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, 2008  [ ]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934  For the transition period from ________ to
__________  Commission File Number: 000-53408  Calibrus,
Inc. (Exact name of registrant as specified in
charter)  Nevada86-0970023 State or other jurisdiction of(I.R.S.
Employer I.D. No.) incorporation or organization  1225 West Washington Street, Suite 213, Tempe,
AZ85281 (Address of
principal executive
offices)(Zip Code)  Issuer's
telephone number, including area code: (602) 778-7500  Securities
registered pursuant to section 12(b) of the Act:  Title
of each class
                Name
of each exchange on which registered None
                                                                N/A  Securities
registered pursuant to section 12(g) of the Act:   Common
Stock, $0.001 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 [  ]No
  [X]  Indicate by check mark if the registrant is not required
to file reports pursuant to Section 13 or 15(d) of the Act Yes [  ]No
  [X]  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 past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
                                                                                                                             
   Yes [   ]  No [   ]  Indicate by check mark if disclosure of delinquent
filers in response to Item 405 of Regulation S-B is not containedherein, and 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-KSB or any amendment to
this Form 10-KSB.
                                                                                                                                         
  [   ]  Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller
reporting company.  See definitions of large accelerated filer,
accelerated filer, and smaller reporting company in Rule 12b-2 of the
Exchange Act.  Large Accelerated filer  ̈Accelerated filer  ̈ Non-accelerated filer   ̈ (Do not check if a smaller reporting
company) Smaller reporting company x  Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange
Act).Yes [  ]   No [X]  State the aggregate market value of the voting and
non-voting common equity held by non-affiliates computed by reference to the
price at which the common equity was last sold, or the average bid and asked
prices of such common equity, as of the last business day of the registrants
most recently completed second fiscal quarter: The Registrant's shares are currently not
trading.   As of March 31, 2009, the Registrant had 6,794,600
shares of common stock issued and outstanding.  DOCUMENTS INCORPORATED BY REFERENCE  List hereunder the following documents if incorporated
by reference and the part of the Form 10-K (e.g., part I, part II, etc.) into
which the document is incorporated:  (1) Any annual report to security
holders; (2) Any proxy or other information statement; and (3) Any prospectus
filed pursuant to rule 424(b) or (c) under the Securities Act of 1933:
 NONE PART
I  ITEM 1. BUSINESS  SPECIAL NOTE REGARDING FORWARD-LOOKING
STATEMENTS  This periodic report contains certain forward-looking
statements with respect to the financial condition, results of operations,
business strategies, operating efficiencies or synergies, competitive positions,
growth opportunities for existing products, plans and objectives of management.
Statements in this periodic report that are not historical facts are hereby
identified as forward-looking statements.  Overview  Calibrus, Inc. is a technology based Hosted Business
Solutions provider established in 1999.  Calibrus provides Third Party
Verification (TPV) Services, Hosted Call Recording Services and Interactive
Voice Response/Voice Recognition Unit (IVR/VRU) Services to some telecom, cable
and insurance companies.  We estimate that we have processed over 50
million live agent calls/recordings and 5 million IVR calls/recordings to date
serving these companies.  With over 160 employees, the latest equipment and
in-house designed software and solutions, we are the hosted solution company
that companies can trust with their data.  Our technology provides us with the ability to provide
fully-integrated live voice, data, and automated services and combinations of
services out of a unified platform.  Our systems processes and
functionality allow our IT staff to easily design and build systems that satisfy
clients process requirements.  Using our technology has allowed us to
develop and build customized web-based solutions incorporating call recording,
click to call and voice message broadcast functionality.  Calibrus Products and Services  Calibrus Hosted Third Party Verification (TPV)
Services  Calibrus' Third Party
Verification service is easy to use and offers both Live Operator and IVR/VRU
Third Party Verification services.  Calibrus Live Operators process
thousands of TPV calls daily.  To date, Live Operator TPV has been the
solution of choice for several of our largest customers.  Live operators
offer the best customer experience and typically higher success rates over
IVR/VRU solutions.  Our Automated IVR (Interactive Voice Response) solution
offers a low-cost alternative to a live voice agent while ensuring compliance
with both FCC and State PUC (Public Utility Commission) Third Party Verification
requirements. Our IVR systems feature intuitive scripting to automatically
ensure the correct questions are asked. Our custom IVR solutions enable clients
customers to easily opt-out to a live agent at any time if they require personal
attention.  What is Third Party Verification?  Third Party Verification is the confirmation of a
customers order by an independent third party.  This process protects both
the customer and the company selling services from fraud and slamming/cramming
of products onto their lines.  Once the sale has been made the customer is
transferred to an independent Third Party, such as Calibrus, that will read a
pre-determined script to which the customer will answer yes or no.  In 1996, the Federal Communications Commission, FCC,
enacted the Telecommunications Act which forced the Regional Bell Operating
Companies to open their lines to competition.  Accordingly, telecom
companies were required to allow competitors to lease their lines and provide
service to customers at a rate set by each individual States Utility  -3- Commission.  This was to
promote competition and help new competitors compete with the larger telecom
companies on a level playing field.  Unfortunately, this led to another
phenomena called slamming, customers being switched from one company to another
without their approval, and sometimes without any knowledge whatsoever until
they received their bill.  In response to slamming, legislation was enacted that
required companies that were changing a customers dial tone or long distance to
their services would have to first obtain the customers approval in one of
three ways:  A written and signed Letter of
Authorization indicating that customer agrees to the change. An automated or live agent
independent third party that the customer is transferred to for the
verification. An
electronic Signature on an electronic Letter of Authorization, usually done on
websites.  Calibrus fulfills the second requirement, providing both
automated IVR/VRU and Live Agent Third party Verifications Services for our
clients.  Automated IVR/VRU Service Highlights  Dual Channel Recording to Eliminate
the Loss of Interactions/Customer Statements · Very Low Implementation and Ongoing
Cost · Simple to Set Up, Implement and
Launch · Close to Real-Time Call Record and
File Retrieval and Posting · Dedicated Management and IT
Resources, 24/7 Availability · Superior Value and Cost Competitive
IVR Services  Our automated IVR verification method provides customers
with a pre-determined script to comply with each clients unique verification
requirements.  The following diagram demonstrates our basic Automated IVR
Process Method:  [calibrus10kdec08001.jpg]  -4-  Our Automated IVR/VRU TPV
services are priced on per transaction or per minute usage.  Live Operator TPV  In addition to our automated TPV services, we also offer
Live Operator TPV Service.  When customers want to provide live
interactions with ultimate flexibility, our Live Operator Services can be used
in conjunction with our automated TPV services or as a stand alone service.
 Customers that select our Live Operator service offering will see several
benefits, such as:  · Better Customer Experience · Superior Universal Language Coverage
(i.e. Spanish, Chinese, Japanese, Korean, etc.) · Documented Higher Success Rates
(success rates average over 96%) · Higher Success Rates Mean: o Less Back
Room Clean-up Expense o Fewer Lost
Sales due to Non-Verified TPVs · Close to Real-Time Call Record and
File Retrieval and Posting · Cost Competitive Live Operator
Answering Service  Calibrus has developed a TPV process that allows for a
very efficient transfer of data from a sales agent to a Calibrus Live Operator.
 This process reduces call lengths, agent errors, and TPV costs.  The
following is a diagram of our Live Operator TPV Process Method.   [calibrus10kdec08002.jpg]  Our Live Operator Third Party Verification solution
helps our customers meet compliance requirements and improve their overall
business processes.   TPV revenue accounted for 91.4% of the Companys
total revenue.  For 2008, 93% of our TPV revenue was derived from Live
Operator services and 7% was derived IVR/VRU services.  Our TPV services
are priced on per transaction or per minute usage.  VOIP
Verifications  Calibrus Live Agent VOIP Verifications provide a
solution for customers that want to provide live interactions with the ultimate
flexibility.  Automated IVR Verifications is a low-cost alternative to a
live voice agent that still complies with both FCC and State PUC Third Party
Verification requirements.  Intuitive scripting ensures the correct
questions are automatically asked.  Customers can easily opt-out to a live
agent at any time if they require personal attention.  -5- Hosted Call Recording  Calibrus Call Recording service is easy to use and
cost-effective and offers a number of features necessary for a superior call
recording solution.  Calibrus Hosted Call Recording solutions are an
alternative for companies that do not wish to invest in expensive hardware,
maintenance and support of a state-of-the-art call recording
system.  Our Hosted Call Recording Features include:  All Inclusive Pay-As-You-Go Pricing Model by the Minute or by the
Transaction/Call · No Maintenance, Upgrade, Programming,
Site/Seat Licensing or Change Fees · Call Record & File Access 24/7 Via a Secured Website for Easy Retrieval · Customized Reporting
Options · High Quality Recording with Redundant
Systems and Disaster Recovery · Compatible and Flexible Process can
be used with Virtually Any System · Optional Quality Control Monitoring
and Evaluation Services  Hosted Call Recording for the Insurance
Industry  Our call recording solution assists insurance companies
to record and retain valuable, mission critical conversations that occur during
claim statements and interviews, while, we believe, improving efficiencies and
reducing costs in the claims process.  Calibrus recording process is easy to use, secure and
completely customizable.  Insurance adjusters can set up a call and start
recording quickly without expensive equipment.  The Calibrus system ties
important information for the claim, claim number, interviewee name, and other
information to the file so customers can sort it later.  The adjustor dials
into Calibrus and records the conversation with the claimant and simply hangs up
when finished.  The recording will be processed and available within
minutes after the call is finished and accessible via the reporting website.
 If necessary, Calibrus can send a confirmation email to the adjuster that
includes a hyperlink to the recording for easy retrieval.  Once the recording has ended a secure password protected
web-based reporting website allows claims managers, compliance officers and
executives to access the recordings of the claim statements and interviews in
seconds.  Indexing of the data such as claim number, insured name,
interviewee name, and adjuster ID allows authorized individuals the ability to
search on things such as claim number and find all associated recordings for
that claim.  The reporting website serves as a quality assurance and
management tool as well, providing the ability to pull up all recordings for an
adjuster ID, and listen to every call that a particular adjuster did that day.  For independent/contracted adjusters out in the field,
Calibrus has developed an upload tool to provide insurance companies with the
ability to combine all of their digital claims recordings, whether done
internally or externally by contracted companies, into one database.  The
Calibrus upload capability allows external adjustors/interviewers to record
interviews on the street and then upload them to the Calibrus database using a
secure web portal.  Independent adjusters can use any handheld recorder
that can download a recording into a .wav file format onto their computers.  The upload process is very simple to use:  Access
the secure web portal, enter in the information into the portal  to be tied
to the recording, mark the Upload existing file checkbox, identify the file
and hit submit.  The file is then uploaded into the Claims  Recording Database and is then
available to pull in the reporting website. Calibrus offers insurance companies
the ability to switch to a hosted solution without having to invest heavily into
an internal recording solution.  By using our hosted solution customers
forgo having to invest in hardware, software, site licenses, continuous
upgrades, storage facilities and dedicated IT support.  We handle all of
that for our customers, and  get a recording solution in place within
weeks.  Other benefits of using our solution are immediate access for
playback of the recorded statement, back up  -6- redundancy of the digital .wav
file for security purposes, enhanced call tracking and data analysis, ability by
managers to quickly review calls and provide coaching easily, and customizable
report capabilities.   For 2008, 8.6% of our total revenue was derived
from Call Recording services.  Voice Message Broadcasting
(VMB)  Our web-based voice message broadcasting solution has
the ability to contact hundreds to thousands of people in seconds.  We can
create dialing parameters based upon dialing lists, the message to be sent and
the times to call out on, which can be adjusted to fit time zones across the
nation.  Customers can broadcast caller id and change and record their
message in a matter of minutes.  Our voice message broadcasting programs can assist
in:  Retail Sales Alerts · Thank You Messages · Direct Customers to your
Website · Relationship calls  Happy Birthday,
Anniversary, etc. · Political Campaigns  Get out to
Vote · Customer Loyalty Campaigns to Repeat
Customers · Meeting/Conference
Notifications · Fundraising · Sports Team Advertising · School and Emergency
Notifications  Calibrus Click-To-Call Services
ClickTalk Calibrus ClickTalk  service allows customers to
put a button or icon on a website or web-listing that will allow customers to
contact others by telephone automatically and anonymously.  The ClickTalk
functionality has a variety of uses: · Call Tracking · Lead Generation · Save Sales on
Cancellations · Online Phone Surveys · Real Estate Listings  When someone presses the Calibrus ClickTalk button a
