion option of the convertible preferred shares under ASC Topic No. 470-20, “Debt with Conversion and Other Options,” (formerly EITF Issues 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments).  A convertible financial instrument includes a beneficial conversion feature if the effective conversion price is less than the Company’s market price of common stock on the commitment date.  The effective conversion price of the Series I Preferred shares was in excess of the Company’s market price and accordingly there was not beneficial conversion feature as a result of the exchange.




Discussion of operating results from continuing operations for three months ended March 31, 2011 as compared to the three months ended March 31, 2010:





As the Company acquired both of its mobile content distribution businesses, Shoot-It! And D Mobile in the first quarter of 2010, the relevant discussions are as follows:




Both products are in the preliminary stages of distribution and accordingly, revenues and cost of goods sold were not significant during the three months ended March 31, 2011 or March 31, 2010. D Mobile generates revenues through consumers’ use of the D Mobile marketplace to purchase and download content to their smart phone and expects to eventually generate revenue through the sale of advertising within the marketplace.  Shoot-It! generates revenue through the use of the application on the smartphone to select a picture and send a postcard.  It is the intent of the Company to include the Shoot-It! application within the D Mobile marketplace.




Total revenue for the three months ended March 31, 2011 was $24,122 as compared to $11,814 for the three months ended March 31, 2010.  Revenue for the three months ended March 31, 2011 for Shoot It! and D Mobile were $2,916 and $21,206, respectively as neither product was being marketed or distributed in a capacity to produce results.  Revenue for the three months ended March 31, 2010 for Shoot It! and D Mobile was $6,880 and $4,934, respectively.  Both Shoot It! and D Mobile were acquired during the first quarter of 2010 and as such the 2010 results do not reflect the entire period.




19




Total cost of sales for the three months ended March 31, 2011 was approximately $14,588 as compared to the three months ended March 31, 2010 of $4,074.  Cost of sales for Shoot It! reflect the purchase of paper and postage.  Cost of sales for D Mobile represents the purchase of mobile content. For the three months ended March 31, 2011, total cost of sales were $3,021 and $11,567 for Shoot It! and D Mobile, respectively. For the three months ended March 31, 2010, total cost of sales were $2,145 and $1,929 for Shoot It! and D Mobile, respectively.  The increase in cost of sales is reflective of the period from the date of acquisition in the first quarter of 2010 through March 31, and as such, the results of 2010 do not include a full period of results. Cost of sales for Shoot-It! exceeded sales during the quarter ended March 31, 2011 due to promotional cards shipped during the quarter.




Total corporate selling, general and administrative expenses for the three months ended March 31, 2011 were approximately $1.9 million as compared to $1.6 million for the three month period ended March 31, 2011.  The increase is primarily from overhead expenses for the D Mobile operations in China which were not included for a full period in 2010.




Total corporate, selling, general and administrative expenses related to D Mobile were approximately $955,000, primarily related to overhead payroll in both China and the United States.  During the first quarter of 2011, the Company began to develop a U.S. based strategy for D Mobile and allocated corporate overhead expenses of approximately $696,000 to the U.S. D Mobile operations, based on the percentage of time spent and actual costs incurred on the D Mobile operation.  Shoot It! incurred selling, general and administrative expenses of approximately $47,375 primarily related to overhead and payroll.




Interest expense increased from comparable periods due to interest on borrowings under a line of credit and notes payable entered into during the year and related dividend accruals for mandatorily redeemable preferred shares.




Discontinued operations




Net loss from discontinued operations totaled $840,101 for the three months ended March 31, 2010.




Liquidity





Our management is focused upon executing our strategic plan which includes expanding the distribution channel for Shoot-It! as well as supporting the operating activities and expansion plans for our investment in D Mobile.  These activities are geared at becoming a mobile application, technology development and distribution company with global reach.





There can be no assurances that such efforts will be successful. We may finance these new business opportunities through a combination of equity and/or debt. If we determine to finance these opportunities by issuing additional equity, then such equity may have rights and preferences superior to the outstanding Common Stock, and the issuance of such equity will dilute the ownership percentage of our existing shareholders. If we determine to finance these opportunities by incurring debt, then such debt may not be available to us on favorable terms, if at all.





Cash used in operating activities was $1,332,766 for the three months ended March 31, 2011, compared to cash  used in operating activities for the comparable period ended March 31, 2010 of $1,822,810. The decrease in cash used from operating activities during the three month period ended March 31, 2011, was primarily a result of the discontinuation of our VoIP and telephony businesses in June of 2010 and related losses.





During the three months ended March 31, 2011, cash from financing activities was $1,130,000, which was provided primarily from the sale of newly issued shares of D Mobile Common Stock.  For the comparable period in 2010, cash provided from financing activities totaled $1,300,000 related to the proceeds from the issuance of a line of credit.




The Company has identified several new business strategies that may enable the Company to reach its profitability goals.  First, the Company currently has a detailed plan under which it will bring in new capital for both D Mobile’s short term and its long term liquidity needs.  By obtaining adequate funding for D Mobile, the Company can maximize its investment in D Mobile.  The Company is also in negotiations with several companies to enable the Company to ultimately expand the market and revenues for Shoot-It!.  In addition, the Company will continue to explore avenues to monetize its intellectual property portfolio.  Management believes that the potential for newly identified business relationships coupled with new capital for D Mobile, should allow the Company to achieve its goal of positive cash flow within the next twelve months. There can be no assurances that such efforts will be successful.




