UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
  FORM
10-K
  (Mark
One)
  x
              ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934
 For
the fiscal year ended December 31, 2009.
 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: 0-27704
  GEOS
COMMUNICATIONS, INC.
 (Exact
Name of Registrant as Specified in its Charter)
 Washington
              
              91-1426372(State
      or Other Jurisdiction of Incorporation or Organization)
              
              (IRS
      Employer Identification No.)430
      North Carroll Avenue, Suite 120, Southlake, Texas
              
              76092(Address
      of Principal Executive Offices)
              
              (Zip
      Code)
  Registrant’s
Telephone Number, Including Area Code(817)
789-6000
  Securities
registered pursuant to Section 12(b) of the Exchange Act: None
  Securities
registered pursuant to Section 12(g) of the Exchange Act:
  Common
Stock, no par value
 (Title
of Class)
  Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
  ̈ Yes  x No
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
  ̈ Yes  x No
 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 such filing requirement for
the past 90 days.
 x Yes   ̈ No
 Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant’s knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K.
  ̈
 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 the definitions of “large accelerated filer,”
“accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act.
  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 by Rule
12b-2 of the Act).   ̈ Yes  x  No
  State the
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average bid and asked price of such
common equity, as of the last business day of the registrant’s most recently
completed second fiscal quarter: $1,493,298 based on 19,155,497 shares held by
non-affiliates and a closing price of $0.60. These amounts are reflective of the
1:10 reverse split effected by the company on May 14,2009.
  As of
March 30, 2010, 32,647,642 shares of the registrant’s common stock were
outstanding.
   
 
  TABLE
OF CONTENTS
  PART
      I
                                                      1Item
      1. Business.Item 1A. Risk
      Factors.
                                                      5Item 1B. Unresolved
      Staff Comment
                                                      13Item
      2. Properties.
                                                      13Item
      3. Legal Proceedings.
                                                      13PART
      II
                                                      14Item
      4. Reserved
                                                      14Item
      5. Market for Registrant’s Common Equity, Related Stockholder Matters
      and Issuer Purchases of Equity Securities.
                                                      15Item
      6. Selected Financial Data.
                                                      16Item
      7. Management’s Discussion and Analysis of Financial Condition and
      Results of Operation.
                                                      16Item
      8. Financial Statements and Supplementary Data.
                                                      20Item
      9. Changes in and Disagreements With Accountants on Accounting and
      Financial Disclosure.
                                                      20Item 9A(T). Controls
      and Procedures
                                                      20Item 9B.
      Other Information
                                                      21PART
      III
                                                      21Item
      10. Directors, Executive Officers and Corporate
      Governance.
                                                      21Item
      11. Executive Compensation.
                                                      25Item
      12. Security Ownership of Certain Beneficial Owners and Management
      and Related Stockholder Matters
                                                      28Item
      13. Certain Relationships and Related Transactions and Director
      Independence
                                                      29Item
      14. Principal Accounting Fees and Services
                                                      30PART
      IV
                                                      31Item
      15. Exhibits, Financial Statement Schedules
                                                      31
  i
  PART
I
  For
convenience in this annual report, “Geos,” “we,” “us,” and “the Company” refer
to Geos Communications, Inc. and our consolidated subsidiaries, taken as a
whole.
  Item
1.   Business.
  We were
incorporated under the laws of the State of Washington on October 17, 1988. Our
offices are located at 430 North Carroll Avenue, Suite 120, Southlake, Texas
76092, and our telephone number at that address is (817) 240-0200.  We
maintain websites at www.geoscommunications.com, www.voicestick.com,
www.myglobaltalk.com, www.shootit.com and www.duoguo.cn.  We affected
a 1:10 reverse split of our common stock effective May 14, 2009.
  Through
our subsidiary Geos Communications, Inc., a Delaware corporation (“Geos (DE)”), we are a
developer and distributor of mobile applications and communications
services.  We leverage our Voice over Internet Protocol (VoIP) and
technology development to introduce solutions to the global mobile community.
Our services include MyGlobalTalk, a comprehensive solution for reducing long
distance calling charges worldwide that makes use of various least cost routing
processes and technologies which may include VoIP.  We have
repositioned our company in the fourth quarter of 2009 to support our strategic
plan of becoming a distributor of mobile applications solutions and services for
the global mobile community. These solutions, which we will license or own
ourselves, will include our MyGlobalTalk service. MyGlobalTalk leverages our
core competencies in VOIP and technology development. Our revenues for 2009 have
been derived primarily from our legacy Voicestick solutions and to a lesser
extent from MyGlobalTalk which became market ready in the fourth quarter of
2009.  We expect revenues from MyGlobalTalk to become more significant
in 2010 as our marketing and sales activities begin to yield
results.
  In early
2010 we acquired a wholly owned subsidiary Shoot It!, Inc., in which we provide
mobile applications for sending picture postcards from smart phones. In
addition, through another recently acquired wholly owned subsidiary, D Mobile,
Inc, we operate a retail channel for the discovery and download of licensed
mobile content under the brand name Duo Guo in China.
  Our
products allow our customers to improve the experience and usefulness of their
mobile phones.  Our corporate headquarters is based in Southlake,
Texas.  In addition, we have locations in Shanghai, China and we
maintain switching equipment in Atlanta, Georgia.
  Our
products and services offer the end user the following benefits:
  MyGlobalTalk
  ·
              A
      secure  network, designed for interoperability and scalability
      in an SAS-compliant environment;
 ·
              Exceptional
      call quality using industry standard, SIP-based network architecture,
      producing minimal lag time, and coverage that works anywhere cellular
      service is available;
 ·
              Low
      cost/high quality internet telephony-based international telephone calls
      from a smartphone, cell phone, landline/desk phone or
      PC/netbook;
 ·
              No
      international plan needed - no hidden fees - no contracts - no connection
      fees - no expiration dates;
 ·
              Consumer
      pre-pay (for individual users), designed for those who need flexibility or
      a pay-as-you-go solution; and,
 ·
              A
      simple, intuitive mobile application for BlackBerry®, iPhoneTM, AndroidTM,
      SymbianTM and Windows® Mobile operating
systems.
  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;
 ·
              Gives
      the user a simple and organized way to locate and purchase applications
      and content;
  1
 
 ·
              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 are accomplishing this by relying on products that we have developed, which
are covered by our patent portfolio, and with products for which we have
negotiated distribution rights with strategic partners. The right strategic
partners and distribution networks are keys to our success as we look to expand
our reach and grow our business. We plan to continue to build on our product
portfolio by executing on an aggressive acquisition and partnering
strategy.  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.
  Recent
Acquisitions
  In
February 2010, we acquired Shoot It, LLC, which expands our product portfolio
applications and technologies for the global mobile communications
market.  Shoot It! is a postcard messaging service that allows users
to take a picture with their smartphone, create a personal message and send it
as a paper postcard from anywhere in the world to any mailbox in North America,
Western Europe or Asia. Shoot It! enhances the experience of smartphones by
allowing users to share their photos with others around the world, while also
giving the user a tangible alternative to SMS or MMS. Shoot It!’s smartphone
application currently supports the iPhone, BlackBerry OS 4.6. and higher,
Android and Windows Mobile operating systems. The Shoot It! smartphone
application is currently available for download via traditional application
retail channels such as the iTunes App store, BlackBerry App World and Android
Marketplace.  It will also be available through Geos’ Duo Guo mobile
content distribution platform in China.
  In March
2010, we acquired D Mobile, Inc., which provides us with a unique,
market-leading platform for mobile content distribution in China, the world’s
largest mobile communications market, and expands our global presence. We
believe D Mobile, which operates under the brand name Duo Guo, is the primary
and only legitimate retail channel for the discovery and download of licensed
mobile media content in China.  Duo Guo operates an innovative
kiosk-based distribution business, which enables mobile device users to discover
and download games, movies, music, ringtones and applications.  The
kiosk network can also serve as a channel for a wide range of mobile
downloadable services such as ticketing, coupon distribution and
advertising.  Duo Guo has established partnerships with major
retailers that include Wal-Mart, China Unicom, Suning and FunTalk, as well as
major media content providers including Paramount Pictures, EA Mobile, Cartoon
Network, Warner Music Group and others. Duo Guo currently operates more than 75
kiosks in 15 cities across China including Shanghai and Beijing, and the
Guangzhou, Shandong, Jiangsu and Zhejiang provinces, and is rapidly opening more
kiosks.
  Industry
Overview
  The
growth in the global mobile community is accelerating dramatically. The adoption
and use of smartphones is accelerating and creating a large demand for mobile
applications and service. According to Gartner, cell phones and smartphones will
overtake PC’s as the most common device used for Web access sometime in the next
three years. In addition, they expect mobile consumers to spend $6.2 billion at
mobile apps stores in 2010 compared to $4.2 billion in 2009. Strategy Analytics
estimates that worldwide sales of smartphones grew 30% in the fourth quarter of
2009 from a year earlier to reach 53 million units. This growth has created a
large demand for applications and services while at the same time creating a
fragmented market with no easy, logical method for discovery and download of
applications or content.
  To
address these opportunities, we provide our own mobile applications to the
market including MyGlobalTalk and Shoot It!  These applications fill
specific needs to the mobile user and enrich the experience and functionality of
the mobile user.  These applications provide recurring customer
revenue through the use of these services.
  2
  In
addition, Geos acquired Duo Guo in 2010, aretail channel for the
discovery and download of licensed mobile content in China, the world’s largest
mobile communications market. Through its strategically placed kiosks in highly
trafficked first and second tier cities, Duo Guo  provides a wide
range of services including mobile-content downloads, ticketing, mobile coupon
distribution and advertising, along with exclusive rights in China to
MyGlobalTalk and Shoot It! content.
  Beyond
these actions, we are developing key partnerships among the most immediately
relevant, rapid adoption markets through unique, highly strategic and pervasive
distribution channels.
  Competition
  We face
unique competition with each of our products. The competitors by product
are:
  MyGlobalTalk:
  Domestically,
the long distance market in the United States is highly competitive and includes
providers of all sizes, including huge incumbents, such as AT&T and Verizon,
and companies such as Vonage, Inc. Skype and other non-traditional
providers.
  Internationally,
the competitive marketplace varies from region to region.  Our
competitors include both government-owned and incumbent phone companies and
emerging competitive carriers.
  The
principal competitive factors in the national and international markets include
price, quality of service, distribution, customer service, reliability, network
capacity, the availability of enhanced communications services and brand
recognition.
  We do not
represent a significant competitive presence in our industry.
  Shoot
It!:
  Domestically,
there are several competitors in this space including Postino and Hippo
Cards.  We do not believe any of the competitors have international
printing capabilities that would compete with us globally nor do they operate on
the breadth of devices we can service.
  Duo
Guo:
  We
believe there are no other “legitimate” kiosk (or computer terminal) based
competitors in China currently. There are small entrepreneurs selling pirated
content from laptops and “FAB”, a kiosk company with a limited number of
units.
  We also
compete with internet sites where content can be downloaded such as: sina.com,
kong zhong, linktone and others. However, this is web based and we believe not
truly competitive since we have retail locations with staff to assist the
consumer.
  In
addition, the mobile operators may also be considered a competitor since they
have their own “decks” (WAP stores) on the phone, which can be accessed through
phone. Customers can discover and download content from these websites. Again,
we believe this is not truly competitive since we have retail locations with
staff to assist the consumer.
  Business
Strategy
  Our
primary objective is to become a leading developer and distributor of mobile
applications and services.  We believe that we can accomplish this
goal by implementing the following strategies:
  ·
              leveraging
      our core competencies in VoIP and technology development along with our
      robust intellectual property portfolio to introduce solutions for the
      growing global mobile community;
 ·
              relying
      on products that we have developed, which are primarily covered by our
      patent portfolio;
 ·
              selling
      products for which we have negotiated distribution rights with strategic
      partners;
 ·
              acquiring
      additional products and services that are compelling to the mobile
      community and expanding our kiosk distribution outlets on a global basis;
      and
 ·
              Potential
      sales of intellectual property (patents) which are non-essential to our
      products.
  3
  Sales
and Marketing
  We sell
our products through our direct sales team and our channel partners, agents,
distributors as well as through our retail kiosk business of Duo Guo in China.
While our individual accounts for both MyGlobalTalk and Shoot It! are on
subscription models that require payment in advance, our enterprise customers
are on a post paid billing plans of net 30 days. All Duo Guo sales are paid at
point of sale.
  Our
websites, www.mygblobaltalk.com, www.shoot-it.com,
www.duoguo.cn,
and www.voicestick.com
are the cornerstones for domestic and international information retrieval, the
service plans and call rates for specific countries and frequently asked
questions.  These sites may also function as full e-commerce sites
through their ability to support provisioning, account set up, the addition of
pre-paid minutes to accounts, account status and account inquiry.
  We are
implementing a variety of methods in order to drive traffic to our
websites.  Banner advertisements on key portals, websites and search
engines as well as targeted key word searches are expected to provide us with a
web presence.  We intend to develop partnerships with enterprise
customers leveraging their brand awareness and distribution into various sales
channels and demographic segments.
  The
primary target markets for the MyGlobalTalkTM service are enterprises with global
calling footprints and consumers with global calling needs that want to reduce
their cost to make long distance calls.  We are also targeting
emerging international markets, with an emphasis on Asia Pacific, Central and
South America and Europe.  We believe these markets have the highest
mobile phone adoption rates as well as users that are inclined to want and need
additional mobile applications and services.
  Since the
United States is the most price competitive market, we are targeting the
domestic market through retail channels, agents and selected original equipment
manufacturers.
  Customer
Service
  Our
customer support center for MyGlobalTalk and Shoot It! is located in Southlake,
Texas and offers Tier 1 and Tier 2 support with established escalation
procedures and associated response metrics.  Tier 3 support is
provided by our remote engineering staff.  Support for our Duo Guo
retail distribution kiosks is provided by our Shanghai, China
office.  Pursuant to our overall business strategy, we may elect to
outsource this function in the future.
  Intellectual
Property
  Our
MyGlobalTalk solutions are supported by an intellectual property portfolio. We
have six issued patents and  have thirteen patent applications
pending.  The patents contain a broad range of claims covering our
proprietary technologies and products. In addition, we are will be making
additional filings around our entire product and services offerings including
Shoot It! and Duo Guo as warranted.
  Government
Regulation
  On
November 5, 2005, the Federal Communications Commission (FCC) Enforcement Bureau
issued further revisions to E-911 compliance requirements for interconnected
VoIP service providers.  VoIP providers were not forced to cut off
subscribers who did not receive E-911 services by November 28,
2005.  However, VoIP companies were expected to stop marketing their
service and accepting new customers in service areas that are not equipped to
provide E-911 call routing, even if subscribers would be able to get “basic” 911
service.  The FCC document states “Although we do not require
providers that have not achieved full 911 compliance by November 28, 2005, to
discontinue the provision of interconnected VoIP service to any existing
customers, we do expect that such providers will discontinue marketing VoIP
service, and accepting new customers for their service, in all areas where they
are not transmitting 911 calls to the appropriate PSAP in full compliance with
the Commission’s rules.”  Currently, we are in the process of
complying with FCC’s order for E-911 services.
  We are
not otherwise subject to direct federal, state, or local regulation, and laws or
regulations applicable to access to or commerce on the Internet, other than
regulations applicable to businesses generally.  However, due to the
increasing popularity and use of the Internet and other VoIP services, it is
possible that a number of laws and regulations may be adopted with respect to
the Internet or other VoIP services 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.
  4
  Environmental
Regulations
  We do not
have any environmental regulations to consider.
  Employees
  As of
March 30, 2010, we had 76 full-time employees.  We also rely on a
number of consultants and advisors whom we employ on an “as-needed”
basis.
  Amendment
of Quarterly Reports on Form 10-Q for Fiscal Year 2009
  As
disclosed in our Current Report on Form 8-K filed April 16, 2010, in connection
with our year-end accounting procedures and audit, management consulted with our
independent auditors and Audit Committee and determined that the unaudited
consolidated financial statements contained in the Company’s Quarterly Reports
on Form 10-Q for the quarter ended June 30, 2009 (“Second Quarter”) and the
quarter ended September 30, 2009 (“Third Quarter”) should not be
relied upon.
 
 Additionally,
on April 30, 2010, in connection with our year-end accounting procedures and
audit, management consulted with our independent auditors and Audit Committee
and determined that, due to an error in the calculation of the stock option and
warrant expenses for the three months ended March 31, 2009, the unaudited
consolidated financial statements contained in the Company’s Quarterly Report on
Form 10-Q for the quarter ended March 31, 2009 (“First Quarter”) should not be
relied upon.
 