pop up appears so that they can enter their phone number.  Once a phone
number is entered and they hit the submit button, the Calibrus system places an
outbound call to them and once they have answered our system places a second
call to a pre-programmed number and connects you with the customer.  Call Center Services  Calibrus, Inc. has been delivering call center services
since 1999 to large and small businesses.  Calibrus live operator agents
can provide call center services to customers who want to grow their business or
handle temporary, seasonal or overflow volume.  -7- Several call center services Calibrus can provide
are:  **Outbound****Inbound** Cold
CallsCustomer Support/Help Desk Outbound
TelemarketingOrder Taking/Fulfillment Phone
SurveysAnswering Service Lead
QualifyingSales Verifications Direct Mail Follow
upSeminar Sign-up Fundraising Political Campaigns Internet Sales Verifications Collections  SpeechTrack.com  Calibrus has developed a hosted call recording utility
that anyone can use from any phone.  Through the SpeechTrack.com website
anyone can record a phone conversation whether they are at work, home or on a
cell phone.  SpeechTrack enables phone conversations to be recorded easily,
and securely, at a low per minute cost.  SpeechTrack is an ideal solution
for any individual, independent professional or small business owner.
 SpeechTrack is a hosted solution that requires no hardware or software to
be purchased.  SpeechTrack can also be used for dictation purposes.
 Customers can access their recordings online on SpeechTracks secure
website.  Customers can add notes to the recording file to keep track of
their calls and they can also download the recordings to their computer.
 Our plan is to market SpeechTrack.com to small to midsize businesses and
individual professionals through several different marketing channels, including
internet advertising, radio ads, forums, blogs and traditional print
media.  Businesses and individuals use SpeechTrack
for:  Staffing and Training Protection/Disputes/Resolution  Prove who said what
in a dispute Confirmation of Agreements or Document
Replacement Compliance Best Practice/Advice or Instructions  SpeechTrack users use our service for a myriad of
purposes.  Below is a partial list of just some of the type of independent
professionals/small business owners that may utilize
Speechtrack.  Attorneys Accountants Contractors/Vendors Doctors Executive Coaching Service Providers  -8- Sales Professionals Private Investigators Project Manager/Coordinators Insurance Agents Mortgage/Financial
Brokers Conference Calls Market Researchers  Technology  Using software based PBX (public exchange system  best
known as a telephone switch), ACD (automated call distribution), network
equipment, data storage arrays, and servers; we have developed object oriented
software application building blocks and relational databases. Because we record
every verification conversation digitally, our system allows clients to be
actively involved in monitoring and managing our services through secure
Internet sites, VPN (virtual private networks), and dedicated point-to-point
connectivity. By allowing near real time review of data and verification
conversations, this infrastructure allows our clients to actively participate in
the management of their programs.  We virtually eliminate data errors
because the majority of the data is transferred electronically.  Redundancy and
Safeguards  Calibrus has worked diligently to provide the necessary
redundancy and disaster recovery requirements to our clients.  We offer a
number of safeguards for our clients including separate power generation units
in the event of a failure by the utility; we have UPSs (uninterrupted power
supply) for all network and telecom equipment; we have a UPS on every agent
station and our system up-time was over 99.9% for the last two years.  For
telecom access Calibrus utilizes two separate long distance providers that both
have multiple access points into the Phoenix Metro area.  One telecom
company provides the primary number while the second provides the back-up number
to prevent any downtime that could arise in a particular companys network.  Calibrus facilities, equipment and technology are
structured to ensure uptime and eliminate the worry of fiber cuts which could
disrupt our business.  Since Calibrus is connected to the telecoms
network, we are able to install additional T1s or PTP (point-to-point) data
circuits on a significantly reduced timeframe.  It is common to have new
circuits delivered and functioning within 10 business days, much quicker than
the 30-45 business days most companies will receive.  Calibrus uses
multiple telephone switches, firewalls, routers and networks; and have automated
tape back-up guards against data loss, corruption and down time.  Our technology  is capable of receiving and
interpreting automatic number identification information.  Calibrus can
then use this information in conjunction with our computer telephone integration
functionalities for reporting and indexing functionality.  Security  Calibrus understands the need to protect data belonging
to our customers.  With that understanding, we have developed strict
guidelines to protect customer information.  Controlled access to data
centers, physical security measures, and strong passwords on all network
equipment ensures that only authorized personnel can gain entrance to sensitive
areas and protects Calibrus internal vulnerabilities.  Firewalls, Access
Control Lists and VPNs ensure that data is safe from external vulnerabilities.  We do offer several levels of securing access to our
clients data, as it can vary from client to client.  With the web based
utility that some clients utilize we offer password protection and unique
individual logins that can be completely -9- controlled and maintained by the
client by a custom interface, which can also be password protected, if
necessary.   Some of our clients find that task to be burdensome due
to their number of agents and managers.  For those specific clients, if
they are coming through a proxy, we can limit access to the websites, both agent
entry and to trusted internet protocol.  This would limit the access to
only those that are coming through the companys client side channel to the
Calibrus website.  Reporting  Calibrus custom builds all reports to suit our clients
needs because we have found that the information that each customer requires may
be different from the information required by another customer.  All
telephone switches are centralized in our server databases and therefore, we can
easily relate customer data with call data.  As a result, we can custom
build reports to the specifications of our clients and provide the data in any
format to the client:  Excel, fixed length and comma delimited, and deliver
it in multiple ways, such as through a website, Web Service, e-mail, connect
direct or FTP (file transfer protocol).  We build all return files to
client specifications and can deliver them at the times the client
requests.  Regulations  One of Calibrus main services is providing both Live
Operator and IVR/VRU Third Party Verification.  Third Party Verification is
mandated by both the FCC and State PUC agencies.  Third Party Verification
is the confirmation of a customers order by an independent third party.
 This process protects both the customer and the company selling from fraud
and slamming/cramming of products onto their lines.  Once the sale has been
made the customer is transferred to an independent Third Party that will read a
pre-determined script to which the customer will answer yes or no.  In 1996, the Federal Communications Commission, FCC,
enacted the Telecommunications Act which forced the Regional Bell Operating
Companies to open their lines to competition.  Accordingly, they were
required to allow competitors to lease their lines and provide service to
customers at a rate set by each individual States Utility Commission.
 This was to promote competition and help new competitors compete with the
large corporations on a level playing field.  This led to another phenomena called slamming, customers
being switched from one company to another without their approval, and sometimes
without any knowledge whatsoever until they received their bill.  In response to this, legislation was enacted that
required companies that were changing a customers Dial Tone or Long Distance to
their services would have to first obtain the customers approval in one of
three ways.  A written and signed Letter of
Authorization indicating that customer agrees to the change.  · An automated or live agent
independent third party that the customer is transferred to for the
verification.  · An electronic Signature on an
electronic Letter of Authorization, usually done on websites.  Calibrus fulfills the second requirement, providing both
automated IVR, and Live Agent Third Party Verifications Services for our
clients.  Third Party Verification though intended to be a protection for
the customer, is also a protection for the company initiating the switch as
well.  The necessity for TPV prevents companies from switching customers
without their approval, and it also prevents a customer, or another company,
from alleging that the company switched a customer without their approval.
 The protection that TPV provides for the company is critical as the fines
levied by the FCC and the State PUCs can run in the millions of dollars and also
include the loss of the ability to sell telecommunications products in a
specific area.  -10- Even though Calibrus acts as a
Third Party Verification provider, Calibrus is not directly subject under any
regulations.  The service or process that we provide for our clients does
have several defined rules and regulations that must be followed.
  For example, scripts that are implemented and used in both our Live
Operator and IVR/VRU TPV services must be read verbatim to the customer.
 There are certain pre-defined questions that must be asked to the customer
and certain types of information must be gathered from the customer in order for
the TPV to be verified.  The FCC and each State PUC has varying
requirements in regards to the information that must be communicated to the
customer and the information that must be captured.   In addition,
there are record keeping requirements for both data and voice for each Third
Party Verification transaction.  Whether the TPV is conducted by a Live
Operator or IVR/VRU TPV there must be a voice recording of the customer
responding to the script and the data that was captured during the transaction
must also be recorded.  The voice recordings and associated data must be
archived and made available for up to thirty six (36) months.   Competitors  Calibrus faces numerous competitors both within and
outside the United States.  Many of Calibrus competitors are much larger
and better financed.  The only barrier to entry in Calibrus markets is
sufficient start up capital to buy initial equipment and such costs are not
substantial.  With the low barriers to entry, Calibrus faces competition
from a large number of competitors with similar capabilities.  Most call
centers, both inside and outside the United States, either have similar
technology or could develop similar technology.  We initially were able to
stay ahead of competitors by having a low cost business model but many
competitors have reduced their costs to be similar to our costs.  As such,
the competition for customers has become more competitive.  Some of Calibrus competitors include VoiceLog, now
owned and operated by BSG Group, 3PV and Data Exchange.  Although these are
some of the larger competitors there are a substantial number of competitors of
similar size to Calibrus that we compete against.  Calibrus competes with
these competitors for business by offering superior quality of service that is
reliable and low cost in the market.  Even with quality of services that we
believe we offer, competition in our industry generally comes down to pricing.
 As such, there is constant pressure on margins and the need to keep costs
low to be able to effectively compete in our industry.  Concentration of Customers  As the number of telecommunications companies has
decreased, we have seen a concentration of revenues coming from two primary
customers.  In 2007 AT&T Communications and Cox Communications exceeded
approximately eighty percent of our revenues for the first time.  Currently
nearly eighty percent of our revenues are still derived from these two
customers.  For the years ended December 31, 2008 and 2007, AT&T
Communications accounted for 54% and 61% and Cox Communications 25%  and
22%, respectively, of our revenues.  This revenue is derived from our TPV
business.  If we were to lose one of these customers before our other
business lines start generating more revenue, it could have a detrimental effect
on our ability to stay in business.  We are actively moving away from the
TPV business being our primary operations and are hopeful that we will be able
to reduce our reliance on these two customers.  We made the decision to
diversify our product offerings based on our belief that consolidation in the
telecommunications industry has reduced the number of telephone customers
changing carriers.  As such, the need for third party verification has
decreased.  We believe there will continue to be customers changing phone
carriers but as the number decreases the revenue we receive from our third party
verification business continues to decline.  We believe it is prudent to
seek other sources of revenue.  Our contract with AT&T has been extended through
December 31, 2009, although AT&T can terminate the contract on 90 days
notice.  The contract sets forth our pricing terms and provides the
conditions on which we are to provide service to AT&T including  that services are deemed performed
when provided.  Currently, we do not have a contract with Cox
Communications and bill them as services are provided.  -11- Patents, Trademarks,
Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts,
including Duration  We protect some of our technology as trade secrets and,
where appropriate, we use trademarks or register trademarks  in connection
with products and our core name.  We do not have any patents.  We have
one trademark covering our name Calibrus.  Research and Development Costs
During the Last Two Fiscal Years  From January 1, 2008 to December 31, 2008, we incurred
$148,742 in research and development costs, with the full amount being incurred
during the last quarter of 2008.  We expect as we expand into new markets
we will continue to incur additional research and development
costs.  ITEM 1A. RISK FACTORS  Calibrus operations are subject to a number of risks
including:  We currently have losses from
operations and will need additional capital to execute our business
plan.  Currently we have losses from operations. Our loss from
operations was $1,229,556 with a net loss of $1,213,998 for the year ended
December 31, 2008, and we have had to rely on existing capital to cover the
loss.  For the year ended December 31, 2008, our operations used $677,169
of our existing capital to fund operations, reducing our current assets to
$1,777,662.  As consolidation has come over the telecommunications
business, our TPV business has been reduced.  We have been leveraging our
technology capabilities to expand into new areas but it will take some time for