To meet short term obligations and finance operations, additional capital will be needed for both Geos and D Mobile.  This could result in either the sale by D Mobile of new D Mobile shares and/or the sale of additional D Mobile shares owned by Geos.  Under either scenario, Geos ownership in D Mobile will be further diluted.  Geos and D Mobile intend to enter into an operating agreement under which executive management and general operational services will be shared between the companies based upon the time and nature of the services provided.  It is the Company’s belief that the best way to improve the value of Geos is to grow the D Mobile operation.




The Company may also finance these new business opportunities through a combination of equity and debt. If the Company determines to finance these opportunities by issuing additional equity, then such equity may have rights and preferences superior to the outstanding Common Stock, and the issuance of such equity will dilute the ownership percentage of the Company’s existing shareholders. If the Company determines to finance these opportunities by incurring debt, then such debt may not be available to the Company on favorable terms, if at all.




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The Company has undertaken a number of specific steps to meet its cash needs and provide positive cash flow in the future.




During 2010 the Company sold 30.5% of its investment in its subsidiary D Mobile for total proceeds of $3,050,000.  During the first quarter of 2011, D Mobile sold 452,000 newly issued shares of Common Stock for total proceeds of $1,130,000 and on April 1, 2011 D Mobile sold 20,000 newly issued shares for total proceeds of $50,000.                 .




In addition, on April 4, 2011, Geos settled outstanding obligations, including accrued interest, under the Drawdown Note and a note payable to a director, of $2,910,718 and $163,710, respectively, by transferring 1,229,771 shares of D Mobile common stock to the lenders. As of April 4, 2011, Geos owned 34.6% of D Mobile.  Accordingly, as of that date, Geos will no longer consolidate D Mobile. Geos’ management team will continue to provide services to D Mobile and Geos will be reimbursed based upon the time and expenses incurred.




The Company has suffered ongoing losses from operations since its inception. These losses, as well as the uncertain conditions that the Company faces relative to its ongoing debt and equity fund-raising efforts, raise substantial doubt about the Company’s ability to continue as a going concern. Please refer to Note 1 to the financial statements, included herewith, “Liquidity and Management Plans” for further discussion regarding management’s plans for funding the Company’s operations.





Off-Balance Sheet Arrangements





We have no off-balance sheet arrangements.





Contractual Obligations





The Company has had no material changes to its contractual obligations as disclosed in the Company’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2010, with the exception of settlement on April 4, 2011 of its obligations, including accrued interest, on the line of credit totaling $2,600,000, and a note payable totaling $150,000 as of March 31, 2011.





Item 3 - Quantitative and Qualitative Disclosures About Market Risk.





Not Applicable.





Item 4 - Disclosure Controls and Procedures





Disclosure Controls and Procedures





At the end of the period covered by this report an evaluation was carried out under the supervision of and with the participation of the Company's management, including the Chief Executive Officer (“CEO”) and the President, of the effectiveness of the design and operations of the Company's disclosure controls and procedures (as defined in Rule 13a - 15(e) and Rule 15d - 15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)).  Based on that evaluation the management has concluded that the Company's disclosure controls and procedures were not adequately designed and were not effective in ensuring that: (i) information required to be disclosed by the Company in reports that it files or submits to the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and President,  as appropriate, to allow for accurate and timely decisions regarding required disclosure.





Changes In Internal Control Over Financial Reporting





We have implemented additional controls and procedures designed to ensure that the disclosure provided by us meets the then current requirements of the applicable filing made under the Exchange Act. To address our lack of sufficient accounting technical expertise in prior periods, we retained additional accounting technical expertise in April 2010. In addition as of October 31, 2010, the former Chief Financial Officer resigned; however the Company subsequently hired a new Chief Financial Officer, who took office on January 7,2011. Other than these matters there have been no changes in our internal control over financial reporting during the first quarter ended March 31, 2011, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.





PART II - OTHER INFORMATION





Item 1 - Legal Proceedings





Other than as described below, we know of no material, existing or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceeding or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any registered or beneficial stockholder of more than 5% of our voting securities, or any associate of such persons, is an adverse party or has a material interest adverse to our company.





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On December 22, 2003, former stockholders of SuperCaller Community, Inc., a Delaware corporation acquired by the Company in September 2002 (“SuperCaller”), filed a lawsuit against the Company in the United States District Court for the Northern District of California, San Francisco Division. The plaintiffs alleged that i2Telecom (DE) and certain of its affiliates and representatives deceived the plaintiffs into selling SuperCaller to the Company, among other things.  On March 27, 2006,  all federal claims against the Company and related parties in the United States District Court in San Francisco were “dismissed with prejudice” by Judge Vaughn Walker.  In addition, the court declined to exercise supplemental jurisdiction over the remaining state law claims which were all “dismissed” as well.  Therefore, no loss or liability has been recorded in the Company’s consolidated financial statements.  In March 2009, the federal claims against the Company and related parties in the United States District Appellate Court in San Francisco were “dismissed with prejudice”.