 As a
result, we subsequently filed amended Quarterly Reports on Form 10-Q/A for the
First Quarter, Second Quarter, and Third Quarter on May 3,
2010.
  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. In addition, 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, any acquired companies may not perform as expected for
various reasons, including legislative or regulatory changes or the loss of key
customers and personnel.  If 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 revenues comes from
residential and small business customers whose spending patterns may be affected
by prevailing economic conditions. While we believe that the weakening economy
had a modest effect on our net subscriber additions during recent months, 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.
  5
  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 December 31, 2009. 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 requirement by receiving net proceeds of
$7,410,000 related to financing during the year ended December 31,
2009.  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
fourth quarter of 2010, 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.
  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 December
31, 2009, 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
$0.15 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 are 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.
  6
  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.
  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.
  7
  We
may not be able to successfully manage our growth.
  Our
liability 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.
  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 and Chief
Operating Officer took office August 10, 2008, our Chief Financial Officer took
office on August 24, 2009, our Senior Vice President of Worldwide Sales took
office on June 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, marketing and
finance.
  Our
performance is dependent on the services of our management as well as on our
ability to recruit, retain and motivate other key employees in the fields of
engineering, marketing and finance. Competition for qualified personnel is
intense and there is a limited number of persons with knowledge of and
experience with VoIP. 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.
  The
general condition of the telecommunications market will affect our business.
Continued pricing declines may result in a decline in our operating
results.
  We are
subject to market conditions in the telecommunications industry. Our operations
could be adversely affected if pricing continues to decline as it has in the
past few years. If pricing declines continue, then we may experience adverse
operating results.
  Risk
Related to doing business in the Peoples Republic of China.
  We
acquired D Mobile in March, 2010.  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 for 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 of 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.
  8
  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.
  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 February, 2010.  D Mobiles 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 an approximate 18.8%
appreciation in the RMB against the U.S. dollar between July 21, 2005 and April
9, 2010. 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 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 its 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.
  9
  The
VoIP telephony market is subject to rapid technological change. Newer technology
may render our technology obsolete which would have a material, adverse impact
on our business and results of operations.
  VoIP
telephony is an emerging market that is characterized by rapid changes in
customer requirements, frequent introductions of new and enhanced products, and
continuing and rapid technological advancement. To compete successfully in this
emerging market, we must continue to design, develop, manufacture, and sell new
and enhanced VoIP telephony software products and services that provide
increasingly higher levels of performance and reliability at lower cost. Our
success in designing, developing, manufacturing, and selling such products and
services will depend on a variety of factors, including:
  ·
              the
      identification of market demand for new
  products;
 ·
              the
      scalability of our VoIP telephony software
  products;
 ·
              product
      and feature selection;
 ·
              timely
      implementation of product design and
  development;
 ·
              product
      performance;
 ·
              cost-effectiveness
      of current products and services and products under
      development;
 ·
              our
      ability to successfully implement service features mandated by federal and
      state law;
 ·
              effective
      manufacturing processes; and
 ·
              effectiveness
      of promotional efforts.
  Additionally,
we may also be required to collaborate with third parties to develop our
products and may not be able to do so on a timely and cost-effective basis, if
at all. We have in the past experienced delays in the development of new
products and the enhancement of existing products, and such delays will likely
occur in the future. If we are unable, due to resource constraints or
technological or other reasons, to develop and introduce new or enhanced
products in a timely manner, if such new or enhanced products do not achieve
sufficient market acceptance, or if such new product introductions decrease
demand for existing products, our operating results would decline and our
business would not grow.
  The
continued growth of the Internet as a medium for telephone services is
uncertain. If this growth does not continue, our business and financial
condition could be materially adversely affected.
  The
continued market acceptance of the Internet as a medium for telephone services
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 Internet as a medium for telephone communications. There can
be no assurance that the number of consumers using the Internet for telephone
communications will grow. If use of the Internet for telephone communications
does not continue to grow, our business and financial condition could be
materially adversely affected.
  Our
business faces security risks. Our failure to adequately address these risks
could have an adverse effect on our business and reputation.
  A party
who is able to circumvent our security measures could misappropriate proprietary
information or cause interruptions in our VoIP operations. We may be required to
expend significant capital and resources to protect against the threat of such
security breaches or to alleviate problems caused by such breaches. Consumer
concern over Internet security has been, and could continue to be, a barrier to
commercial activities requiring consumers to send their credit card information
over the Internet. Computer viruses, break-ins, or other security problems could
lead to misappropriation of proprietary information and interruptions, delays,
or cessation in service to our customers. Moreover, until more comprehensive
security technologies are developed, the security and privacy concerns of
existing and potential customers may inhibit the growth of the Internet as a
merchandising medium. Our failure to adequately address these risks could have
an adverse effect on our business and reputation.
  Our
ability to do business depends, in part, on our ability to license certain
technology from third parties.
  We rely
on certain technology licensed from third parties, and there can be no assurance
that these third party technology licenses will be available to us on acceptable
commercial terms or at all. If we cannot license the technology we need on
acceptable commercial terms, then our business, financial condition and results
of operations will be materially and adversely affected.
  10
  Products
and services like the ones we offer change rapidly and therefore, we must
continually improve them. However, our need to invest in research and
development may prevent us from ever being profitable.
  Products
and services like the ones we offer are continually upgraded in an effort to
make them work faster, function easier for the user and provide more options.
Our industry is characterized by the need for continued investment in research
and development. If we fail to invest sufficiently in research and development,
then our products could become less attractive to potential customers, which
could have a material adverse effect on our results of operations and financial
condition. However, any investment in research and development and technological
innovation will cause our operating costs to increase. This could prevent us
from ever achieving profitability.
  We
sell a service that allows our customers to make telephone calls over the
Internet. Intellectual property infringement claims brought against us, even
without merit, could require us to enter into costly licenses or deprive us of
the technology we need.
  The
service we sell allows our users to make telephone calls over the Internet.
Third parties may claim that the technology we develop or license infringes
their proprietary rights. Any claims against us may affect our business, results
of operations and financial conditions. Any infringement claims, even those
without merit, could require that we pay damages or settlement amounts or could
require us to develop non-infringing technology or enter into costly royalty or
licensing agreements to avoid service implementation delays. Any litigation or
potential litigation could result in product delays, increased costs or both. In
addition, the cost of litigation and the resulting distraction of our management
resources could have a material adverse effect on our results of operations and
financial condition. If successful, a claim of product infringement could
completely deprive us of the technology we need.
  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.
  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.
  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.
  11
  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 and other VoIP services, it is possible that
a number of laws and regulations may be adopted with respect to the Internet or
other VoIP services 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 were
late in filing this Annual Report, and may be unable to timely file periodic
reports in the future. We were
unable to timely file this Annual Report, and may continue to be unable to
timely file our annual and quarterly periodic reports with the SEC in the
future.  Additional failures to timely file periodic reports could
impair our eligibility to have our shares listed on the OTC Bulletin Board, as
well as delay our eligibility to register our securities on Form
S-3.
  We
may become subject to litigation.
  We may be
subject to claims involving how we conduct our business or the market for or
issuance of the Common Stock or other securities. Any such claims against the
Company may affect our business, results of operations and financial conditions.
Such claims, including those without merit, could require us to pay damages or
settlement amounts and would require a substantial amount of time and attention
from our senior management as well as considerable legal expenses. Although we
do not anticipate that our activities would warrant such claims, there can be no
assurances that such claims will not be made.
  We
depend on third-party vendors for key Internet operations including broadband
connectivity, termination capability and different operating systems. The loss
of any of our vendors could have a material adverse effect on our business,
results of operations and financial condition.
  We rely
on our relationships with third party vendors of Internet development tools and
technologies including providers of switches, network termination and
operational and billing specialized operations. There can be no assurance that
the necessary cooperation from third parties will be available on acceptable
commercial terms or at all. Although there are a number of providers of these
services, if we are unable to develop and maintain satisfactory relationships
with such third parties on acceptable commercial terms, or if our competitors
are better able to leverage such relationships, then our business, results of
operations and financial condition will be materially adversely
affected.
  We
may not be able to successfully compete with current or future
competitors.
  The
market for telecom services is highly competitive, and rapidly changing. In
addition to intense competition from VoIP services providers, we also face
competition from traditional telephone systems integrators and
providers.
  12
  Our
competitors range from the large incumbents such as Verizon and AT&T to
newer, large VolP telephonyproviders such as Vonage and Skype. These companies
generally have longer operating histories, significantly greater financial,
technical and marketing resources, greater name recognition and larger existing
customer bases than we have. These competitors may be able to respond more
quickly to new or emerging technologies and changes in customer requirements and
to devote greater resources to the development, promotion, and sale of their
products or services than we can. There can be no assurance that we will be able
to compete successfully against current or future competitors. If we cannot do
so, then our business, financial condition and results of operations will be
materially and adversely affected.
  We
may not be able to comply with the FCC’s requirements to provide 911 services to
our customers. Our inability to comply with these requirements could have an
adverse effect on our business and results of operations.
  On June
3, 2005 the Federal Communications Commission (“FCC”) issued the VoIP 911 Order
adopting rules that require interconnected VoIP providers to provide their new
and existing subscribers with 911 services no later than November 28, 2005. On
November 5, 2005, the FCC issued a public notice stating that VoIP providers who
failed to comply with the VoIP 911 Order by November 28, 2005 would not be
required to discontinue the provision of interconnected VoIP service to any
existing customers, but would be required to discontinue marketing VoIP service
and accepting new customers for VoIP service in all areas where the providers
are not transmitting 911 calls to the appropriate PSAP (public safety answering
point) in full compliance with the FCC’s rules. Because we have not fully
complied with the VoIP 911 Order, we are subject to this restriction. We cannot
be certain that we will be able to fully comply with this VoIP 911 Order.
Because it would prevent us from marketing and accepting new customers in
certain areas, our inability to comply with the VoIP 911 Order may have an
adverse effect on our business and results of operations.
  Item
1B.  Unresolved Staff Comment
  None
  Item
2.     Properties.
  We lease
approximately 4,812 square feet of office space in Southlake, Texas for our
headquarters and operations at a total monthly rent of $7,711. The lease expires
June 30, 2012.  We also have co-location and managed hosting
agreements for our network operations in Atlanta, Georgia and Roswell Georgia.
The total monthly payment for these agreements is $8,902.  We are on a
month-to-month basis with these agreements.
  In
addition, with the acquisition of D Mobile in March 2010 we also lease the
following locations in China (rent approximated in US Dollars based upon March
31, 2010 exchange rate of 6.82 rmb per US Dollar):
  1.
              Lease
      of head office, 228 Mei Yuan Road, Room 820, Shanghai, China,
      20070
 ·
              Monthly
      Rent: approx. $3,953
 ·
              2,559
      Square Feet
 ·
              Expiration:
      May 31, 2011
 2.
              Lease
      of training room, 228 Mei Yuan Road, Room 303, Shanghai, China,
      20070
 ·
              Monthly
      Rent:  approx. $1,101
 ·
              733
      Square Feet
 ·
              Expiration:
      October 31, 2011
 3.
              People
      Square, Metro Line 2, People’s Square Station, Exit 9, Shanghai,
      China
 ·
              Monthly
      Rent: $586
 ·
              53
      Square Feet
 ·
              Expiration:
      October 4, 2010
 4.
              Ya
      Xin Store, Yaxin Square, No. 401 Changshou Road, Shanghai,
      China
 ·
              Monthly
      Rent: $659
 ·
              43
      Square Feet
 ·
              Expiration:
      March 31, 2010
 5.
              Da
      Ning, N0 50  booth , Daning International Shopping Mall, Gonghexin
      Rd, Shanghai, China
 ·
              Monthly
      Rent: $806
 ·
              26
      Square Feet
 ·
              Expiration:
      March 31, 2010
  13
 
 6.
              ZhongShan
      Park (Longzhimeng) Store, No.1018, Changning Road, Zhongshan Park,
      Underground 2 Layer of Longzhimeng Shopping Mall, Shanghai,
      China
 ·
              Monthly
      Rent: $733
 ·
              21
      Square Feet
 ·
              Expiration:
      November 19, 2010
  The
foregoing is a description of our principal and materially important physical
properties.  In addition to those described above, we also have
agreement with retailers to locate our kiosk in their
facilities.  While we do have a revenue sharing arrangement for the
kiosks in retail locations, we do not have any physical lease or rent
obligations. We currently have 75 kiosks in retail locations. We believe that
our leased facilities are adequate to meet our current needs and that additional
facilities are available to us if we determine such additional facilities are
necessary.
  Item
3.     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 2002 (“SuperCaller”),
filed a lawsuit against the Company in the United States District Court for the
Northern District of California, San Francisco Division. The plaintiffs alleged
that i2Telecom (DE) (now known as Geos (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 (DE) (now known as Geos (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. The Company intends to vigorously defend the
matter.
  On May
11, 2009, we commenced litigation against defendants MagicJack, L.P., SJ Labs,
Inc., YMAX Corporation and Daniel Borislow (the “Federal Court
Litigation”).  On June 9, 2009, the defendant’s claims were dismissed
without prejudice.  Prior to the dismissal of the Federal Court
Litigation, and in response to the Federal Court Litigation, SJ Labs, Inc. filed
an action for declaratory judgment, damages and ancillary relief against the
Company in the Court of Common Pleas, Cuyahoga County, Ohio.  We
responded to the declaratory judgment action of SJ Labs by asserting the
defenses of (1) the action fails to state a claim; (2) the claims are barred
because a declaratory action would mot terminate the controversy between the
parties; (3) unclean hands; (4) breach of agreements; (5) conversion of
confidential information; (6) contributory negligence; (7) failure to mitigate
damages; (8) accord and satisfaction; (9) release; and (10) failure of condition
precedent.  Additionally, we responded to the declaratory judgment
action as a counterclaim-plaintiff alleging causes of action against MagicJack,
L.P., SJ Labs, Inc., YMAX Corporation and Daniel Borislow (collectively, the
“Defendants”).  We allege that the Defendants: (i) acquired our
intellectual property pursuant to contracts preserving its confidentiality;
(ii) have improperly used our intellectual property in violation of their
contractual commitments, as well as statutory and common law;
and (iii) in combination with one another, agreed to conspire to use,
convert, or misappropriate the Company’s trade secrets for their own
benefit.  As a result, we allege that the Defendants are jointly and
severally liable for actual, consequential, special, exemplary and
punitive damages.  We are also seeking a permanent injunction to
prevent Defendants from directly or indirectly using or misappropriating any of
our trade secrets.
  14
  PART
II
 Item
4.     Reserved.
  Item
5.    Market for Registrant’s Common Equity, Related
Stockholder Matters and Issuer Purchases of Equity Securities.
  Market
for Common Equity
  Our
Common Stock is traded on the Over-the-Counter Bulletin Board, and our trading
symbol is “GCMI”. The following table sets forth, for the periods indicated, the
range of reported high and low bid information for our Common Stock as reported
on the OTCBB.  Such quotations reflect prices between dealers in
securities and do not include any retail mark-up, mark-down or commission, and
may not necessarily represent actual transactions.  Trading in our
Common Stock has generally been limited and sporadic, and should not be deemed
to constitute an “established trading market”.
  All
share prices in this filing are presented reflective of our 1:10 reverse split
which occurred effective May 14, 2009.
  High
                        
                        Low20081st
      Quarter
                        
                        $
                        0.12
                        
                        
                        $
                        0.082nd
      Quarter
                        
                        $
                        0.15
                        
                        
                        $
                        0.083rd
      Quarter
                        
                        $
                        0.16
                        
                        
                        $
                        0.084th
      Quarter
                        
                        $
                        0.09
                        
                        
                        $
                        0.0420091st
      Quarter
                        
                        $
                        1.10
                        
                        
                        $
                        0.302nd
      Quarter
                        
                        $
                        0.80
                        
                        
                        $
                        0.503rd
      Quarter
                        
                        $
                        0.60
                        
                        
                        $
                        0.404th
      Quarter
                        
                        $
                        0.60
                        
                        
                        $
                        0.15
 Holders
  As of
March 30, 2010, we had approximately 539 shareholders of record. Our transfer
agent is Continental Stock Transfer and Trust Company located at 17 Battery
Place, New York, New York, 10004, (212)509-4000.
  Dividend
Policy
  We have
never paid cash dividends on our Common Stock.  We intend to reinvest
earnings, if any, for use in the operation of our business and therefore do not
anticipate paying any cash dividends on our Common Stock in the foreseeable
future.
  Equity
Compensation Plan Information
  The
following table sets forth information regarding equity compensation plans under
which our Common Stock is authorized for issuance as of December 31,
2009.
  15
 
 Plan Category
                    
                    Number of
                      Securities to
                      be Issued
                      Upon Exercise
                      of
                      Outstanding
                      Options,
                      Warrants and
                      Rights
                    
                    
                    Weighted
                      Average
                      Exercise
                      Price of
                      Outstanding
                      Options,
                      Warrants
                      and Rights
                    
                    
                    Number of
                      Securities
                      Remaining
                      Available for
                      Future Issuance
                      Under Equity
                      Compensation
                      Plans(excluding
                      securities reflected
                      in column AEquity
      compensation plans approved by security holders: (1)
                    
                    
                    4,025,000
                    
                    
                    $
                    .83
                    
                    
                    
                    0Equity
      compensation plans not approved by security holders:
                    
                    
                    2,576,438
                    (2)
                    
                    $
                    .43
                    (2)
                    
                    
                    3,490,000Total
                    
                    
                    6,601,438
                    
                    
                    $
                    .68
                    
                    
                    
                    3,490,000
 
 (1)
              Represents
      options granted pursuant to the Company’s 2004 Stock Incentive
      Plan.
 (2)
                Includes
      options and warrants to purchase Common Stock granted under plans not
      approved by the Company’s shareholders. The material features of such
      plans are set forth below.
 
