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 September 30, 2010


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 (§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 x  No   ̈





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 outstanding at November 15, 2010: 36,619,966





INDEX





Page
                                          No.(s)PART
      I - FINANCIAL INFORMATIONItem
      1.
                                        
                                        Financial
      Statements
                                        
                                        3Condensed
      Consolidated Balance Sheets as of September 30,
      2010  (unaudited) and December 31, 2009
                                        
                                        3Condensed
      Consolidated Statements of Operations for the three and nine months ended
      September 30, 2010 and  2009 (unaudited)
                                        
                                        4Condensed
      Consolidated Statements of Cash Flows for the nine months ended September
      30, 2010 and  2009 (unaudited)
                                        
                                        5Notes
      to  Condensed Consolidated Financial Statements
                                        
                                        6Item
      2.
                                        
                                        Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                        
                                        23Item
      3.
                                        
                                        Quantitative
      and Qualitative Disclosures About Market Risk
                                        
                                        27Item
      4.
                                        
                                        Controls
      and Procedures
                                        
                                        28PART
      II - OTHER INFORMATIONItem
      1.
                                        
                                        Legal
      Proceedings
                                        
                                        28Item
      1A.
                                        
                                        Risk
      Factors
                                        
                                        29Item
      2.
                                        
                                        Unregistered
      Sales of Equity Securities and Use of Proceeds
                                        
                                        36Item
      3.
                                        
                                        Defaults
      Upon Senior Securities
                                        
                                        37Item
      4.
                                        
                                        Reserved
                                        
                                        37Item
      5.
                                        
                                        Other
      Information
                                        
                                        37Item
      6.
                                        
                                        Exhibits
                                        
                                        37SIGNATURES
                                        
                                        39


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 September 30, 2010 (unaudited) and
December 31, 2009, the unaudited Condensed Consolidated Statements of Operations
for the three and  nine months ended September 30, 2010 and 2009, and
unaudited condensed Consolidated Statements of Cash Flows for the nine months
ended September 30, 2010 and 2009.


GEOS
COMMUNICATIONS, INC. AND SUBSIDIARIES


Condensed
Consolidated Balance Sheets





September 30,
                      2010
                    
                    
                    December 31, 2009(Unaudited)ASSETSCurrent
      Assets:Cash
      and Cash Equivalents
                    
                    $
                    330,740
                    
                    
                    $
                    1,041,830Accounts
      Receivable
                    
                    
                    35,063
                    
                    
                    
                    -Prepaid
      Expenses and Other Current Assets
                    
                    
                    331,985
                    
                    
                    
                    17,826Total
      Current Assets
                    
                    
                    697,788
                    
                    
                    
                    1,059,656Property
      and Equipment, Net
                    
                    
                    610,528
                    
                    
                    
                    1,145,419Other
      Assets:Goodwill
                    
                    
                    2,144,192
                    
                    
                    
                    -Other
      Intangible Assets, Net of Amortization
                    
                    
                    3,144,713
                    
                    
                    
                    2,441,900Deposits
                    
                    
                    47,220
                    
                    
                    
                    83,489Investment,
      at Cost
                    
                    
                    -
                    
                    
                    
                    250,000Notes
      Receivable
                    
                    
                    -
                    
                    
                    
                    60,000Assets
      Held For Sale
                    
                    
                    178,254
                    
                    
                    
                    305,157Total
      Other Assets
                    
                    
                    5,514,379
                    
                    
                    
                    3,140,546Total
      Assets
                    
                    $
                    6,822,695
                    
                    
                    $
                    5,345,621LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      Liabilities:Accounts
      Payable
                    
                    $
                    883,312
                    
                    
                    $
                    344,261Accrued
      Expenses
                    
                    
                    1,084,914
                    
                    
                    
                    1,091,552Liabilities
      Related to Assets Held For Sale
                    
                    
                    631,069
                    
                    
                    
                    72,247Convertible
      Bonds
                    
                    
                    50,000
                    
                    
                    
                    50,000Notes
      Payable
                    
                    
                    159,000
                    
                    
                    
                    9,000Borrowing
      under Line of Credit
                    
                    
                    2,600,000
                    
                    
                    
                    -Total
      Current Liabilities
                    
                    
                    5,408,295
                    
                    
                    
                    1,567,060Series
      A–D, Preferred Shares subject to mandatory redemption
                    
                    
                    9,414,220
                    
                    
                    
                    7,880,627Series
      G Preferred Shares subject to mandatory redemption
                    
                    
                    3,975,707
                    
                    
                    
                    -Total
      Liabilities
                    
                    
                    18,798,222
                    
                    
                    
                    9,447,687Series
      F Convertible Preferred Shares, 5,000,000 Shares Authorized, and 7,570
      Shares Issued and Outstanding
                    
                    
                    5,047,057
                    
                    
                    
                    5,047,057Series
      H Convertible Preferred Shares, 20,000 Shares Authorized,
      and  350 Shares Issued and Outstanding
                    
                    
                    232,482
                    
                    
                    
                    -Series
      I Convertible Preferred Shares, 20,000 Shares Authorized,
      and  427 Shares Issued and Outstanding
                    
                    
                    288,445
                    
                    
                    
                    -Commitments
      And ContingenciesStockholders’
      Deficit:Common
      Stock,  No Par Value, 500,000,000 Shares Authorized and
      36,619,966 Shares Issued and Outstanding
                    
                    
                    50,050,457
                    
                    
                    
                    46,705,124Accumulated
      Deficit
                    
                    
                    (67,581,615
                    )
                    
                    
                    (55,854,247Stockholders’
      Deficit
                    
                    
                    (17,531,158
                    )
                    
                    
                    (9,149,123
                    )Noncontrolling
      Interest in Subsidiary
                    
                    
                    (12,353
                    )
                    
                    
                    -Total
      Stockholders’ Deficit
                    
                    
                    (17,543,511
                    )
                    
                    
                    (9,149,123
                    )Total
      Liabilities and Stockholders’ Deficit
                    
                    $
                    6,822,695
                    
                    
                    $
                    5,345,621





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 Months
                  
                  
                  Nine months
                  
                  
                  Nine monthsEnded
                  
                  
                  Ended
                  
                  
                  Ended
                  
                  
                  EndedSeptember 30, 2010
                  
                  
                  September 30, 2009
                  
                  
                  September 30, 2010
                  
                  
                  September 30, 2009Net
      Revenue
                  
                  $
                  31,992
                  
                  
                  $
                  -
                  
                  
                  $
                  67,390
                  
                  
                  $
                  -Cost
      of Revenue
                  
                  
                  77,793
                  
                  
                  
                  -
                  
                  
                  
                  143,657
                  
                  
                  
                  -Gross
      Profit (Loss)
                  
                  
                  (45,801
                  )
                  
                  
                  -
                  
                  
                  
                  (76,267
                  )
                  
                  
                  -General
      and Administrative Expenses
                  
                  
                  1,750,293
                  
                  
                  
                  1,042,124
                  
                  
                  
                  5,401,479
                  
                  
                  
                  3,761,314Loss
      From Operations
                  
                  
                  (1,796,094
                  )
                  
                  
                  (1,042,124
                  )
                  
                  
                  (5,477,746
                  )
                  
                  
                  (3,761,314
                  )Other
      Income (Expense):Interest
      Income
                  
                  
                  13,369
                  
                  
                  
                  -
                  
                  
                  
                  14,765
                  
                  
                  
                  1,474Interest
      Expense
                  
                  
                  (839,136
                  )
                  
                  
                  (616,381
                  )
                  
                  
                  (2,229,310
                  )
                  
                  
                  (1,090,733
                  )Gain
      on Forbearance of Debt
                  
                  
                  -
                  
                  
                  
                  4,122
                  
                  
                  
                  -
                  
                  
                  
                  116,658Loss
      on Debt Extinguishment
                  
                  
                  -
                  
                  
                  
                  (1,469,523
                  )
                  
                  
                  -
                  
                  
                  
                  (1,469,523
                  )Total
      Other Income (Expense)
                  
                  
                  (825,767
                  )
                  
                  
                  (2,081,782
                  )
                  
                  
                  (2,214,545
                  )
                  
                  
                  (2,442,124
                  )Loss
      from continuing operations
                  
                  
                  (2,621,861
                  )
                  
                  
                  (3,123,906
                  )
                  
                  
                  (7,692,291
                  )
                  
                  
                  (6,203,438
                  )Income
      (Loss) from discontinued operations, net of $0 tax
benefits
                  
                  
                  44,842
                  
                  
                  
                  (1,049,258
                  )
                  
                  
                  (3,441,026
                  )
                  
                  
                  (2,787,299
                  )Net
      loss
                  
                  
                  (2,577,019
                  )
                  
                  
                  (4,173,164
                  )
                  
                  
                  (11,133,317
                  )
                  
                  
                  (8,990,737
                  )Losses
      attributable to Noncontrolling Interest in Subsidiary
                  
                  
                  54,027
                  
                  
                  
                  -
                  
                  
                  
                  54,027
                  
                  
                  
                  -Losses
      attributable to Geos
                  
                  
                  (2,522,992
                  )
                  
                  
                  (4,173,164
                  )
                  
                  
                  (11,079,290
                  )
                  
                  
                  (8,990,737
                  )Dividends
      associated with  beneficial conversion  features,
      Series I Preferred Stock and Series H and I Preferred Stock,
      respectively
                  
                  
                  (172,640
                  )
                  
                  
                  
                  
                  
                  
                  (295,678
                  )Dividends
      for Series F, H and I Preferred Stock
                  
                  
                  (127,999
                  )
                  
                  
                  (770,258
                  )
                  
                  
                  (355,580
                  )
                  
                  
                  (2,870,825
                  )Net
      Loss attributable to Common Shareholders
                  
                  $
                  (2,823,631
                  )
                  
                  $
                  (4,943,422
                  )
                  
                  $
                  (11,730,548
                  )
                  
                  $
                  (11,861,562
                  )Weighted
      Average Common Shares Outstanding:Basic
      and Diluted
                  
                  
                  36,619,966
                  
                  
                  
                  28,253,922
                  
                  
                  
                  33,986,433
                  
                  
                  
                  28,829,666Basic
      and Diluted Loss Per Common Share:Continuing
      Operations
                  
                  $
                  (.07
                  )
                  
                  $
                  (.11
                  )
                  
                  $
                  (.23
                  )
                  
                  $
                  (.22
                  )Discontinued
      Operations
                  
                  
                  .00
                  
                  
                  
                  (.04
                  )
                  
                  
                  (.
      10
                  )
                  
                  
                  (.
      10
                  )Net
      Loss attributable to Geos Common Shareholders
                  
                  $
                  (.08
                  )
                  
                  $
                  (.17
                  )
                  
                  $
                  (.35
                  )
                  
                  $
                  (.41
                  )





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)