In April 2009, the same attorney representing the plaintiffs in the above matter filed an action against the Company in the Superior Court of California, County of Santa Clara (the “Superior Court”).  The plaintiffs alleged, among other things, that i2Telecom (DE) and certain of its affiliates and representatives deceived the plaintiffs into selling SuperCaller to the Company.  Beginning on January 11, 2010, the case was heard by a jury in the Superior Court.  On February 23, 2010, the court ruled that the Company was entitled to judgment after receiving a jury verdict in favor of the defendants on all claims in the litigation.  On March 5, 2010, the plaintiffs filed a motion for judgment notwithstanding the verdict or in the alternative, judgment for constructive trust, or in further alternative, motion for a new trial.  Those motions were denied by the Court.  The Plaintiffs filed a notice of appeal.  Subsequently the Plaintiffs filed an abandonment of the appeal for plaintiffs Teng Howe Lim and Fung Chee Lim.




The remaining plaintiff’s appeal was dismissed by the California Appeal Court for procedural errors.  On February 16, 2011, the California Supreme Court denied plaintiff’s petition for review of the dismissal of the appeal.




Item 1A - Risk Factors





You should carefully consider the risks described below together with all of the other information included in this report before making an investment decision with regard to our securities. The statements contained in or incorporated into this report that are not historic facts are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those set forth in or implied by forward-looking statements. If any of the following risks actually occurs, our business, financial condition or results of operations could be harmed. In that case, the trading price of our common stock could decline, and you may lose all or part of your investment.





RISKS RELATED TO OUR BUSINESS




Current and future acquisitions and alliances may expose Geos to new risks, or fail to perform as expected. Conversely, Geos’ failure to complete acquisitions, enter into suitable alliances or integrate acquired companies may hinder its growth and future profitability.




One of Geos’ key strategies is to grow through acquisitions, joint ventures, and other strategic alliances, particularly with respect to its retail operations and attainment of applications for mobile users. Joint ventures and strategic alliances may expose Geos to operational, regulatory, and market risk as well as risks associated with additional capital requirements. In addition, Geos may not be able to identify suitable future acquisition candidates or alliance partners.  Even if Geos identifies suitable candidates or partners, Geos may be unable to complete an acquisition or alliance on commercially acceptable terms. If Geos fails to identify appropriate candidates or complete desired acquisitions, Geos may not be able to implement its growth strategies effectively or efficiently. In addition, Geos’ acquisition and integration process may divert management from operating Geos’ existing business, negatively affecting Geos’ earnings and revenues.




In addition, Geos’ ability to successfully integrate the acquired companies or their operations may be adversely affected by a number of factors, including diversion of management’s attention and difficulties in retaining clients of the acquired companies. Furthermore, any acquired companies may not perform as expected for various reasons, including legislative or regulatory changes or the loss of key customers and personnel.  If Geos  is not able to realize the benefits envisioned from such acquisitions, joint ventures, or other strategic alliances, ‘Geos’ overall profitability and growth plans may be hindered.





Current economic conditions may continue to adversely affect our industry, business and results of operations.





The United States economy has undergone a period of slowdown and very high volatility, and the future economic environment may continue to be less favorable than that of recent years. A substantial portion of our revenues comes from retail consumers whose spending patterns may be negatively affected by prevailing economic conditions. If economic conditions were to continue to deteriorate, the growth of our business and results of operations could be affected. Reduced consumer spending may drive us and our competitors to offer certain services at promotional prices, which could have a negative impact on our operating results.




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We may not be able to successfully compete with current or future competitors.




As discussed above under “Item 1. Business,” the products offered by our subsidiaries face unique competitive obstacles in their respective markets, including direct competition from companies providing similar products and services, as well as indirect competition from other product and service categories that may draw customers and resources away from our companies’ products and services. These and other unforeseen obstacles could have a negative impact on our operating results.




Our business faces security risks. Our failure to adequately address these risks could have an adverse effect on our business and reputation.




A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our content delivery systems. We may be required to expend significant capital and resources to protect against the threat of such security breaches or to alleviate problems caused by such breaches. Consumer concern over Internet security has been, and could continue to be, a barrier to commercial activities requiring consumers to send their credit card information over the Internet. Computer viruses, break-ins, or other security problems could lead to misappropriation of proprietary information and interruptions, delays, or cessation in service to our customers. Moreover, until more comprehensive security technologies are developed, the security and privacy concerns of existing and potential customers may inhibit the growth of the Internet as a merchandising medium. Our failure to adequately address these risks could have an adverse effect on our business and reputation.




We have a history of losses and negative cash flows from operations and we may not be profitable in the future.




We had losses of $2,493,318 for the three months ended March 31, 2011 and $12,403,535 for the fiscal year ended December 31, 2010. We had an accumulated deficit at March 31, 2011 of $71,774,021. Our ability to generate positive cash flows from operations and net income is dependent, among other things, on the acceptance of our products in the marketplace, market conditions, cost control, and our ability to raise capital on acceptable terms. The financial statements included elsewhere in this filing do not include any adjustments that might result from the outcome of these uncertainties. Furthermore, developing and expanding our business will require significant additional capital and other expenditures. Accordingly, if we are not able to increase our revenue, then we may never achieve or sustain profitability.