 From June
2002 to February 2004, the Company granted a current employee options to
purchase 66,438 shares of Common Stock at a split-adjusted exercise price of
$1.50.  These options are all considered non-qualified since the
merger with Digital Date Networks occurred on February 28, 2004.
  At a
special meeting of the Board of Directors held on October 15, 2009, the Board
approved the Company’s 2009 Omnibus Long Term Incentive Plan (the “Plan”).  A
Registration Statement on Form S-8, filed on January 8, 2010, registered a total
of 6,000,000 shares of Common Stock authorized for issuance under the
Plan.  The plan will be presented to shareholders for approval at the
next Annual Meeting.  The Company has granted options to purchase
2,510,000 shares under the plan, which options are subject to the Plan being
approved by shareholders prior to October 15, 2010.
  As part
of a debt settlement from time to time the Company may negotiate to pay its debt
through a combination of stock options or shares of common stock.
  Sales
of Unregistered Securities
  As
partial consideration under, and pursuant to the terms of, an endorsement
agreement dated as of January 30, 2009, as subsequently amended, the Company
issued (i) a total of 159,575 shares of Common Stock on April 9, 2009, and (ii)
a total of 300,000 shares of Common Stock on September 8, 2009. In issuing these
shares without registration under the Securities Act of 1933, as amended (the
“Securities Act”), we relied upon Section 4(2) of the Securities
Act.
  Item
6.   Selected Financial Data.
  Not
applicable.
  Item
7.   Management’s Discussion and Analysis of Financial Condition
and Results of Operations.
  The
following discussion and analysis should be read in conjunction with the
Company’s Consolidated Financial Statements filed with this Annual Report on
Form 10-K (the “Annual Report”). This Annual Report contains forward-looking
statements that involve risks and uncertainties, such as statements of the
Company’s plans, objectives, expectations and intentions. Forward-looking
statements, within the meaning of Section 21E of the Securities and Exchange Act
of 1934, as amended (the “Exchange Act”), are made throughout this Management’s
Discussion and Analysis of Financial Condition and Results of Operations. For
this purpose, any statements contained herein that are not statements of
historical fact may be deemed to be forward-looking statements. Without limiting
the foregoing, the words “believes”, “anticipates”, “plans”, “expects”,
“estimates” and similar expressions are intended to identify 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 Annual Report should be read as being applicable to all
related forward-looking statements wherever they appear in this Annual
Report.
  16
  Overview
  We have
repositioned our company in the fourth quarter of 2009 to support our strategic
plan of becoming a distributor of mobile applications solutions and services for
the global mobile community. These solutions, which we will license or own
ourselves, will include our MyGlobalTalk service. MyGlobalTalk leverages our
core competencies in VOIP and technology development. Our revenues for 2009 have
been derived primarily from our legacy Voicestick solutions and to a lesser
extent from MyGlobalTalk which became market ready in the fourth quarter of
2009.  We expect revenues from MyGlobalTalk to become more significant
in 2010 as our marketing and sales activities begin to yield
results.  We currently offer calling plans for residential and
commercial use, varying in price from “pay as you go” to specific plans with
base charges up to $24.99 per month for combination unlimited and most favorable
per minute charges. The price of the plans varies depending on the service
provided (international long distance service to most countries, long distance
service throughout the United States and Canada and 400 minutes in long distance
service throughout the United States and Canada).
  In
February 2010, we acquired Shoot It!, LLC, which expands our product portfolio
applications and technologies for the global mobile communications
market.  This is an application that we will own and distribute as
well in accordance with our strategic plan.
  In March
2010, we acquired D Mobile, Inc., which provides us with a unique,
market-leading 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 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.
  The
discussion below of our results of operations does not include Shoot It, LLC or
D Mobile, Inc.  These businesses have very little activity at this
time.
  Results
of Operations
  2009
Compared to 2008
  Revenues
decreased to $344,577 in 2009 from $629,824 in 2008.  The decrease of
$285,247 in revenues was due to our repositioning and rebranding efforts due an
increased focus on new services called MyGlobalTalk.  Revenues for
2009 are primarily from our legacy VoiceStick  products, which are
similar to those services of the prior year, and the decrease in these revenues
is attributable to our repositioning of efforts towards other services during
the fourth quarter of 2009.
  Cost of
goods sold decreased slightly to $674,254 in 2009 from $705,495 in
2008.  The decrease of $31,241 is attributable to a decrease in
network and infrastructure cost of $254,412 due to less cost of carrier traffic
termination during 2009 in accordance with decreased traffic and revenue. The
decrease was offset by an increase in hardware cost of goods sold of $209,323
primary due to the write off of obsolete inventory of $189,511 related to the
repositioning efforts noted above.
  General
and administrative expenses increased to $9,390,655 in 2009 from $7,067,815 in
2008. The increase of $2,322,840 was primarily attributable to increased
professional fees of $331,000 which included increased legal fees related to
corporate organizational and equity matters, and consulting fees in
repositioning the company, along with increases related to compensation,
including share based compensation of approximately $1,991,000.
  Other
income/expenses was $2,831,718 in expenses in 2009. In 2008 other
income/expenses was income of $4,205,964. During 2008 a net gain of $5,193,620
was recognized from the sale of assets related to one of our patents, versus $0
gain in 2009. In addition in 2009 interest expense increased from 2008 totaling
approximately  $474,000 due to accretion on interest and dividends on
Preferred Shares, along with the related loss on debt extinguishment of
$1,469,523, from the exchange of notes payable for the Preferred
Stock.
  Financial
Condition, Liquidity and Capital Resources
  As of
December 31, 2009, we had $1,041,830 in cash. We believe this along with our
Drawdown Note in 2010, described below, will provide for our short term cash
needs to be met. The increase in cash from 2008 of $1,039,185 was primarily from
the sale of Series F Preferred Shares of $7,550,000 during 2009, less net cash
used in operating activities. In addition, on February 23, 2010, we issued a
Drawdown Promissory Note in an amount up to a maximum of $2,000,000, all of
which has been drawn down as of April 23, 2010.
  17
  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 shares of Series H Preferred Stock of the
Company, which is a series of preferred stock we anticipate creating (the “Series H Preferred Stock”) in
the Offering (as defined below); or (ii) August 23, 2010 (the “Maturity
Date”).  The note holders 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 Series H Preferred Stock and warrants (the “Offering”), at a conversion
price equal to the purchase price paid for the Series H Preferred Stock and
warrants in the Offering.    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 “Warrant”).  The term
of each Warrant is three years from the issuance date of each
Warrant.
  Our net
working capital on December 31, 2009 was a negative $442,354, compared to a
negative $5,478,348 as of December 31,2008.  This improvement resulted
primarily from the extinguishment of current notes payables and accrued interest
of $6,328,212. The notes payable were exchanged for Series A-D Preferred Stock
of our subsidiary, Geos Communications IP Holdings, Inc., which was valued with
the assistance  independent valuation consultants. The initial
valuation was $7,028,630. Subsequently, $570,040 has been accreted for interest,
plus dividends of $277,955. As these shares are mandatorily redeemable, the
amounts are recorded as long term liabilities versus equity in the Consolidated
Balance Sheets.
  Our net
cash used in operating activities for 2009 was approximately $6,900,000 as
compared to approximately $2,100,000 used in operating activities during 2008.
This is primarily attributable to a patent sold in 2008 which provided net
proceeds of approximately $5,200,000.
  The
decrease in net cash used in investing activities to approximately $840,000 in
2009 from approximately $1,260,000 in 2008 was due to additional equipment
purchased in conjunction with a new switch and billing platform in
2008.
  Net cash
provided by financing activities was approximately $8,770,000 in 2009 as
compared to approximately $3,131,000 in 2008. The increase in cash provided by
financing activities was primarily due to the issuance of Series F Preferred
Stock  yielding $7,550,000..
  Our board
of directors approved an additional Preferred H Series we expect to issue in
2010. The Series H Preferred Stock will not be registered under the Securities
Act of 1933 as amended and may not be offered or sold in the United States
absent registration or an applicable exemption from registration requirements.
We are currently marketing the shares and believe the funding will be adequate
based upon our current operating plan and will bridge us to positive cash
flow.  In addition, the Company is in negotiations with several
companies to enable us to ultimately expand the market and revenues for its
products and services.  Management believes that new products it has in
development, the potential for newly identified business relationships coupled
with new capital from sophisticated investors, should allow us to achieve its
goal of positive cash flow within the next twelve months, and
thereafter. This belief is based upon our current operating
plan  and assumes growth in revenues for our products and
services.  Actual operating results may be different than the
operating plan assumptions which may require us to obtain additional
funding.
  We have
historically reported net losses from our operations and negative cash
flows.  We will need to continue to raise capital to support our
operations until we reach positive cash flows which management believes will be
in the fourth quarter of 2010.  If we cannot raise additional capital
we may need to reduce or cease operations.
  Management
believes we can continue to attract adequate capital and increases in revenues
in 2010 to support the execution of our strategic plan.
  Critical
Accounting Policies and Estimates
  Intangible
Assets
  We have
capitalized certain costs related to registering trademarks and patent pending
technology that is amortized over 10 years on a straight-line
basis.
  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., our wholly-owned
subsidiary.  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.
  18
  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 occured 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.  We recorded a loss on debt
extinguishment of $1,469,523 which is included in the Statement of Operations
for the year ended of December 31, 2009.
  Income
Taxes
  We file a
consolidated federal income tax return with our wholly-owned subsidiaries. We
are 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 when the temporary differences
reverse in accordance with ASC 740, Income Taxes(“ASC 740”).
  In
accordance with ASC 740, we recognize 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. We recognize both interest and penalties related to uncertain
tax positions as part of the income tax provision.  There were no
uncertain income tax positions as of December 31, 2009.
  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.  As of December 31, 2009 all deferred tax assets were
reduced to zero by the allowance.
  NOLs may
be limited, and we are in process of determining if such a triggering event took
place.  At this time, the annual limitation, if any, is not readily
determinable.
  Preferred
Shares
  We apply
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
of dividends and interest is recorded as interest expense in the Statement of
Operations.  As of December 31, 2009, the Company had recorded
liabilities related to Series A-D Preferred Shares of Geos Communications IP
Holdings, Inc. with a mandatory redemption value of $7,880,627.
  In
addition, we classify conditionally redeemable convertible preferred shares,
which includes preferred shares subject to redemption upon the occurrence of
uncertain events not solely within our control, as temporary equity. At all
other times, we classify our preferred shares in stockholders’ equity. As of
December 31, 2009, we had recorded as temporary equity F Series Preferred Shares
totaling $5,047,057.  Dividends on preferred shares included in
temporary equity and equity are recorded as Dividends on Preferred Stock below
Net Income on the Statement of Operations.
  Additionally,
we evaluate 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.  We recorded $2,870,825 as a beneficial conversion
feature of the F Series Preferred Shares for the year ended December 31,
2009.
  Off-Balance
Sheet Arrangements
  We have
not entered into any other financial guarantees or other commitments to
guarantee the payment obligations of any third parties. We have not entered into
any derivative contracts that are indexed to our shares and classified as
stockholder’s equity or that are not reflected in our consolidated financial
statements. Furthermore, we do not have any retained or contingent interest in
assets transferred to an unconsolidated entity that serves as credit, liquidity
or market risk support to such entity. We do not have any variable interest in
any unconsolidated entity that provides financing, liquidity, market risk or
credit support to us or engages in leasing, hedging or research and development
services with us.
  19
  Item
8.   Financial Statements and Supplementary Data.
  Our
consolidated financial statements for the years ended December 31, 2009 and 2008
begin after the Exhibit listing of this annual report on Form
10-K.  We are not required to file any financial statement
schedules.
  Item
9.   Changes in and Disagreements With Accountants on Accounting
and Financial Disclosure.
  We
changed our independent accounting firm during the year ended December 31,
2009.  There were no disagreements with the former independent
accounting firm.
  Item
9A(T).  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 our management, including the
Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the
effectiveness of the design and operations of our disclosure controls and
procedures (as defined in Rule 13a - 15(e) and Rule 15d - 15(e) under the
Exchange Act).  Based on that evaluation the CEO and the CFO have concluded
that as of the end of the period covered by this report, our disclosure controls
and procedures were not adequately designed and were not effective in ensuring
that: (i) information required to be disclosed by us in reports that we file or
submit to the Securities and Exchange Commission 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 CFO, as appropriate, to
allow for accurate and timely decisions regarding required
disclosure.
  Management’s
Annual Report on Internal Control Over Financial Reporting
  Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting, in accordance with Rules 13a-15 and
15d-15 of the Exchange Act. Under the supervision and with the participation of
our management, we, in conjunction with an independent third party, conducted an
evaluation of the effectiveness of our internal control over financial reporting
based on the framework set forth by the Committee of Sponsoring Organizations
(“COSO”) of the
Treadway Commission in Internal Control — Integrated
Framework.
  Internal
control over financial reporting is a process designed to provide reasonable
assurance regarding the reliability of financial reporting and the preparation
of financial statements for external purposes in accordance with generally
accepted accounting principles in the United States of America. Internal control
over financial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that in reasonable detail
accurately and fairly reflect the transactions and dispositions of the assets of
the Company; (ii) provide reasonable assurance that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with generally accepted accounting principles, and that receipts and
expenditures of the Company are being made only in accordance with
authorizations of management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection
of unauthorized acquisition, use, or disposition of the Company’s assets that
could have a material effect on the financial statements.
  Because
of its inherent limitations, internal control over financial reporting may not
prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
  Our
management, with the participation of our Chief Executive Officer and Chief
Financial Officer, evaluated the effectiveness of our internal control over
financial reporting as of December 31, 2009. In making this assessment, our
management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control — Integrated
Framework. Based on this evaluation and those criteria, our management, with the
participation of our Chief Executive Officer and Chief Financial Officer,
concluded that, as of December 31, 2009, our internal control over
financial reporting was not effective.
  20
  Our
management has identified a deficiency that constitutes a material weakness in
our technical accounting expertise necessary for an effective system of internal
control and timely financial reporting.  In an effort to mitigate these
material weaknesses, our management has hired additional staff with accounting
technical expertise. At any time, if it appears that any control can be
implemented to continue to mitigate such control deficiencies in a cost
effective manner, we will attempt to implement the control.
  This
Form 10-K does not include an attestation report of our independent
registered public accounting firm regarding internal control over financial
reporting pursuant to temporary rules of the SEC that permit us to provide
only management’s report in this Form 10-K. For our fiscal year ending
December 31, 2010, we will be required to include the auditor attestation report
on the Company’s internal control over financial reporting under existing
rules.
  This
report shall not be deemed to be filed for purposes of Section 18 of the
Exchange Act, or otherwise subject to the liabilities of that section, and it is
not incorporated by reference into any of our filings, whether made before or
after the date hereof, regardless of any general incorporation language in such
filings.
  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, during the fourth quarter of 2009, we retained additional
accounting technical expertise. Other than this there have been no changes in
our internal control over financial reporting during the fourth quarter ended
December 31, 2009 that have materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
  Item
9B. Other Information
  None
  PART
III
  Item
10.  Directors, Executive Officers and Corporate Governance.
  Directors
and Executive Officers
  The
following table sets forth the names and ages of all directors and executive
officers of the Company as of March 31, 2010.  The Board of Directors
is comprised of only one class.  All of the directors will serve until
the next annual meeting of stockholders and until their successors are elected
and qualified, or until their earlier death, retirement, resignation or
removal.  There are no family relationships among our directors or
executive officers.  There are no arrangements or understandings
between any two or more of the Company’s directors or executive
officers.  There is no arrangement or understanding between any of the
Company’s directors or executive officers and any other person pursuant to which
any director or officer was or is to be selected as a director or officer, and
there is no arrangement, plan or understanding as to whether non-management
shareholders will exercise their voting rights to continue to elect the current
board of directors.  There are also no arrangements, agreements or
understandings between non-management shareholders that may directly or
indirectly participate in or influence the management of the Company’s
affairs.  Also provided herein is a brief description of the business
experience of each director and executive officer during the past five years and
an indication of directorships held by each director in other companies subject
to the reporting requirements under the Federal securities laws.
  Set forth
below is certain information, as of March 31, 2010, concerning each of the
directors and executive officers of the Company. Each of the individuals listed
as a director below shall serve as a director of the Company until the Company’s
next annual meeting of shareholders and until their successors have been elected
and qualified, or until their resignation, death or removal. Each of the
individuals listed below as executive officers shall serve in such offices until
removed by the Board of Directors, subject to applicable employment
agreements.
  Name
              Age
              PositionAndrew
      L. Berman
              51
              Director,
      Chairman of Executive Committee, Chief Executive
OfficerChristopher
      Miltenberger
              53
              President
      and Chief Operating OfficerRichard
      H. Roberson
              51
              Chief
      Financial OfficerDavid
      W. Schafer
              57
              Senior
      Vice President, Worldwide SalesBruce
      Friedman
              60
              DirectorOsmo
      Aimo Antero Hautanen
              55
              DirectorFrederick
      Mapp
              66
              DirectorTimothy
      McGeehan
              43
              DirectorMichael
      Reardon
              57
              DirectorJonathan
      Serbin
              40
              Director,
      Chief Executive Officer, Geos Asia
  21
  None of
the Company’s directors or executive officers, during the past five years, (1)
had any bankruptcy petition filed by or against any business of which such
person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time; (2)  been convicted
in a criminal proceeding or subject to a pending criminal proceeding;
(3)  been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities, futures, commodities or
banking activities; or (4)  been found by a court of competent
jurisdiction (in a civil action), the Securities and Exchange Commission or the
Commodity Futures Trading Commission, to have violated a Federal or State
securities or commodities law, and the judgment has not been reversed, suspended
or vacated.
  Certain additional biographical
information concerning the individuals named above is set forth below.
  Andrew
Berman, Director and Chief Executive Officer
  Mr.
Berman has served as a director of the Company since April 2008 and as Chief
Executive Officer since April 2009.  With over 26 years of industry
experience, Mr. Berman has experience in nearly all sectors of the technology
and telecommunications industries and was instrumental in revolutionizing global
Internet connectivity in the early 1990s. He has extensive experience in the
disciplines of strategic alliance planning and business development, as well as
sales and marketing, product development and distribution, and his experience
provides the Board with valuable insight and perspective.
  Mr.
Berman is the founder and owner of Chesapeake Ventures, LP (“Chesapeake”), a
consulting group specializing in strategic global alliances and business
development for the technology and telecommunications industries.  His
clients at Chesapeake have included Monster Cable, Cisco, RadioShack and Valence
Semiconductor, among others.  Mr. Berman was President and Chief
Executive Officer for Nextlink USA, Inc, AB, a Denmark-based headset
manufacturer from May 2006 to February 2007, at which time he was elected to
their Board of Directors.  He served as Vice President, Strategic
Alliances and Business Development, at RadioShack from July 2003 through April
2006, where he successfully delivered emerging technologies and new
products/services to distribution channels and brought many licensing and
investment opportunities to the company.  Mr. Berman, as a Senior Vice
President of Sales and Marketing for CipherOptics from January 2002 through June
2003, successfully negotiated strategic relationships with SafeNet, CNT, IBM,
EMC, Storage Technology, and Hitachi Data Systems.
  Christopher
Miltenberger, President and Chief Operating Officer
  Mr.
Miltenberger has served as President and Chief Operating Officer of the Company
since August 2008. Furthermore, Mr. Miltenberger has more than 25 years of
experience in business, legal, marketing, and related disciplines in the
computer, technology, and other industries. From April 2008 to present, Mr.
Miltenberger has been a Managing Director of Virenta, LLC and from September
2005 to April 2008, the owner of  the Miltenberger Law Firm providing
legal counsel, specializing in negotiation and drafting of commercial contracts
and other business-related legal matters.  Prior thereto, from August
1998 to September 2004, Mr. Miltenberger was President and General Counsel to
Resource Concepts, Inc., a computer services company which sold to a private
equity firm in April 2004.  From June 1982 to August 1998, Mr.
Miltenberger was Partner and Associate with Worsham, Forsythe & Woolridge,
LLP (now Hunton & Williams, LLP).
  In 1982,
Mr. Miltenberger graduatedwith a Juris Doctorate,
University of Missouri and was a Member, Missouri Law Review.  Mr.
Miltenberger also received a B.A., Accounting and Economics degree, cum laude, Southeast Missouri
State University in 1978.
  Richard
H. Roberson, Director and Chief Financial Officer
  Mr.
Roberson joined Geos as Chief Financial Officer in August 2009. Mr. Roberson has
28 years of experience in business and finance, most recently serving as senior
vice president and Chief Financial Officer with Excel Telecommunications from
September 2008 through August, 2009 where he led the Finance and Human Resources
departments. His experience provides the Board with valuable insight and
perspective. Before joining Excel, Mr. Roberson was Chief Financial Officer,
Secretary and a Director of Enfora, Inc from 1999 to 2008. Mr. Roberson was a
key contributor to growing Enfora from start-up to a mature company with over
$100 million in revenues in 2008. Prior to Enfora, Mr. Roberson was Chief
Financial Officer, Secretary and a Director of IWL Communications, Inc. from
1996 to 1998. While at IWL, he completed the company’s IPO and was involved in
substantial merger and acquisition activity, including the sale of the company
to Caprock Communications in 1998. Mr. Roberson also has public accounting and
enterprise leadership experience prior to joining IWL.
  22
  Mr.
Roberson holds a Bachelor of Business Administration Degree in Accounting from
the University of Texas at Austin and is a Certified Public
Accountant.
  David
W. Schafer, Senior Vice President, Worldwide Sales
  Mr. Schafer has served as Geos Senior
Vice President for Worldwide Sales since October of 2009. From 2008 to the
beginning of 2009 he was a Managing Partner with Virenta, a consulting firm, and
from 2002 until 2008, he served as Senior Vice President of Worldwide Sales of
Lantronix.
  Mr. Schafer earned a Bachelor of Arts
with honors in Business Administration from California State University,
Fullerton in 1979.
  Bruce
Friedman
  Mr.
Friedman has served as a director of the Company since May 2009 and is the
Chairman of our Audit Committee. Mr. Friedman has over thirty-five years of
experience in structuring financial transactions and designing marketing
campaigns to introduce new, innovative products to the general public. In 2003
Mr. Friedman founded MyBrainTrainer, LLC (“MyBrainTrainer”), which maintains a
website to help enhance cognitive function, and has served as its President from
2003 to the present. Additionally, Mr. Friedman was the founder and President
from 1992 to 2009 of Heart Check America, Inc., an operator of medical imaging
facilities specializing in cardiac screening examinations. Previously, he was a
commercial real estate broker from 1988 to 1992 and Chief Financial Officer of
Pacific Triangle Management Corporation from 1977 to 1985, a Beverly Hills based
real estate developer. From 1973 to 1976, he was a Certified Public Accountant
for Arthur Andersen & Co. and performed audits of public companies. His
experience provides the Board with valuable insight and perspective. Mr.
Friedman received an M.B.A. from The Wharton School and a B.A. from State
University of New York at Stony Brook.
  Osmo
Aimo Antero Hautanen, Director
  Mr.
Hautanen has served as a director of the Company since February 2009. Mr.
Hautanen is CEO of Magnolia Broadband and owner of Cosmos Consulting, Inc. of
Dallas, Texas. Previously, Mr. Hautanen served as the CEO of Fenix LLC, the
holding company for Union Pacific Corporation’s extensive portfolio of
technology assets and operating companies including Nexterna, a mobile resource
management and wireless data company; Timera, an enterprise workforce management
software company; and Transentric, a supply chain and e-commerce software
company.  Earlier, Mr. Hautanen was CEO of Denver-based
FormusCommunications, an international wireless telecommunications start-up.
Prior to Formus, he was President-Americas of Philips Consumer Communications
where he established consumer communications activities in North and South
America, overseeing all aspects of creating and developing the Americas’ markets
for the company’s complete range of wireless, PCS and paging
products.
  Prior to
Philips, Mr. Hautanen held several executive positions over an 18-year period
with Nokia, the global leader in wireless communications, where he held the
positions of Vice President and General Manager for Personal Communications
Services, helped launch the Latin American division, and was Vice President of
Sales and Marketing for the U.S.  He began his career with Nokia serving in
numerous technical positions involving design, project management and customer
service. His experience provides the Board with valuable insight and
perspective.
  Mr.
Hautanen holds a BS in control engineering from the Technical College of
Varkaus, Varkaus, Finland and an MBA in international business from Georgia
State University.
  23
  Frederick
Mapp, Director
  Mr. Mapp
has served as a director of the Company since June of 2009. Mr. Mapp has more
than 40 years of experience in the areas of information technology systems,
applications, infrastructure support, customer support and consulting services.
During that time he has held senior executive-level positions with companies
such as InfoSpan, American Express and IBM as well as the position of chief
information officer for Advanced Micro Devices (AMD) and Honeywell. In addition,
Mr. Mapp served as CEO and president of the World Congress on Information
Technology, a forum that is held every two years under the direction of the
World Information Technology Services Alliance. His experience provides the
Board with valuable insight and perspective. Mr. Mapp attended the University of
New Haven and majored in electrical engineering.
  Timothy
McGeehan, Director
  Mr.
McGeehan has served as a director of the Company since October
2008.  From August 1988 to May 2008, Mr.  McGeehan, was
employed in a senior executive capacity for Best Buy and oversaw Best Buy Mobile
and the enterprise’s expanding global wireless business, through its strategic
relationship with The Carphone Warehouse Group PLC (CPW). Mr. McGeehan was
responsible for the rollout of Best Buy Mobile across North America and
internationally; he also played a key leadership role in the enterprise’s
international expansion. His experience provides the Board with valuable insight
and perspective. Mr. McGeehan attended North Dakota State University and served
four years in the U.S. Army.
  Michael
Reardon, Director
  Mr.
Reardon has served as a director of the Company since June of 2009. Mr. Reardon
has more than 25 years experience as an entrepreneur, consultant, director and
marketing expert in the fields of telecommunications, finance and manufacturing,
and brings valuable insight and perspective to the Board. Currently, Mr. Reardon
is the president of ProVision Communications, a telecommunications consulting
firm established in 2000. Mr. Reardon holds a Bachelor of Science degree in
economics from Arizona State University. Mr. Reardon also serves as director of
Hyperflo, a manufacturer of precision cleaning equipment, and sits on the board
of Nelnet, Inc., one of the leading education and finance companies in the
United States.
  Jonathan
Serbin, Director, Chief Executive Officer, Geos Asia
  Mr.
Serbin has served as a director of the Company since March of 2010, and
currently serves as Chief Executive Officer of D Mobile, Inc. Prior to D Mobile,
Mr. Serbin was the Chief Financial Officer and Chief Strategic Officer at EBT
Mobile (LSE: EBT), a leading Chinese mobile-phone retail chain. He has also
served as the President of Sinosure Financial Group, a financial advisory firm
focused on China’s media and retail sector. His experience brings valuable
insight and perspective to the Board. Earlier in his career, Mr. Serbin was an
investment banker at Lehman Brothers, focusing on communications, media and
entertainment mergers and acquisitions, and was also a corporate attorney at
Coudert Brothers, focusing on international corporate finance and mergers and
acquisitions in the media sector. Additionally, he was previously Chief
Financial Officer of Hana Biosciences (NASDAQ: HNAB.OB).
  Meetings
and Committees of the Board of Directors
  During
the year ended December 31, 2009, the Company had approximately eight telephonic
meetings and one physical meeting of its Board of Directors. All members of the
Board of Directors were present at the Company’s 2009 Annual Meeting of
Shareholders.
  The
Company does not have a nominating committee of the Board of Directors, or any
committee performing similar functions.  Nominees for election as a
director are selected by the Board of Directors, who seek to nominate directors
bringing a wide range of experience and skills to the management of
Geos.
  The
compensation committee of the Board of Directors consists of Mr. Reardon and Mr.
Friedman, each being an independent director.  The compensation
committee reviews the performance of the executive officers of the Company and
reviews the compensation programs and agreements for key employees including
salary and bonus levels.
  Mr.
McGeehan, Mr. Mapp, Mr. Reardon, Mr. Friedman and Mr. Hautanen are the Company’s
independent directors as defined under NASDAQ Rule 5605(a)(2).
  24
  Audit
Committee
  The audit
committee of the Board of Directors consists of Mr. Friedman, who is the
Chairman of the Audit Committee, and Mr. Mapp, each being an independent
director of the Company.  The audit committee reviews actions with
respect to various auditing and accounting matters, including the selection of
the Company’s independent public accountants, the scope of the annual audits,
the nature of non-audit services, the fees to be paid to the independent public
accountants, and the accounting practices of the Company. The Company does not
currently have an audit committee financial expert serving on its audit
committee because we believe that the members of our Board are collectively
capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting.  The Company
may in the future attempt to add a qualified board member to serve as an audit
committee financial expert in the future, subject to its ability to locate and
compensate such a person.
  Corporate
Governance Committee and Code of Ethics
  The
Corporate Governance Committee of the Board of Directors consists of Mr. Reardon
and Mr. McGeehan. The primary purpose of the Corporate Governance Committee is
the establishment and review of the Company’s Code of Business Conduct and
Ethics, which was originally adopted in October of 2009, and applies to all of
the Company’s employees, including the Company’s executive officers. A copy of
the Company’s Code of Business Conduct and Ethics is available on the Company’s
website at www.geoscommunications.com.
Additionally, the Company will provide to any person without charge, upon
request, a copy of the Company’s Code of Business Conduct and Ethics. Such
requests should be directed to the Secretary of Geos Communications, Inc. at 430
North Carroll Avenue, Suite 120, Southlake, Texas, 76092.
  Section
16(a) Beneficial Ownership Reporting Compliance
  Section
16(a) of the Exchange Act requires the Company’s directors and executive
officers, and all persons (“Reporting Persons”) who beneficially own more than
10% of the outstanding shares of Common Stock, to file with the SEC initial
reports of ownership and reports of changes in ownership of the Common Stock and
other equity securities of the Company. Reporting Persons are also required to
furnish the Company with copies of all Section 16(a) forms they file. To the
Company’s knowledge, based solely upon a review of the copies of such forms
furnished to the Company for the year ended December 31, 2009, and the
information provided to the Company by Reporting Persons of the Company, no
Reporting Person failed to file the forms required by Section 16(a) of the
Exchange Act on a timely basis, except that (i) each of Messrs. Arena, Berman,
Miltenberger, Friedman, Mapp, McGeehan and Reardon failed to timely file reports
of changes in ownership on Form 4 (or annual statements on Form 5) reflecting,
among other things, the granting and vesting of certain stock options in 2009
and (ii) Stephen F. Butterfield, a beneficial owner of more than 10% of the
outstanding shares of Common Stock, failed to timely file an initial report of
ownership on Form 3 reflecting a total of 7 transactions in which he acquired
beneficial ownership of shares of the Company’s Series F Convertible Preferred
Stock and warrants for the purchase of Common Stock.
  Item
11.  Executive Compensation.
  Executive
Compensation
  The following table sets forth certain
information regarding cash and non-cash compensation earned during each of the
Company’s last two fiscal years by (i) our Chief Executive Officer, (ii) our
Chief Financial Officer, (iii) the three most highly compensated executive
officers other than our CEO and CFO who were serving as executive officers at
the end of our last completed fiscal year, whose total compensation exceeded
$100,000 during the fiscal year ended December 31, 2009, and (iv) up to two
additional individuals for whom disclosure would have been provided but for the
fact that the individual was not serving as an executive officer at the end of
our last completed fiscal year, whose total compensation exceeded $100,000
during the fiscal year ended December 31, 2009 (the “Named Executive Officers”).
  25
 