Nine months Ended
                          September 30, 2010
                        
                        
                        Nine months
                          Ended
                          September 30,
                          2009Cash
      Flows From Operations:Net
      Loss
                        
                        $
                        (11,133,317
                        )
                        
                        $
                        (8,990,737
                        ))Loss
      from discontinued operations
                        
                        
                        3,441,026
                        
                        
                        
                        2,787,299Adjustments
      to Reconcile Net Loss to NetCash
      Used In Operating Activities:Depreciation
      and amortization
                        
                        
                        467,259
                        
                        
                        
                        189,962Amortization
      of loan fees
                        
                        
                        -
                        
                        
                        
                        270,411Warrants
      issued for services
                        
                        
                        229,825
                        
                        
                        
                        1,313,978Stock
      based compensation
                        
                        
                        696,844
                        
                        
                        
                        222,973Accretion
      of interest and dividends on Preferred Stock Liabilities
                        
                        
                        2,022,960
                        
                        
                        
                        -Loss
      on extinguishment of debt
                        
                        
                        -
                        
                        
                        
                        1,469,523Gain
      on forbearance of debt
                        
                        
                        -
                        
                        
                        
                        (116,658
                        ))Change
      in operating assets and liabilities, net of effect of acquisitions and
      dispositions:Accounts
      Receivable
                        
                        
                        35,063
                        
                        
                        
                        -Prepaid
      Expenses, net of prepaid loan fees
                        
                        
                        (102,129
                        )
                        
                        
                        (238,053
                        ))Accounts
      Payable and Accrued Expenses
                        
                        
                        672,160
                        
                        
                        
                        460,170Net
      Cash Used In Operating Activities:
                        
                        
                        (3,740,435
                        )
                        
                        
                        (2,631,132
                        ))Cash
      Flows From Investing Activities:Cash
      returned on deposits
                        
                        
                        64,109
                        
                        
                        
                        -Acquisitions,
      net of cash acquired
                        
                        
                        119,674
                        
                        
                        
                        -Capital
      expenditures
                        
                        
                        (65,257
                        )
                        
                        
                        -Cash
      proceeds from sale of subsidiary stock
                        
                        
                        1,000,000
                        
                        
                        
                        -Net
      Cash Provided by Investing Activities
                        
                        
                        1,118,526
                        
                        
                        
                        -Cash
      Flows From Financing Activities:Proceeds
      from convertible notes and notes payable
                        
                        
                        -
                        
                        
                        
                        1,433,002Repayment
      of Notes Payable
                        
                        
                        -
                        
                        
                        
                        (722,482
                        ))Issuance
      of common stock
                        
                        
                        -
                        
                        
                        
                        456,564Proceeds
      from issuance of Series F Preferred stock
                        
                        
                        
                        
                        
                        
                        5,650,000Foreign
      currency translation
                        
                        
                        3,961Issuance
      of Series H and I Preferred stock
                        
                        
                        777,000
                        
                        
                        
                        -Proceeds
      from line of credit and note payable
                        
                        
                        2,750,000
                        
                        
                        
                        -Net
      Cash Provided By Financing Activities
                        
                        
                        3,530,961
                        
                        
                        
                        6,817,084Increase
      in Cash and Cash Equivalents From Continuing Operations
                        
                        
                        909,052
                        
                        
                        
                        4,185,952Cash
      Flow From Discontinued Operations:Operating
      Cash Flows
                        
                        
                        (1,620,142
                        )
                        
                        
                        (2,042,938
                        ))Investing
      Cash Flows
                        
                        
                        -
                        
                        
                        
                        (292,727
                        )Financing
      Cash Flows
                        
                        
                        -Decrease
      in Cash and Cash Equivalents From Discontinued Operations
                        
                        
                        (1,
      620,142
                        )
                        
                        
                        (2,335,665
                        ))Increase
      (Decrease) in Cash and Cash Equivalents
                        
                        
                        (711,090
                        )
                        
                        
                        1,850,287Balance,
      Beginning of period
                        
                        
                        1,041,830
                        
                        
                        
                        2,645Balance,
      End of period
                        
                        $
                        330,740
                        
                        
                        $
                        1,852,932Non-Cash
      Investing and Financing Activities:Issuance
      of common stock for dividends on Preferred Stock Series F and
      H
                        
                        
                        674,710
                        
                        
                        
                        -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 and MANAGEMENT’S PLANS





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.





The
Company, a Washington corporation, was incorporated as “Transit Information
Systems, Inc.” on October 17, 1988.  In March 2004, the Company
changed its name to “i2 Telecom International, Inc.”  In September
2009, the Company  changed its name from “i2 Telecom International,
Inc.” to “Geos Communications, Inc.”





Geos is a
Delaware corporation, and a developer and distributor of mobile applications and
services.





On June
17, 2010, the Company’s board of directors approved a plan by which the Company
discontinued offering its VoIP and telephony services directly to consumer and
enterprise customers.  Under the plan the Company implemented a
reduction-in-force and closed its network switching operations located in
Atlanta, Georgia. As such all related operations have been presented as
discontinued operations and the network switching equipment has been classified
as held for sale.  The Company is in negotiations for the sale of its
telephony network assets.





The
Company is continuing to monetize its intellectual property portfolio and focus
its efforts on accelerating the growth and expansion of its digital content
distribution platform.





On
February 19, 2010, we acquired Shoot It!, LLC (“Shoot It!”), which expanded our
product portfolio applications and technologies for the global mobile
communications market.  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, and expands our global presence. D Mobile, which operates
under the brand name Duo Guo, is a retail channel for the discovery and download
of licensed mobile media content in China. We have included the results of
operations for D Mobile since the date of acquisition in our results of
operations.





In
addition, we have begun marketing the mobile content distribution platform
globally, including the U.S., and we are developing product offerings and
business models that are appropriate for the culture and business practices of
those unique markets.





The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern.  The Company 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.





We
effected a 1:10 reverse split of our common stock effective May 14, 2009, and
all references to shares and per share amounts retroactively reflect the reverse
stock split for all periods presented.





LIQUIDITY AND MANAGEMENT’S
PLANS





As shown
in the accompanying condensed consolidated financial statements, the Company
incurred a net loss of $11,133,317 during the nine months ended September 30,
2010, the Company’s current liabilities exceeded its current assets by $
4,710,507 and its total liabilities (which includes the Preferred Shares subject
to mandatory redemption of $13,389,927) exceeded its total assets by $11,975,527
as of September 30, 2010.





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, which were not considered impaired in the current year.





In view
of these matters, realization of a major portion of the assets in the
accompanying 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  positive cash flows while maintaining adequate
liquidity.





The
Company has undertaken a number of specific steps to achieve positive cash flow
in the future.  These actions include the two acquisitions consummated
in thefirst
quarter of 2010, as well as the Company’s issuance of the Drawdown Note (as
defined under Note 8 below) obtaining several notes payable, and completion of
equity placements (described in the following footnotes). The Company has taken
further action to reduce its cash flow concerns by discontinuing the VoIP
operations, which has resulted in a significant reduction in personnel and
associated salaries and operating costs. In addition, the Company has identified
several new business strategies that may enable the Company to reach its
profitability goals.





Our
strategy is to raise additional capital to enable the Company to realize the
market opportunities for  its mobile content distribution
business.  In July 2010, the Company received subscriptions for its
Series I Preferred Shares totaling $427,000.  As of September 30,
2010, the Company sold 10% of its investment in its subsidiary D Mobile for
$1,000,000. The Company also intends to solicit subscriptions for common shares
of its subsidiary, D  Mobile.





In
October 2010, the Company sold an additional 10% of the outstanding equity
interests in D Mobile for an additional $1,000,000. The Company is also in
negotiations with several companies to enable the Company to ultimately expand
the market and revenues for its products and services.





The
financial statements do not include any adjustments that might result from this
uncertainty.


6


NOTE
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





The
condensed 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
condensed consolidated financial statements include the accounts of Geos
Communications, Inc. (DE), Geos Communications IP Holdings, Inc. (“Geos IP
Holdings”),  SuperCaller Community, Inc. (“SuperCaller”), Shoot It!,
and D Mobile, all of which, except for D Mobile, are, directly or indirectly,
wholly-owned subsidiaries of the Company.  As of September 30, 2010,
the Company owned 90% of D Mobile.  All significant intercompany
accounts and transactions have been eliminated in consolidation.





In
September 2009, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards (“SFAS”) No. 168, The FASB Accounting Standards
Codification (“ASC”) and the Hierarchy of Generally Accepted Accounting
Principles). The FASB ASC became the single source of authoritative
nongovernmental U.S. generally accepted accounting principles (“GAAP”),
superseding existing FASB, American Institute of Certified Public Accountants
(“AICPA”), Emerging Issues Task Force (“EITF”), and related accounting
literature. The new codification system organizes the thousands of GAAP
pronouncements into roughly 90 accounting topics and displays them using a
consistent structure. Also included is relevant SEC guidance organized using the
same topical structure in separate sections. This standard, which is now
considered FASB ASC Topic No.105, became effective for financial statements
issued for reporting periods that end after September 15, 2009.





Accordingly,
previous references to GAAP accounting standards are no longer used by the
Company in its disclosures including these notes to the consolidated financial
statements.  The codification does not affect the Company’s
consolidated balance sheet, cash flows or results of operations.





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, 2009, 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 September 30, 2010, the
results of operations for each of the three and nine months ended September 30,
2010 and 2009, and the cash flows for the nine months ended September 30, 2010
and 2009. In addition, operating results for the nine months ended September 30,
2010 is not necessarily indicative of results that may be expected for the year
ending December 31, 2010.





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 2009 Annual Report on Form 10-K.





Discontinued
Operations and Assets Held For Sale





We have
reclassified for all periods presented in the accompanying Consolidated
Statements of Operations, the amounts related to the discontinued operations in
accordance with the applicable accounting criteria. In addition, long-lived
assets and related liabilities classified as held for sale are reported
separately in the accompanying condensed consolidated balance
sheets.


7


Revenue
Recognition





Revenue
is recognized when persuasive evidence of an arrangement exists, the fee is
fixed or determinable, collectability is probable, delivery of a product has
occurred or services have been rendered and title and risk of loss has
transferred. Revenues include shipping and handling costs billed to the
customers.





Business
Combinations





Pursuant
to ASC 805, “Business
Combinations” (“ASC 805”), the Company has used the acquisition method of
accounting. The acquisition method of accounting is used for all business
combinations where the acquiror is identified for each business combination. ASC
805 defines the acquirer as the entity that obtains control of one or more
businesses in the business combination and establishes the acquisition date as
the date that the acquirer achieves control. We will recognize separately from
goodwill, the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interests in an acquiree, generally at the acquisition date fair
value as defined by Topic 820, Fair Value Measurements. Goodwill as of the
acquisition date is measured as the excess of consideration transferred, which
is also generally measured at fair value, and the net of the acquisition date
fair value amounts of the identifiable assets acquired and the liabilities
assumed.