We have been able to meet our operating requirement by receiving net proceeds of $1,130,000 related to financing during the three months ended March 31, 2011 and $6,647,000 related to financing during the year ended December 31, 2010.  We will need to receive additional capital to continue our operations into 2011.




Until we reach and maintain positive cash flow, we will be required to raise additional capital to fund our operations. Financing may not be available to us on commercially reasonable terms, if at all. There is no assurance that we will be successful in raising additional capital or that the proceeds of any future financings will be sufficient to meet our future capital needs. It is not likely that we will be able to continue our business without additional financing.




Dilution of our ownership interest in D Mobile could further reduce our control over D Mobile’s operations and corporate governance.




It is likely that we will be forced to raise additional capital through either the sale of newly issued D Mobile shares or the sale of outstanding D Mobile shares currently owned by Geos, either of which would necessarily result in a dilution of our interest in D Mobile and potentially further reduce our control over D Mobile’s operations and corporate governance.  As D Mobile’s operations are expected to be  our primary source of revenue, any further loss of control over D Mobile could negatively affect the financial stability of Geos as a whole.




We may not be able to successfully manage our growth.




Our ability to manage the Company’s growth will require that we continue to improve our operational, financial and management information systems, and to motivate and effectively manage our employees. If our management is unable to manage such growth effectively, then the quality of our services, our ability to retain key personnel and our business, financial condition and results of operations could be materially adversely affected.




Changes in our board and management team may negatively impact our business.




Our previous Chief Financial Officer resigned in October of 2010, and our Chief Executive Officer of our Asia operations resigned in January of 2011. The Chief Executive Officer of our Asia operations also served on our Board of Directors. Partially, as a result, our current executive officers have been employed by the Company for a relatively short period of time, and may not be able to implement our business strategy. The failure to effectively implement our business strategy will have a material, adverse effect on our business, financial condition and results of operations. Our Chief Executive officer took office on April 21, 2009, our President and Chief Operating Officer took office on August 10, 2009, our Senior Vice President of Worldwide Sales took office on June 23, 2009, and our Chief Financial Officer took office on January 7, 2011. There can be no assurance that they will function successfully as a management team to implement our business strategy. If they are unable to do so, then our business, financial condition and results of operations could be materially adversely affected.




23




Our performance could be adversely affected if we are unable to attract and retain qualified personnel in the fields of engineering, marketing and finance.





Our performance is dependent on the services of our management as well as on our ability to recruit, retain and motivate other key employees in the fields of engineering, marketing and finance. Competition for qualified personnel is intense and there are a limited number of persons with knowledge of and experience with the products and markets that make up the core businesses of D Mobile and Shoot It!. We cannot assure you that we will be able to attract and retain key personnel, and the failure to do so could hinder our ability to implement our business strategy and could cause harm to our business.




Shifts or advances in available technology could render certain products offered by our subsidiaries less desirable or even obsolete.




Much of the potential success of D Mobile’s kiosk model is predicated on the general lack of fast, low-cost wireless or broadband access in China and other target markets. Dramatic increases in the speed and availability of such access, in conjunction with decreases in the costs associated with such access, could severely impact the demand for D Mobile’s services. Likewise, improvements in digital picture frames, low-cost, high definition monitors, and other display technologies could reduce the demand for Shoot It’s postcard messaging service. These and other unforeseen changes in available technology could negatively impact the Company’s finances and results of operations.





RISKS RELATED TO THE MARKET FOR OUR STOCK




The price of our Common Stock has been volatile in the past and may continue to be volatile.




The stock market in general and the market for technology companies in particular, has recently experienced extreme volatility that has often been unrelated to the operating performance of particular companies. From January 1, 2010 to December 31, 2010, the per share closing price of our Common Stock on the Over-the-Counter Bulletin Board fluctuated from a high of $0.27 to a low of $0.02. We believe that the volatility in the price of our Common Stock does not solely relate to our performance and is broadly consistent with volatility experienced in our industry. Fluctuations may result from, among other reasons, responses to operating results, announcements by competitors, regulatory changes, economic changes, market valuation of technology firms and general market conditions.




In addition, in order to respond to competitive developments, we may from time to time make pricing, service or marketing decisions that could harm our business. Also, our Company’s operating results in one or more future quarters may fall below the expectations of securities analysts and investors. In either case, the trading price of our Common Stock would likely decline.




The trading price of our Common Stock could continue to be subject to wide fluctuations in response to these or other factors, many of which are beyond our control. If the market price of our Common Stock decreases, then shareholders may not be able to sell their shares of our Common Stock at a profit.




Our Common Shares are sporadically or “thinly-traded” on the OTCBB, meaning that the number of persons interested in purchasing our common shares at or near ask prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors, including the fact that we are a small company and we are relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community that generate or influence sales volume, and that even if we came to the attention of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained, or that current trading levels will be sustained. As a consequence, you may be unable to sell at or near ask prices or at all if you need to sell your shares to raise money or otherwise desire to liquidate your shares.