 Summary
      Compensation tableName and principal position
                                  
                                  Year
                                  
                                  Salary ($)
                                  
                                  
                                  Bonus
                                    ($)
                                  
                                  
                                  Stock
                                    Awards
                                    ($)
                                  
                                  
                                  Option
                                    Awards
                                    ($) (5)
                                  
                                  
                                  Non-
                                    Equity
                                    Incentive
                                    Plan
                                    Compensation
                                    ($)
                                  
                                  
                                  Nonqualified
                                    Deferred
                                    Compensation
                                    Earnings
                                    ($)
                                  
                                  
                                  All
                                    Other
                                    Compensation
                                    ($)
                                  
                                  
                                  Total ($)Paul
      R. Arena (1),
                                  
                                  2008
                                  
                                  $
                                  206,250
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  $
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  $
                                  206,250Chairman,
      CEO, and CFO
                                  
                                  2009
                                  
                                  
                                  254,162
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  371,885
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  15,740
                                  
                                  
                                  
                                  641,787Andrew
      Berman (2)
                                  
                                  2008
                                  
                                  
                                  
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —Chief
      Executive Officer
                                  
                                  2009
                                  
                                  
                                  219,792
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  351,870
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  571,662Christopher
      Miltenberger,
                                  
                                  2008
                                  
                                  
                                  120,000
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  120,000President
      & Chief  Operating Officer
                                  
                                  2009
                                  
                                  
                                  179,848
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  265,975
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  445,823David
      W. Schafer(3)
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —Sr.
      V. P. of Worldwide Sales
                                  
                                  2009
                                  
                                  
                                  105,000
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  94,325
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  199,325Richard
      H. Roberson (4)
                                  
                                  2008
                                  
                                  
                                  
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —Chief
      Financial Officer
                                  
                                  2009
                                  
                                  
                                  68,642
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  94,325
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  6,995
                                  
                                  
                                  
                                  169,962
 
 (1)
              Mr.
      Arena served as Chief Executive Officer of Geos until April 20, 2009, and
      as Chief Financial Officer until August 24,
  2009.
 (2)
              Mr.
      Berman has served as Chief Executive Officer of Geos since April 20,
      2009.
 (3)
              Mr.
      Schafer has served as Sr. V.P. of Worldwide Sales of Geos since June 1,
      2009
 (4)
              Mr.
      Roberson has served as Chief Financial Officer of Geos since August 24,
      2009.
 (5)
              2009
      Awards are equal to the grant date fair value of the entire
      award.
 