The
acquisition method requires us to use significant estimates and assumptions,
including fair value estimates, as of the business combination date and to
refine those estimates, as necessary, during the measurement period (defined as
the period, not to exceed one year, in which we may adjust the provisional
amounts recognized for a business combination) in a manner that is prescribed in
Topic 805.





Noncontrolling
Interests





The
Company received $1,000,000, as of September 30, 2010, for the sale of 10% of
its equity interest in D Mobile. ASC Topic
No. 810, Non-controlling
Interests in Consolidated Financial Statements-an Amendment of ARB No. 51
establishes accounting and reporting standards for the non-controlling interest
in a subsidiary and for the deconsolidation of a subsidiary.




Changes
in a parent’s ownership interest in a consolidated subsidiary that do not result
in a change in control are accounted for as equity transactions. Such
changes do not affect earnings or the carrying values of assets and liabilities
(including goodwill). Therefore, a parent does not recognize any gain or loss
from a sale of shares of a consolidated subsidiary. Instead, the carrying amount
of the noncontrolling interest is adjusted to reflect the change in ownership
interest in the subsidiary. Any difference between the fair value of the
consideration received or paid and the amount by which the noncontrolling
interest is adjusted is recognized in equity attributable to the
parent.





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 Convertible debt, Preferred Stock Series F,
G, H and I, as well as Preferred Stock Series A–D of Geos IP Holdings, are
presented in the following Notes.





Concentrations
of Credit Risk





Financial
instruments which potentially subject us to concentration of credit risk consist
principally of cash and cash equivalents, and accounts receivable. We have
placed cash and cash equivalents with a single high credit-quality
institution.  We perform ongoing credit evaluations of our customers
and maintain an allowance for potential credit losses.


8


Cash
and Cash Equivalents





For
purposes of the statement of cash flows, the Company considers all short-term
securities purchased with an original maturity of three months or less to be
cash equivalents.





Property
and Equipment and Related Depreciation





Property
and equipment are recorded at cost.  Depreciation is computed using
the straight-line method for financial and tax reporting purposes. Estimated
lives range from five to ten years.  When properties are disposed of,
the related costs and accumulated depreciation are removed from the respective
accounts and any gain or loss on disposition is recognized at that
time.  Maintenance and repairs which do not improve or extend the
lives of assets are expensed as incurred.





Internal Use
Software





Expenditures
for internal use software, all of which have been obtained from third parties,
have been capitalized and are being amortized over five years. The Company
accounts for its internal use software in accordance with guidance in ASC Topic
No. 350, (formerly Statement of Position 98-1), Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use.





Intangible
Assets





The
Company has capitalized certain costs related to registering trademarks and
patent pending technology. In addition, the Company has acquired the trade names
of Shoot It! and Duo Guo, and noncompete agreements in the acquisition of the
two companies. In accordance with FASB ASC topic 350, the Company amortizes its
intangible assets with a finite life over periods ranging from 2 to 10 years on
a straight-line basis. Additionally, the Company tests its intangible assets for
impairment whenever circumstances indicate that their carrying value may not be
recoverable.





Goodwill





In
determining the valuation of goodwill, the Company is applying ASC 805, “Business Combinations”.
Goodwill as of the acquisition date is measured as the excess of consideration
transferred, which is also generally measured at fair value, and the net of the
acquisition date amounts of the identifiable assets acquired and the liabilities
assumed.





ASC 805
requires an entity:





●
            to
      record and expense separately from the business combination the direct
      costs, where previously these costs were included in the total allocated
      cost of the acquisition.


●
            to
      recognize the assets acquired, liabilities assumed, and any
      non-controlling interest in the acquired at the acquisition date, at their
      fair values as of that date.


●
            to
      recognize as an asset or liability at fair value for certain
      contingencies, either contractual or non-contractual, if certain criteria
      are met.


●
            to
      recognize contingent consideration at the date of acquisition based on the
      fair value at that date.





Goodwill
is required to be tested at least on an annual basis for impairment or on an
interim basis if an event occurs or circumstances change that would reduce the
fair value of a reporting unit below its carrying value. The Company assesses
goodwill for impairment by periodically comparing the fair value of its
reporting units to their carrying amounts to determine if there is potential
impairment. Fair values for reporting units are determined based on discounted
cash flows, market multiples or appraised values as appropriate. As of September
30, 2010, there was no impairment indicated.





Assets
Held for Sale and Related Liabilities





Individual
non-current assets or groups of non-current assets and related liabilities are
classified separately as held for sale in the balance sheet if their disposal
has been committed and is probable.  Assets held for sale are
recognized at the lower of their carrying amount and their fair value less costs
to sell, and are no longer depreciated once they are classified as held for
sale.


9


Impairment
of Long-lived Assets





In
accordance with the FASB ASC topic 360 on impairment or disposal of long-lived
assets, the Company reviews its long-lived assets, including property and
equipment, and finite-life intangibles for impairment whenever events or changes
in circumstances indicate that the carrying amount of the assets may not be
fully recoverable.  To determine recoverability of its long-lived
assets, the Company compares the future undiscounted net cash flows, without
interest charges to the carrying amount of the assets, and if the latter exceeds
the former, then impairment is recorded to adjust the asset to its fair value
(using discounted cash flows). The Company recorded asset impairment losses of
$1,047,707 related to assets held for sale and discontinued operations during
the three months ended June 30, 2010 as a result of the decision by the Board of
Directors to discontinue the telecom switching operations. The total amount of
impairment consisted of $143,298 related to software assets held for sale, plus
$904,409 related to equipment for discontinued operations.





Debt
Extinguishment





On July
1, 2009, we offered to certain of our existing note holders the opportunity to
exchange some or all of the principal, interest and loan fees under $6,328,212
of notes, which included all accrued interest and related fees, (the “Debt”) for
different series of preferred stock of Geos Communications IP Holdings, Inc.
This exchange was deemed to be debt extinguishment for the notes payable
according to the ASC Topic No.405- Liabilitiesand 470-50 –
Debt, Modifications and
Extinguishments.As a result of this exchange a loss on debt
extinguishment of $1,469,523 was recorded and is included in the Consolidated
Statement of Operations for the year ended December 31, 2009.





ASC
470-50-40-10 (formerly EITF Issue 96-19) establishes the criteria for debt
extinguishment and modification. If the debt is substantially different, then
the debt is extinguished, and a gain or loss is calculated and recorded. We
determined that an extinguishment existed as the present value of the cash flows
under the terms of the new instrument, the different series of preferred stock,
was at least 10% different from the present value of the remaining cash flows
under the terms of the original notes.





Income
Taxes





The
Company files a consolidated federal income tax return with its wholly-owned and
majority-owned subsidiaries. The Company is a C-Corporation under the provisions
of the Internal Revenue Code. We utilize the asset and liability approach to
measuring deferred tax assets and liabilities based on temporary differences
existing at each balance sheet date using enacted tax rates expected to be in
effect at when the temporary differences reverse in accordance with ASC 740,
Income Taxes(“ASC
740”). ASC 740 takes into account the differences between financial statement
treatment and tax treatment of certain transactions. Deferred tax assets and
liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled.





In
accordance with ASC 740, the Company recognizes the effect of uncertain income
tax positions only if those positions are more likely than not of being
sustained. Recognized income tax provisions for these uncertain tax positions
are measured at the largest amount that is greater than 50% likely of being
realized. Changes in recognition or measurement are reflected in the period in
which the change in judgment occurs. The Company considers both interest and
penalties related to uncertain tax positions as part of the income tax
provision.





Our
deferred tax calculation requires management to make certain estimates about
future operations. Deferred tax assets are reduced by a valuation allowance
when, in the opinion of management, it is more likely than not that some portion
or all of the deferred tax assets will not be realized. The effect of a change
in tax rate is recognized as income or expense in the period that includes the
enactment date.


10


Net
operating losses (“NOLs”) may be limited, and the Company is in the process of
determining if such a triggering event took place.  The Company is in
the process of determining if a change in control, for purposes of Internal
Revenue Code section 382, occurred during a testing period in
2009.  If it is determined there was a change in control, the net
operating losses will be subject to an annual limitation on their
utilization.  At this time, the annual limitation, if any, is not
readily determinable.





Net
Income (Loss) per Common Share





Basic
earnings (loss) per common share represent income available to common
shareholders divided by the weighted average number of shares outstanding during
the period.  Diluted earnings per common share reflect additional
common shares that would have been outstanding if dilutive potential common
shares had been issued, as well as any adjustment to income available to common
stockholders that would result from the assumed issuance. Options on shares of
common stock warrants, and certain bonds convertible into common shares were not
included in the computing of diluted loss per share because their effects were
anti-dilutive because of the net loss reported by the Company.





Comprehensive
Income or Loss





The
Company has no components of other comprehensive income or loss, and
accordingly, net loss equals comprehensive loss for all periods
presented.





Stock
Based Compensation





The
Company measures all share-based payments, including grants of employee stock
options to employees and warrants to service providers, using a fair-value based
method in accordance with the ASC Topic No. 505 and Topic No. 718 (formerly SFAS
No. 123R) Share-Based
Payments. The cost of services received in exchange for awards of equity
instruments is recognized in the Consolidated Statement of Operations based on
the grant date fair value of those awards amortized over the requisite service
period.





Preferred
Shares





The
Company applies the guidance enumerated in ASC Topic No. 480 “Distinguishing
Liabilities from Equity,” and “Classification and Measurement of Redeemable
Securities,” when determining the classification and measurement of preferred
stock. Preferred shares subject to mandatory redemption are classified as
liability instruments and are measured initially at fair value and are accreted
to the mandatory redemption value using the effective interest
method.   Accretion and dividends are recorded as interest
expense in the Consolidated Statement of Operations.  As of September
30, 2010, the Company had recorded liabilities related to Series A–D Preferred
Shares of Geos IP Holdings and the Company’s Series G Preferred Shares subject
to mandatory redemption features, which amounted to $9,414,220 and $3,975,707,
respectively.





The
Company classifies conditionally redeemable convertible preferred shares, which
includes preferred shares subject to redemption upon the occurrence of uncertain
events not solely within the Company’s control, as temporary equity. At all
other times, the Company classifies its preferred shares in stockholders’
equity. As of September 30, 2010, the Company had recorded as temporary equity
Series F, H and I Preferred Shares totaling $5,047,057, $232,482 and $288,445,
respectively.  Dividends on preferred shares included in temporary
equity and equity are recorded as Dividends on Preferred Stock below Net Loss on
the Consolidated Statement of Operations.





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.