The market price for our common shares is particularly volatile given our status as a relatively unknown company with a small and thinly-traded public float and limited operating history. The price at which you purchase our common shares may not be indicative of the price that will prevail in the trading market. You may be unable to sell your common shares at or above your purchase price, which may result in substantial losses to you.




The market for our common shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our common shares are sporadically or thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common shares are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, lack of capital to execute our business plan, and uncertainty of future market acceptance for our technologies. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. The following factors may add to the volatility in the price of our common shares: actual or anticipated variations in our quarterly or annual operating results, market acceptance of our government regulations, announcements of significant acquisitions, strategic partnerships or joint ventures, our capital commitments, and additions or departures of our key personnel. Many of these factors are beyond our control and may decrease the market price of our common shares, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common shares will be at any time, including as to whether our common shares will sustain their current market prices, or as to what effect, if any, that the sale of shares or the availability of common shares for sale at any time will have on the prevailing market price.




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Volatility in our common share price may subject us to securities litigation.




As discussed in the preceding risk factor, the market for our Common Shares is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. In the past, plaintiffs have often initiated securities class action litigation against a company following periods of volatility in the market price of its securities. We may in the future be the target of similar litigation. Securities litigation could result in substantial costs and liabilities and could divert management’s attention and resources. The application of the “penny stock” rules could adversely affect the market price of our common shares and increase your transaction costs to sell those shares.




As long as the trading price of our common shares is below $4 per share, the open-market trading of our common shares will be subject to the “penny stock” rules.




Rule 3a51-1 of the Securities Exchange Act of 1934 establishes the definition of a “penny stock,” for purposes relevant to the Company, as any equity security that has a minimum bid price of less than $4.00 per share or with an exercise price of less than $4.00 per share, subject to a limited number of exceptions which are likely not available to us. It is likely that our shares will be considered to be penny stocks for the immediately foreseeable future. This classification severely and adversely affects any market liquidity for our common stock.




For any transaction involving a penny stock, unless exempt, the penny stock rules require that a broker or dealer approve a person’s account for transactions in penny stocks and the broker or dealer receive from the investor a written agreement to the transaction setting forth the identity and quantity of the penny stock to be purchased.  In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience and objectives of the person and make a reasonable determination that the transactions in penny stocks are suitable for that person and that that person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.




The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, which, in highlight form, sets forth the basis on which the broker or dealer made the suitability determination, and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.




Disclosure also has to be made about the risks of investing in penny stock in both public offerings and in secondary trading and commissions payable to both the broker–dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.




Because of these regulations, broker–dealers may not wish to engage in the above-referenced necessary paperwork and disclosures and/or may encounter difficulties in their attempt to sell shares of our common stock, which may affect the ability of selling shareholders or other holders to sell their shares in any secondary market and have the effect of reducing the level of trading activity in any secondary market. These additional sales practice and disclosure requirements may impede the sale of our securities. In addition, the liquidity for our securities may decrease, with a corresponding decrease in the price of our securities. Our shares, in all probability, will be considered subject to such penny stock rules for the foreseeable future, and our shareholders may, as a result, find it difficult to sell their securities.




We do not intend to pay dividends for the foreseeable future.




For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Accordingly, investors must be prepared to rely on sales of their common stock after price appreciation to earn an investment return, which may never occur. Investors seeking cash dividends should not purchase our common stock. Any determination to pay dividends in the future will be made at the discretion of our board of directors and will depend on our results of operations, financial condition, contractual restrictions, restrictions imposed by applicable law and other factors our board deems relevant.




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RISK RELATED TO DOING BUSINESS IN THE PEOPLES REPUBLIC OF CHINA.




Political, regulatory and economic conditions in the Peoples Republic of China may adversely impact the successful expansion and operation of D Mobile.




Since acquiring D Mobile in 2010, the Company has invested significant resources into D Mobile’s operations and expansion. D Mobile’s operations are primarily located in the Peoples Republic of China (PRC). Accordingly, Geos’ business, results of operations, financial condition and prospects are subject to a significant degree to economic, political, and legal conditions in China. China’s economy differs from the economies of developed countries in many respects, including with respect to government regulation and control of foreign exchange, the level of development, growth rate and the allocation of resources.




While the PRC economy has experienced significant growth in the past 20 years, growth has been uneven across different regions and economic sectors. The PRC government has implemented certain measures to encourage economic development and guide the allocation of resources. While some of these measures benefit the PRC economy generally, they may also negatively affect Geos. For example, Geos’ business, financial condition and results of operations may be adversely affected by government control over capital investments or changes in tax regulations applicable to Geos or D Mobile.




Fluctuation in the value of the Chinese Yuan (Reniminbi or RMB) may have a material effect on the value of your investment.




The value of the RMB against the U.S. Dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions. Substantially all of D Mobile’s revenues and cost are denominated in the RMB, and a significant portion of D Mobile’s financial assets are also denominated in the RMB. The PRC recently adopted a floating rate with respect to the value of Renminbi against foreign currencies. This floating exchange rate could materially, and potentially adversely, affect D Mobile’s cash flows, revenues, earnings and financial position, and could also result in foreign currency translation losses for financial reporting purposes. But it is not possible to predict whether the net effects of this floating rate, or any resulting appreciation of the RMB, would be positive or negative for our business.




Uncertainties with respect to the PRC legal system could adversely affect Geos.