the new areas to replace the loss in business from our TPV operations.  If
we are not able to generate sufficient revenues, we may be forced to seek
additional capital to fund potential shortfalls.  There can be no assurance
that we will be able to raise additional capital or that we will be able to
raise capital on terms that are favorable to Calibrus and current
stockholders.  If we are not able to stop our
losses or expand into new areas, we may be forced to terminate
operations.  With revenues from our main business, TPV, being reduced
as a result of consolidation in the telecommunications industry, we have had to
look to expand into new areas.  Our TPV revenue has seen year over year
declines from a high of approximately $11,300,000 in 2003 to revenues of
approximately $5,500,000 in 2008.  This was a reduction ofapproximately $1,100,000 from TPV revenues in 2007.
 If our expansion efforts do not prove successful, our ability to stay in
operation is questionable.  We are already trying to reduce our expenses
related to TPV to be able to make a profit at anticipated revenue levels.
 With our long term rent commitments, we were only able to recently reduce
expenses in the last quarter. Even with the reduced expenses, we still operate
at a loss and will have to continue to reduce expenses to be able to make a
profit at anticipated TPV revenue levels.  Our future success will depend,
to a great extent, on our ability to expand into new revenue areas.  Since
we are only beginning expansion into these revenue areas, prospective investors
will not be able to rely on an operating history when evaluating our potential.
 If our expansion efforts do not prove successful, it is likely we would
not be able to stay in business with only TPV sales.  With our expansion into new
business areas, our ability to raise additional capital may be key to our
success and without additional capital, we may not be able to stay in
business.  We have been losing money and need to expand into new
business areas as our TPV business, which has been our primary operations, has
declining revenue.  Even if we leverage our current technology and
infrastructure, without additional capital it will be difficult for us to enter
into new business markets.  With the current credit crisis in the United  -12- States, it may be difficult to
raise capital and we do not think traditional forms of financing, such as bank
loans, will be available for us.  We may explore raising capital through
the sale of debt or equity securities but at this point we have not evaluated
the nature of any such sales.  Given the current economic climate, we would
anticipate it being difficult to raise any capital and believe the terms we
could obtain may not be very favorable, possibly resulting in substantial
dilution to current shareholders.  There can be no assurance the new
business areas we pursue will be successful and if they are not, it is likely we
would be forced to terminate operations.  We have only begun to expand our product offering and to
date have not had significant sales outside of our TPV operations.
 Accordingly, it will be difficult to evaluate the potential for success of
the new product offerings.  If the new products and services do not prove
successful, it will be unlikely we will have the capital to pursue additional
new business directions.  Our inability to adequately
retain or protect our employees, customer relationships and proprietary
technology could harm our ability to compete.  Our future success and ability to compete depends in
part upon our employees and their customer relationships, as well as our
proprietary technology.  Despite our efforts, we may not prevent third
parties from soliciting our employees or customers or infringing upon or
misappropriating our intellectual property. Our employees, customerrelationships and intellectual property may not provide
us with a competitive advantage adequate to prevent the competitors from
entering the markets for our products and services. Additionally, our
competitors, which are larger and better financed, could independently develop
non-infringing technologies that are competitive with, and equivalent or
superior to our technology.  We face numerous competitors and
as a result, we may not get the business we seek.  We have many competitors with comparable technology and
capabilities that compete for the same group of customers. Our competitors are
competent and experienced and are continuously working to take projects away
from us. Many of our competitors have greater financial, technical, marketing
and other resources than we do. Our ability to compete effectively may be
adversely affected by the ability of these competitors to devote greater
resources to the sale and marketing of their products and
services.  We depend upon a single customer
segment, the telecommunication market, for the majority of revenues and a
decrease in its demand for our services or pricing modifications in this
customer segment might harm our operating results.  Currently, a substantial part of our revenue sources
come from our TPV business related to telecommunications.  As the
telecommunication business has consolidated, we have already seen a reduction in
revenue.  If this market segment continues to consolidate, we could see a
further reduction in the TPV revenue from telecommunications.  Although we
have moved to expand our product offerings, it will take time for our new
offerings to gain acceptance in the marketplace and there can be no assurances
that the new product offerings will prove successful.  Accordingly, it is
possible, we could see further reduction in business and increased losses if the
TPV business is reduced further.  Almost 80% of our revenues are
derived from two customers and the loss of either customer could result in our
inability to stay in business.  Currently, almost 80% of our revenues are derived from
AT&T Communications and Cox Communications.  AT&T  -13- Communications accounted for 54%
of our revenue in 2008 and Cox Communications accounted for 25% of our revenues
in 2008.  Currently, we do not have a written contract with Cox
Communications and provide service to them on a per usage basis.   The
lack of a contract with Cox Communications creates additional risk for our
options since we have had to staff our call center to cover their business but
have no assurance that they would not move to another provider at any time.
 This would leave us with excess capacity and cost which would take a
period of time to reduce.  The loss of the revenue would also make it
difficult for us to cover our ongoing additional cost not related to Cox
Communication.  With the consolidation in the telecommunication industry,
the loss of either customer would have detrimental long term effects on Calibrus
that we may not beable to overcome.
 It is unlikely we could replace either client in the short term and may
not have the resources to survive long enough to add additional product
offerings without the ongoing revenue from these customers.  Accordingly,
investors in Calibrus could lose their entire investment if we were to lose
either customer.  We may not be able to adapt quickly enough to
changing customer requirements and industry standards.  We are in an industry dependent on technology and the
ability to adapt this technology to changing  market needs.   We
may not be able to adapt quickly enough to changing customer requirements and
preferences and industry standards. Competitors are continually
 introducing new products and services with new technologies. These changes
and the emergence of new industry standards and practices could render our
existing products obsolete and will require us to spend funds on research and
development to stay competitive.  Efforts to expand will place a significant strain on
our management, operational, financial and other resources.  We plan to expand our operations by introducing new
products and aggressively marketing existing products placing a significant
strain on our management, operations, technical performance and financial
resources. There can be no assurance that we will be able to manage expansion
effectively.  Our current and planned personnel, systems, procedures, and
controls may not be adequate to support and effectively manage our future
operations, especially as we employ personnel in multiple geographic locations.
We may not be able to hire, train, retain, motivate, and manage required
personnel, which may limit our growth. If any of this were to occur, it could
damage our reputation, limit our growth, negatively affect our operating results
and harm our business.  We have limited funds upon which
to rely for adjusting to business variations and for growing new business.  We have been experiencing losses, with a net loss of
$1,213,998 and $1,043,638 for the years ended December 31, 2008 and 2007,
respectively.   These losses are the result of consolidation in the
telecommunication business.  We are actively diversifying our product
offerings to adjust to changes in our customers and the telecommunications
industry.  Currently, our working capital is limited with only $1,259,023
in working capital at December 31, 2008. Given our limited working capital, if
we were to lose existing customers, it could further hurt our ability to
continue in business.  It is likely we will have to seek additional capital
in the future as we seek to expand our product offerings.  There can be no
assurance we will be able to raise additional capital and even if we are
successful in raising additional capital, that we will be able to raise capital
on reasonable terms. If we do raise capital, our existing shareholders may incur
substantial and immediate dilution.   We may issue more stock without
shareholder input or consent which could dilute the book value of your
investment.  The board of directors has authority, without action by
or vote of the shareholders, to issue all or part of the authorized but unissued
shares. In addition, the board of directors has authority, without action by or
vote of the shareholders, to fix and determine the rights, preferences, and
privileges of the preferred stock, which may be given voting rights superior to
that of the common stock. Any issuance of additional shares of common stock or
preferred stock will dilute the ownership percentage of shareholders and may
further dilute the book value of Calibrus shares. It is likely we will seek
additional capital in the future to fund operations. Any future capital will
most likely reduce current investors percentage of ownership.  -14- There is no current market
for Calibrus stock. Should a market not develop, you may not be able to sell
the stock.  At the present time, there is no public market for
shares of Calibrus common stock, and we do not know if a public market will
develop.  Calibrus is seeking a securities broker-dealer, called a market
maker, willing to apply for a trading symbol and trade our stock. We do not know
if such a market maker will continue acting for us, or that an active market
will be developed or maintained. Even if a market develops, the future market
price may be volatile and significant volume may not result in our stock, making
it difficult to sell our stock if purchased.  If no market develops, or if
the future market price is low, you may be unable to sell your shares or may
only be able to sell at a loss.  You will not receive dividend
payments. Calibrus has not paid and does not plan to pay dividends
in the foreseeable future even if our operations are profitable. Earnings, if
any, will be used to expand our operations, hire additional staff, pay operating
expenses and salaries, rather than to make distributions to shareholders. Future
value of an investment will be tied to an increase in Calibrus enterprise value
and/or market price of our common stock, if trading on an exchange or market.  Your ability to sell shares may
be limited if the price of our stock, once listed, is below $5.00 per share
because of special sales practice requirements applicable to "designated
securities" or "penny stock." Upon successful listing of the common stock on the OTC
Bulletin Board, if the bid price for our common stock is below $5.00 per share,
our common stock would be subject to special sales practice requirements
applicable to designated securities on penny stocks which are stock which
trade below $5.00 per share and whose underlying companies do not meet certain
minimum asset requirements. No assurance can be given that the bid price for our
common stock will be above $5.00 per share. If such $5.00 minimum bid price is
not maintained and another exemption is not available, our common stock would be
subject to additional sales practice requirements imposed onbroker-dealers who sell the common stock to persons
other than established customers and accredited investors (generally
institutions with assets in excess of $5,000,000 or individuals with net worth
in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly
with their spouse). For transactions covered by these rules, the broker-dealer
must make a special suitability determination for the purchaser and have
received the purchaser's written agreement to the transaction prior to the sale.
These limitations make it difficult for broker dealers to sell penny stocks and
most will not recommend a penny stock or sell a penny stock except to long term
customers who are accredited investors. Because of these limitations many
brokers do not follow penny stocks or recommend them to clients. Consequently,
the penny stock rules may affect the ability of broker-dealers to sell our
common stock and also may affect the ability of persons acquiring our common
stock to resell such securities in any trading market that may develop. If
brokers do not recommend Calibrus to their clients, it may be difficult to
establish a market for the securities or to develop a wide spread shareholder
base. Therefore, an investor trying to resell our shares may have difficulty
because there may be little demand for our shares and even small share sales may
result in a reduction in our share price.  Current management and our
founders own over fifty percent of our outstanding shares and will control
Calibrus leaving other shareholders of Calibrus dependent on managements
ability and making it difficult to change management or our direction if an
investor should become dissatisfied with management or our business
model.  Calibrus management currently owns 50.74% of our issued
and outstanding shares of common stock.  As a result, management will most
likely be in a position to elect at least a majority of the Board of Directors,
to dissolve, merge or sell the assets, and to direct our business affairs
without shareholder input or consent.  As such, outside shareholders will
not have the ability to change management or the direction of the Company and
will be subject to the judgment and decisions of current management for the
foreseeable future.  -15-  Employees  As of February 5, 2008, we had 98 full-time employees
and 64 part-time employees.  Offices  Our offices are located at 1225 West Washington Street,
Tempe, Arizona 85281 where we lease approximately 13,295 square feet.  Our
lease runs through October 31, 2010 at a lease rate of approximately $27 per
square foot, including common area charges, for an annual lease amount of
$361,296, or $30,108 per month.  Management believes our current lease will
serve current and future expansion plans through its term.  ITEM 2.