11


New
Accounting Pronouncements





Variable
Interest Entities





In June
2009, the Financial Accounting Standards Board issued guidance that changed the
consolidation model for variable interest entities (VIEs). This guidance
requires companies to qualitatively assess the determination of the primary
beneficiary of a VIE based on whether a company (1) has the power to direct
matters that most significantly impact the activities of the VIE, and (2) has
the obligation to absorb losses or the right to receive benefits of the VIE that
could potentially be significant to the VIE. This standard is effective at the
beginning of 2010 and must be applied retrospectively. The adoption of this
guidance did not have any impact on our financial statements.





NOTE
3.  ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS





Assets
held for sale:





As
described in Note 2, at September  30, 2010, the Company classified
disposal groups (comprising network switching equipment) as held for sale. The
Group reported these items in other assets and other liabilities and presented
them at the lower of their carrying amount or fair value less costs to sell
resulting in an impairment loss of $143,298 relating to the estimated disposal
losses. The balance classified as held for sale consisted primarily of
equipment.





Liabilities
related to Assets Held for Sale as of September 30, 2010 totaled $ 631,069 which
consisted of accounts payable for switch hardware security totaling $176,160,
and accrued expenses of $454,910 related to the termination of software licenses
and operating contracts related to the switching operations in Atlanta,
Georgia.





Results from discontinued
operations:





Included
in prepaid assets and deposits are $27,840 of assets related to discontinued
operations as of September 30, 2010. For the three months ended September 30,
2010, prepaid assets decreased by $15,749.





For the
second quarter ended June 30, 2010, total impairment of $1,047,040 was recorded
and consisted of $143,298 related to software held for sale, and $904,409
related to equipment. There were no remaining costs for equipment after
impairment related to discontinued operations. For the three months ended
September 30, 2010, there were no additional impairments.





Included
in accrued expenses is $203,290 of FCC charges and advertising costs related to
discontinued operations as of September 30, 2010. For the three months
ended September 30, 2010, accrued expenses decreased by $19,620.


In
addition, during the third quarter the Company settled certain accrued expenses
for less than amounts due.





The
following table presents the Condensed Consolidated Statement of Operations
from the Company’s discontinued operations until their respective divestment
dates.


Three
      Months
      Ended
      September
      30, 2010
                          
                          
                          Nine Months
                            Ended
      September 30, 2010
                          
                          Three Months
                            Ended
                            September 30,
                            2009
                          
                          
                          Nine Months
                            Ended
      September 30,
      2009Revenues
                          
                          $
                          -
                          
                          
                          $
                          167,244
                          
                          $
                          97,991
                          
                          
                          $
                          312,562Cost
      of Sales
                          
                          
                          -
                          
                          
                          
                          227,711
                          
                          
                          113,965
                          
                          
                          
                          307,787Gross
      Profit (loss)
                          
                          
                          -
                          
                          
                          
                          (60,467
                          )
                          
                          (15,974
                          )
                          
                          
                          4,775General
      and Administrative expenses
                          
                          
                          44,842
                          
                          
                          
                          2,332,852
                          
                          
                          1,003,124
                          
                          
                          
                          2,792,074Impairment
      Losses
                          
                          
                          
                          
                          
                          
                          1,047,707
                          
                          
                          
                          
                          
                          
                          -Loss
      from Discontinued Operations
                          
                          
                          (44,842
                          )
                          
                          
                          (3,441,026
                          )
                          $
                          (1,019,098
                          )
                          
                          
                          (2,787,299
                          )Tax
      Benefit
                          
                          
                          
                          
                          
                          
                          -Net
      Loss from Discontinued Operations
                          
                          $
                          (44,842
                          )
                          
                          $
                          (3,441,026
                          )
                          $
                          (1,019,098
                          )
                          
                          $
                          (2,787,299
                          )


12


No
benefit or provision for income taxes has been recorded due to the uncertainty
of the realization of any deferred tax assets.





NOTE
4.  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.  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 condensed 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 condensed 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 asset acquired, consisting of assets acquired
less liabilities assumed.





The
purchase price allocation is preliminary pending the completion of valuations of
assets acquired and liabilities assumed and certain other liabilities including,
but not limited to, deferred taxes.  As such, the allocation of the
purchase price presented below is preliminary and subject to change, the
allocation presented below reflects the estimated fair value of the individual
assets acquired and liabilities assumed as of the date of
acquisition.





Purchase
Price:





Fair
      value of original acquisition in 2009 previously presented on a cost
      basis
                
                $
                250,000Fair
      value of preferred stock Series G transferred
                
                
                1,358,322Total
      consideration
                
                $
                1,608,322





Purchase price
allocation:




Property
      and equipment
                
                $
                319,000Trade
      Name intangible
                
                
                345,000Non-Compete
      agreement
                
                
                22,000Goodwill
                
                
                922,322Total
      purchase price allocation
                
                $
                1,608,322





Including
the results of Shoot It! as if the acquisition occurred on January 1, 2010, the
pro forma net loss, and net loss attributable to the common shareholders would
have been $10,331,972 and $10,983,230, respectively, for the nine months ended
September 30, 2010. Shoot It! was incorporated on April 15, 2009, and, as such,
pro forma results from 2009 have not been presented since they are not
materially different from stated results. 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 or Shoot It! for any future
period.  The actual operating results of Shoot It! contained in the
accompanying condensed consolidated financial statements include net revenues of
$25,259, and net losses of $225,039.


13


D Mobile
Acquisition





As of
March 1, 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 Stock,
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 condensed
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 (formerly SFAS
141r).  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 condensed 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 asset acquired, consisting of assets acquired
less liabilities assumed.





The
purchase price allocation is preliminary pending the completion of valuations of
assets acquired and liabilities assumed and certain other liabilities including,
but not limited to, deferred taxes.  As such, the allocation of the
purchase price presented below is preliminary and subject to change, the
allocation presented below reflects the estimated fair value of the individual
assets acquired and liabilities assumed as of the date of
acquisition.





Purchase
Price:





Fair
      value of cash  to one Shareholder
                  
                  $
                  75,000Fair
      value of 2010 loan from Geos to D Mobile
                  
                  
                  60,000Fair
      value of 2009 loan from Geos to D Mobile
                  
                  
                  60,000Fair
      value of preferred stock Series G transferred
                  
                  
                  1,964,900Fair
      value of preferred stock Series G warrants issued
                  
                  
                  163,118Total
      consideration
                  
                  $
                  2,323,018





Purchase price
allocation:





Cash
      and cash equivalents
                  
                  $
                  256,106Accounts
      Receivable
                  
                  
                  11,848Prepaid
      and other assets
                  
                  
                  58,349Property
      and equipment
                  
                  
                  245,207Trade
      Name intangible
                  
                  
                  626,000Non-Compete
      agreement
                  
                  
                  60,000Trade
      payables
                  
                  
                  (154,762
                  )Goodwill
                  
                  
                  1,220,270Total
      purchase price allocation
                  
                  $
                  2,323,018





Including
the results of D Mobile as if the acquisition occurred on January 1, 2010, the
pro forma net loss, and net loss attributable to the common shareholders would
have been $10,979,656 and $11,630,914, respectively, for the nine month period
ended September 30, 2010, and $5,248,314 and $7,348,880, respectively, for the
comparable period ended September 30, 2009. The proforma 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 or D Mobile for any future
period.  The actual operating results of D Mobile contained in the
accompanying condensed consolidated financial statements include net revenues of
$42,131 and net losses of $852,457 since the date of
acquisition.


14


The acquisitions combined as
of acquisition dates are as follows:





Combined Purchase
Price:





Fair
      value of original acquisition 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 preferred stock Series G warrants issued
                  
                  
                  163,118Total
      consideration
                  
                  $
                  3,931,340





Combined Purchase Price
Allocation:





Cash
      and cash equivalents
                  
                  $
                  256,106Account
      Receivable
                  
                  
                  11,848Prepaid
      and other assets
                  
                  
                  58,349Property
      and equipment
                  
                  
                  564,207Trade
      Name intangible
                  
                  
                  971,000Non-Compete
      agreement
                  
                  
                  82,000Trade
      payables
                  
                  
                  (154,762
                  )Goodwill
                  
                  
                  2,142,592Total
      purchase price allocation
                  
                  $
                  3,931,340





Including
the combined results of Shoot It! and D Mobile as if the acquisition occurred on
January 1, 2010, the proforma net loss, and net loss attributable to the common
shareholders would have been $11,309,835 and $11,961,093, respectively for the
nine month period ended September 30, 2010, and $9,654,848 and $12,525,673,
respectively, for the comparable period ended September 30, 2009. 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 or D Mobile 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 $67,390 and net losses of $1,077,497 since
the date of acquisition through September 30, 2010.





SERIES G PREFERRED SHARES
MANDITORILY REEDEMABLE





The
Company authorized 20,000 shares of Series G Preferred Stock on February 12,
2010. Subsequently, approximately 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.
Upon certain milestones related to share pricing, the Series G Preferred shares
automatically convert to common shares of the Company at $.50 per
share.  The stated value of $1,000 per share, or a total of
$5,278,000, is mandatorily redeemable at the end of three years from the date of
issuance. In addition, for the D Mobile acquisition approximately 258 warrants
were issued which are convertible for three years after issuance date into
Series G Preferred Shares at $.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.


15


The
Company applies the guidance enumerated in ASC Topic No. 480 “Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity,” and “Classification and Measurement of Redeemable Securities,” when
determining the classification and measurement of preferred stock. Preferred
shares subject to mandatory redemption are classified as liability instruments
and are measured initially at fair value with accretion of interest expense and
dividends related to the shares added to the mandatory redemption value using
the effective interest method.  The fair value at date of the
acquisitions was $3,323,222.  We have accreted interest of $380,969,
and dividends of $184,717 through September 30, 2010, less payment of dividends
totaling $75,847 in common shares; and have included the fair value of the
warrants of $163,118, resulting in a balance of $3,975,707 as of September 30,
2010.





NOTE
5.  PROPERTY AND EQUIPMENT





Estimated
lives range from five to ten years. Depreciation charged to operations was
$118,938 for the nine months ended September 30, 2010.