Geos conducts its business operations in China primarily through its D Mobile subsidiary which operates under the Duo Guo brand. Geos’ operations in China are governed by the PRC laws and regulations. Geos’ operating subsidiaries are generally subject to laws and regulations applicable to wholly owned foreign-owned enterprises. The PRC legal system is principally based on statutes. Prior court decisions may be cited for reference but typically have limited precedential value.




Since 1979, PRC legislation and regulations have significantly enhanced the protections afforded to foreign investments in China.  However, China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, because these laws and regulations are relatively new, and because of the limited volume of published decisions (and the non-binding nature of such decisions), the interpretation and enforcement of these laws and regulations raise uncertainties. In addition, the PRC legal system is based in part of the government policies and internal rules (some of which are not published on a timely basis or at all) that may have retroactive effect. As a result, Geos may not be aware of its violation of these policies and rules until after a violation occurs. In addition, any litigation in China may be protracted and result in substantial cost and diversion of resources and management attention.




Contract drafting, interpretation and enforcement in China involve significant uncertainty.




Geos, through D Mobile, is a party to numerous contracts governed by the PRC law, many of which are material to Geos’ business. Compared to contracts in the United States, contracts governed by the PRC law tend to contain less detail and are not as comprehensive in defining contracting parties’ rights and obligations. As a result, contracts in China are more vulnerable to disputes and legal challenges. In addition, contract interpretation and enforcement in China are not as developed as in the United States, and the result of any contract dispute is subject to significant uncertainties. Therefore, Geos may be subject to disputes under its material contracts, and if such disputes arise, Geos cannot assure you that it will prevail. Due to the materially of certain contracts to Geos’ business, any disputes involving such contracts, even without merit, may materially and adversely affect Geos’ reputation and business.




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Changes in PRC laws and regulations on labor and employee benefits may adversely affect Geos’ business and results of operations.




As a result of the D Mobile acquisition, Geos will be conducting a significant portion of its business in China, which will be subject to PRC laws and regulations on labor and employee benefits. In recent years, the PRC government has implemented policies to strengthen the protection of employees and obligate employers to provide more benefits to their employees. In addition, an employment contract law came into effect in China on January 1, 2009 and its implementation regulation came into effect on September 18, 2009. The PRC employment contract law and related legislation required more benefits to be provided to employees, such as an increase in pay or compensation for termination of employment contracts. As a result, employers incurred higher labor cost.  If additional employment and labor laws are brought to law, additional labor cost may be incurred and could have an adverse impact on Geos’ business and results of operations.




Future inflation in China may inhibit our ability to conduct business in China.




In recent years, the Chinese economy has experienced periods of rapid expansion and highly fluctuating rates of inflation. During the past ten years, the rate of inflation in China has been as high as 5.9% and as low as -0.8%. These factors have led to the adoption by the Chinese government, from time to time, of various corrective measures designed to restrict the availability of credit or regulate growth and contain inflation. High inflation may in the future cause the Chinese government to impose controls on credit and/or prices, or to take other action, which could inhibit economic activity in China, and thereby harm the market for our products and our company.




We may be exposed to liabilities under the Foreign Corrupt Practices Act and Chinese anti-corruption laws, and any determination that we violated these laws could have a material adverse effect on our business.




We are subject to the Foreign Corrupt Practice Act, or FCPA, and other laws that prohibit improper payments or offers of payments to foreign governments and their officials and political parties by U.S. persons and issuers as defined by the statute, for the purpose of obtaining or retaining business. We have operations, agreements with third parties, and make most of our sales in China. The PRC also strictly prohibits bribery of government officials. Our activities in China create the risk of unauthorized payments or offers of payments by the employees, consultants, sales agents, or distributors of our Company, even though they may not always be subject to our control. It is our policy to implement safeguards to discourage these practices by our employees. However, our existing safeguards and any future improvements may prove to be less than effective, and the employees, consultants, sales agents, or distributors of our Company may engage in conduct for which we might be held responsible. Violations of the FCPA or Chinese anti-corruption laws may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition. In addition, the U.S. government may seek to hold the Company liable for successor liability FCPA violations committed by companies in which we invest or that we acquire.





RISK RELATED TO INTELLECTUAL PROPERTY AND OTHER LEGAL AND REGULATORY CONCERNS




Our ability to do business depends, in part, on our ability to license certain technology from third parties.




We rely on certain technology licensed from third parties, and there can be no assurance that these third party technology licenses will be available to us on acceptable commercial terms or at all. If we cannot license the technology we need on acceptable commercial terms, then our business, financial condition and results of operations will be materially and adversely affected.




Products and services like the ones we offer change rapidly and therefore, we must continually improve them. However, our need to invest in research and development may prevent us from ever being profitable.




Products and services like the ones we offer are continually upgraded in an effort to make them work faster, function more easily for the user and provide more options. Our industry is characterized by the need for continued investment in research and development. If we fail to invest sufficiently in research and development, then our products could become less attractive to potential customers, which could have a material adverse effect on our results of operations and financial condition. However, any investment in research and development and technological innovation will cause our operating costs to increase. This could prevent us from ever achieving profitability.