PROPERTIES   Our offices are located at 1225 West Washington, Tempe,
Arizona 85281 where we lease approximately 13,295 square feet.  Our lease
runs through October 31, 2010, at a lease rate of approximately $27 per square
foot, including common area charges, for an annual lease amount of $361,296 or
$30,108 per month.  Management believes our current lease will serve
current and future expansion plans through the term of our
lease.  ITEM 3. LEGAL
PROCEEDINGS  None.  ITEM 4. SUBMISSION OF MATTERS TO
A VOTE OF SECURITIES HOLDERS  No matters were submitted to a vote of stockholders of
the Company during the fourth quarter of the fiscal year ended December 31,
2008.  PART II  ITEM 5. MARKET FOR REGISTRANTS
COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
SECURITIES  Calibrus common stock is not quoted on any market or
exchange.  Since its inception, Calibrus has not paid any dividends on
shares of common stock, and Calibrus does not anticipate that it will pay
dividends in the foreseeable future. At December 31, 2008, we had approximately
125 shareholders of record.  As of December 31, 2008, Calibrus had
6,794,600 shares of our common stock issued and outstanding. At March 15, 2009,
Calibrus had 6,794,600 shares or our common stock issued and
outstanding.  Possible Sale of Common Stock
Pursuant to Rule 144  Calibrus has previously issued shares of common stock
that constitute restricted securities as that term is defined in Rule 144
adopted under the Securities Act.  Subject to certain restrictions, such
securities may generally be sold in limited amounts under Rule 144.  Except
for 500 shares of Calibrus common stock issued in 2006, all of Calibrus issued
6,794,600 shares have been outstanding for several years with the majority of
the shares issued in 1999 and 2000.    Accordingly, all of the
shares of common stock outstanding would meet the time test of Rule 144 and
potentially be available for resale.  With the number of shares potentially
becoming available for resale, there could be a depressive effect on any market
that may develop for Calibrus common stock.  -16- Reports
to Shareholders  This report will be available over the internet at the
Securities and Exchange Commission web site www.sec.gov.   Recent Sales of Unregistered
Securities  Calibrus has not sold any securities during the last
three years except for 500 shares issued to an employee in 2006 related to an
option exercise.  We have issued options to our executive officers and
directors in the last two years.  Options issued were all to executive
officers and directors and accordingly we believe all issuances are exempt from
the registration provisions of the Securities Act of 1933.   We issued
a total of 615,000 options in 2008 and 135,000 in 2007 to our executive officers
and directors.  No shares of our common stock were issued in 2008 and
2007.  Securities
Authorized for Issuance under Equity Compensation Plans  Number of securities remaining available for Number
of securities to    
Weighted-average       Further issuance
under be
issued upon exercise      exercise price
of       equity compensation plans of
outstanding options     outstanding
options       excluding securities Plan
Category                                      
warrants and rights         
warrants and rights       reflected in column
(a) (a)                                      
(b)                                       
(c) Equity compensation plans approved by security
holders                    
1,685,832                               
1.33                                 
2,614,168  Total                                                               
1,685,832                               
1.33                                 
2,614,168  ITEM 6. SELECTED FINANCIAL DATA Summary of Financial Information  We had revenues of $5,485,798 and a net loss of
$1,213,998 for the year ended December 31, 2008.  At December 31, 2008, we
had cash and cash equivalents of $854,159 and working capital of $1,259,023,
which represented a decrease in working capital of $916,091 from the amount
reported at December 31, 2007, of $2,175,114.  The following table shows selected summarized financial
data for Calibrus at the dates and for the periods indicated.  The data
should be read in conjunction with the financial statements and notes included
herein beginning on page F-1.  -17-   STATEMENT OF OPERATIONS DATA:  For the Year Ended
December 31, 2008
For the Year Ended
December 31, 2007Revenues
$
   5,485,798
$
   6,558,142Cost of
Revenues
2,652,230
3,370,495Research and
Development
148,742
0General and
Administrative Expenses
3,910,538
3,719,454Net Income
(Loss)
$(1,213,998)
$(1,043,638)Basic and Diluted
Income (Loss) per Share
(0.18)
(0.15)Basic and Diluted
Weighted Average Number of Shares Outstanding
6,794,600
6,794,600BALANCE SHEET
DATA:December 31, 2008
December 31, 2007Total Current
Assets
$
    1,777,662
$
    2,541,686Total
Assets
1,980,578
2,872,286Total Current
Liabilities
518,639
366,572Working
Capital
1,259,023
2,175,114Shareholders
Equity
1,461,939
2,505,714   ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS  Certain statements in this Report constitute
forward-looking statements. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause our actual
results, performance or achievements to be materially different from any future
results, performance or achievements expressed or implied by such
forward-looking statements. Factors that might cause such a difference include,
among others, uncertainties relating to general economic and business
conditions; industry trends; changes in demand for our products and services;
uncertainties relating to customer plans and commitments and the timing of
orders received from customers; announcements or changes in our pricing policies
or that of our competitors; unanticipated delays in the development, market
acceptance or installation of our products and services; changes in government
regulations; availability of management and other key personnel; availability,
terms and deployment of capital; relationships with third-party equipment
suppliers; and worldwide political stability and economic growth. The words
"believe", "expect", "anticipate", "intend" and "plan" and similar expressions
identify forward-looking statements. Readers are cautioned not to place undue
reliance onthese forward-looking
statements, which speak only as of the date the statement was made.  -18- Critical Accounting Policies and
Estimates  The preparation of financial statements and related
disclosures in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions
that affect the amounts reported in the audited  Financial Statements and
accompanying notes.  Management bases its estimates on historical
experience and on various other assumptions that are believed to be reasonable
under the circumstances. Actual results could differ from these estimates
under different assumptions or conditions.  Calibrus believes
there have been no significant changes during the year ended December 31,
2008.  Calibrus believes that the following addresses Calibrus most
critical accounting policies.  We recognize revenue in accordance with Securities and
Exchange Commission Staff Accounting Bulletin No. 104, Revenue Recognition
(SAB 104).  Under SAB 104 revenue is recognized at the point of passage
to the customer of title and risk of loss, when there is persuasive evidence of
an arrangement, the sales price is determinable, and collection of the resulting
receivable is reasonably assured.   Our customers are charged either
on a per call basis or per minute basis according to the terms of the contract
and the service provided to that customer.  Live agent TPV customers are
generally charged on a per call basis which is defined as a call that is
answered by the Companys agent.  Call recording services are charged on a
per minute basis for the length of the call being recorded.  Revenue Recognition.   The Company from time
to time executes outbound sales campaigns for customers, primarily for the sale
of telecommunications services.  Although this revenue source has been
immaterial, the Company recognizes the commissions earned on these campaigns on
a net basis in accordance with EITF 99-19 "Reporting Revenue Gross as a
Principal versus Net as an Agent".  Our allowance for doubtful accounts is maintained to
provide for losses arising from customers inability to make required payments.
 If there is deterioration of our customers credit worthiness and/or there
is an increase in the length of time that the receivables are past due greater
than the historical assumptions used, additional allowances may be required.  The Company has stock-based compensation plans.
Effective January 1, 2006, the Company adopted the fair value recognition
provisions of Statement of Financial Accounting Standards No. 123 (revised
2004), "Share-Based Payment" ("SFAS 123R"), using the modified prospective
transition method. Under this transition method, stock-based compensation
expense for the years ended December 31, 2008 and 2007 includes compensation
expense for all stock-based compensation awards granted in prior years if  not fully vested as of December 31,
2005, based on the grant date fair value estimated in accordance with the
original provision of Statement of Financial Accounting Standards No. 123,
"Accounting for Stock-based Compensation" ("SFAS 123"). Stock-based compensation
expense for all stock-based compensation awards granted after January 1, 2006 is
based on the grant date fair value estimated in accordance with the provisions
of SFAS 123R. The value of the compensation cost is amortized on a straight-line
basis over the requisite service periods of the award (the option vesting
term).  The Company estimates fair value
using the Black-Scholes valuation model. Assumptions used to estimate
compensation expense are determined as follows:  · Expected term is determined using an average of the
contractual term and vesting period of the award;  · Expected volatility of award grants made under the
Company's plans is measured using the historical daily changes in the market
price of similar industry indices, which are publicly traded, over the expected
term of the award;  · Risk-free interest rate is equivalent to the implied
yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the
expected term of the awards; and,  -19- · Forfeitures are based on the history of cancellations of
awards granted by the Company and management's analysis of potential
forfeitures.  We account for income taxes in accordance with Statement
of Financial Accounting Standards No. 109, Accounting for Income Taxes (SFAS
No. 109).  Under SFAS No. 109, deferred tax assets and liabilities are
measured using enacted tax rates in effect for the year in which the differences
are expected to reverse.  Deferred tax assets will be reflected on the
balance sheet when it is determined that it is more likely than not that the
asset will be realized.  Managements Discussion and
Analysis of Financial Condition and Results of Operations  Third Party Verification market size has been shrinking
over the last four (4) years.  Calibrus business has been severely
impacted by industry consolidation and increased competition.  The
telecommunications industry has been experiencing consolidation between the
major Incumbent Local Exchange Carriers (ILEC). Over the past decade the major
telecommunications players have been Verizon, SBC Communications, BellSouth
Communications, AT&T, Sprint, MCI, Adelphia Communications and Qwest
Communications.  In the past two years SBC communications acquired AT&T
and  Bellsouth Communications.
 Adelphia Communications and MCI are no longer in business.  The
remaining players are Verizon, AT&T, and Sprint.  The result is that
the number of potential Calibrus ILEC/ TPV customers has declined and may shrink
even further over the next several years, reducing the overall TPV market size
even further.  Calibrus overall business has also been affected by
increased competition from Wireless, Cable and Broadband Industries which have
reduced revenue and market share for our business.  For sometime the ILECs
have been experiencing tremendous pressure in their core business offerings
(Local and Long Distance phone service).  Wireless, Cable and Broadband
companies are impacting the way in which customers are buying communication
services.  VOIP is also beginning to add to existing pressures on the
Telecommunications companies revenue growth and creating upward pressures on
capital spending.  In order to fight the increased competition the ILECs
are reinventing their business models by expanding their offerings from Local
and Long Distance phone service.  ILECs are providing a multi-service
offering, i.e. Local and Long Distance phone service, Broadband, VOIP and TV
services to their customers.  ILECs have just begun to incorporate a
business strategy of bundling services, where a service provider includes DSL
service, Cable or Satellite TV along with Telephone or VOIP services all at
discounted rates.  This is a proven strategy designed to increase revenue
per customer, promote customer loyalty and increase retention, making it more
difficult for customers to switch to another company.    It is
clear to us that our TPV volume will continue to decrease due to increased
competition from service providers offering multiple services to
customers.  With the decline of the TPV market, Calibrus is looking
to penetrate new markets with its products and services.  Over the next
twelve (12) months Calibrus will be focusing on more Automated Hosted Business
Solutions that require little to no labor involvement.  Calibrus
management strongly believes in trying to significantly reduce one of its
highest costs, its Live Operator workforce.  Industries that we have
targeted for our Automated Hosted Business solutions are the Insurance,
Internet, Real Estate, and Financial Industries.  Automated Hosted Business
programs while typically generating less top line revenue tend to have
significantly higher margins. Going forward, Calibrus plans to focus its time
and efforts into pursuing these types of products and services that shall return
a higher margin than what we are able to achieve from Live Operator programs.  Over the next twelve (12) months Calibrus intends to
continue to offer and develop customized solutions on a client by client basis
in call recording, IVR/VRU, Voice Message Broadcast and Click-To-Call
services.  We will market these types of Automated Hosted Business
Solutions through print, radio and online advertising.  -20- We also intend to develop,
internally or through outsourcing, products and services that can be marketed
directly to businesses or consumers.  Calibrus hopes to build upon and
leverage our existing technology and infrastructure.  Calibrus is currently
researching and  developing existing technologies and
platforms some of which are already developed, such as our Call Recording and
Click-To-Call services.  Calibrus has several projects that are currently
in the idea stage that would utilize our current telephony infrastructure and
Click-To-Call and Call Recording functionality.  Our plan is to further
develop, implement, market and sell these services in the next twelve (12)
months, given sufficient capital.  It is anticipated that additional hardware and software
may be required, as well as additional employees, particularly software
programmers and web developers, may be needed in order to complete certain