The major
components of property and equipment at September 30, 2010 and December 31, 2009
are as follows:





September 30,
                    2010
                  
                  
                  December 31,
                    2009Network
      Equipment
                  
                  $
                  -
                  
                  
                  
                  13,755Office
      Equipment
                  
                  
                  95,244
                  
                  
                  
                  368,148Software
                  
                  
                  40,433
                  
                  
                  
                  1,077,322Software
      Development
                  
                  
                  26,506
                  
                  
                  
                  861,119Lab
      Equipment
                  
                  
                  -
                  
                  
                  
                  39,577Furniture
      and Fixtures
                  
                  
                  469,096
                  
                  
                  
                  46,884Purchased
      Technology
                  
                  
                  319,000
                  
                  
                  
                  -950,279
                  
                  
                  
                  2,406,805Less:  Accumulated
      Depreciation and Amortization
                  
                  
                  338,751
                  
                  
                  
                  1,261,386Net
      Property and Equipment
                  
                  $
                  610,528
                  
                  
                  $
                  1,145,419





NOTE
6.  INTANGIBLE ASSETS





Intangible
assets at September 30, 2010, and December 31, 2009, consisted of the following,
at cost:





September 30,
                    2010
                  
                  
                  December 31,
                    2009Patent
      Pending Technology
                  
                  $
                  3,190,917
                  
                  
                  $
                  3,190,917Trademarks
                  
                  
                  274,017
                  
                  
                  
                  274,017Non-Compete
                  
                  
                  82,000
                  
                  
                  
                  -Trade
      Names
                  
                  
                  971,000
                  
                  
                  
                  -4,517,934
                  
                  
                  
                  3,464,934Accumulated
      Amortization
                  
                  
                  1,373,221
                  
                  
                  
                  1,023,034Intangible
      Assets, net
                  
                  $
                  3,144,713
                  
                  
                  $
                  2,441,900





The
Company has six patents which 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 life of the Non Compete and Trade Name are two and ten,
respectively. As of September 30, 2010, the Company has determined there is no
impairment of the intangible assets.





Amortization
expense totaled $348,321 for the nine months ended September 30,
2010.


16


NOTE
7.   CONVERTIBLE BONDS





On
December 9, 2006, the Company sold $2,000,000 of 6% secured convertible
debentures pursuant to a Securities Purchase Agreement dated thereof. The
Company received $1,625,000 in December 2006 and remaining $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 pre-split warrants
exercisable for three years at the price of $.07 per share, of which were only
partially converted in 2007, with the remaining warrants forfeited as of
December 31, 2009.





On
February 28, 2007, the Company sold $2,000,000 of 6% Senior Subordinated Secured
Convertible Notes convertible into 1,666,666  post- split shares of
the Company's common stock priced at $.24 each, and 833,000 post-split Warrants,
priced at $.24 each. For every two shares of Common Stock to be issued, the
investor(s) received one warrant which is exercisable into the Company's common
stock at $.24. These warrants mature three years from issuance and will expire
in February 2010, all of which 566,673  are outstanding as of December
31, 2009. The Notes will automatically convert into the Company's common stock
if any of the following events occur: (i) the Shares become registered and
freely trading, or (ii) the financial closing by the Company of $10,000,000 or
more. The Notes are secured by all assets of the Company and its subsidiaries.
All future debt securities issued by the Company will be subordinate in right of
payment to the Notes; provided, however, that the Company may raise up to $1.0
million of senior indebtedness that ranks pari passu with the Notes in the
future. During the year ended December 31, 2007, the Company converted
Convertible debt in the amount of $3,392,274, net of bond discount of $557,419,
in principal and accrued interest, to common stock. Total shares issued in
exchange for the debt were 40,851,517.





Due to
the late registration of shares received in conversion of the Convertible Debt,
penalty shares were awarded and issued to convertible note holders. The total
number of penalty shares issued was 6,320,476.





Convertible
bonds at their carrying value, which approximated fair value consisted of the
following as of September 30, 2010:





Description
                    
                    September
                      30, 2010December
      2006 6% Convertible Bonds
                    
                    $
                    50,000February
      2007 6% Convertible Bonds
                    
                    
                    -0-$
                    50,000





NOTE
8.   CONVERTIBLE BONDS, NOTES PAYABLE, BORROWINGS UNDER LINE OF
CREDIT, and SERIES A–D PREFERRED SHARES OF GEOS IP HOLDINGS (Series G Preferred
Shares discussed in Footnote Number 3 above)





Convertible
Bonds and 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,
$688,849 has been accreted for interest, plus dividends of $333,547 for the nine
months ended September 30, 2010, and $574,041 and $277,955, respectively as of
December 31, 2009, resulting in a balance of $9,414,220 as of September 30,
2010.


17


The final
mandatory redemption amount is $9,784,027 which encompasses additional charges
for each time period passing as follows:





July
      31, 2010
                  
                  $
                  114,808July
      31, 2011
                  
                  $
                  1,377,699





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.





The
Company applies the guidance enumerated in ASC Topic No. 480 “Accounting for
Certain Financial Instruments with Characteristics of both Liabilities and
Equity,” and “Classification and Measurement of Redeemable Securities,” when
determining the classification and measurement of preferred stock. Preferred
shares subject to mandatory redemption are classified as liability instruments
and are measured initially at fair value with accretion of interest expense and
dividends related to the shares added to the mandatory redemption value using
the effective interest method. Redemption value approximates fair value at
December 31, 2009 due to the short period of time from issuance to the reporting
date.





This
exchange was also deemed to be debt extinguishment for the notes payable
according to the ASC Topic No.405- Liabilitiesand 470-50 –
Debt, Modifications and
ExtinguishmentsAs a result of this exchange a loss on debt
extinguishment of $1,469,523 was recorded for the year ended of December 31,
2009.





Notes
Payable





On
February 23, 2010, the Company issued a Drawdown Promissory Note (included in
the 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.  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 September 30, 2010, $2.6 million was
outstanding. The carrying value approximated the fair value as of September 30,
2010. 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.





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) September 30, 2010, 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 note bears interests at 12%.





NOTE
9.  SERIES F CONVERTIBLE PREFERRED STOCK





During
2009, the Company issued Series F Convertible Preferred Stock, no par value (the
“Series F PreferredShares”). Each share of
the Series F Preferred Shares is convertible at the option of the holder into
shares of our Common Stock, no par value. In addition, each share of Series F
Preferred Shares will automatically convert (i) if certain milestones provided
in the Certificate of Designations are met, (ii) if such share is outstanding on
the third anniversary of the date that Series F Preferred Shares are first
issued or (iii) if the holders of more than fifty percent of the outstanding
Series F Preferred Shares so consent. Without the express written consent of
holders of at least fifty percent of the then-outstanding Series F Preferred
Shares (as well as any holders of more than twenty percent of the
then-outstanding Series F Preferred Shares) the Company may not authorize or
issue any additional class or series of equity securities of the Company ranking
senior to, or pari passu with, the Series F Preferred Shares with respect
to  dividends, distributions and payments upon the liquidation,
dissolution and winding up of the Company. The holders of Series F Preferred
Shares are entitled to elect one director to the Board of Directors, but the
Series F Preferred Shares otherwise carry no voting rights other than those
required by law.


18


The
Series F holders may convert, at their discretion, the Series F Preferred shares
into Common Shares at a conversion price of $0.50, resulting in 15,100,000
shares of Common Stock.  There have been no conversions as of
September 30, 2010.





The
Company has the option to redeem all or a portion of the outstanding Series F
Preferred Shares at $2,000 per share, for a total redemption price of
$15,100,000. Holders of Series F Preferred Shares also have the option to
require the Company to redeem their Series F Preferred Shares if the Company
fails to pay required dividends to such holders or breaches any material
representation, warranty or covenant contained in the Certificate of
Designations or in any subscription agreement pursuant to which any Series F
Preferred Shares are issued, and such failure is not cured.





The
Company applies the guidance enumerated in ASC Topic No. 480 “Distinguishing
Liabilities from Equity” when determining the classification and measurement of
preferred stock. In addition, the Company classifies conditionally redeemable
preferred shares, which includes preferred shares that feature redemption rights
that are either within the control of the holder or subject to redemption upon
the occurrence of uncertain events not solely within the Company’s control, as
temporary equity.





In
connection with the issuance of 7,550 Series F Preferred Shares as of December
31, 2009, plus an additional 20 shares issued as of September 30, 2010,
7,570,000 warrants were also issued.  The proceeds of $7,550,000 were
allocated based on the relative fair values of the underlying shares and
warrants.  The value allocated to the multiple issuances during 2009
was $5,047,057 as of December 31, 2009. 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. The beneficial conversion
feature totaled $2,870,825, and was included in Common Stock, No Par, as of
December 31, 2009, 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.





The value
allocated to the warrants issued to investors, and warrants issued to pay
transaction costs was $2,502,943, and was included in Common Stock, no par, as
of December 31, 2009.  The warrants are exercisable at any time at
$.63, for a period of three years. As of September 30, 2010 there was no
exercise of warrants.





During
the nine months ended September 30, 2010, and for the year ended December 31,
2009, the Company accrued dividends of 6% totaling of $516,465 and $176,844,
respectively which are due semiannually. As of September 30, 2010, $402,031 in
dividends was paid in common stock. The remaining balance at September 30, 2010
was $114,434 and is included in accrued expenses on the Consolidated Balance
Sheets.





NOTE
10.  SERIES H CONVERTIBLE PREFERRED STOCK





During
April, 2010, Geos authorized 20,000 shares of Series H Convertible Preferred
Stock, no par value (the “ Series H Preferred Shares ”).
The Series H Preferred Shares rank pari passu with shares of the Company’s
Series F Convertible Preferred Stock and Series G 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 H Preferred Shares is convertible at the option of the holder into
shares of our Common Stock, no par value (“Common Stock”). The number of shares
of Common Stock issuable upon conversion is determined by dividing the stated
value, or $1,000, by a conversion price of $0.20, subject to adjustment as
provided in the Certificate of Designations. Holders of Series H 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 H Preferred Shares are entitled to elect one
director to the Board of Directors.


19


The
Company has the option to redeem all or a portion of the outstanding Series H
Preferred Shares at $2,000 per share. Holders of Series H Preferred Shares also
have the option to require the Company to redeem their Series H Preferred Shares
if the Company fails to pay required dividends to such holders or breaches any
material representation, warranty or covenant contained in the Certificate of
Designations or in any subscription agreement pursuant to which any Series H
Preferred Shares are issued, and such failure or breach is not
cured.





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.  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 $232,492. The shares are shown as temporary
equity on the Consolidated Balance Sheets and are outside of stockholders’
equity because such shares are contingently redeemable because 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 September 30, 2010, and was recognized as a return on the Series F
Preferred Shares in the period of issuance because the Preferred Stock was
immediately convertible.





The value
allocated to the warrants issued to investors, and warrants issued to pay
transaction costs, was $123,038, and was included in Common Stock, no par, as of
September 30, 2010.  The warrants are exercisable at any time at $.20,
for a period of three years. As of September 30, 2010, there was no exercise of
warrants.





During
the nine months ended September 30, 2010, the Company accrued dividends of 6%
totaling $9,419. As of September 30, 2010 $4,126 in dividends was paid in
common stock. The remaining balance at September 30, 2010 of $5,293 is included
in accrued expenses on the Consolidated Balance Sheets.