 Outstanding
Equity Awards at Fiscal Year-End
  Option
      Awards
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Stock
      AwardsName
                                                                                                                                          
                                                                                                                                          Number of
                                                                                                                                            Securities
                                                                                                                                            Underlying
                                                                                                                                            Unexercised
                                                                                                                                            Options (#)
                                                                                                                                            Exercisable
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Equity
                                                                                                                                            Incentive
                                                                                                                                            Plan
                                                                                                                                            Awards:
                                                                                                                                            Number of
                                                                                                                                            Securities
                                                                                                                                            Underlying
                                                                                                                                            Unexercised
                                                                                                                                            Options (#)
                                                                                                                                            Unexercisable
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Equity
                                                                                                                                            Incentive
                                                                                                                                            Plan
                                                                                                                                            Awards:
                                                                                                                                            Number of
                                                                                                                                            Securities
                                                                                                                                            Underlying
                                                                                                                                            Unexercised
                                                                                                                                            Unearned
                                                                                                                                            Options (#)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Option
                                                                                                                                            Exercise
                                                                                                                                            Price ($)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Option
                                                                                                                                            Expiration
                                                                                                                                            Date
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Number of
                                                                                                                                            Shares
                                                                                                                                            or Units
                                                                                                                                            of Stock
                                                                                                                                            That Have
                                                                                                                                            Not
                                                                                                                                            Vested (#)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Market
                                                                                                                                            Value of
                                                                                                                                            Shares or
                                                                                                                                            Units of
                                                                                                                                            Stock That
                                                                                                                                            “Have Not
                                                                                                                                            Vested ($)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          Equity
                                                                                                                                            Incentive
                                                                                                                                            Plan
                                                                                                                                            Awards:
                                                                                                                                            Number of
                                                                                                                                            Unearned
                                                                                                                                            Shares, Units
                                                                                                                                            or Other
                                                                                                                                            Rights That
                                                                                                                                            Have Not
                                                                                                                                            Vested (#)Paul
      R. Arena159,722
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          90,278
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .70
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          12/201162,500
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          187,500
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .80
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          2/201288,889
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          311,111
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .70
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          3/2012Andrew
      L Berman83,333
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          116,667
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          1.00
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          3/201241,667
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          58,333
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          1.20
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          8/201112,500
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          37,500
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .70
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          2/201288,889
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          311,111
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .70
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          3/2012250,000
                                                                                                                                          (1)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .40
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          9/2014Christopher
      Miltenberger88,889
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          111,111
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          1.30
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          7/201125,000
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          75,000
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .70
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          2/201244,444
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          155,556
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .70
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          3/2012250,000
                                                                                                                                          (1)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .40
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          9/2014David
      W. Shafer
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          250,000
                                                                                                                                          (1)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .40
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          9/2014Richard
      H. Roberson
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          250,000
                                                                                                                                          (1)
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          .40
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          
                                                                                                                                          9/2014
  26
  (1) At a
special meeting of the Board of Directors held on October 15, 2009, the Board
approved the Company’s 2009 Omnibus Long Term Incentive Plan (the “Plan”).  A
Registration Statement on Form S-8, filed on January 8, 2010, registered a total
of 6,000,000 shares of Common Stock authorized for issuance under the
Plan.  The plan will be presented to shareholders for approval at the
next Annual Meeting.  The Company has granted options to purchase
2,510,000 shares under the plan, which options are subject to the Plan being
approved by shareholders prior to October 15, 2010.
  Employment
Agreements
  On April
20, 2009, the Company entered into Employment Agreements with each of Andrew L.
Berman, Paul R. Arena, Christopher R. Miltenberger, and Douglas F. Bender, all
of which were subsequently amended on June 24, 2009.
  As
amended, the Berman Employment Agreement provides for, among other things: (i)
employment as Chief Executive Officer of the Company; (ii) a two-year term,
subject to annual extensions at the option of the Company; (iii) a base salary
of $275,000, and an annual bonus of up to 50% of such base salary; (iv) a grant
of 4,000,000 stock options, at an exercise price of $0.07 per share, which
options shall have a five-year term, and 1,000,000 of which vest 1/36 over
three-years, and the remaining 3,000,000 of which will vest upon the attainment
of certain performance hurdles; and (v) change of control
protection.
  The Arena
Employment Agreement provided for, among other things: (i) employment as
Executive Chairman of the Board, Chief Financial Officer and Secretary of the
Company; (ii) a two-year term, subject to annual extensions at the option of the
Company; (iii) a base salary of $275,000, and an annual bonus of up to 50% of
such base salary; (iv) a grant of 4,000,000 stock options, at an exercise price
of $0.07 per share, which options shall have a five-year term, and 1,000,000 of
which vest 1/36 over three-years, and the remaining 3,000,000 of which will vest
upon the attainment of certain performance hurdles; and (v) change of control
protection. The Arena Employment Agreement terminated on March 10,
2010.
  As
amended, the Miltenberger Employment Agreement provides for, among other things:
(i) employment as President and Chief Operating Officer of the Company; (ii) a
two-year term, subject to annual extensions at the option of the Company; (iii)
a base salary of $200,000 and an annual bonus of up to 50% of such base salary;
(iv) a grant of 2,000,000 stock options, at an exercise price of $0.05 per
share, which options shall have a five-year term, and 500,000 of which vest 1/36
over three-years, and the remaining 1,500,000 of which will vest upon the
attainment of certain performance hurdles; and (v) change of control
protection.
  On August
24, 2009, the Company and Richard H. Roberson entered into an Employment
Agreement, dated August 24, 2009, which provides for, among other things: (i)
employment as Chief Financial Officer of the Company; (ii) a twelve-month term;
(iii) a base salary of Fifteen Thousand, Eight Hundred and Thirty-Three Dollars
and 33/100 ($15,833.33) per month, and an annual bonus of up to 50% of such base
salary; (iv) eligibility to receive options as determined by the Board of
Directors from time to time; and (iv) upon a change of control, full vesting of
any options or similar securities held by Mr. Roberson.
  On
October 1, 2009, the Company and David Schafer entered into an Employment
Agreement, dated August 24, 2009, which provides for, among other things: (i)
employment as Senior Vice President–Worldwide Sales of the Company; (ii) a
twelve-month term; (iii) a base salary of Fifteen Thousand Dollars ($15,000.00)
per month, and an annual bonus of up to 50% of such base salary; (iv)
eligibility to receive options as determined by the Board of Directors from time
to time; and (iv) upon a change of control, full vesting of any options or
similar securities held by Mr. Schafer.
  27
  Director
Compensation
  The
following table provides compensation information for our directors during the
fiscal year ended December 31, 2009:
  Name
                    
                    Fees
                      Earned or
                      Paid in
                      Cash
      ($)
                    
                    
                    Option Awards ($) (1)
                    
                    
                    Non-Equity
      Incentive Plan Compensation
                      ($)
                    
                    
                    Non-Qualified Deferred Compensation
      Earnings ($)
                    
                    
                    All Other Compensation($)
                    
                    
                    Total ($)Bruce
      Friedman
                    
                    
                    —
                    
                    
                    $
                    49,721
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    $
                    49,721Fred
      Mapp
                    
                    
                    —
                    
                    
                    
                    65,592
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    65,592Timothy
      McGeehan
                    
                    
                    —
                    
                    
                    
                    19,717
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    19,717Michael
      Reardon
                    
                    
                    —
                    
                    
                    
                    53,533
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    53,533
 (1)
              The
      award amount represents the grant date fair value of the entire
      award.
  Item
12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters
  Beneficial
Ownership
  As used
in this section, the term beneficial ownership with respect to a security is
defined by Rule 13d-3 under the Securities Exchange Act of 1934, as amended, as
consisting of sole or shared voting power (including the power to vote or direct
the vote) and / or sole or shared investment power (including the power to
dispose of or direct the disposition of) with respect of security through any
contract, arrangement, understanding, or relationship or otherwise, subject to
community property laws where applicable.
  As of
March 30, 2010, the Company had a total of 32,647,642 shares of Common Stock
issued and outstanding, which is the only issued and outstanding voting equity
security of the Company.
  The
following table sets forth, as of March 30, 2010; (a)  the names of
each beneficial owner of more than five percent (5%) of the Company’s Common
Stock known to the Company, the number of shares of Common Stock beneficially
owned by each such person, and the percent of the Company’s Common Stock so
owned; and (b)  the names of each director and executive officer, the
number of shares of Common Stock beneficially owned and the percentage of the
Company’s Common Stock so owned, by each such person, and by all directors and
executive officers as a group.  Each person has sole voting and
investment power with respect to the shares of Common Stock, except as otherwise
indicated.
  Common Stock
                      Beneficially Owned (1)Name of Beneficial Owner
(2)
                    
                    Number of
                      Shares of
                      Common Stock
                    
                    
                    Percentage of
                      Class (3)Paul
      Arena
                    
                    
                    2,079,127
                    (4)
                    
                    
                    6.28
                    %Andrew
      Berman†‡
                    
                    
                    1,573,611
                    (5)
                    
                    
                    4.60
                    %Christopher
      Miltenberger‡
                    
                    
                    1,477,778
                    (6)
                    
                    
                    4.33
                    %Timothy
      McGeehan†
                    
                    
                    130,555
                    (7)
                    
                    
                    0.40
                    %Richard
      H. Roberson†‡
                    
                    
                    -
                    
                    
                    
                    -David
      W. Schafer‡
                    
                    
                    -
                    
                    
                    
                    -Bruce
      Friedman†
                    
                    
                    1,003,035
                    (8)
                    
                    
                    3.06
                    %Osmo
      Aimo Antero Hautanen†
                    
                    
                    -
                    
                    
                    
                    -Frederick
      Mapp†
                    
                    
                    61,111
                    (9)
                    
                    
                    0.19
                    %Michael
      Reardon†
                    
                    
                    61,111
                    (10)
                    
                    
                    0.19
                    %Jonathan
      Serbin†
                    
                    
                    3,498,440
                    (11)
                    
                    
                    9.68
                    %Vestal
      Venture Capital
                      6471
      Enclave Way
                      Boca
      Raton, FL 33496
                    
                    
                    6,884,013
                    (12)
                    
                    
                    21.09
                    %Stephen
      F. Butterfield
                      6991
      E. Camelback Road, Suite B-290
                      Scottsdale,
      AZ 85251
                    
                    
                    7,000,219
                    (13)
                    
                    
                    17.66
                    %All
      executive officers and directors as a group (8 persons)
                    
                    
                    7,805,641
                    
                    
                    
                    22.44
                    %
  28
 
 †
              Director
      of the Company
 ‡
              Officer
      of the Company
 *
              Owns
      less than .1%
 (1)
              Unless
      otherwise noted, all of the shares shown are held by individuals or
      entities possessing sole voting and investment power with respect to such
      shares. Shares not outstanding but deemed beneficially owned by virtue of
      the right of a person or member of a group to acquire them within 60 days
      of March 30, 2010, are treated as outstanding only when determining the
      amount and percentage owned by such individual or
  group.
 (2)
              The
      address of each executive officer and director of the Company is 430 North
      Carroll Avenue, Suite 120, Southlake, Texas,
  76092.
 (3)
              In
      accordance with regulations of the SEC, the percentage calculations are
      based on shares of Common Stock issued and outstanding as of March 30,
      2010, plus shares of Common Stock which may be acquired within 60 days of
      March 30, 2010, by each individual or group
  listed.
 (4)
              Represents
      (i) 1,616,017 shares of Common Stock owned by Mr. Arena, and (ii) 463,110
      shares of Common Stock issuable upon exercise of certain
      options.
 (5)
              Represents
      (i) 1,573,611 shares of Common Stock issuable to Mr. Berman upon exercise
      of certain options and warrants. Of this amount 1,250,000 shares of Common
      Stock are issuable upon exercise of certain warrants to Virenta, LLC of
      which Mr. Berman shares voting power with Mr. Miltenberger and 5 other
      persons.
 (6)
              Represents
      (i) 1,477,778 shares of Common Stock issuable to Mr. Miltenberger upon
      exercise of certain options and warrants. Of this amount 1,250,000 shares
      of Common Stock are issuable upon exercise of certain warrants to Virenta,
      LLC of which Mr. Miltenberger shares voting power with Mr. Berman and 5
      other persons.
 (7)
              Represents
      130,555 shares of Common Stock issuable to Mr. McGeehan upon exercise of
      certain options and warrants.
 (8)
              Represents
      (i) 903,039 shares of Common Stock owned by Mr. Friedman, and (ii) 99,996
      shares of Common Stock issuable upon exercise of certain
      options.
 (9)
              Represents
      61,111 shares of Common Stock issuable upon exercise of certain
      options.
 (10)
              Represents
      61,111 shares of Common Stock issuable upon exercise of certain
      options.
 (11)
              Represents
      3,435,500 shares of Common Stock issuable to Mr. Serbin upon the
      conversion of shares of Series G Preferred Stock and 62,940 shares of
      Common Stock issuable to Mr. Serbin upon the exercise of certain
      warrants.
 (12)
              Represents
      6,209,013 shares of Common Stock held by Vestal Venture Capital. Mr. Allan
      Lyons, managing partner of 21st Century Strategic Investment Planning, LC
      is the General Partner on behalf of Vestal Venture Capital in voting these
      shares of Common Stock.  Also includes 675,000 of shares of
      Common Stock held by 21st Century Strategic Investment Planning,
      LC.
 (13)
              Represents
      (a) 5,300,000 shares of Common Stock issuable to Butterfield Family Trust
      U/A/D 1/12/1999 upon the exercise of certain warrants and (b) 1,700,219
      shares of Common Stock issuable to the Stephen F. Butterfield 2009 Grantor
      Retained Annuity Trustupon conversion of
      shares of Series F Convertible Preferred Stock. As trustee of both the
      Butterfield Family Trust U/A/D 1/12/1999 and the Stephen F. Butterfield
      2009 Grantor Retained Annuity Trust, Stephen F. Butterfield may be deemed
      to have beneficial ownership of these
shares.
 
 Item
13. Certain Relationships and Related Transactions and Director
Independence
  Described
below are certain transactions or series of transactions between us and our
executive officers, directors and the beneficial owners of 5% or more of our
common stock, on an as converted basis, and certain persons affiliated with or
related to these persons, including family members, in which they had or will
have a direct or indirect material interest in an amount that exceeds the lesser
of $120,000 or 1% of the average of our total assets as of year-end for the last
three completed fiscal years, other than compensation arrangements that are
otherwise required to be described under “Executive Compensation.”
  On
September 8, 2009, the Company entered into a Second Amendment to Marketing
Agreement (the “Second Amendment”) amending that certain Marketing Agreement
dated as of April 22, 2008 (the “Marketing Agreement”), by and between the
Company and Virenta, LLC, a Texas limited liability company (“Virenta”), as
previously amended pursuant to an Amendment to Marketing Agreement dated October
22, 2008. Virenta is affiliated with certain of the Company’s officers and
directors: both Andrew L. Berman (the Company’s Chief Executive Officer and a
member of the Company’s Board of Directors) and Christopher Miltenberger (the
Company’s President and Chief Operating Officer) own membership interests in
Virenta.
  Pursuant
to the Second Amendment, the Company and Virenta agreed to (i) reduce the
monthly payment owed to Virenta for services rendered under the Marketing
Agreement from $22,916.00 to $7,500.00, (ii) eliminate other additional
monthly and quarterly payments based on revenues generated by Virenta’s
marketing efforts, and (iii) eliminate provisions addressing web-based marketing
efforts and sale of wholesale airtime minutes by Virenta.
  29
  On
November 19, 2009, pursuant to the terms of subscription agreement dated
November 19, 2009 (in the form attached hereto as Exhibit 10.01, the
“Subscription Agreement”) and for a total purchase price of $1,500,000, the
Company issued to Steven F. Butterfield, Living Trust U/A/D 01/12/1999 (i) 1,500
shares of Series F Convertible Preferred Stock, no par value per share (the
“Series F Preferred Shares”), and (ii) a three-year warrant (in the form
attached hereto as Exhibit 10.02, the “Warrants”) to purchase 1,500,000 shares
of the Company’s common stock, no par value per share (“Common Stock”), at a
price of $0.625 per share.
  On
December 17, 2009, pursuant to the terms of Subscription Agreement dated
December 17, 2009 and for a total purchase price of $150,000, the Company issued
to Scott B. Butterfield and Susie Molenaar Butterfield (i) 150 shares of Series
F Preferred Shares and (ii) a three-year Warrant to purchase 150,000 shares of
the Company’s Common Stock, at a price of $0.625 per share. Mr. Scott
Butterfield is the brother of Mr. Stephen F. Butterfield, a beneficial owner of
more than 10% of the outstanding Common Stock.
  On
December 27, 2009, pursuant to the terms of Subscription Agreement dated
December 27, 2009 and for a total purchase price of $10,000, the Company issued
to Kristi Reardon (i) 10 shares of Series F Preferred Shares and (ii) a
three-year Warrant to purchase 10,000 shares of the Company’s Common Stock, at a
price of $0.625 per share. Ms. Kristi Reardon is the daughter of Michael D.
Reardon, a member of the board of directors of the Company.
  Mr.
Reardon, Mr. Mapp, Mr. McGeehan, Mr. Friedman and Mr. Hautanen are the Company’s
independent directors as defined under NASDAQ Rule 5605(a)(2).
  The
Company believes that the foregoing transactions with its officers and directors
were on terms no less favorable to the Company than could have been obtained
from independent third parties.
  Item
14. Principal Accounting Fees and Services
  Audit
Fees
  Freedman
& Goldberg, CPA’s (“Freedman”) billed $82,321 in Audit Fees for fiscal year
2008 and $80,741 for fiscal year 2009.  BDO Seidman, LLP (“BDO”) has
billed and  received pre-approval for fees of $220,000 in Audit
Fees for fiscal year 2009, including fees for the restatement of our quarterly
financial statements on Form 10-Q for the quarterly periods ended March 31, June
30, and September 30, 2009.
  Tax
Fees
  Freedman
billed $3,750 for fiscal year 2008 and $4,479 for fiscal year 2009 for tax
compliance, tax advice and tax planning.  These services provided by
Freedman included the preparation of the Company’s federal and state tax returns
for 2007 and 2008, respectively.  BDO billed $14,658 for tax planning
and consulting services for the fiscal year 2009.
  All
Other Fees
  BDO
billed $22,000 for due diligence assistance services for fiscal year
2009.  Freedman did not bill for any additional fees during the 2008
or 2009 fiscal year.
  Policy
on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditors
  The
Company’s Audit Committee is required to pre-approve all audit and non-audit
services performed by the Company’s independent auditors. The Company’s Audit
Committee, however, has not adopted any general pre-approval policy with regard
to specified audit or non-audit services which may be provided by the
independent auditors, but requires that the Company’s Audit Committee grant
specific pre-approval of each audit or non-audit service to be provided by the
independent auditor before the independent auditor is engaged to render such
service.
  30
  PART
IV
  Item
15. Exhibits, Financial Statement Schedules
  Financial
Statements; Schedules
  Our
consolidated financial statements for the  years ended December 31,
2009 and 2008 begin after the following Exhibit listing.  We are not
required to file any financial statement schedules.
  Exhibits
  The
Exhibit Table beginning on the following page lists those documents that we are
required to file with this annual report on Form 10-K.
  Exhibit
Table
  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 June 3,
    2004
                
                Incorporated
      by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form
      10-QSB for the quarter ended June 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,
2006
  31
 
 Exhibit
      No.
                