products and services.  We believe within the next twelve (12) months in
order to further develop, implement, market and sell Automated Hosted Business
services we will need to raise additional capital.   We currently
anticipate it will cost an additional $1,000,000 to launch our new product line.
 This is only an estimate and may change substantially as we move forward
with our new products.   This is only an estimate and may change.
 Additionally, with the current economic conditions facing the country, we
may have to raise more funds if we are not able to generate sufficient revenues
from the new and existing product lines.  There can be no assurance that we
will be able to raise any funds or that the funds raised will be sufficient to
cover ongoing expenses.  In the next twelve (12) months we will also be looking
to grow our business through acquisition, although we have not identified any
potential targets.  Given sufficient capital, we believe there will be
opportunities to acquire companies that are providing similar Automated Hosted
Business services.  Results of
Operations  December 31,
2008  For the year ended December 31, 2008, we had revenues of
$5,485,798 compared to revenues of $6,558,142 for the year ended December 31,
2007.  The reduction in revenues is the result of less third party
verification work available as the telecommunication industry continued to
consolidate.  Since we currently represent some of the largest
telecommunication companies, we do not believe we will see a significant
increase in revenues from this source.  Accordingly, we are actively
expanding our product offerings to leverage our core technology and capabilities
to cover other needs of businesses.  Since these efforts to expand our
products and services have only recently begun, we cannot say if we will be
successful in bringing in additional revenues.  We have reduced expenses to better match our current
revenue stream.  As part of this reduction, we elected to terminate the
lease on one of our facilities and we consolidated operations into one location.
 Unfortunately, we had to wait until the early termination period was
effective to do so in November 2008.  As such, we have reduced our cost of
revenues for the year ended December 31, 2008 to 48% vs. 51% for 2007.
 Additionally, as we sought to expand our product offerings, our general
and administrative expenses  increased resulting in a net loss of
$1,213,998 for the year ended December 31, 2008 compared to net loss of
$1,043,638 for the year ended December 31, 2007.  Seasonality and Cyclicality  We do not believe our business is cyclical.  -21-  Liquidity and Capital Resources  As of December 31, 2008, we had working capital of
$1,259,023 with current assets of $1,777,662 and current liabilities of
$518,639.  We have been experiencing slower pay from our customers but
believe that our accounts receivable are collectable given the companies we
represent are relatively large and seem to be paying their obligations;
although, we believe, there is a conscious decision to extend payments over
longer periods then they have in the past.  We believe, from our
conversations with these companies, that this is a temporary situation and once
the economy starts to improve and the credit markets start functioning better
the normal payable periods will return. In the meantime, we have adjusted our
expectations on when receivables will be paid and are paying our obligations
based on these new assumptions.  Our working capital as of December 31, 2008, was down
from working capital of $2,175,114 at December 31, 2007, as we continued to
incur losses as we deal with a slowing economy and a reduction in third party
verifications resulting from the consolidation in the telecommunications
industry.  We have been working to reduce our dependence on third party
verification revenues by expanding our product offerings. This expansion has
increased our usage of capital which is reflected, in part, in the reduction of
our working capital.  Although we have been expanding our product offerings,
which have increased our need for capital, we have also reduced our long term
expenses by closing one of our call centers and centralizing our operations to
reflect our business focus going forward.  With the closing of one of our
call centers we were also able to reduce expenses through a reduction in our
workforce.  We are hopeful these changes along with our new product
offerings, which are not as labor intensive, will allow us to return to
profitability in the near future, but can offer no assurances in this regard.  As we try to expand our product offerings, we will need
to seek additional capital.  As of January 31, 2009, we believe we had
enough capital to last at least 12 months based on our current burn rate, but
management believes it will need to raise additional capital to help expand our
marketing efforts and to be able to aggressively launch our new product
offerings.  We have estimated our capital needs based on the potential
revenues from existing clients and our current burn rate over the last few
months since we reduced staff and closed one of our facilities.  Currently,
our monthly burn rate is averaging $50,000 beyond our cash receipts.  If
our burn rate stays at this level and projected revenue goals  are achieved, we should be able to
stay in business for another twelve months from February 1, 2009. These revenue
figures may not come to fruition given the current economic conditions in the
United States and the world in general.  If we have revenue short falls, we
may have to reevaluate our ability to survive until we have additional revenue
sources on line.  There can be no guarantee our new products will increase
revenues or that we can achieve profitability before our assets are
depleted.  At this time we estimate we will need an additional
$1,000,000 in capital to cover our ongoing expenses and to launch our new
product offerings.  This is only an estimate and may change as we receive
feedback from customers and have a better feel of the demand for our new
products.  Our estimates assume that prior discussions with interested
potential customers will lead to sales and that our current projected revenue is
realized.  With the current economic conditions, both of these factors may
change and we may not be able to raise the capital.  Anticipating the
difficulty in raising capital as a private enterprise, Calibrus is pursing a
potential public listing for our shares of common stock.  Given the current state of Calibrus and our revenues, we
do not believe bank financing will be feasible and if we need additional capital
it will be in the form of an equity or debt offering.  To this end,
management has made the decision to position Calibrus to be more attractive to
investors, particularly angel investors.  Management believes as a public
company with a trading market, Calibrus may be able to attract additional
investors that otherwise would not be interested in a private company. Even as a
public company, there is no guarantee Calibrus will be able to raise additional
capital.  Calibrus has not had to raise capital for over five years and it
is uncertain, particularly given current economic conditions, that we will be
able to raise additional capital.  Management is hopeful that even without
additional capital, the changes made over the last few months, including
consolidating operations in one location and reducing staffing will help
conserve capital until new product offerings can start producing revenues
although no assurances can be offered in this regard.  -22- Off-Balance Sheet
Arrangements  We have no off balance sheet
arrangements.  ITEM 8.  FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA  The financial statements of the Company are set forth
immediately following the signature page to this Form 10-K.  ITEM 9.  CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE  The Company has had no disagreements with its
independent registered accounting firm with respect to accounting practices or
procedures or financial disclosure.   ITEM 9A(T).  CONTROLS AND
PROCEDURES  Evaluation of Disclosure
Controls and Procedures  We conducted
an evaluation under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls and
procedures. The term disclosure controls and procedures, as defined in Rules
13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as
amended (Exchange Act), means controls and other procedures of a company that
are designed to ensure that information required to be disclosed by the company
in the reports it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the
Securities and Exchange Commission's rules and forms. Disclosure controls and
procedures also include, without limitation, controls and procedures designed to
ensure that information required to be disclosed by a company in the reports
that it files or submits under the Exchange Act is accumulated and communicated
to the company's management, including its principal executive and principal
financial officers, or persons performing similar functions, as appropriate, to
allow timely decisions regarding required disclosure. Based on this evaluation,
our Chief Executive Officer and Chief Financial Officer concluded as of December
31, 2008 that our disclosure controls and procedures were effective at the
reasonable assurance level over financial reporting.  Compliance
with Section 16(a) of the Exchange Act**.**  To our
knowledge, pursuant to Section 16(a) of the Exchange Act, seven
form 3s were filed late. Managements Report on
Internal Control Over Financial Reporting  This Annual Report does not
include a report of management's assessment regarding internal control over
financial reporting or an attestation report of our registered public accounting
firm due to a transition period established by rules of the SEC for newly public
companies.  -23-  Changes in Internal Control over Financial
Reporting  Due to a transition period
established by the rules of the SEC for newly public companies we are not yet
required to evaluate, pursuant to Exchange Act Rule 13a-15(d), any change in our
internal control over financial reporting that occurred during the quarter ended
December 31, 2008.  ITEM 9B.  OTHER INFORMATION  None.  -24- PART
III   ITEM 10.  DIRECTORS, EXECUTIVE OFFICERS AND
CORPORATE GOVERNANCE   The following table sets forth information with respect
to the officers and directors of Calibrus.  Calibrus directors serve for a
term of one year and thereafter until their successors have been duly elected by
the shareholders and qualified.  Calibrus officers serve for a term of one
year and thereafter until their successors have been duly elected by the Board
of Directors and qualified.  NameAgePositions  Jeff W.
Holmes55CEO, Director Greg
Holmes45President Kirk
Blosch54Director Charles
House68Director Christian J. Hoffmann,
III61Director Kevin
Asher32CFO Tom
Harker35CTO  Jeff W. Holmes  Chairman and C.E.O.  Jeff
Holmes is a founder of Calibrus and has been active in the roles of President,
C.E.O. and Chairman of the Board of Directors since Calibrus inception in 1999.
 For the past 25 years Mr. Holmes has been active in developing
technologies that improve the efficiencies of business processes in the
Healthcare, Internet, Computer (hardware and software) and Telecommunications
industries.  He graduated in 1976 with a B.S. in Marketing and Management
from the University of Utah.  Greg W. Holmes  President.  Greg Holmes is
a founder of Calibrus and has served in several positions during his Calibrus
tenure which began in 1999.  Most recently, Mr. Holmes served as Director
of Business Development, working on developing new business opportunities and
strategic relationships. In 2003, Mr. Holmes served as Production Manager over
Calibrus Papago Facility, managing activities related to client  call volumes, staffing levels,
scheduling and Quality Assurance issues for Fortune 1000 clients at Calibrus
Corporate headquarters in Tempe, AZ.  From January 2001 to February 2003,
Mr. Holmes was the Director of Human Resources for Calibrus.  He was also
responsible for managing accounts receivable, accounts payable and invoicing.
 From 1996 to 1999, Mr. Holmes was head of Internet Business Development
& Research for J.W. Holmes & Associates and The Scottsdale Equity Growth
Fund.  Responsibilities included conducting research and analysis for
existing portfolio companies and companies seeking investment capital.
 From 1995 to 1996, Mr. Holmes was Director of Finance & Director of
Human Resources for Pro Tour Tennis in which he handled the accounts payable,
payroll, budget forecasting, financial statements and human resource duties.
 He earned his Bachelors degree in Geography and minor in Finance from the
University of Utah in 1995.  Kirk Blosch  Director.Mr. Blosch is a
general partner and founder of Blosch and Holmes LLC, a business consulting  -25- and private venture funding
general partnership established in 1984.  Mr. Blosch is and has been, since
October 1999, a member of the board of directors of Calibrus, Inc.  From
the first quarter of 1997 through the second quarter of 2000, Mr. Blosch was a
director of Zevex International, a medical product company specializing in
medical devices and ultrasound technology.  Zevex (ZVXI) was traded on
NASDAQ prior to its sale.  Mr. Blosch also served on the board of directors
of OCIS, Inc. from 2003 through July 2007.  Mr. Blosch graduated from the
University of Utah in 1977 with a B.S. degree in Speech
Communications.  Christian J. Hoffmann, III  Director.Mr.
Hoffmann, Director is a lawyer specializing in corporate, securities, mergers
and acquisitions and venture capital.  He has been a partner with Quarles
& Brady, LLP and its predecessor in Phoenix, Arizona since November 1995. He
graduated magna cum laude from Georgetown University with Bachelors of Science
in Business Administration in 1969 and from the Georgetown University Law Center
with a juris doctorate in 1973.  Charles House  Director. Mr. House, 68, has been Executive
Director for Media X at Stanford University, as well as Senior Research Scholar
in the H-STAR (Human Science and Technologies Advanced Research) Division since
2006.  Before joining Stanford, he was at Intel Corporation, as co-founding
Director of their Research Collaboratory in 2003.  He joined Intel when
they bought Dialogic Corporation in 1999 where House headed Corporate
Engineering.  From 1995 to 1997, House was President of Spectron
Microsystems, a wholly-owned subsidiary of Dialogic that was sold to Texas
Instruments.  Prior, House was President of the Vista Division of Veritas
Software (1993-1995), and the R&D Vice President for Informix (1991-1993)
after many years in a variety of roles for Hewlett-Packard (1962-1991).
 House is an IEEE Fellow, a past President of ACM, and chair for many years
of the Information Council for CSSP in Washington D.C.  He holds numerous
technology awards for his work, including the  Computer Hall of Fame, the
Entrepreneurs Hall of Fame, and the Smithsonian Wizards of
Computing.  Kevin J. Asher - Chief Financial Officer.
 Mr. Asher, prior to joining Calibrus, from March 2006 to February
2008,  was the Principal, General Manager and CFO of Medical Aesthetics,
LLC, an operator of five medical spa clinics in the greater Phoenix metropolitan
area. Mr. Asher was responsible for all aspects of the business including
finance, accounting, human resources and day to day decision making. From
February 2005 through March 2006, Mr. Asher was Vice President of Finance for