NOTE
11.  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 are
part of an offering of up to $12,000,000 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 September 30, 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,
H and G 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 the weighted average
price of the common stock for the 10 days prior to delivery of the conversion
notice.  However, the conversion price cannot be below $0.10 per share
or above $0.20 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. Holders of Series H Preferred Shares also
have the option to require the Company to redeem their Series H Preferred Shares
if the Company fails to pay required dividends to such holders or breaches any
material representation, warranty or covenant contained in the Certificate of
Designations or in any subscription agreement pursuant to which any Series H
Preferred Shares are issued, and such failure or breach is not
cured.


20


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 $426,993. 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.





The value
allocated to the warrants issued to investors was $138,555, and was included in
Common Stock, no par, as of September 30, 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 3-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 September 30, 2010, there was no exercise of warrants.





During
the nine months ended September 30, 2010, the Company accrued dividends of 8%
totaling $8,272. The dividends are due semiannually are included in accrued
expenses on the Consolidated Balance Sheets.





NOTE
12.  COMMON STOCK AND STOCK OPTIONS AND WARRANTS





On May
14, 2009, the Company and Board of Directors approved a ten for one reverse
stock split.  As such, all Common Stock share prices and amounts have
been retroactively adjusted accordingly for all periods presented.





During
2004 and 2009, the Company’s board of directors approved a stock option plan for
its officers, directors and certain key employees. The 2009 stock option plan
and the options issued thereunder are awaiting approval by the shareholders or
will be replaced by a 2010 stock option plan which will be required to be
approved by the shareholders.. 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 Topic No. 718 and No. 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 during the three months ended September
30, 2010.





The
Company also issued 15,000 stock warrants during the three months ended
September 30, 2010, to certain investors, which vest upon issuance, and are
accordingly expensed, with expiration dates of three years. The warrant fair
value was determined by using the Black–Scholes option pricing model. Variables
used in the Black–Scholes option-pricing model include (1) risk-free interest
rate of .48%, (2) expected warrant life of 1.5 years, (3) expected volatility of
224%, and (4) zero expected dividends.





Information
regarding stock options and warrants outstanding as of September 30, 2010 are
summarized below:





Number of
                            Shares
                          
                          
                          Weighted
                            Average
                            Exercise
                            PriceOutstanding
      at December 31, 2009
                          
                          
                          23,339,944
                          
                          
                          $
                          0.74Options
      Granted
                          
                          
                          -
                          
                          
                          
                          -Warrants
      Granted
                          
                          
                          90,000
                          
                          
                          
                          0.30Canceled
                          
                          
                          (1,809,482
                          )
                          
                          
                          (1.06
                          )Exercised
                          
                          
                          -
                          
                          
                          
                          -Outstanding
      at March 31, 2010
                          
                          
                          21,620,462
                          
                          
                          $
                          .73Options
      Granted
                          
                          
                          3,930,532
                          
                          
                          
                          0.20Warrants
      Granted
                          
                          
                          1,065,000
                          
                          
                          
                          0.20Canceled
                          
                          
                          (1,407,570
                          )
                          
                          
                          (1.12
                          )Exercised
                          
                          
                          -
                          
                          
                          
                          -Outstanding
      at June 30, 2010
                          
                          
                          25,208,424
                          
                          
                          $
                          .63Warrants
      Granted
                          
                          
                          15,000
                          
                          
                          
                          .12Canceled
                          
                          
                          (319,097
                          )
                          
                          
                          .47Exercised
                          
                          
                          -
                          
                          
                          
                          -Outstanding
      at September 30, 2010
                          
                          
                          24,904,327
                          
                          
                          $
                          .63Exercisable
      at September 30, 2010
                          
                          
                          19,987,478
                          
                          
                          $
                          .66


21


The
exercise price for options outstanding and exercisable at September 30, 2010 was
as follows:





Shares
                                                              
                                                              
                                                              Weighted
                                                              
                                                              
                                                              Weighted
                                                              
                                                              
                                                              Shares
                                                              
                                                              
                                                              WeightedUnderlying
                                                              
                                                              
                                                              Average
                                                              
                                                              
                                                              Average
                                                              
                                                              
                                                              Underlying
                                                              
                                                              
                                                              AverageRange of
                                                              
                                                              
                                                              Options
                                                              
                                                              
                                                              Remaining
                                                              
                                                              
                                                              Exercise
                                                              
                                                              
                                                              Options
                                                              
                                                              
                                                              ExerciseExercise Prices
                                                              
                                                              
                                                              Outstanding
                                                              
                                                              
                                                              Contractual Life (Years)
                                                              
                                                              
                                                              Price
                                                              
                                                              
                                                              Exercisable
                                                              
                                                              
                                                              Price$
      .01-$2.00
                                                              
                                                              
                                                              
                                                              9,510,304
                                                              
                                                              
                                                              
                                                              3.25
                                                              
                                                              
                                                              $
                                                              0.50
                                                              
                                                              
                                                              
                                                              4,593,455
                                                              
                                                              
                                                              $
                                                              0.42





The
exercise price for warrants outstanding at September 30, 2010 was as
follows:





Shares
                            
                            
                            Weighted
                            
                            
                            Weighted
                            
                            
                            Shares
                            
                            
                            WeightedUnderlying
                            
                            
                            Average
                            
                            
                            Average
                            
                            
                            Underlying
                            
                            
                            AverageRange of
                            
                            
                            Warrants
                            
                            
                            Remaining
                            
                            
                            Exercise
                            
                            
                            Warrants
                            
                            
                            ExerciseExercise Prices
                            
                            
                            Outstanding
                            
                            
                            Contractual Life (Years)
                            
                            
                            Price
                            
                            
                            Exercisable
                            
                            
                            Price$
      .01-$1.00
                            
                            
                            
                            15,394,023
                            
                            
                            
                            1.88
                            
                            
                            $
                            0.71
                            
                            
                            
                            15,349,023
                            
                            
                            $
                            0.71





During
the nine months ended September 30, 2010, total compensation costs recognized in
expense from stock options was $205,869, and is included in general and
administrative expenses on the Consolidated Statement of Operations. As of
September 30, 2010, there was unrecognized compensation expense related to
non-vested stock option agreements of $832,403. The intrinsic value of options
exercised during nine months ended September 30, 2010 is $0.





During
the nine months ended September 30, 2010, total compensation costs recognized in
expense from warrants issued was $1,801, and is included in general and
administrative expenses on the Consolidated Statement of Operations. As of
September 30, 2010, there was not unrecognized compensation expense related to
non-vested warrants.





NOTE
13.  INCOME TAXES





For the
nine months ended September 30, 2010, the Company had net losses from continuing
operations of $7.7 million, and $3.4 million from discontinued operations. No
benefit or provision for income taxes has been recorded due to the uncertainty
of the realization of any tax assets. At September 30, 2010, the Company has
accumulated net losses totaling approximately $65 million. The net operating
loss carry forwards will begin to expire in 2019 if not utilized. The Company
has recorded net operating loss carry forwards in each year since its inception
and through September 30, 2010. 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 $23 million.





NOTE
14.  RELATED PARTY TRANSACTIONS





The
Company received approximately $427,000 in proceeds from subscription agreements
related to the Series I Preferred Stock in July 2010, of which $100,000 was from
a director of the Company.  In addition, another 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 or (ii) September 30,
2010, which was 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
Company also sold 10% of its equity interest in D Mobile.


22


NOTE
15.  COMMITMENTS AND CONTINGENCIES




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




Total
rent expensed was $145,229 during the nine months ended September 30, 2010, as
compared with $53,290 during the nine months ended September 30,
2009.





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




Remainder
      of 2010
                  
                  $
                  69,0512011
                  
                  $
                  198,6382012
                  
                  $
                  58,9472013
                  
                  $
                  -0-2014
      and thereafter
                  
                  $
                  -0-




NOTE
16. SEGMENT INFORMATION





During
the quarter ended  March 31, 2010, the Company completed two
acquisitions and is currently evaluating the effect of these acquisitions on our
segment identification and reporting. The Company may identify segments based on
product and service offering and geographic regions.  Segments may
include Shoot It!, and Duo Guo.  Information on segments and the
reconciliation to earnings before income taxes have not been included for the
quarter as revenues and expenses related to continuing operations which are from
Shoot It! and Duo Guo were not significant.




NOTE
17.   SUBSEQUENT EVENTS





On
October 14, 2010, the Company made an offer to exchange (the “Offer”) to current
holders of Series F Preferred Stock and Series H Preferred Stock (together, the
“Old Preferred Stock”) along with related warrants (the “Old Warrants”), for
Series I Preferred Stock and related warrants (the “New Warrants”). In exchange
for the shares of Old Preferred Stock the holders will receive an equal number
of shares of Series I Preferred Stock.  Though the Offer originally
provided for the number of shares covered by the New Warrants to be a function
of the conversion price of the Series I Preferred Stock, and therefore subject
to adjustment based on the trading price of our Common Stock, on November 8,
2010, the Board authorized the revision of the Offer, such that, in exchange for
the Old Warrants, each holder will receive a New Warrant to purchase an amount
of shares of Common Stock equal to 5,000 multiplied by the number of shares of
Series I Preferred Stock they receive in exchange for their Old Preferred
Stock.  All accrued, but unpaid, dividends associated with the Old
Preferred Stock (the “Dividends”) will be paid in shares of our Common Stock in
accordance with the certificates of designation for each series of Old Preferred
Stock through the date the Old Preferred Stock is accepted for exchange. The
offer is subject to the terms and conditions set forth in the Offer to Exchange,
which was included as an exhibit to the Schedule TO filed by the Company on
October 14, 2010.  The Offer is contingent on approval by the
Securities & Exchange Commission, and it is expected that holders of Old
Preferred Stock and Old Warrants will receive revised offering materials
reflecting any changes made to the Offer in response to SEC commentary or
otherwise.





On
October 13, 2010, the Company sold an additional 10% of the outstanding equity
interests of D Mobile for an additional $1,000,000.





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, 2009 filed with the Securities and
Exchange Commission (the “SEC”) on May 7, 2010 (the “Form 10-K”), including the
factors disclosed under “Item 1A. Risk Factors.”




23


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




We have
continued to execute our plan of repositioning the Company as a mobile content
distribution provider. As part of that plan, we have discontinued our VoIP and
telephony business. This restructuring was approved by our Board of Directors on
June 17, 2010. This portion of our business is classified as discontinued
operations in the accompanying financial statements. Assets and related
liabilities which we believe are marketable are classified as held for sale. The
assets associated with our discontinued operations, including those held for
sale, have been evaluated and valued at the estimated fair market values with
any resulting impairment charges being reflected in the loss from discontinued
operations.





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





As
previously discussed in the consolidated financial statements, we acquired Shoot
It!, LLC, and D Mobile, Inc., which expanded our product portfolio applications
and technologies for the global mobile communications market.  Since
the date of acquisition, we have included the financial results for both
companies in our results of operations.