                Exhibit
                
                Method
      of Filing3.7
                
                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, 20093.8
                
                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 June 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, 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 June 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, 201010.1
                
                Form
      of Non-Negotiable Secured Promissory Note.
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed May 30, 200810.2
                
                Form
      of Term Loan Agreement
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed May 30, 200810.3
                
                Form
      of Warrant
                
                Incorporated
      by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
      filed May 30, 2008
  32
 
 Exhibit
      No.
                
                Exhibit
                
                Method
      of Filing10.4
                
                Form
      of Registration Rights Agreement.
                
                Incorporated
      by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K
      filed May 30, 200810.5
                
                Employment
      Agreement, dated August 5, 2008 and effective August 18, 2008, by and
      between i2 Telecom International, Inc. and Christopher R.
      Miltenberger
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed August 14, 200810.6
                
                Form
      of Non-Negotiable Secured Promissory Note
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed October 3, 200810.7
                
                Form
      of Term Loan Agreement
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed October 3, 200810.8
                
                Form
      of Warrant
                
                Incorporated
      by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
      filed October 3, 200810.9
                
                Form
      of Registration Rights Agreement
                
                Incorporated
      by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K
      filed October 3, 200810.10
                
                Form
      of Non-Negotiable Secured Promissory Note
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed March 10, 200910.11
                
                Form
      of Term Loan Agreement
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed March 10, 200910.12
                
                Form
      of Warrant.
                
                Incorporated
      by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
      filed March 10, 200910.13
                
                Form
      of Registration Rights Agreement
                
                Incorporated
      by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K
      filed March 10, 200910.14
                
                12%
      Non-Negotiable Secured Promissory Note issued by the Registrant to Vestal
      Venture Capital, dated January 30, 2009
                
                Incorporated
      by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K
      filed March 10, 200910.15
                
                Term
      Loan Agreement between the Registrant and Vestal Venture Capital, dated
      January 30, 2009
                
                Incorporated
      by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K
      filed March 10, 200910.16
                
                Pledge
      Agreement between the Registrant and Vestal Venture Capital, dated January
      30, 2009
                
                Incorporated
      by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K
      filed March 10, 200910.17
                
                Employment
      Agreement, dated April 20, 2009, by and between the Company and Andrew L.
      Berman. Represents an executive compensation plan or
      arrangement*
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed April 24, 2009
  33
 
 Exhibit
      No.
                
                Exhibit
                
                Method
      of Filing10.18
                
                Employment
      Agreement, dated April 20, 2009, by and between the Company and Paul R.
      Arena. Represents an executive compensation plan or
      arrangement*
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed April 24, 200910.19
                
                Employment
      Agreement, dated April 20, 2009, by and between the Company and
      Christopher R. Miltenberger. Represents an executive compensation plan or
      arrangement*
                
                Incorporated
      by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
      filed April 24, 200910.20
                
                Employment
      Agreement, dated April 20, 2009, by and between the Company and Douglas F.
      Bender. Represents an executive compensation plan or
      arrangement*
                
                Incorporated
      by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K
      filed April 24, 200910.21
                
                Form
      of Non-Negotiable Secured Promissory Note
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed May 4, 200910.22
                
                Form
      of Term Loan Agreement
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed May 4, 200910.23
                
                Form
      of Warrant
                
                Incorporated
      by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
      filed May 4, 200910.24
                
                Form
      of Registration Rights Agreement
                
                Incorporated
      by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K
      filed May 4, 200910.25
                
                Form
      of Subscription Agreement
                
                Incorporated
      by reference to Exhibit 10.66 to the Company’s Current Report on Form 8-K
      filed May 8, 200910.26
                
                Form
      of Warrant
                
                Incorporated
      by reference to Exhibit 4.60 to the Company’s Current Report on Form 8-K
      filed May 8, 200910.27
                
                Warrant
                
                Incorporated
      by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K
      filed June 10, 200910.28
                
                Amended
      and Restated Warrant
                
                Incorporated
      by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K
      filed June 10, 200910.29
                
                Subscription
      Agreement
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed June 10, 2009
  34
 
 Exhibit
      No.
                
                Exhibit
                
                Method
      of Filing10.30
                
                Exchange
      Agreement
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed June 10, 200910.31
                
                Amendment
      to Arena Employment Agreement, dated June 24, 2009*
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed June 29, 200910.32
                
                Amendment
      to Bender Employment Agreement, dated June 24, 2009*
                
                Incorporated
      by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K
      filed June 29, 200910.33
                
                Amendment
      to Berman Employment Agreement, dated June 24, 2009*
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed June 29, 200910.34
                
                Amendment
      to Miltenberger Employment Agreement, dated June 24, 2009*
                
                Incorporated
      by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K
      filed June 29, 200910.35
                
                First
      Amendment to Subscription Agreement, dated June 26, 2009
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed July 1, 200910.36
                
                Employment
      Agreement, dated August 24, 2009, by and between the Company and Richard
      Roberson*
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed August 28, 200910.37
                
                Form
      of Warrant
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed September 10, 200910.38
                
                Form
      of Subscription Agreement
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed September 10, 200910.39
                
                Second
      Amendment to Marketing Agreement, dated September 8, 2009
                
                Incorporated
      by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K
      filed September 10, 200910.40
                
                Form
      of Warrant
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed February 9, 201010.41
                
                Form
      of Subscription Agreement
                
                Incorporated
      by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K
      filed February 9, 201010.42
                
                Drawdown
      Promissory Note issued to Butterfield Family Trust U/A/D 1/12/99 dated
      February 23, 2010 in an amount up to $2,000,000
                
                Incorporated
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K
      filed on February 25, 201014.1
                
                Code
      of Ethics and Conduct
                
                Incorporated
      by reference to Exhibit 14 to the Company’s Annual Report on Form 10-KSB
      filed April 4, 2006
  35
 
 Exhibit
      No.
                
                Exhibit
                
                Method
      of Filing16.1
                
                Letter
      from Freedman & Goldberg Certified Public Accountants, a Professional
      Corporation, regarding change in certifying accountant
                
                Incorporated
      by reference to Exhibit 16.1 to the Company’s Current Report on Form 8-K
      filed on December 3, 200921.1
                
                Subsidiaries
      of the Company
                
                Filed
      herewith.23.1
                
                Consent
      of BDO Seidman, LLP
                
                Filed
      herewith23.2
                
                Consent
      of Freedman & Goldberg Certified Public Accounts, a Professional
      Corporation
                
                Filed
      herewith31.1
                
                Rule
      13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive
      Officer
                
                Filed
      herewith31.2
                
                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
  *
Management contract, compensatory plan or arrangement.
  36
  SIGNATURES
  Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
  GEOS
      COMMUNICATIONS, INC.By:
                  
                  /s/
      Andrew L. BermanAndrew
      L. BermanChief
      Executive OfficerDate:
                  
                  May
      7, 2010
  Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
  Name
                
                Title
                
                Date/s/
      Andrew BermanAndrew
      Berman
                
                Chief  Executive
      Officer (Principal Executive Officer) and Director
                
                May
      7, 2010/s/
      Richard RobersonRichard
      Roberson
                
                Chief
      Financial Officer (Principal Financial Officer and Principal Accounting
      Officer)
                
                May
      7, 2010/s/
      Michael ReardonMichael
      Reardon
                
                Director
                
                May
      7, 2010/s/
      Frederick MappFrederick  Mapp
                
                Director
                
                May
      7, 2010/s/
      Bruce FriedmanBruce
      Friedman
                
                Director
                
                May
      7, 2010/s/
      Jonathan SerbinJonathan
      Serbin
                
                Director
                
                May
      7, 2010
  37
  
     Report of Independent
Registered Public Accounting Firm
 
 
 The Board
of Directors and Shareholders
 Geos
Communications, Inc.
 Southlake,
Texas
 
 We have
audited the accompanying consolidated balance sheet of Geos Communications, Inc.
and subsidiaries (“the Company”) as of December 31, 2009 and the related
consolidated statements of operations, stockholders’ equity (deficit), and cash
flows for the year then ended. These financial statements are the responsibility
of the Company’s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
 
 In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of Geos Communications, Inc.
and subsidiaries at December 31, 2009, and the results of its operations and its
cash flows for the year then ended in conformity with accounting principles
generally accepted in the United States of America.
 
 The
accompanying financial statements have been prepared assuming that Geos
Communications, Inc. and subsidiaries will continue as a going concern. As
discussed in Note 12 to the consolidated financial statements, Geos
Communications, Inc. and subsidiaries has not generated positive cash flows from
operations and has accumulated losses since inception, which raises substantial
doubt about its ability to continue as a going concern. Management’s plans
regarding those matters also are described in Note 12. The financial statements
do not include any adjustments that might result from the outcome of this
uncertainty.
 
  
 Dallas,
Texas
 May 7,
2010
   38
  Report
of Independent Registered Public Accountant
  To the
Board of Directors
 i2
Telecom International, Inc. and Subsidiaries
 5070 Old
Ellis Pointe
 Suite
110
 Roswell,
Georgia 30076
  We have
audited the accompanying consolidated balance sheet of i2 Telecom International,
Inc. and Subsidiaries as of December 31, 2008, and the related consolidated
statements of operations, stockholders equity and cash flows for the year then
ended. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
  We
conducted our audit in accordance with the auditing standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting. Our audit included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessment of the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion
  In our
opinion the financial statements referred to above present fairly, in all
material respects, the financial position of i2 Telecom International, Inc. and
Subsidiaries of December 31, 2008 and the results of its operations and its cash
flows for the years then ended in conformity with accounting principles
generally accepted in the United States of America.
  The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 12 to the financial
statements, 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.
The financial statements do not include any adjustments relating to the
recoverability and classification of recorded assets, or the amounts and
classification of liabilities that might be necessary in the event the company
cannot continue in existence.
  /s/ Freedman & GoldbergFreedman
      & GoldbergCertified
      Public AccountantsFarmington
      Hills, MIApril
      1, 2009
  39
 GEOS
COMMUNICATIONS, INC. AND SUBSIDIARIES
 CONSOLIDATED
BALANCE SHEETS
 December
31, 2009 and 2008
  2009
                                    
                                    
                                    2008ASSETSCurrent
      Assets:Cash
      and Cash Equivalents
                                    
                                    $
                                    1,041,830
                                    
                                    
                                    $
                                    2,645Inventories
                                    
                                    
                                    65,050
                                    
                                    
                                    
                                    187,607Prepaid
      Expenses and Other Current Assets
                                    
                                    
                                    17,826
                                    
                                    
                                    
                                    213,059Total
      Current Assets
                                    
                                    
                                    1,124,706
                                    
                                    
                                    
                                    403,311Property
      and Equipment, Net
                                    
                                    
                                    1,385,526
                                    
                                    
                                    
                                    1,253,074Other
      Assets:Intangible
      Assets, Net of Amortization
                                    
                                    
                                    2,441,900
                                    
                                    
                                    
                                    2,788,947Deposits
                                    
                                    
                                    83,489
                                    
                                    
                                    
                                    38,840Investments,
      at Cost
                                    
                                    
                                    250,000
                                    
                                    
                                    
                                    -Note
      Receivable
                                    
                                    
                                    60,000
                                    
                                    
                                    
                                    -Total
      Other Assets
                                    
                                    
                                    2,835,389
                                    
                                    
                                    
                                    2,827,787Total
      Assets
                                    
                                    $
                                    5,345,621
                                    
                                    
                                    $
                                    4,484,172LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)Current
      Liabilities:Accounts
      Payable
                                    
                                    $
                                    416,509
                                    
                                    
                                    $
                                    1,129,169Accrued
      Expenses (accrued interest of $0, accrued dividends
      of  $176,844, and other accrued expenses of $881,333 for 2009
      and $672,921, $27,491 and $570,079, for 2008)
                                    
                                    
                                    1,058,177
                                    
                                    
                                    
                                    1,270,491Deferred
      Revenue
                                    
                                    
                                    33,374
                                    
                                    
                                    
                                    25,985Convertible
      Bonds
                                    
                                    
                                    50,000
                                    
                                    
                                    
                                    100,000Notes
      Payable
                                    
                                    
                                    9,000
                                    
                                    
                                    
                                    2,156,014Notes
      Payable-Related Parties
                                    
                                    
                                    -
                                    
                                    
                                    
                                    1,200,000Total
      Current Liabilities
                                    
                                    
                                    1,567,060
                                    
                                    
                                    
                                    5,881,659Series
      A–D, Preferred Shares Subject to Mandatory Redemption
                                    
                                    
                                    7,880,627
                                    
                                    
                                    
                                    -Total
      Liabilities
                                    
                                    
                                    9,447,687
                                    
                                    
                                    
                                    5,881,659Series
      F Convertible Preferred Shares, 5,000,000 Shares Authorized, and 7,550
      shares Issued and Outstanding
                                    
                                    
                                    5,047,057
                                    
                                    
                                    
                                    -Commitments
      And ContingenciesStockholders’
      (Deficit):Common
      Stock,  No Par Value, 500,000,000 Shares Authorized , 32,647,842
      and  27,278,560 Shares Issued and Outstanding
                                    
                                    
                                    46,705,124
                                    
                                    
                                    
                                    38,857,041Accumulated
      Deficit
                                    
                                    
                                    (55,854,247
                                    )
                                    
                                    
                                    (40,254,528
                                    )Total
      Stockholders’ (Deficit)
                                    
                                    
                                    (9,149,123
                                    )
                                    
                                    
                                    (1,397,487
                                    )Total
      Liabilities and Stockholders’ (Deficit)
                                    
                                    $
                                    5,345,621
                                    
                                    
                                    $
                                    4,484,172
 See
Accompanying Notes to Consolidated Financial Statements
  40
  GEOS
COMMUNICATIONS, INC. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF OPERATIONS
 For
the Years Ended December 31, 2009 and 2008
  2009
                        
                        
                        2008Net
      Revenue
                        
                        $
                        344,577
                        
                        
                        $
                        629,824Cost
      of Revenue
                        
                        
                        674,254
                        
                        
                        
                        705,495Gross
      Profit (Loss)
                        
                        
                        (329,677
                        )
                        
                        
                        (75,671
                        )General
      and Administrative Expenses
                        
                        
                        9,390,655
                        
                        
                        
                        7,067,815Loss
      From Operations
                        
                        
                        (9,720,332
                        )
                        
                        
                        (7,143,484
                        )Other
      Income (Expense):Interest
      Income
                        
                        
                        71,635
                        
                        
                        
                        -Interest
      Expense
                        
                        
                        (1,463,399
                        )
                        
                        
                        (989,846
                        )Loss
      on Extinguishment of Debt
                        
                        
                        (1,469,523
                        )
                        
                        
                        -Gain
      on Forbearance of Debt
                        
                        
                        29,569
                        
                        
                        
                        2,190Gain
      on Sale of Technology
                        
                        
                        -
                        
                        
                        
                        5,193,620Total
      Other Income (Expense)
                        
                        
                        (2,831,718
                        )
                        
                        
                        4,205,964Net
      Loss
                        
                        $
                        (12,552,050
                        )
                        
                        $
                        (2,937,520
                        )Beneficial
      Conversion Feature on Series F Convertible Preferred
Shares
                        
                        
                        (2,870,825
                        )
                        
                        
                        -Dividends
      on Preferred Stock
                        
                        $
                        (176,844
                        )
                        
                        
                        (12,000
                        )Net
      Loss attributable to Common Shareholders
                        
                        $
                        (15,599,719
                        )
                        
                        $
                        (2,949,520
                        )Weighted
      Average Common Shares Outstanding:Basic
      and Diluted
                        
                        
                        29,124,906
                        
                        
                        
                        21,609,742Basic
      and Diluted Loss Per Common Share:
                        
                        $
                        (0.54
                        )
                        
                        $
                        (0.14
                        )
 
 See
Accompanying Notes to Consolidated Financial Statements
  41
  GEOS
COMMUNICATIONS, INC. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)\
 Years
Ended December 31, 2009 and 2008
  Preferred
                      Stock
                    