AirLink Mobile, Inc., an industry leading  MVNO (mobile virtual network
operator) and provider of prepaid wireless telephone service where he was
responsible for all aspects of accounting and finance including financial
reporting, treasury management, financial analysis, financial projections,
payroll, regulatory reporting and daily accounting. From September 2003 to
February 2005, Mr. Asher was a director of MCA Financial Group Ltd. of Phoenix,
Arizona which provides advisory services to businesses, financial institutions
and investor groups in the areas of financial restructuring, mergers and
acquisitions, business oversight, and corporate and capital formation. His
responsibilities included representation of debtors and creditors in the areas
of business turnarounds, financial restructuring, chapter 11 business
reorganizations, divestures, mergers and acquisitions, business valuations,
financial management, and performance improvement. He advised clients in a
variety of industries including aviation, aerospace and defense, retail,
homebuilding, construction and manufacturing. Prior to his position at MCA
Financial, Mr. Asher worked in the public accounting industry primarily as an
audit manager. Mr. Asher has a Bachelor of Science degree in accountancy from
Northern Arizona University at Flagstaff, Arizona and is a Certified Public
Accountant.  Tom Harker  Chief Technology Officer.  Mr.
Harker has served as Director of Software Development and CTO at Calibrus since
2000.  Toms responsibilities are to oversee all aspects of design and
implementation of IT systems.  Prior to coming to Calibrus, Tom served as
Division Software Manager at ACS (Affiliated Computer Services) for 2 years. Mr.
Harker has been involved deeply in the Third Party Verification (TPV) process
for the past 9 years with an understanding of the TPV process and FCC
requirements.  -26- Key
Employees:  Michael J. Brande, MCSE - Vice President of Network
Operations.  For the past 6 years, Michael Brande has served as the
Director of Network Operations and Facilities at Calibrus.  His team is
responsible for all aspects of the data and telecom networks at Calibrus - from
cabling to wiring, and switches and routers, to the servers, PBXs and PC
workstations.  Mr. Brande directs and cultivates many key business
relationships for Calibrus and its Vendor Partners.  His responsibilities
range from procurement, to services, to facilities and equipment maintenance.
 Prior to his employment with Calibrus, Michael was employed by ACS
(Affiliated Computer Services) TeleSolutions  as the Division Network Manager and
was part of a team that designed a new and better process for Third Party
Verification. He has over 12 years experience in the call center
industry.  Michael Rae - Vice President of Software
Development.  Mr. Rae received his Bachelor of Science in Computer
Information Systems in 1999. Prior to working at Calibrus he worked at a
software development company where he was responsible for developing a large
scale web application used to organize and track volunteers. Mr. Rae has been
working as a Senior Systems Architect for Calibrus since 2000.  His
responsibilities include designing and developing all web related
technologies/products for clients and internal management as well as serving as
a technical contact for clients.  Mike Rae accepted the position of Vice
President of Software Development in 2006.  James Stockert  Vice President of Marketing and
Sales.  Mr. Stockert oversees all aspects of the negotiations of
establishing clients and helping clients through the process of setup and
implementation.  Mr. Stockert joined the Calibrus team in 2005 after
working for SBC in their Marketing department since 1999.  Mr. Stockert
oversaw the implementation and processes of Calibrus as SBCs Third Party
Verification provider and managed the relationship for over four years.
 Mr. Stockhert graduated with a BBA in Marketing from Texas State in 1994
and before working with SBC worked with Montgomery Ward in their Merchandising
department at their headquarters in Chicago.  Kelly M. Robinson  Director of TPV Operations.
 Mr. Robinson joined the Calibrus team in 2003.  His background
includes developing and managing Third Party Verification operations for major
telecommunications companies including, BellSouth, Verizon and SBC/AT&T
Communications, Cox Communications, CenturyTel, Frontier and others. He has also
directed Customer Service and Lead Generation programs for Oakwood Corporate
Housing, Grainger Tools, Lucent Technologies/Avaya and others.  He has
worked within the TPV industry for the last 11 years at Calibrus and previously
at ACS (Affiliated Computer Services) and understands the nuances of Third Party
Verification processes and its importance to the overall sales process.  Family
Relationships  Except for Jeff Holmes and Greg Holmes, who are
brothers, there are no family relationships between our officers and directors.  None of the officers and directors has filed for
bankruptcy, been convicted in a criminal proceeding or been the subject of any
order, judgment, or decree permanently, temporarily, or otherwise limiting
activities (1) in connection with the sale or purchase of any security or
commodity, or in connection with any violation of Federal or State securities
laws or Federal commodities laws, (2) engaging in any type of business practice,
or (3) acting as a futures commission merchant, introducing broker, commodity
trading advisor, commodity pool operator, floor broker, leverage transaction
merchant, any other person regulated by the Commodity Futures Trading Commission
or an associated person of any of the foregoing, or as an investment adviser,
underwriter,  broker or dealer in securities, or
as an affiliated person, director or employee of an investment company, bank,
savings and loan association or insurance company, or engaging in or continuing
any conduct or practice in connection with such activity.  -27- COMPLIANCE WITH SECTION 16(A)
OF THE EXCHANGE ACT  The Company is not aware of any reports not filed by
officers, directors and ten percent stockholders.  ITEM 11.  EXECUTIVE
COMPENSATION  The following table sets forth, for the fiscal years
indicated, all compensation awarded to, earned by or paid to Calibrus chief
executive officer and each of the other executive officers that were serving as
executive officers at December 31, 2008 (collectively referred to as the "Named
Executives").  No other executive officer serving during 2008 received
compensation greater than $100,000. SUMMARY COMPENSATION
TABLE   Name and Principal
Position
Year
Salary
Bonus
Stock Awards
Option Awards
Non-Equity Incentive Plan
Compensation
Nonqualified  Deferred
Compensation
All Other
Compensation
Total(a)
(b)
(c)
(d)
(e)
(f) (1)
(g)
(h)
(i) (2)
(j)Jeff W. Holmes,
CEO
12/31/2008
$220,000
$500
$0
$19,600
$0
$0
$4,336
$244,43612/31/2007
$220,000
$500
$0
$0
$0
$0
$2,591
$223,091Greg W. Holmes,
President
12/31/2008
$150,000
$500
$0
$14,000
$0
$0
$3,470
$167,97012/31/2007
$150,000
$500
$0
$0
$0
$0
$4,392
$154,892Thomas Harker,
CTO
12/31/2008
$140,000
$500
$0
$14,000
$0
$0
$3,525
$158,02512/31/2007
$140,000
$500
$0
$0
$0
$0
$4,706
$145,206Kevin J. Asher,
CFO
12/31/2008
$130,000
$0
$0
$21,000
$0
$0
$3,008
$154,00812/31/2007
$0
$0
$0
$0
$0
$0
$0
$0   (1) This column represents the aggregate dollar
amount of the awards granted in 2008 and 2007, respectively. Therefore, the
values shown here are not representative of the amounts that may eventually be
realized by an executive. Pursuant to the rules of the Securities and Exchange
Commission, we have provided a grant date fair value for option  awards in accordance with the provisions of Statement of
Financial Accounting Standards No. 123(R), Share-based Payments. For
option awards, the fair value is estimated as of the date of grant using the
Black-Scholes option pricing model, which requires the use of certain
assumptions, including the risk-free interest rate, dividend yield, volatility,
forfeitures and expected term. The risk-free interest rate is based on the yield
at the date of grant of a U.S. Treasury security with a maturity period equal to
or approximating the options expected term. The dividend yield assumption is
based on our historical dividend payouts, which is zero. The volatility
assumption is based on the historical volatility of an industry sector over a
period equal to the options expected term or stocks trading history which ever
is shorter. The expected term of options granted is based on expectations about
future exercises and represents the period of time that options granted are
expected to be outstanding.  (2) The amounts shown include Company-paid portion of
health insurance for the fiscal years ended 2008 and 2007.  -28- Outstanding Equity Awards At Fiscal
Year-End  Stock Awards
Stock AwardsName
Number of securities underlying
unexercised Options (#) Exercisable
Number of Securities Underlying
Unexercised Options (#) Unexercisable
Equity Incentive Plan Awards:
Number of Securities Underlying Unexercised Unearned Options
(#)
Option Exercise Price
($)
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
(#)
Equity Incentive Plan Awards
Market or Payout Value of Unearned Shares, Units or Other Rights That Have
Not Vested (#)Jeff W. Holmes,
CEO
45,000
-
-
$1.50
5/9/2009
-
-
-
-27,500
-
-
$1.52
12/29/2009
-
-
-
-25,000
-
-
$1.52
12/15/2010
-
-
-
-20,833
-
-
$1.52
12/11/2011
-
-
-
-70,000
-
-
$1.00
12/17/2013
-
-
-
-Greg W. Holmes,
President
25,000
-
-
$1.52
12/29/2009
-
-
-
-25,000
-
-
$1.52
12/15/2010
-
-
-
-20,833
-
-
$1.52
12/11/2011
-
-
-
-50,000
-
-
$1.00
12/17/2013
-
-
-
-  Thomas Harker,
CTO
25,000
-
-
$1.52
12/29/2009
-
-
-
-50,000
-
-
$1.52
12/15/2010
-
-
-
-20,833
-
-
$1.52
12/11/2011
-
-
-
-50,000
-
-
$1.00
12/17/2013
-
-
-
-Kevin J. Asher,
CFO
50,000
-
-
$1.00
11/18/2013
-
-
-
-25,000
-
-
$1.00
12/17/2013
-
-
-
-  Compensation of Directors  Name
Year
Fees Earned or Paid in Cash
($)
Stock Awards
($)
Option Awards
($)(1)
Non-Equity Incentive Plan
Compensation ($)
Nonqualified Deferred
Compensation Earnings ($)
All Other Compensation
($)
Total
($)(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)Kirk Blosch (2)
12/31/2008
-
-
$25,000
-
-
-
$25,00012/31/2007
-
-
$3,150
-
-
-
$3,150Charles House (2)
12/31/2008
-
-
$25,000
-
-
-
$25,00012/31/2007
-
-
$3,150
-
-
-
$3,150Christian J. Hoffmann, III
(2)
12/31/2008
-
-
$25,000
-
-
-
$25,00012/31/2007
-
-
$3,150
-
-
-
$3,150   (1) This column represents the aggregate dollar amount
of the awards granted in 2008 and 2007, respectively. Therefore,  -29- the values shown here are not
representative of the amounts that may eventually be realized by a director.
Pursuant to the rules of the Securities and Exchange Commission, we have
provided a grant date fair value for option awards in accordance with the
provisions of Statement of Financial Accounting Standards No. 123(R),
Share-based Payments. For option awards, the fair value is estimated as of the
date of grant using the Black-Scholes option pricing model, which requires the
use of certain assumptions, including the risk-free interest rate, dividend
yield, volatility and expected term. The risk-free interest rate is based on the
yield at the date of grant of a U.S. Treasury security with a maturity period
equal to or approximating the options expected term. The dividend yield
assumption is based on our historical dividend payouts, which is zero. The
volatility assumption is based on the historical volatility of an industry
sector over a period equal to the options expected term or stocks trading
history which ever is shorter. The expected term of options granted is based on
expectations about future exercises and represents the period of time that
options granted are expected to be outstanding.  For further information on
these calculations, please refer to the notes to our financial statements, Notes
1 and 9 included in Item 8.  (2)  As of December 31, 2008,
Kirk Blosch had 270,000 options outstanding, Charles House had 250,000 options
outstanding and Christian J. Hoffmann, III had 270,000 options outstanding.
 No director had any stock awards outstanding.  Option/SAR Grants in Last Fiscal
Year  In fiscal 2008, 345,000 options were granted out of
Calibrus Incentive Option Plan and 270,000 options were granted out of the
Non-Qualified Option Plan.  The Company has adopted two Stock Option Plans, the 2001
Non-Qualified Stock Option Plan and the 2001 Incentive Stock Option Plan. During
the year ended December 31, 2007 the Company increased the number of options
available for grant under the 2001 Non-Qualified Stock Option Plan and Incentive
Stock Option Plan by 1,425,000 and 725,000 options, respectively.  Under
the 2001 Non-Qualified Plan, the Company may grant options for up to 2,850,000
shares of common stock and has granted 835,000 options as of February 11, 2009,
at exercise prices ranging from $1.50 to $1.52. The maximum term of the options
is five years, and they vest at various times according to the Option
Agreements. Under the 2001 Incentive Stock Option Plan, the Company may grant
options for up to 1,450,000 shares of common stock and has granted 850,832 as of
February 11, 2009, at exercise prices ranging from $1.50 to $1.52. The maximum
term of the options is five years and they vest at various times according to
the Option Agreements.  Stock Option
Exercise In fiscal 2008, none of the
named executives exercised any options to purchase shares of common
stock. Long-Term Incentive Plan
(LTIP)  There were no awards granted during fiscal year 2008 or
2007. Board of Directors
Compensation Each director may be paid his
expenses, if any, of attendance at each meeting of the board of directors, and
may be paid a stated salary as director or a fixed sum for attendance at each
meeting of the board or directors or both.  No such payment shall preclude
any director from serving the corporation in any other capacity and receiving
compensation therefore.    Each director received options during
the prior years with the non-employee directors receiving 90,000 options each
with an exercise price of $1.00 for the year ended December 31, 2008 and 45,000
options each with an exercise price of $1.52 for the year ended December 31,
2007.  No other compensation arrangements exist between
Calibrus and our Directors.  -30-  Employment Contracts and
Termination of Employment and Change-in-Control Arrangements  Calibrus has employment contracts with all officers and
those employees identified herein as key employees.   All of our
employment agreements contain language assigning all inventions over to
Calibrus, they also contain non-compete agreements.  Additionally, on
termination, if not for cause and Calibrus is cash flow and earnings positive,
our officers and key employees will receive up to three months salary as
severance. On a change of control of Calibrus, which results in termination of
the officer or key employee and Calibrus is cash flow positive and has a
positive earnings per share at the time of the change of control, the officer or
key employee will receive a three months salary as severance based on the
officers or employees current salary.  Employment contracts are entered
into for two, three or four year periods with automatic two, three or four one
year extensions depending on the officer or key employee. Except for terms and
salary, all of our employment contracts contain the same material terms.  A
summary of the officers employment contracts are below:  Employee