D Mobile,
which operates under the brand name Duo Guo, is the primary, and we believe,
only legitimate retail channel for the discovery and download of licensed mobile
media content in China. D Mobile gives us a pervasive mobile applications and
content distribution platform to support our strategic plan. We have included
the results of operations for D Mobile since the date of acquisition in our
results of operations.





Our
products and services offer the end user the following benefits:




Shoot
It!




·
            Allows
      users to take a picture with the smartphone, create a personal message,
      and mail as a postcard to recipient;·
            Delivery
      to any mailbox in North America, Western Europe, and
  Asia;·
            Blends
      familiar postcard capability with new technology; and·
            Gives
      a tangible alternative to SMS or MMS
messaging.




Duo Guo




·
            Allows
      users to discover and download mobile applications and content through our
      retail kiosks;




24





·
            Gives
      the user a simple and organized way to locate and purchase applications
      and content;·
            Allows
      for expanded services for vendors in ticketing, couponing and advertising;
      and·
            We
      believe, currently, the only legitimate source for licensed, non-pirated
      content from many producers.




Our
management is focused upon executing our strategic plan of becoming a mobile
application, technology development and distribution company with global reach.
We will continue to introduce exciting and relevant device- and geographic-
agnostic products coupled with pervasive and strategic distribution solutions,
which will position us to emerge as a leader in the global mobile solutions and
distribution market.




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.





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 2009 Annual
Report on Form 10-K.  During the nine months ended September 30, 2010
the following were also identified as critical:





Business
Combinations




Pursuant
to ASC 805, “Business
Combinations” (“ASC 805”), the Company has used the acquisition method of
accounting. The acquisition method of accounting is used for all business
combinations where the acquirer is identified for each business combination. ASC
805 defines the acquirer as the entity that obtains control of one or more
businesses in the business combination and establishes the acquisition date as
the date that the acquirer achieves control. We will recognize separately from
goodwill, the identifiable assets acquired, the liabilities assumed, and any
noncontrolling interests in an acquiree, generally at the acquisition date fair
value as defined by Topic 820, Fair Value Measurements. Goodwill as of the
acquisition date is measured as the excess of consideration transferred, which
is also generally measured at fair value, and the net of the acquisition date
fair value amounts of the identifiable assets acquired and the liabilities
assumed.




The
acquisition method requires us to use significant estimates and assumptions,
including fair value estimates, as of the business combination date and to
refine those estimates, as necessary, during the measurement period (defined as
the period, not to exceed one year, in which we may adjust the provisional
amounts recognized for a business combination) in a manner that is prescribed in
Topic 805.





Information
regarding other significant accounting policies is included in the notes to our
consolidated financial statements in Item 8 of Part II of our Annual Report on
Form 10-K for the year ended December 31, 2009 and to the notes to the condensed
consolidated financial statements in this Quarterly Report on Form
10-Q.





Noncontrolling
Interests




ASC Topic
No. 810, Non-controlling
Interests in Consolidated Financial Statements-an Amendment of ARB No. 51
establishes accounting and reporting standards for the non-controlling interest
in a subsidiary and for the deconsolidation of a subsidiary.




25


Changes
in a parent’s ownership interest in a consolidated subsidiary that do not result
in a change in control are accounted for as equity transactions. Such changes do
not affect earnings or the carrying values of assets and liabilities (including
goodwill). Therefore, a parent does not recognize any gain or loss from a sale
of shares of a consolidated. Instead, the carrying amount of the noncontrolling
interest is adjusted to reflect the change in ownership interest in the
subsidiary. Any difference between the fair value of the consideration received
or paid and the amount by which the noncontrolling interest is adjusted is
recognized in equity attributable to the parent.





Discussion
of operating results from continuing operations:





As the
Company acquired the operating businesses in the first quarter of 2010, the
relevant discussions are as follows:





Shoot It!
was not incorporated until April 2009, and thus the operations for the three and
nine months ended September 30, 2010 is not deemed
comparable.  However, revenues have averaged approximately $2,900 per
month since acquisition.  Related Cost of Sales has averaged
approximately $2,400 per month for the same period.





D Mobile
was not acquired until the first quarter of 2010. However, revenues have
averaged approximately $6,019 per month since acquisition.  Related
cost of sales have averaged approximately $20,000 per month for the same period,
and general and administrative expenses related to the China operations averaged
$110,000 per month. During the third quarter the Company has allocated corporate
overhead expenses to the subsidiary operations, based on the percentage of time
spent for development of the Company.





Total
corporate selling, general and administrative expenses increased during the nine
month period ended September 30, 2010 over the prior year by approximately
$1,400,000 primarily as a result of professional fees incurred by the Company
for the acquisition and audits of the two businesses acquired, and increase in
salaries in 2010 related to personnel additions.




Other
income/expenses increased from comparable periods due to the Private Placement
Proceeds and related interest accretions and dividend accruals for mandatorily
redeemable preferred shares.





Discussion
of discontinued operations:





As the
Company implemented a plan of restructuring during the second quarter of 2010,
the relevant discussion is as follows:





The
general and administrative expenses related to discontinued operations totaled
$2,332,852 for the nine months ended September 30, 2010. These expenses, in
approximation, consisted primarily of salaries for $1,073,000, professional fees
of $152,000, contract labor of $188,000; travel $86,000, marketing $138,000 and
other administrative expenses of $695,852.





The above
expense as compared to the nine months ended September 30, 2009 of $2,792,074,
is lower as a result of reductions in all expenses related to discontinued
operations in the third quarter of 2010 versus 2009.





Liquidity





Cash used
in operating activities was $3,740,435 for the nine month period ended September
30,2010, compared to cash  used in operating activities for the
comparable period ended September 30, 2009 of $2,631,132. The increase in cash
used from operating activities during the nine month period ended September
30,2010,was primarily a result of increased professional fees.





During
the nine months ended September 30, 2010 cash from financing activities
increased $3,530,961, which was provided primarily from a line of credit of
$2,600,000 and $427,000 in subscription agreements for Series H Preferred Stock.
In addition, cash increased $1,118,526 from investing activities during the same
period primarily as a result of the sale of 10% of its interest in its
subsidiary D Mobile for $1,000,000.  For the comparable period in 2009
cash provided from financing activities totaled $6,817,084 primarily related to
the proceeds from the issuance of Series F Preferred Stock totaling $5,650,000,
common stock proceeds totaling $456,564 and net proceeds from notes payable of $
710,519.




26


Cash used
in discontinued operations was $1,620,142 for the nine month period ended
September 30, 2010 compared to cash used in discontinued operations of
$2,335,665 for the comparable period ended September 30, 2009. The decrease in
use of cash is primarily related to impairment charges in 2010.





In
July 2010, the Company authorized Series I Preferred Stock, no par value per
share (the “Series I Preferred Stock”). The shares are part of an offering of up
to $12,000,000 of Series I Preferred Stock and Warrants (“Offering”). Separate
from the Offering, the Company’s subsidiary, D Mobile, is making an offering of
up to $15,000,000 of its securities in a private placement.








The
Company has undertaken a number of specific steps to achieve positive cash flow
in the future.  These actions include the two acquisitions consummated
in thefirst
quarter of 2010 and the issuance of the drawdown note, obtaining several notes
payable, and equity placements described above. The Company has taken further
action to reduce its cash flow concerns by discontinuing the VoIP operations,
which has resulted in a significant reduction in personnel and associated
salaries and operating costs. In addition, the Company has identified several
new business strategies that may enable the Company to reach its profitability
goals.





Our
strategy is to raise additional capital to enable the Company to realize the
market opportunities for its mobile content distribution business. In October
2010, the Company sold an additional 10% of the outstanding
equity  interest in D Mobile for an additional $1,000,000. The Company
is also in negotiations with several companies to enable the Company to
ultimately expand the market and revenues for its products and
services.





Management
believes that new products it has in development and the potential for newly
identified business relationships, coupled with new capital from sophisticated
investors, 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. The Company may 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.





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
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,  2009, with the exception of extended maturity dates on
its line of credit totaling $2,600,000, and a note payable totaling $150,000 as
of September 30, 2010.


Item 3 - Quantitative and Qualitative Disclosures About Market
Risk.


Not
Applicable.




27


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 Chief
Financial Officer resigned, however the Company has began a search for a
replacement. Other than these matters there have been no changes in our internal
control over financial reporting during the third quarter ended September 30,
2010, 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.




On
December 22, 2003, former stockholders of SuperCaller Community, Inc., a
Delaware corporation acquired by the Company in September of 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 International (DE) (now known as Geos
Communications (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 2008, 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
2008, 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 International (DE) (now known as Geos Communications
(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
Company intends to continue to vigorously defend the matter against the
remaining plaintiff Teng Lew Lim.


28


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.




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




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




In
addition, our 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, acquired companies may not perform as expected for
various reasons, including legislative or regulatory changes or the loss of key
customers and personnel.  If we are not able to realize the benefits
envisioned from such acquisitions, joint ventures, or other strategic alliances,
‘our overall profitability and growth plans may be hindered.




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




The
United States economy is currently undergoing 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 projected
revenues is predicted to come from  customers whose spending patterns
may be affected by prevailing economic conditions. If these economic conditions
continue to deteriorate, the growth of our business and results of operations
may 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.





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




We had
losses and an accumulated deficit at September 30, 2010. 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 report 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 and
might have to cease operations. Our independent auditors have added an
explanatory paragraph in their report expressing substantial doubt about the
Company’s ability to continue as a going concern.




We have
been able to meet our operating requirements by receiving proceeds of $2,000,000
from the sale of 20% of our interest in D Mobile as of October 31, 2010. We will
need to receive additional capital to continue our operations into
2010.




Until we
reach and maintain positive cash flow, which management believes will be in the
third quarter of 2011, 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.




29


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, 2009 to September
30, 2010, the per share closing price of our common stock on the
Over-the-Counter Bulletin Board fluctuated from a high of $1.10 to a low of
$0.09, both on a post-split basis. We believe that the volatility of 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 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 stock is sporadically or “thinly-traded” on the OTCBB, meaning that the
number of persons interested in purchasing our common stock 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 stock 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 stock 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 stock may
not be indicative of the price that will prevail in the trading market. You may
be unable to sell your common stock at or above your purchase price, which may
result in substantial losses to you.




The
market for our common stock 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 stock 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
stock 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 stock, regardless of our
operating performance. We cannot make any predictions or projections as to what
the prevailing market price for our common stock will be at any time, including
as to whether our common stock will sustain their current market prices, or as
to what effect, if any, that the sale of shares or the availability of common
stock for sale at any time will have on the prevailing market
price.




30


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




As
discussed in the preceding risk factor, the market for our common stock 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 stock and increase your transaction costs to sell those
shares.




As
long as the trading price of our common stock is below $5 per share, the
open-market trading of our common stock will be subject to the “penny stock”
rules. The “penny stock” rules impose additional sales practice requirements on
broker-dealers who sell securities to persons other than established customers
and accredited investors (generally those with assets in excess of $1,000,000 or
annual income exceeding $200,000 or $300,000 together with their
spouse).