                    
                    Preferred
                      Stock
                    
                    
                    Common
                      Stock
                    
                    
                    Common
                      Stock
                    
                    
                    Accumulated
                      Deficit
                    
                    
                    TotalShares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    Amount
                    
                    
                    Amount
                    
                    
                    AmountBalance,
      December 31, 2007 (1:10 reverse split applied
    retroactively)
                    
                    
                    800
                    
                    
                    $
                    800,000
                    
                    
                    
                    18,375,204
                    
                    
                    $
                    33,921,988
                    
                    
                    $
                    (37,305,007
                    )
                    
                    $
                    (2,583,019
                    )Conversion
      of Preferred to Common
                    
                    
                    (800
                    )
                    
                    
                    (800,000
                    )
                    
                    
                    400,000
                    
                    
                    
                    800,000
                    
                    
                    
                    -
                    
                    
                    
                    -Exercise
      of Options and Warrants
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    6,767,230
                    
                    
                    
                    501,552
                    
                    
                    
                    -
                    
                    
                    
                    501,552Stock
      Compensation
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    2,081,250
                    
                    
                    
                    
                    
                    
                    
                    2,081,250Stock
      and Warrants Issued for Services and Debt
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,736,126
                    
                    
                    
                    1,552,250
                    
                    
                    
                    -
                    
                    
                    
                    1,552,250Net
      Loss for the Year Ended December 31, 2008
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (2,937,520
                    )
                    
                    
                    (2,937,521
                    )Dividends
      on Preferred Stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (12,000
                    )
                    
                    
                    (12,000
                    )Balance,
      December 31, 2008
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    27,278,560
                    
                    
                    
                    38,857,040
                    
                    
                    
                    (40,254,528
                    )
                    
                    
                    (1,397,488
                    )Exercise
      of Options and Warrants
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    3,817,760
                    
                    
                    
                    456,564
                    
                    
                    
                    -
                    
                    
                    
                    456,564Stock
      options and Warrants Issued for Services
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    1,551,522
                    
                    
                    
                    2,072,789
                    
                    
                    
                    -
                    
                    
                    
                    2,072,789Issuance
      of warrants in connection with Series F Preferred Shares, net of issuance
      costs of $55,037
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,447,906
                    
                    
                    
                    -
                    
                    
                    
                    2,447,906Net
      Loss for the Year Ended December 31, 2009
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (12,552,050
                    )
                    
                    
                    (12,552,050
                    )Beneficial
      Conversion Feature for Series F Preferred Shares
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    2,870,825
                    
                    
                    
                    (2,870,825
                    )
                    
                    
                    -Dividends
      on Preferred Stock
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    (176,844
                    )
                    
                    
                    (176,844
                    )Balance,
      December 31, 2009
                    
                    
                    -
                    
                    
                    $
                    -
                    
                    
                    
                    32,647,842
                    
                    
                    $
                    46,705,124
                    
                    
                    $
                    (55,854,247
                    )
                    
                    $
                    (9,149,123
                    )
 
 See
Accompanying Notes to Consolidated Financial Statements
  42
  GEOS
COMMUNICATIONS, INC. AND SUBSIDIARIES
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 For
the Years Ended December 31, 2009 and 2008
  2009
                      
                      
                      2008Cash
      Flows From Operations:Net
      Loss
                      
                      $
                      (12,552,050
                      )
                      
                      $
                      (2,937,520
                      )Adjustments
      to Reconcile Net Loss to NetCash
      Used In By Operating Activities:Depreciation
      and Amortization
                      
                      
                      744,351
                      
                      
                      
                      663,821Amortization
      of Loan Fees
                      
                      
                      270,411
                      
                      
                      
                      -Warrants
      issued for services
                      
                      
                      1,497,898
                      
                      
                      
                      -Loss
      on Extinguishment of Debt
                      
                      
                      1,469,523
                      
                      
                      
                      -Gain
      on Forbearance of Convertible Debt
                      
                      
                      (29,569
                      )
                      
                      
                      -Stock
      Compensation
                      
                      
                      574,891
                      
                      
                      
                      349,827Change
      in operating assets and liabilities:Accounts
      Receivable
                      
                      
                      (7,374
                      )
                      
                      
                      (2,350
                      )Inventories
                      
                      
                      122,557
                      
                      
                      
                      3,604Prepaid
      Expenses, net of prepaid loan fees
                      
                      
                      (67,805
                      )
                      
                      
                      (54,179
                      )Other
      Assets
                      
                      
                      (44,649
                      )
                      
                      
                      0Accounts
      Payable and Accrued Expenses, net of extinguished debt accrued interest
      and fees
                      
                      
                      1,123,743
                      
                      
                      
                      (90,251
                      )Deferred
      Revenue
                      
                      
                      7,389
                      
                      
                      
                      2,311Net
      Cash Used In Operating Activities:
                      
                      
                      (6,890,684
                      )
                      
                      
                      (2,064,738
                      )Cash
      Flows From Investing Activities:Property
      and Equipment Purchases
                      
                      
                      (529,756
                      )
                      
                      
                      (1,143,068
                      )Investment
      in Affiliate and Note Receivable
                      
                      
                      (310,000
                      )
                      
                      
                      -Payments
      for Patents and Trademarks
                      
                      
                      -
                      
                      
                      
                      (115,101
                      )Net
      Cash Used In Investing  Activities
                      
                      
                      (839,756
                      )
                      
                      
                      (1,258,169
                      )Cash
      Flows From Financing Activities:Exercise
      of stock options
                      
                      
                      456,564
                      
                      
                      
                      630,679Issuance
      of Series F Preferred Shares
                      
                      
                      7,550,000
                      
                      
                      
                      -Proceeds
      from Notes Payable
                      
                      
                      1,510,089
                      
                      
                      
                      2,929,024Repayment
      on Notes Payable and Convertible Debt
                      
                      
                      (747,028
                      )
                      
                      
                      (3,597,186
                      )Issuance
      of Common Stock
                      
                      
                      -
                      
                      
                      
                      1,064,860Payment
      for Financing Cost with warrants
                      
                      
                      -
                      
                      
                      
                      2,063,894Net
      Cash Provided By Financing Activities
                      
                      
                      8,769,625
                      
                      
                      
                      3,131,271Increase
      (Decrease) in Cash and Cash Equivalents
                      
                      
                      1,039,185
                      
                      
                      
                      (191,635
                      )Balance,
      Beginning of year
                      
                      
                      2,645
                      
                      
                      
                      194,279Balance,
      End of year
                      
                      $
                      1,041,830
                      
                      
                      $
                      2,644
 
 See
Accompanying Notes to Consolidated Financial Statements
  43
  GEOS
COMMUNICATIONS, INC. AND SUBSIDIARIES
 NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
  NOTE
1.   NATURE OF BUSINESS and MANAGEMENT’S PLANS
  For
convenience in this annual report, “Geos,” “we,” “us,” and “the Company” refer
to Geos Communications, Inc. and our consolidated subsidiaries, taken as a
whole.
  Through
our subsidiary Geos Communications, Inc., a Delaware corporation, (“Geos (DE)”), we are a
developer and distributor of mobile applications and services.  We
leverage our core competencies in Voice over Internet Protocol (VoIP) and
technology development to introduce solutions to the global mobile community.
Our services include MyGlobalTalk, a comprehensive solution for reducing long
distance calling worldwide.
  The
Company, a Washington corporation, was incorporated as “Transit Information
Systems, Inc.”  under the laws of the State of Washington on October
17, 1988.  In March 2004, the Company changed its name to “i2 Telecom
International, Inc.”  In September 2009, the Company filed with the
Secretary of State of the State of Washington an amendment to its Articles of
Incorporation reflecting the change of the Company’s name from “i2 Telecom
International, Inc.” to “Geos Communications, Inc.”
  The
Company’s management has focused historically upon VoIP as the Company’s primary
line of business.  The Company is a developer of mobile phone
applications and is constantly exploring various strategic alternatives,
including partnering with other telecommunication companies, both foreign and
domestic, and engaging in acquisitions of strategic competitors and/or
telecommunication service providers.
  The
accompanying financial statements have been prepared assuming that Geos
Communications, Inc. and subsidiaries will continue as a going concern. As
discussed in Note 12 to the financial statements, Geos Communications, Inc. and
subsidiaries has not generated positive cash flows from operations and has
accumulated losses since inception, which raises substantial doubt about its
ability to continue as a going concern. Management’s plans regarding those
matters also are described in Note 12. 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.
  NOTE
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
  The
consolidated financial statements of Geos Communications, Inc. have been
prepared in accordance with accounting principles generally accepted in the
United States of America (“GAAP”).
  Basis
of Consolidation
  The
consolidated financial statements include the accounts of Geos Communications
(DE), Geos Communications IP Holdings, Inc., and SuperCaller Community, Inc.
(“SuperCaller”), all of which are, directly or indirectly, wholly-owned
subsidiaries of the Company.  All significant intercompany accounts
and transactions have been eliminated in consolidation.
  In June
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.
  44
  Accounting
Estimates
  Preparation
of the accompanying consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
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 consolidated financial statements and the
reported amounts of revenues and expenses during the reporting
period.
  Revenue
Recognition
  Our
revenues for 2009 have been derived primarily from our legacy Voicestick long
distance services and to a lesser extent from MyGlobalTalk  services
which became market ready in the fourth quarter of 2009.  All revenues
are due upon delivery of services.
  Revenue
is recognized in accordance with SEC Staff Accounting Bulletin (SAB) No. 104
“Revenue Recognition” (“SAB 104”), when persuasive evidence of an arrangement
exists, the fee is fixed or determinable, collectability is probable, delivery
of a product has occurred and title and risk of loss has transferred or services
have been rendered. Revenues include shipping and handling costs billed to the
customers.
  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 Preferred Stock Series A-D, and Series F
are presented in a separate Footnotes below.
  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.  The Company’s risk of loss is limited due to advance
billings to customers for long distance services and the ability to discontinue
these primary services on delinquent accounts.  We perform ongoing
credit evaluations of our customers and maintain an allowance for potential
credit losses.
  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.
  Inventories
  Inventories
consisting of purchased components available for resale are stated at lower of
cost or market.  Cost is determined on the first-in, first-out (FIFO)
basis.
  Deferred
Financing Cost
  Deferred
financing costs include underwriting, legal, accounting and other direct costs
incurred in connection with the issuance and amendments thereto, of the
Company’s debt. These costs are amortized over the terms of the related debt
using the straight-line method which approximates amortization using the
effective interest method. Initial purchasers’ discounts are accreted over the
terms of the related debt, utilizing the effective interest method. The
amortization expense of deferred financing costs and accretion of initial
purchasers’ discounts is included in interest expense as an overall cost of the
related financings.
  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.
  45
  Intangible
Assets
  The
Company has capitalized certain costs related to registering trademarks and
patent pending technology.  In accordance with FASB ASC topic 350, the
Company amortizes its intangible assets with a finite life over 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.
  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 it exceeds cash
flow an impairment is recorded. The Company had no impairment of assets during
the years ended December 31, 2009 or 2008.
  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.
  Investments,
at Cost
  Investments
in non-affiliated companies with a less than 20% ownership interest, no
significant influence, and market prices not readily available, are accounted
for under the cost method. The Company made an  investment in Shoot
it!, Inc. in November for $ 250,000, the value of which is carried at
cost.
  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 Statement of
Operations for the year ended of 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
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.
  46
  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.
  NOLs may
be limited and the company is in 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.
  Research
and Development
  The
Company expenses research and development expenses as
incurred.  Amounts payable to third parties under product development
agreements are recorded at the earlier of the milestone achievement, or when
payments become contractually due.  The company estimates 25% of it’s
operating expenses for 2008 were related to research and development. There were
no material research and development expenses for the year ended December 31,
2009.
  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.
  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
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 Statement of Operations.  As of December 31, 2009, the
Company had recorded liabilities related to Series A-D Preferred Shares of Geos
Communications IP Holdings, Inc. with a mandatory redemption value of
$7,880,627.
  47
  In
addition, 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 December 31, 2009, the Company had
recorded as temporary equity F Series Preferred Shares totaling
$5,047,057.  Dividends on preferred shares included in temporary
equity and equity are recorded as Dividends on Preferred Stock below Net Income
on the 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.  The Company recorded $2,870,825 as a
beneficial conversion feature of the F Series Preferred Shares for the year
ended December 31, 2009.
  New
Accounting Pronouncements
  Variable
Interest Entities
  In June
2009, the Financial Accounting Standards Board (FASB) 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 our 2010 year and must be applied retrospectively. The adoption
of this guidance will not have a significant impact on our financial
statements.
  NOTE
3.  PROPERTY AND EQUIPMENT
  Estimated
lives range from five to ten years. Depreciation and amortization charged to
operations was $397,303 and $322,818 for the years ended December 31, 2009 and
2008, respectively.
  The major
components of property and equipment at December 31, 2009 and 2008 are as
follows:
  2009
                      
                      
                      2008Network
      Equipment
                      
                      $
                      1,133,245
                      
                      
                      $
                      1,115,822Office
      Equipment
                      
                      
                      368,148
                      
                      
                      
                      267,181Software
                      
                      
                      1,077,322
                      
                      
                      
                      889,632Software
      Development
                      
                      
                      861,119
                      
                      
                      
                      639,744Lab
      Equipment
                      
                      
                      39,577
                      
                      
                      
                      40,277Furniture
      and Fixtures
                      
                      
                      46,884
                      
                      
                      
                      43,8843,526,295
                      
                      
                      
                      2,996,540Less:  Accumulated
      Depreciation and  Amortization
                      
                      
                      2,140,769
                      
                      
                      
                      1,743,466Net
      Property and Equipment
                      
                      $
                      1,385,526
                      
                      
                      $
                      1,253,074
 
 NOTE
4.  INTANGIBLE ASSETS
  Intangible
assets at December 31, 2009 and 2008 consisted of the following, at
cost:
  2009
                    
                    
                    2008Patent
      Pending Technology
                    
                    $
                    3,190,917
                    
                    
                    $
                    3,190,917Trademarks
                    
                    
                    274,017
                    
                    
                    
                    274,0173,464,934
                    
                    
                    
                    3,464,934Accumulated
      Amortization
                    
                    
                    1,023,034
                    
                    
                    
                    675,987Intangible
      Assets, net
                    
                    $
                    2,441,900
                    
                    
                    $
                    2,788,947
  48
  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. As of December 31, 2009, the
Company has determined there is no impairment of the intangible
assets.
  Amortization
expense for the years ended December 31, 2009 and 2008 totaled $347,047 and
$341,003.  The following table represents the expected amortization
expense for each of the next five years ending December 31, for those intangible
assets with remaining carrying value as of December 31, 2009:
  2010
                      
                      $
                      346,4932011
                      
                      $
                      346,4932012
                      
                      $
                      346,4932013
                      
                      $
                      346,4932014
                      
                      $
                      346,493Thereafter
                      
                      $
                      709,435
  NOTE
5.   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 remaining at December 31, 2009 and 2008 consisted of the
following:
  December
      31, 2009
                      
                      
                      December
      31, 2008December
      2006 6% Convertible Bonds
                      
                      $
                      50,000
                      
                      
                      $
                      50,000February
      2007 6% Convertible Bonds
                      
                      
                      -0-
                      
                      
                      $
                      50,000$
                      50,000
                      
                      
                      $
                      100,000
  NOTE
6.   NOTES PAYABLE and SERIES A-D, PREFERRED SHARES SUBJECT TO
MANDATORY REDEMPTION
  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 totaling
$6,328,212 of notes and notes payable to related parties, which included all
accrued interest and related fees, (the “Debt”) for different series of
preferred stock of Geos Communications IP Holdings, Inc., a Delaware corporation
and our wholly owned subsidiary (“IP Holdings”).The issuance
price of the preferred stock of IP Holdings was $1.00 for every $1.00 of each
note being exchanged.  On July 31, 2009, the Company exchanged an
aggregate of $5,598,385 (with approximately $729,827 of remaining debt and fees
paid in cash  to nonconverting holders) of the Debt into IP Holdings
Series A–D Preferred Stock. The former secured debt included 12% interest with
maturities of principal and all accrued interest originally due in 2008, and
subsequently extended to 2009.
  49
  In
connection with the creation of IP Holdings, substantially all of the Company’s
intellectual property was transferred to IP Holdings, with the Company owning
all of the common stock of IP Holdings.  The IP Holdings Preferred
Stock provides for an accruing dividend of 12% per annum and a special dividend
for up to two years in the event that the IP Holdings Preferred Stock has not
been redeemed. In addition the Series A–D shares are subordinate to the Series F
Preferred Shares described below.
  With
assistance from a  independent third party, the company determined the
initial fair value of the new preferred series to be $7,028,630 for the new
shares issued. Subsequently, $574,041 has been accreted for interest plus
dividends of $277,955, resulting in a balance of $7,880,627 as of December 31,
2009. The final redemption amount is $9,784,027 which encompasses additional
charges for each time period passing as follows:
  July
      31, 2010
                    