We have developed our underlying software and we try to protect it from being used by others in our industry. Failure to protect our intellectual property rights could have a material adverse effect on our business.




We rely on copyright, trade secret and patent laws to protect our content and proprietary technologies and information, including the software that underlies our products and services. Additionally, we have taken steps that we believe will be adequate to establish, protect and enforce our intellectual property rights. There can be no assurance that such laws and steps will provide sufficient protection to our intellectual property. Despite our efforts to protect our proprietary rights, unauthorized parties may attempt to copy or otherwise obtain rights to use our products or technologies.




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We have six issued patents. In addition, we have 13 pending patent applications related to embedded software technology and methods of use. There can be no assurance that these pending patents will be issued, or what the scope of the allowed claims will be if issued. Even if the balance of patents pending are issued, the limited legal protection afforded by patent, trademark, trade secret and copyright laws may not be sufficient to protect our proprietary rights to the intellectual property covered by these patents.




Furthermore, the laws of many foreign countries in which we do business do not protect intellectual property rights to the same extent or in the same manner as do the laws of the United States. Although we have implemented and will continue to implement protective measures in those countries, these efforts may also not be successful. Additionally, even if our domestic and international efforts are successful, our competitors may independently develop non-infringing technologies that are substantially similar or superior to our technologies.




If our products contain defects, then our sales would be likely to suffer, and we may even be exposed to legal claims. Defects in our products could have a material adverse impact on our business and operating results.




Our business strategy calls for the development of new products and product enhancements which may from time to time contain defects or result in failures that we did not detect or anticipate when introducing such products or enhancements to the market. In addition, the markets in which our products are used are characterized by a wide variety of standard and non-standard configurations and by errors, failures and bugs in third-party platforms that can impede proper operation of our products. Despite product testing, defects may still be discovered in some new products or enhancements after the products or enhancements are delivered to customers. The occurrence of these defects could result in product returns, adverse publicity, loss of or delays in market acceptance of our products, delays or cessation of service to our customers or legal claims by customers against us. Any of these occurrences could have a material adverse impact on our business and operating results.




Doing business over the Internet may become subject to governmental regulation. If these regulations substantially increase the cost of doing business, they could have a material adverse effect on our business, results of operations and financial condition.




We are not currently subject to direct federal, state, or local regulation, and laws or regulations applicable to access to or commerce on the Internet, other than regulations applicable to businesses generally. However, due to the increasing popularity and use of the Internet and mobile networks for the delivery of all forms of digital content, it is possible that a number of laws and regulations may be adopted with respect to the Internet and mobile networks covering issues such as user privacy, “indecent” materials, freedom of expression, pricing content and quality of products and services, taxation, advertising, intellectual property rights and information security. The adoption of any such laws or regulations might also decrease the rate of growth of Internet and mobile network use, which in turn could decrease the demand for our products and services or increase the cost of doing business or in some other manner have a material adverse effect on our business, results of operations, and financial condition.




Our business faces security risks. Our failure to adequately address these risks could have an adverse effect on our business and reputation.




A party who is able to circumvent our security measures could misappropriate proprietary information or cause interruptions in our content delivery systems. We may be required to expend significant capital and resources to protect against the threat of such security breaches or to alleviate problems caused by such breaches. Consumer concern over Internet security has been, and could continue to be, a barrier to commercial activities requiring consumers to send their credit card information over the Internet. Computer viruses, break-ins, or other security problems could lead to misappropriation of proprietary information and interruptions, delays, or cessation in service to our customers. Moreover, until more comprehensive security technologies are developed, the security and privacy concerns of existing and potential customers may inhibit the growth of the Internet as a merchandising medium. Our failure to adequately address these risks could have an adverse effect on our business and reputation.





We may become subject to litigation.




We may be subject to claims involving how we conduct our business or the market for or issuance of the Common Stock or other securities. Any such claims against the Company may affect our business, results of operations and financial conditions. Such claims, including those without merit, could require us to pay damages or settlement amounts and would require a substantial amount of time and attention from our senior management as well as considerable legal expenses. Although we do not anticipate that our activities would warrant such claims, there can be no assurances that such claims will not be made.




We depend on third-party vendors for key Internet operations including broadband connectivity, termination capability and different operating systems. The loss of any of our vendors could have a material adverse effect on our business, results of operations and financial condition.




We rely on our relationships with third party vendors of Internet development tools and technologies including providers of switches, network termination and operational and billing specialized operations. There can be no assurance that the necessary cooperation from third parties will be available on acceptable commercial terms or at all. Although there are a number of providers of these services, if we are unable to develop and maintain satisfactory relationships with such third parties on acceptable commercial terms, or if our competitors are better able to leverage such relationships, then our business, results of operations and financial condition will be materially adversely affected.




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We may be exposed to potential risks relating to our internal controls over financial reporting.




As directed by Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404, the SEC adopted rules requiring public companies to include a report of management on their internal controls over financial reporting in their annual reports, on Form 10-K. We are subject to this requirement, and a report of our management is included under Item 9A of this Annual Report on Form 10-K. We can provide no assurance that we will be able to remediate existing material weaknesses to comply with all of the requirements imposed thereby, and if we identify additional significant deficiencies or material weaknesses in our internal controls that we cannot remedy in a timely manner, investors and others may lose confidence in the reliability of our financial statements.