Beginning Date

End
Date

Annual Salary

Renewal TermJeff W.
Holmes

1/1/2005

12/31/2009

$
220,000

(4) one year
extensionsGreg W.
Holmes

1/1/2005

12/31/2009

$
150,000

(4) one year
extensionsKevin J.
Asher

2/5/2008

2/4/2010

$
130,000

(2) one year
extensionsTom
Harker

1/10/2007

1/9/2011

$
140,000

(3) one year
extensionsMichael
Brande

1/10/2007

1/9/2011

$
105,000

(3) one year
extensionsMichael
Rae

1/10/2007

1/9/2011

$
90,000

(3) one year
extensionsJim
Stockert

9/26/2005

9/25/2009

$
80,000

(4) one year
extensionsKelly
Robinson

6/28/2004

6/28/2008

$
90,000

(4) one year
extensions   The Company has agreed to indemnify its officers and
directors for certain events or occurrences arising as a result of the officer
or director serving in such capacity. The term of the indemnification period is
for the officers or directors lifetime. The maximum potential amount of future
payments the Company could be required to make under these indemnification
agreements is unlimited.  Report on Repricing of
Options/SARs  We have not adjusted or amended the exercise price of
stock options or SARs previously awarded to any executive
officers.  Report on Executive
Compensation The Board of Directors
determines the compensation of Calibrus executive officer and  president and sets policies for and
reviews with the chief executive officer and president the compensation awarded
to the other principal executives, if any.   The board of directors
has two committees, the audit and compensation committee which are made up of
non-employee directors.  Our Compensation Committee is composed of Kirk
Blosch and Charles House.  Our Audit Committee is composed of Kirk Blosch,
Charles House and Christian J. Hoffmann, III.  The compensation policies utilized by the Board of
Directors are intended to enable Calibrus to attract, retain and motivate
executive officers to meet our goals using appropriate combinations of base
salary and incentive compensation in the form of stock options. Generally,
compensation decisions are based on contractual commitments, if any, as well as
corporate performance, the level of individual responsibility of the particular
executive and individual performance. During the fiscal year ended December 31,
2008, Calibrus chief executive officer was Jeff W. Holmes and Greg W. Holmes,
President.  Kevin J. Asher, CFO, was retained as CFO in February of
2008.  -31- Base salaries for Calibrus
executive officers are determined initially by evaluating the responsibilities
of the position held and the experience of the individual, and by reference to
the competitive marketplace for management talent, including a comparison of
base salaries for comparable positions at comparable companies within Calibrus
industry.  Annual salary adjustments are determined by evaluating
the competitive marketplace, the performance of Calibrus, the performance of the
executive, particularly with respect to the ability to manage the growth of
Calibrus, the length of the executive's service to Calibrus and any increased
responsibilities assumed by the executive.  During 2008, the board of directors of Calibrus met
twice.  Additionally, the Compensation Committee and the Audit Committee
each met once.  All members of the board of directors were either present
in person or by proxy at all the meetings.  Code of
Ethics  We have adopted a Code of Ethics that applies to all of
our directors and executive officers serving in any capacity for our Company,
including our principal executive officer, principal financial officer,
principal accounting officer or controller or persons performing similar
functions. Nominating
Committee  The Company currently does not have a nominating
committee related to its Board of Directors. Due to the Company's small size and
privately held nature the Company has been limited to the individuals it could
attract as Director's. As such the Board has not deemed it necessary to adopt a
formal nominating committee  Option
Plans  Calibrus has 4,300,000 shares reserved for issuance
under stock option plans with 1,685,832 stock options issued and outstanding.
 The board of directors has the authority to issue the options, at their
sole discretion.  The Company has adopted two Stock Option Plans, the 2001
Non-Qualified Stock Option Plan and the 2001 Incentive Stock Option Plan. During
the year ended December 31, 2008 the Company increased the number of options
available for grant under the 2001 Non-Qualified Stock Option Plan and Incentive
Stock Option Plan by 1,425,000 and 725,000 options, respectively.  Under
the 2001 Non-Qualified Plan, the Company may grant options for up to 2,850,000
shares of common stock and has granted 835,000 as of March 11, 2009, at exercise
prices ranging from $1.00 to $1.52. The maximum term of the options is five
years, and they vest at various times according to the Option Agreements. Under
the 2001 Incentive Stock Option Plan, the Company may grant options for up to
1,450,000 shares of common stock and has granted 850,832 as of March 11, 2009,
at exercise prices ranging from $1.00 to $1.52. The maximum term of the options
is five years and they vest at various times according to the Option
Agreements.   ITEM 12. SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS  The following table sets forth
certain information as of March 11, 2009, with respect to the beneficial
ownership of Calibrus Common Stock by each director of Calibrus and each person
known by Calibrus to be the beneficial owner of more than 5% of Calibrus
outstanding shares of Common Stock.  At December 31, 2008 and March 11,
2009, there were 6,794,600 shares of common stock outstanding. For purposes of this table, information as to the
beneficial ownership of shares of common stock is determined in  -32- accordance with the rules of the
Securities and Exchange Commission and includes general voting power and/or
investment power with respect to securities. Except as otherwise indicated, all
shares of our common stock are beneficially owned, and sole investment and
voting power is held, by the person named. For purposes of this table, a person
or group of persons is deemed to have beneficial ownership of any shares of
common stock, which such person has the right to acquire within 60 days after
the date hereof. The inclusion herein of such shares listed as beneficially
owned does not constitute an admission of beneficial ownership.  All percentages are calculated based upon a total number
of 6,794,600 shares of common stock outstanding as of March 11, 2009, plus, in
the case of the individual or entity for  which the calculation is made, that
number of options or warrants owned by such individual or entity that are
currently exercisable or exercisable within 60 days.   Title of Class
Name of Beneficial Owner
Number of Shares Owned
Percent of ClassPrincipal
ShareholdersCommon
Jeff W.
Holmes
225 West Washington
Street
Suite 213
Tempe, Arizona
85281
1,683,667
24.11%Common
Kirk
Blosch
2081 S. Lakeline
Drive
Salt Lake City, Utah
84109
1,665,334
23.57%Director(s)Common
Jeff W. Holmes (1)
                          --------------See
above--------------Common
Kirk Blosch (2)
                                --------------See
above--------------Common
Charles House
(3)
250,000
3.55%Common
Christian J.
Hoffmann, III (4)
345,000
4.88%Common
All Officers and
Director as a Group (four  persons)
3,944,001
50.74%  (1) Shares include 188,333 stock options which are
exercisable now at prices ranging from $1.00 to $1.52.  Mr. Holmes owns
1,495,334 shares exclusive of the options.  In calculating Mr. Holmes
percentage, the 188,333 shares have been added to the 6,794,600 shares currently
outstanding.  (2) Shares include 270,000 stock options which are
exercisable now at prices ranging from $1.00 to $1.52.  Mr. Blosch owns
1,395,334 shares exclusive of the options.  In calculating Mr. Bloschs
percentage, the 270,000 shares have been added to the 6,794,600 shares currently
outstanding.  (3) Shares include 250,000 stock options which are
exercisable now at prices ranging from $1.00 to $1.52.  Mr. House owns no
shares.  The shares shown are the options he can exercise.  In
calculating Mr. Houses percentage, the 250,000 shares have been added to the
6,794,600 shares currently outstanding.  (4) Shares include 270,000 stock options which are
exercisable now at prices ranging from $1.00 to $1.52.  Mr. Hoffmann owns
75,000 shares exclusive of the options.  In calculating Mr. Hoffmanns
percentage, the 270,000 shares have been added to the 6,794,600 shares currently
outstanding.  -33- Control by Existing Shareholders  Given the large percentage
of stock owned by current management, they most likely will be able to control
any shareholder vote.  As a result, the persons currently in control of
Calibrus will most likely continue to be in a position to elect at least a
majority of the Board of Directors of Calibrus, to dissolve, merge or sell the
assets of Calibrus, and generally, to direct the affairs of
Calibrus.  Dividends  We have not declared any cash dividends with respect to
our common stock, and do not intend to declare dividends in the foreseeable
future. Our future dividend policy cannot be ascertained with any certainty.
There are no material restrictions limiting, or that are likely to limit, our
ability to pay dividends on our securities.  Securities Authorized for Issuance under Equity
Compensation Plans  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
(a)(a)
(b)
(c)Equity compensation
plans approved by security holders
1,685,832
1.33
2,614,168Total
1,685,832
1.33