For
transactions covered by these rules, the broker-dealer must make a special
suitability determination for the purchase of securities and have received the
purchaser’s written consent to the transaction before the purchase.
Additionally, for any transaction involving a penny stock, unless exempt, the
broker-dealer must deliver, before the transaction, a disclosure schedule
prescribed by the SEC relating to the penny stock market. The broker-dealer also
must disclose the commissions payable to both the broker-dealer and the
registered representative and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information on the
limited market in penny stocks. These additional burdens imposed on
broker-dealers may restrict the ability or decrease the willingness of
broker-dealers to sell the common stock, and may result in decreased liquidity
for our common stock and increased transaction costs for sales and purchases of
our common shares as compared to other securities.




Shareholders
should be aware that, according to SEC Release No. 34-29093, the market for
penny stocks has suffered in recent years from patterns of fraud and abuse. Such
patterns include (1) control of the market for the security by one or a few
broker-dealers that are often related to the promoter or issuer; (2)
manipulation of prices through prearranged matching of purchases and sales and
false and misleading press releases; (3) boiler room practices involving
high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (4) excessive and undisclosed bid-ask differential and markups by
selling broker-dealers; and (5) the wholesale dumping of the same securities by
promoters and broker-dealers after prices have been manipulated to a desired
level, along with the resulting inevitable collapse of those prices and with
consequent investor losses. Our management is aware of the abuses that have
occurred historically in the penny stock market. Although we do not expect to be
in a position to dictate the behavior of the market or of broker-dealers who
participate in the market, management will strive within the confines of
practical limitations to prevent the described patterns from being established
with respect to our securities.




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.




31


Our
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 took office
August 10, 2008, our Senior Vice President of Worldwide Sales took office on
September 23, 2009 and our Chief Executive Officer of our Asia operations took
office on March 7, 2010 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.




Our
performance could be adversely affected if we are unable to attract and retain
qualified personnel in the fields of engineering, design, contract negotiation,
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, design, contract negotiation, marketing and finance. Competition
for qualified personnel is intense and there are a limited number of persons
with knowledge of and experience in the content acquisition and
billboard/electronic media advertising disciplines. 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.




Risk
Related to doing business in the Peoples Republic of China.




We
acquired D Mobile in March, 2010.  D Mobile’s operations are primarily
located in the Peoples Republic of China (“PRC”). Accordingly, our
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 us. For example, our business,
financial condition and results of operations may be adversely affected by
government control over capital investments or changes in tax regulations
applicable to us.




The PRC
economy has been transitioning from a planned economy to a more market-oriented
economy. Although the PRC government has implemented measures since the late
1970’s emphasizing market-oriented reforms, the reduction of state ownership of
productive assets and improved corporate governance, the PRC government still
owns a substantial portion of the productive assets in China and continues to
play a significant role in regulating industrial development. In addition, the
PRC government exercises significant control over China’s economic growth by
controlling the allocation of resources and payment of foreign
currency-denominated obligations, setting monetary policy and giving
preferential treatment to particular industries or companies.


In late
2003, the PRC government implemented a number of measures, such as raising bank
reserves against deposit rates and placing additional limitation on the ability
of commercial banks to make loans and raise interest rates, in an attempt to
slow down specific segments of China’s economy that the government believed to
be overheating. In 2009, however, in response to the world economic crisis, the
PRC government cut interest rates and announced a stimulus plan in an attempt to
help sustain growth. These actions, as well as future actions and policies of
the PRC government, could materially affect our liquidity, access to capital,
financial results as well as our ability to operate our business.




32


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




We
acquired D Mobile in March, 2010.  D Mobile’s operations are primarily
located in the PRC.  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. On July 21, 2005 the PRC government
changed its decade-old policy of pegging the value of the RMB to the U.S.
dollar.  Under the current policy, the RMB has been permitted to
fluctuate within a narrow and managed band against a basket of foreign
currencies. The change in the policy has resulted in appreciation in the RMB
against the U.S. dollar. While the international reaction to the RMB revaluation
has generally been positive, there remains significant international pressure on
the PRC government to adopt an even more flexible currency policy, which could
result in a further and more significant appreciation of the RMB against the
U.S. dollar.




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. Any significant revaluation of the RMB could materially and adversely
affect Mobile’s cash flows, revenues, earnings and financial position. Any
fluctuations of the exchange rate between the RMB and U.S. dollar could also
result in foreign currency translation losses for financial reporting
purposes.




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




We
conduct our business operations in China primarily through our D Mobile
subsidiary which operates under the Duo Guo brand. Our operations in China are
governed by the PRC laws and regulations. Our 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, we 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.




We,
through our D Mobile subsidiary, have entered into numerous contracts governed
by the PRC law, many of which are material to our 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, we may be subject to disputes under its material
contracts, and if such disputes arise, we cannot assure you that we will
prevail. Due to the materially of certain contracts to our business, any
disputes involving such contracts, even without merit, may materially and
adversely affect our reputation and business.




Changes
in PRC laws and regulations on labor and employee benefits may adversely affect
our 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, 2008 and its
implementation regulation came into effect on September 18, 2008. 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.




33


The
continued growth in the use of Smart Phones and mobile devices as a medium for
communications, business and entertainment is uncertain. If this growth does not
continue, our business and financial condition could be materially adversely
affected.




The
continued market acceptance of the use of Smart Phones and other mobile
computing/communication devices as a medium for communication, business and
entertainment is subject to a high level of uncertainty. Our future success will
depend on our ability to significantly increase revenues, which will require
widespread acceptance of the Smart Phone or other mobile devices as a medium for
communication, business and entertainment. There can be no assurance that the
number of consumers using Smart Phones or other mobile devices  will
grow. If use of  Smart Phones or other mobile devices for
communication, business and entertainment   does not continue to
grow, our business and financial condition could be materially adversely
affected.




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




We rely
on content 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 content 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 distribution platform
design, functionality, and in securing additional content licenses may prevent
us from ever being profitable.




Services
and products like the ones we offer are continually upgraded in an effort to
make them work faster, function more easily for the user, provide aesthetically
pleasing look and feel and provide more options. Our industry is characterized
by the need for continued investment content acquisition and in design of
distribution platforms.  If we fail to invest sufficiently in these,
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 our distribution platform design,
functionality, and in securing additional content licenses 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.




From our
previous business operations in the telephony and VoIP technologies, we have six
issued patents and thirteen 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
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.




34


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.




Sales
to customers based outside the United States have recently accounted for a
significant portion of our revenues, which exposes the Company to risks inherent
in international operations.




Our
strategic plan includes increases in foreign sales in order to increase our
revenues.  However, international sales are subject to a number of
risks, including changes in foreign government regulations, laws, and
communications standards; export license requirements; currency fluctuations,
tariffs and taxes; other trade barriers; difficulty in collecting accounts
receivable; longer accounts receivable collection cycles; difficulty in managing
across disparate geographic areas; difficulties associated with enforcing
agreements and collecting receivables through foreign legal systems; expenses
associated with localizing products for foreign markets; and political and
economic instability, including disruptions of cash flow and normal business
operations that may result from terrorist attacks or armed
conflict.




If the
relative value of the U.S. dollar in comparison to the currency of our foreign
customers should increase, then the resulting effective price increase of our
products to these foreign customers could result in decreased sales. In
addition, to the extent that general economic downturns impact our customers,
the ability of these customers to purchase our products could be adversely
affected. Payment cycles for international customers are typically longer than
those for customers in the United States.




If we are
able to increase our foreign sales significantly, the occurrence of any of the
foregoing could have a material adverse impact on our results of
operations.




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, it is possible that a number of laws and
regulations may be adopted with respect to the Internet 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 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.




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.




35


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.




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




The
market for mobile content distribution is highly competitive, and rapidly
changing. In addition to intense competition for distribution of movies, and
music, we also face competition from gaming, ring tones, and other content
providers.   In the kiosk- based distribution arena, there is one
similar concept called MOD Systems out of Seattle.  They are placing
57 kiosks in 35 stores located in US airports.  In addition, there are
many segment competitors of which include some with Kiosk/Vending Machine based
solution and some with web based offerings.  An attribute of these
competitors is they are focused on a specific segment such as movies, music, or
games and they usually have many titles.  For example in the movie and
music space, Redbox rents movies and TV shows from approximately 24,000 vending
machine style kiosks. Their revenue is unknown as it is a subsidiary of Coin
Star which has $1.2B annual revenue. NCR Corporation has rolled out 6500
Blockbuster Express kiosks in Safeway and convenience stores like Quik Trip, and
has additional plans to roll out 10,000 kiosks this year that are similar in
style to Redbox.  In the gaming arena, Game Stop, who has 6,450 stores
worldwide has entered the kiosk space but are only selling digital add-ons and
upgrades for games.





Other
peripheral players include Netflix, which delivers movies via mail or streams
them to a TV or computer.





In
addition, there are other “cloud” services where you can stream or download
content to your device.  These charge a monthly
subscription.  For music you have Spotify, MOG, Napster, Rdio,
Pandora, Rhapsody.





Another
area of competition comes from companies like Apple, Amazon, and Wal-Mart who
primarily offer customers the opportunity to buy, rather than rent,
content.  Apple’s iTunes Store also has a digital library that
includes TV shows, apps, games, movies, books, and ringtones.





Redbox,
Netflix, and Apple dominate their respective segments in the content
distribution area.




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
$12,000,000 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 September 30, 2010, of
which $100,000 was from a director of the Company.





As
described in the notes to the 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) September 30, 2010, 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.


36


Item
3 - Defaults Upon Senior Securities





None




Item
4 – Reserved




None




Item
5 – Other Information




2010
Annual Meeting of Shareholders





The
Company has not yet scheduled its annual shareholders’ meeting for
2010.




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,
2009




37





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, 20093.9
                
                Amendment
      to the Company’s Articles of Incorporation filed May 11,
    2009
                
                Incorporated
      by reference to Exhibit 3.9 to the Company’s Quarterly Report on Form 10-Q
      for the quarter ended September 30, 20093.10
                
                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, 20093.11
                
                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, 20093.12
                
                Amendment
      to the Company’s Articles of Incorporation filed September 10,
      2009
                
                Incorporated
      by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K
      filed September 10, 20093.13
                
                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,
    20094.2
                
                2009
      Omnibus Long Term Incentive Plan
                
                Incorporated
      by reference to Exhibit 4.1 to the Company’s Form S-8 Registration
      Statement filed January 8, 201031.1
                
                Rule
      13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive
      Officer
                
                Filed
      herewith


38




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:
              November
      15, 2010By:
              /s/ Chris R.
MiltenbergerChris
      R. MiltenbergerPresidentDate:
              November
      15, 2010




39