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





In July 2010, the Board of Directors authorized the creation of the Series I Preferred Stock. The shares are part of an offering of up to $8,000,000 of Series I Preferred Stock and Warrants. The Company received approximately $427,000 in proceeds from subscription agreements related to the Series I Preferred Stock during the third quarter ended March 31, 2011, of which $100,000 was from a director of the Company.





As described in the notes to the condensed consolidated financial statement included herein, on July 1, 2010, a director of the Company loaned the Company $150,000 to be repaid on the earlier of (i) the receipt and acceptance of $5,000,000 in subscriptions under the D Mobile Offering or (ii) March 31, 2011, which date was subsequently extended to March 31, 2011. As compensation for extending the maturity date on the loan, the Company issued the director a warrant to purchase 33,000 shares of Common Stock at a purchase price of $0.08 per share.





The sales of the above securities were not registered under the Securities Act of 1933, as amended (the “Act”), in reliance on the private offering exemption from registration provided by Section 4(2) of the Act.




Item 3 - Defaults Upon Senior Securities





None





Item 4 – Reserved





None





Item 5 – Other Information





2011 Annual Meeting of Shareholders





The Company has not yet scheduled its annual shareholders’ meeting for 2011.





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Item 6 – Exhibits





Exhibit No.

Exhibit

Method of Filing2.1

Agreement and Plan of Merger by and among Geos Communications, Inc., Duo Guo Acquisition, Inc., Jonathan Serbin and D Mobile, Inc.

Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 19, 20102.2

Agreement and Plan of Merger dated as of February 19, 2010 by and among Geos Communications, Inc., Shoot It! Acquisition, Inc., Shoot It!, LLC and certain security holders of Shoot It!, LLC

Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed on February 25, 20102.3

First Amendment to Agreement and Plan of Merger by and among Geos Communications, Inc., Duo Guo Acquisition, Inc., Jonathan Serbin and D Mobile, Inc. dated as of March 1, 2010

Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed on March 11, 20103.1

Articles of Incorporation, as amended

Incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 20033.2

Bylaws

Incorporated by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-KSB for the year ended December 31, 20033.3

Amendment to the Company’s Articles of Incorporation filed September 3, 2004

Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended September 30, 20043.4

Certificate of Designations of Rights and Preferences of Series D Preferred Stock

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed August 13, 20043.5

Certificate of Designations of Rights and Preferences of Series E Preferred Stock

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 22, 20053.6

Amendment to Certificate of Designations of Rights and Preferences of Series E Preferred Stock

Incorporated by reference to Exhibit 3.1.8 to the Company’s Quarterly Report on Form 10-QSB for the quarter ended March 31, 20063.7

Amendment to the Company’s Articles of Incorporation filed July 13, 2007

Incorporated by reference to Exhibit 3.7 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010





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Exhibit No.

Exhibit

Method of Filing3.8

Certificate of Designations of Rights and Preferences of Series F Preferred Stock

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed April 30, 20103.9

Amendment to the Company’s Articles of Incorporation filed May 11, 2010

Incorporated by reference to Exhibit 3.9 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 20103.10

Amendment to Certificate of Designations of Rights and Preferences of Series F Preferred Stock

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed September 10, 20103.11

Certificate of the Designations, Preferences, Rights and Limitations of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock of i2 Telecom IP Holdings, Inc.

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed July 1, 20103.12

Amendment to the Company’s Articles of Incorporation filed September 10, 2010

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed September 10, 20103.13

Certificate of Designations of Rights and Preferences of Series G Convertible Preferred Stock

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on February 19, 20103.14

Amendment to Bylaws, dated February 12, 2010

Incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K filed on February 19, 20103.15

Certificate of Designations of Rights and Preferences of Series H Convertible Preferred Stock

Incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on May 10, 20103.16

Certificate of Designations of Rights and Preferences of Preferred Stock Series I

Incorporated by reference to Exhibit 3.16 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 20103.17

Articles of Correction to Certificate of Designations of Rights and Preferences of Preferred Stock Series I

Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 3, 20104.1

Amended and Restated 2004 Stock Incentive Plan

Incorporated by reference to Exhibit 4.1 to the Company’s Post-Effective Amendment No. 3 to Form S-8 Registration Statement filed September 25, 20104.2

2010 Omnibus Long Term Incentive Plan

Incorporated by reference to Exhibit 4.1 to the Company’s Form S-8 Registration Statement filed January 8, 201010.1

Employment Agreement, dated January 7, 2011, between Cynthia Gordon and Geos Communications, Inc.

Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on January  13, 201131.1

Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer

Filed herewith





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Exhibit No.

Exhibit

Method of Filing31.2

Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer

Filed herewith32.1

Section 1350 Certification of the Company’s Principal Executive Officer

Filed herewith32.2

Section 1350 Certification of the Company’s Principal Financial Officer

Filed herewith





SIGNATURES





Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





GEOS COMMUNICATIONS, INC.By:
/s/ Andrew L. BermanAndrew L. BermanChief Executive OfficerDate:
May 13, 2011By:
/s/ Cynthia T. GordonCynthia T. GordonPresidentDate:
May 13, 2011





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