                    $
                    1,377,699July
      31, 2011
                    
                    $
                    803,657
 
 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 and is included in the Consolidated
Statement of Operations for the year ended of December 31, 2009.
  NOTE
7.  SERIES F CONVERTIBLE PREFERRED STOCK
  In 2009,
the Company issued Series F Convertible Preferred Stock, no par value (the
“Series F Preferred
Shares”). 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. 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 $ 0.50, subject
to adjustment as provided in the Certificate of Designations.  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.
  The
Series F holders may convert, at their discretion (subject to a conversion
restriction prohibiting any conversion that would result in a Series F holder’s
beneficially owning more than 4.9% of the then-issued and outstanding Common
Stock), all or any of the shares into Common Shares at a conversion price of
$0.50, resulting in 15,100,000 shares of Common Stock.  During the
year ended December 31, 2009, no Series F Preferred Shares were
converted.
  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.
  50
  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 multiple issuances of 7,550 shares of Preferred Series F
shares, 7,550,000 warrants were issued.  The proceeds of $7,410,000,
net of cost of $140,000, were allocated based on the relative fair values of the
underlying shares and warrants.  The value allocated to the shares was
$5,047,057 and is 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 is included in Common Stock, No Par, and was recognized as a return on the
Preferred Series F in the period of issuance because the Preferred Stock was
immediately convertible. The fair value of the Preferred Series F shares was
$7,049,683 at December 31, 2009.
  The value
allocated to the warrants issued to investors and warrants issued to pay
transaction costs was $2,502,943, and is included in Common Stock, no
par.  The warrants are exercisable at any time at $.63, for a period
of three years.
  During
the year ended December 31, 2009, the Company declared and accrued dividends of
6% totaling of $176,844, which is due in six months and are included in accrued
expenses on the Consolidated Balance Sheets.
  NOTE
8.  COMMON STOCK AND STOCK OPTIONS AND WARRANTS
  On May
14, 2009,  the Company and Board of Directors approved a reverse ten
for one reverse stock split.  As such, all 2008 Common Stock share
prices and amounts have been adjusted accordingly.
  During
2004, the Company’s board of directors approved a stock option plan for its
officers, directors and certain key employees.  Generally, the options
vest over a period of three years. Compensation expense is based upon
straight-line amortization of the grant-date fair value over the implicit
vesting period of the underlying stock option. In accordance with ASC 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.
  Stock
options issued in 2009   were recorded at a fair value of
$2,091,575 using the following attributes and assumptions for 2009: share price
of $0.09, risk-free interest rate of 1.37%, expected dividend yield of 0%,
expected life of 2.87 years, and expected volatility of 186%. The Company
estimates forfeitures of 12% based on historical experience. As of
December 31, 2009, there was unrecognized compensation expense related to
non-vested stock option agreements of $1,516,685. Assumptions for 2008 were as
follows: share price of $0.09, risk-free interest rate of 1.37%, expected
dividend yield of 0%, expected life of 2.87 years, and expected volatility of
186%.
  In
addition, the Company has issued stock warrants to key employees, consultants,
and 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 for 2009 and 2008, respectively include (1)
risk-free interest rate of 1.68% and3.30%, (2) expected warrant life of 3.2
years and 2.62, (3) expected volatility of 197% and 183% , and (4) zero
expected dividends.
  Information
regarding stock options and warrants outstanding as of December 31, 2009 is
summarized below:
  Number
      of
                      
                      
                      Weighted
      AverageShares
                      
                      
                      Exercise
      PriceOutstanding
      at December 31, 2007
                      
                      
                      12,224,823
                      
                      
                      $
                      2.30Option
      Granted
                      
                      
                      1,510,000
                      
                      
                      
                      0.90Warrants
      Granted
                      
                      
                      20,446,350
                      
                      
                      
                      1.00Canceled
                      
                      
                      (16,446,855
                      )
                      
                      
                      1.90Exercised
                      
                      
                      (1,251,483
                      )
                      
                      
                      5.80Outstanding
      at December 31, 2008
                      
                      
                      16,482,835
                      
                      
                      
                      1.30Exercised
                      
                      
                      (3,817,760
                      )
                      
                      
                      0.12Option
      Granted, (1)
                      
                      
                      8,997,760
                      
                      
                      
                      0.57Warrants
      Granted, including 7,550,000 of Series F warrants granted in
      2009
                      
                      
                      10,422,648
                      
                      
                      
                      0.66Canceled
                      
                      
                      (8,745,539
                      )
                      
                      
                      1.90Outstanding
      at December 31, 2009
                      
                      
                      23,339,944
                      
                      
                      $
                      0.74Exercisable
      December 31, 2009
                      
                      
                      18,067,764
                      
                      
                      $
                      .78
  51
  (1)
              (1)
      At a special meeting of the Board of Directors held on October 15, 2009,
      the Board approved the Company’s 2009 Omnibus Long Term Incentive Plan
      (the “Plan”).  A
      Registration Statement on Form S-8, filed on January 8, 2010, registered a
      total of 6,000,000 shares of Common Stock authorized for issuance under
      the Plan.  The plan will be presented to shareholders for
      approval at the next Annual Meeting.  The Company has granted
      options to purchase 2,510,000 shares under the plan, which options are
      subject to the Plan being approved by shareholders prior to October 15,
      2010.
  The
exercise price for options outstanding and exercisable at December 31, 2009 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
                                    
                                    
                                    6,601,438
                                    
                                    
                                    
                                    2.45
                                    
                                    
                                    
                                    0.68
                                    
                                    
                                    
                                    1,329,259
                                    
                                    
                                    
                                    0.92
  The
exercise price for warrants outstanding at December 31, 2009 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
                                  
                                  
                                  16,738,505
                                  
                                  
                                  
                                  9.5
                                  
                                  
                                  $
                                  0.77
                                  
                                  
                                  
                                  16,738,
      505
                                  
                                  
                                  $
                                  0.77
 
 During
the years ended December 31, 2009 and 2008, total compensation costs recognized
in income from stock-based compensation awards was $574,891 and $349,827
respectively, and is included in general and administrative expenses on the
Consolidated Statement of Operations. As of December 31, 2009, there was
unrecognized compensation expense related to non-vested stock option agreements
of $1,516,685.
  During
the years ended December 31, 2009 and 2008, total warrants issued for services
was $1,497,898 and $1,202,423, respectively, and is included in  the
Consolidated Statement of Operations.
  The
intrinsic value of options exercised during 2009 and 2008 is $0 and $275,326
respectively.
  NOTE
9.    CERTAIN RELATED PARTY TRANSACTIONS
  Interest
expense incurred on certain notes from officers and directors for the years
ended December 31, 2009 and 2008 was $90,233 and $116,909, respectively which
was issued at market rates.
  NOTE
10.  INCOME TAXES
  For the
years ended December 31, 2009 and 2008, the Company had net operating
losses and, accordingly, no provision for income taxes has been recorded. In
addition, no benefit for income taxes has been recorded due to the uncertainty
of the realization of any deferred tax assets. Therefore, the Company has
provided a valuation allowance against its deferred tax assets at December 31,
2009 and 2008, respectively. The Company has incurred net operating losses for
federal income tax purposes of $11,661,985 and $953,802 for the years ended
December 31, 2009 and 2008 respectively.   At December 31, 2009,
the Company has total net operating loss carry forwards of $54,401,778 which
expire in various years ranging from 2009 to 2029.  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 at December 31, 2009 and 2008.
  52
  Deferred
taxes are detailed as follows:
  December
      31, 2009
                    
                    
                    December
      31, 2008Deferred
      Income Tax Liability:Patents
      and Trademarks
                    
                    $
                    164,482
                    
                    
                    $
                    216,982Deferred
      Income Tax Assets:Net
      Operating Loss Available
                    
                    
                    18,503,411
                    
                    
                    
                    14,538,336Research
      and Development Expenses
                    
                    
                    146,497
                    
                    
                    
                    195,329Accrued
      Expenses
                    
                    
                    1,581,566
                    
                    
                    
                    1,535,00820,231,474
                    
                    
                    
                    16,268,673Valuation
      Allowance
                    
                    
                    (20,066,992
                    )
                    
                    
                    16,051,691Deferred
      Income Tax Asset
                    
                    
                    164,482
                    
                    
                    
                    216,982Net
      Deferred Income Taxes
                    
                    $
                    -
                    
                    
                    $
                    -
 
 Reconciliation
between the income tax benefit determined by applying the applicable Federal
statutory income tax rate to the pre-tax loss is as follows for the period
indicated:
  December
      31, 2009
                      
                      
                      December
      31, 2008Tax
      benefit at statutory income tax rate
                      
                      $
                      (4,346,659
                      )
                      
                      $
                      (1,028,132
                      )Meals
      and entertainment
                      
                      
                      9,863
                      
                      
                      
                      4.965Stock
      based compensation
                      
                      
                      201,212
                      
                      
                      
                      95,818Other
                      
                      
                      120,283
                      
                      
                      
                      29,765Change
      in valuation allowance
                      
                      
                      4,015,301
                      
                      
                      
                      897,584Tax
      benefit reported
                      
                      $
                      -
                      
                      
                      $
                      -
 
 Effective
December 1, 2007, we adopted the provisions of ASC 740-10 (formerly FIN
48), which contains a two-step process for recognizing and measuring uncertain
tax positions. The first step is to determine whether or not a tax benefit
should be recognized. A tax benefit will be recognized if the weight of
available evidence indicates that the tax position is more likely than not to be
sustained upon examination by the relevant tax authorities. The recognition and
measurement of benefits related to our tax positions requires significant
judgment, as uncertainties often exist with respect to new laws, new
interpretations of existing laws, and rulings by taxing authorities. Differences
between actual results and our assumptions or changes in our assumptions in
future periods are recorded in the period they become known.  Interest
costs and penalties related to income taxes are classified as income tax
expenses in the consolidated financial statements.  As of December 31,
2009 and 2008 the company has not identified any uncertain tax
positions.  We are currently subject to a three year statute of
limitations by major tax jurisdictions. We and our subsidiaries file income tax
returns in the U.S. federal jurisdiction.
  NOLs may
be limited and the company is in process of determining if such a triggering
event took place.  The company is in 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.
  NOTE
11.  LEASE OBLIGATIONS
  The
Company leases its office facilities in Southlake, Texas under an operating
lease expiring in June 2012.  The Company also leases space in
Atlanta, Georgia for its network operations on a month to month
basis.
  Total
rent expensed during the years ended December 31, 2009 and 2008 was $73,487 and
$76,624.
  53
  Future
minimum lease obligations under all operating leases for each year ended
December 31, are as follows:
  2010
                    
                    $
                    107,9752011
                    
                    $
                    116,0902012
                    
                    $
                    58,9472013
                    
                    $
                    -0-2014
      and thereafter
                    
                    $
                    -0-
  NOTE
12.   LIQUIDITY AND MANAGEMENTS PLANS
  As shown
in the accompanying consolidated financial statements, the Company incurred a
net loss of $12,552,050 and $2,937,520 during the years ended December 31, 2009
and 2008, respectively, and as of December 31, 2009, the Company’s current
liabilities exceeded its current assets by $442,354 and its total liabilities
exceeded its total assets by $4,102,066 which includes the Preferred Shares
subject to mandatory redemption of $7,880,627.
  The
accompanying 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 a 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 and draw down loan described in footnote 14 along with the
economic cost associated with the integration, and debt restructuring and equity
placements which occurred at the same time as the acquisitions in the first
quarter of 2010. The Company has taken further action to reduce its ongoing
operating costs, and has been in discussions with the secured and unsecured
creditors regarding restructuring of commitments. Other actions include
continued increases in revenues by introducing new products and revenue streams,
reductions in the cost of revenues, continued expansion into new territories,
reviewing additional financing options, and accretive acquisitions. Management
believes that the actions undertaken as a whole provide the opportunity for the
Company to continue as a going concern, although this will be highly dependent
on the ability to restructure our financing arrangements.
  The
Company has identified several new business strategies that may enable the
Company to reach its profitability goals.  First, the Company currently has
a detailed plan under which it will bring in new capital for both its short term
as well as its long term liquidity needs.  The Company is 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, 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.
  In
addition, on February 23, 2010, the Company issued a Drawdown Promissory Note in
an amount up to a maximum of $2,000,000 (the “Drawdown Note ”) to
Butterfield Family Trust U/A/D 1/12/99 (the “ Trust ”).  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 shares of Series H Preferred Stock of the
Company, which is a series of preferred stock we anticipate creating (the “Series H Preferred Stock”) in
the Offering (as defined below); or (ii) August 23, 2010 (the “Maturity
Date”).  The Trust 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 Series H Preferred Stock and warrants (the “Offering”), at a
conversion price equal to the purchase price paid for the Series H Preferred
Stock and warrants in the Offering.    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 the issuance date
of each Warrant.  At April 23, 2010 we had drawn down all amounts
under the line of credit.
  54
  NOTE
13.   SUPPLEMENTAL CASH FLOW DISCLOSURES
  Interest
paid, income taxes paid and non-cash transactions incurred during the years
ended December 31, 2009 and 2008 was as follows:
  2009
                      
                      
                      2008Interest
      Paid
                      
                      $
                      78,342
                      
                      
                      $
                      46,143Income
      Taxes
                      
                      $
                      -0-
                      
                      
                      $
                      -0-Non-Cash
      Transactions:Payment
      of Debt and accrued interest with Preferred Stock
                      
                      $
                      5,598,385
                      
                      
                      $
                      1,008,264Exercise
      of Warrants
                      
                      
                      —
                      
                      
                      
                      3,218,551Financing
      Cost paid via issuance of warrants
                      
                      $
                      247,367
                      
                      
                      
                      —
  NOTE
14.   SUBSEQUENT EVENTS
  On
February 19, 2010, the Company entered into and closed an Agreement and Plan of
Merger (the “Shoot It!
Merger Agreement)” with
Shoot It!, LLC., an Arizona limited liability company (“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.
  At
Closing, the Company issued 2,000 shares of Geos newly issued Series G
Convertible Preferred Stock, stated value of $1,000 per share, no par value per
share (“Series G Preferred Stock”) and held
back 500 shares of Series G Preferred Stock in order to satisfy potential
indemnification obligations under the Shoot It! Merger Agreement.  Any
Series G Preferred Stock remaining after the expiration of the holdback period
set forth in the Shoot It! Merger Agreement will be issued pro rata to the Shoot
It! security holders.  The Series G Preferred stated value is
convertible to common shares of the Company at $ .50 per share, and carries a 6%
dividend rate on the stated value.  Upon certain milestones related to
share pricing, the Series G preferred shares automatically convert to common
shares.  The Company is currently obtaining an independent valuation
of the Series G Preferred Stock, and an estimate of the event’s financial effect
cannot be made at this time.
  On
February 12, 2010, the Company entered into an Agreement and Plan of Merger (the
“D Mobile Merger Agreement)” with D
Mobile, Inc., a Delaware corporation (“D Mobile”), Jonathan Serbin
(“Serbin”) and D Mobile
Acquisition, Inc., a Delaware corporation and wholly-owned subsidiary of the
Company (“D Mobile Merger
Sub”).  Subject to the terms and conditions of the D Mobile
Merger Agreement, D Mobile was merged with and into D Mobile Merger Sub (the
“D Mobile Merger”) with D Mobile Merger
Sub surviving as a wholly-owned subsidiary of the Company. On March 1, 2010, the
Company entered into a First Amendment to the D Mobile Merger Agreement (the
“   First
Amendment”). Pursuant to the First Amendment, the D Mobile Merger
Agreement was amended to provide for each D Mobile securityholder to have the
option for ten days following the closing of the Merger to elect (the “Cash Election”) to receive
$49.68 in lieu of each share of Series G  Preferred Stock and each
Parent Warrant to purchase a share of Series G Preferred Stock that such
securityholder would have received in the D Mobile Merger.
  At
Closing on March 1, 2010, the Company paid $75,002.39 to one D Mobile
Shareholder that opted for the Cash Election and issued 2,473.24 shares of Geos
Series G Convertible Preferred Stock and warrants to purchase 205.32 shares of
Series G Preferred Stock at a price of $0.50 per share (“Parent
Warrants”).  Pursuant to the Merger Agreement the Series G
Preferred Stock consideration was reduced by 121.20 shares of Series G Preferred
Stock to repay a $60,000 Convertible Promissory Note dated December 22, 2009
issued by D Mobile in favor of the Company.  Additionally (i) 637.61
shares of Series G Preferred Stock and 52.92 Parent Warrants were held back by
the Company in order to satisfy Serbin’s and the other D Mobile security
holders’ potential indemnification obligations under the D Mobile Merger
Agreement and (ii) 177.53 shares of Series G  Preferred Stock will be
held back to satisfy the conversion provisions of the convertible note which
Pypo Holdings (HK) Company Limited has the option to purchase pursuant to a
subscription agreement.  Any Series G Preferred Stock or Parent
Warrants remaining after the expiration of the holdback periods set forth in the
Merger Agreement, will be issued pro rata to the D Mobile security holders that
did not opt for the Cash Election. The Company is currently obtaining an
independent valuation of the Series G Preferred Stock, and an estimate of the
event’s financial effect cannot be made at this time.
  55
  On
February 23, 2010, the Company issued a Drawdown Promissory Note in an amount up
to a maximum of $2,000,000 (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 shares of Series H Preferred Stock of the
Company, which is a series of preferred stock we anticipate creating (the “Series H Preferred Stock”) in
the Offering (as defined below); or (ii) August 23, 2010 (the “Maturity
Date”).  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 Series H Preferred Stock and warrants (the “Offering”), at a conversion
price equal to the purchase price paid for the Series H Preferred Stock and
warrants in the Offering.    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.  At April 23, 2010, we had drawn down all funds available under
the Drawdown Note.
  56