2,614,168   ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS, AND DIRECTOR INDEPENDENCE  We believe that all purchases from or transactions with
affiliated parties were on terms and at prices substantially similar to those
available from unaffiliated third parties. There were no material
transactions, or series of similar transactions, during our Companys last
fiscal year, or any currently proposed transactions, or series of similar
transactions, to which our Company was or is to be a party, in which the amount
involved exceeded the lesser of $120,000 or one percent of the average of our
total assets at year-end for the last three completed fiscal years and in which
any director, executive officer or any security holder who is known to us to own
of record or beneficially more than five percent of any class of our common
stock, or any member of the immediate family of any of the foregoing persons,
had an interest.  There were no material transactions, or series of
similar transactions, during our Companys last five fiscal years, or any
currently proposed transactions, or series of similar transactions, to which we
or any of our subsidiaries was or is to be a party, in which the amount involved
exceeded the lesser of $120,000 or one percent of the average  of our total assets at year-end for
the last three completed fiscal years and in which any promoter or founder of
ours or any member of the immediate family of any of the foregoing persons, had
an interest.  One of our directors, Christian J. Hoffmann, III, is a
partner with Quarles & Brady, LLP, which has provided certain legal services
for Calibrus.  Quarles & Brady, LLP is not currently providing any
legal services to the Company. During 2007, we paid Quarles & Brady, LLP
$4,047 and $681 during 2008.  -34- ITEM 14. PRINCIPAL ACCOUNTANT
FEES AND SERVICES  1) Audit Fees - The aggregate fees incurred for each of
the last two fiscal years for professional services rendered by our independent
registered public accounting firm for the audit of our annual financial
statements and review of our quarterly financial statements is approximately
$52,500 and $44,500 for each of the years ending December 31, 2008 and
2007. 2) Audit-Related Fees. $0 and $0. 3) Tax Fees. $2,800 and $2,800. 4) Form 10 Registration Statement. $36,000 and
$0. 5) Approval Policy. Our entire Board of Directors
approves in advance all services provided by our independent registered public
accounting firm. All engagements of our independent registered public accounting
firm in fiscal years 2007 and 2008 were pre-approved by the Board of
Directors. 6) Not Applicable.  ITEM 15. EXHIBITS, FINANCIAL
STATEMENT SCHEDULES.  (a)(1)FINANCIAL STATEMENTS.  The
following financial statements are included in this report:  The following financial statements, notes thereto, and
the related independent registered public accounting firms report contained on
page F-1 to our financial statements are herein incorporated:  December 31, 2008 and
2007 Report of Independent Registered
Public Accounting Firm Balance Sheets - December 31, 2008 and December 31,
2007               
Statements of Operations - Years ended December 31, 2008 and 2007 Statements of Changes in
Stockholders' Equity  Years ended December 31, 2008 and 2007 Statements of Cash Flows  Years
ended December 31, 2008 and 2007 Notes to Financial Statements 
Years ended December 31, 2008 and 2007  (a)(2)FINANCIAL STATEMENT SCHEDULES.  The
following financial statement schedules are included as part of this
report:   None.  (a)(3)EXHIBITS.  The following exhibits are
included as part of this report: SECExhibit No.Reference
No.Title of
DocumentLocation  3(i)3.01Articles of Incorporation of
CalibrusIncorporated byReference*  3(ii)3.02Amendment to Articles of Incorporation Calibrus-Name
ChangeIncorporated byReference*  3(iii)3.03Bylaws of
CalibrusIncorporated byReference*  44.01Specimen Stock
CertificateIncorporated byReference*   -35-  1010.01Lease Agreement 
ParagonIncorporated by Reference*  1010.02AT&T Services,
Inc.-AgreementIncorporated byReference*  1010.03Magnet
WarrantIncorporated byReference*  1010.04Employment Agreement-Jeff
HolmesIncorporated byReference*  1010.05Employment Agreement-Greg
HolmesIncorporated byReference*  1010.06Employment Agreement-Kevin
AsherIncorporated byReference*  1010.07Incentive Stock Option
PlanIncorporated byReference*  1010.08Non-Qualified Stock Option
PlanIncorporated byReference*  1010.09Form of
OptionsIncorporated byReference*  1414.01Code of
EthicsIncorporated byReference*  3131.01CEO
certificationThis Filing  3131.02CFO
certificationThis Filing  3232.01CEO
certificationThis Filing  3232.02CFO
certificationThis Filing _________________________ *  Incorporated by reference from the Company's
registration statement on Form 10 filed with the Commission, SEC file no.
000-53408.  -36-  SIGNATURES  Pursuant to the
requirements of the Securities Exchange Act of 1934, as amended, this report has
been signed below by the following persons on behalf of the Registrant and in
the capacities and on the dates indicated:  Calibrus, Inc.  Date:
April
14,2009                                               By:/s/
Jeff W. Holmes_______________ Jeff W.
Holmes, CEO  Date: April 14,
2009                                             
By:/s/ Kevin J. Asher________________ Kevin J. Asher, CFO  In accordance with the Securities Exchange Act of 1934,
this report has been signed by the following persons on behalf of the registrant
and in the capacities and on the dates indicated.  SignatureTitleDate  /s/ Jeff W.
Holmes_________Director,
CEOApril 14, 2009 Jeff W. Holmes   /s/ Kirk
Blosch____________DirectorApril 14, 2009 Kirk Blosch  /s/ Christian J
Hoffmann,III___DirectorApril 14, 2009 Christian Hoffmann, III   /s/ Charles
House_________DirectorApril 14, 2009 Charles House     Report of Independent Registered Public Accounting
Firm  Board of Directors and Stockholders Calibrus, Inc. We have audited the
accompanying balance sheets of Calibrus, Inc. as of December 31, 2008 and
2007 and the related statements of operations, changes in stockholders equity,
and cash flows for the years 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 audits. We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States).  Those standards require that we plan and perform the
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 audits included
consideration of internal control over financial reporting as a basis for
designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of 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 presentation of the financial statements and
schedules.  We believe that our audits provide a reasonable basis for our
opinion. In our opinion, the financial
statements referred to above present fairly, in all material respects, the
financial position of Calibrus, Inc. at December 31, 2008 and 2007, and the
results of its operations, changes in stockholders' equity and its cash
flows for the years then ended, in conformity with accounting principles
generally accepted in the United States of America.    Semple, Marchal & Cooper, LLP  Phoenix, Arizona  February 11, 2009   F-1   CALIBRUS, INC. BALANCE SHEETS December 31, 2008 and 2007 ASSETS2008

2007Current AssetsCash and cash equivalents




$  
854,159

$1,591,704Accounts receivable - trade, net




799,311

791,560Prepaid expenses




124,192

158,422Total
Current Assets




1,777,662

2,541,686Property and equipment, net




165,421

286,936Deposits




34,382

34,382Intangible asset, net




3,113

9,282Total
Assets




$
1,980,578

$ 
2,872,286LIABILITIES AND
STOCKHOLDERS' EQUITYCurrent LiabilitiesNotes payable - current portion




$          
-

$   
16,981Accounts payable -
trade




301,397

68,162Accrued liabilities




217,242

281,429Total Current Liabilities




518,639

366,572Total
Liabilities




518,639

366,572Commitments and Contingencies




-

-  Stockholders' EquityPreferred stock, $.001 par
value, 5,000,000 shares authorized,none issued or
outstanding




-

-Common stock, $.001 par value,
45,000,000 shares authorized,6,794,600
 shares issued and outstanding




6,795

6,795Additional paid-in
capital




4,631,544

4,461,321Accumulated
deficit




(3,176,400)

(1,962,402)Total
Stockholders' Equity




1,461,939

2,505,714Total
Liabilities and
Stockholders' Equity




$
1,980,578

$
2,872,286    The Accompanying Notes are an Integral Part of the Financial Statements F-2         CALIBRUS, INC. STATEMENTS OF OPERATIONS For The Years Ended December 31, 2008 and
2007  2008

2007Revenues




$
5,485,798

$
6,558,142Cost of revenues




2,652,230

3,370,495Gross profit




2,833,568

3,187,647General and administrative expenses




3,910,538

3,719,454Research and development




148,742

-Loss on disposal/sale of asset




3,844

-Loss from Operations




(1,229,556)

(531,807)Other Income (Expense):Interest income




19,980

55,060Interest expense




(4,422)

(5,891)15,558

49,169Loss before income taxes




(1,213,998)

(482,638)Income tax benefit (expense) - deferred




-

(561,000)Net Loss




$
(1,213,998)

$(1,043,638)Loss per Common Share: (Note 1)Basic and Diluted




$ (0.18)

$ (0.15)  Weighted Average Common Shares
Outstanding:Basic and Diluted




6,794,600

6,794,600      The Accompanying Notes are an Integral Part of the Financial Statements F-3         CALIBRUS, INC. STATEMENTS OF CHANGES IN STOCKHOLDERS
EQUITY For The Years Ended December 31, 2008 and
2007  Additional



TotalCommon Stock

Paid-In

Accumulated

Stockholders'Shares

Amount

Capital

Deficit

EquityBalance at December   31,
2006

6,794,600

$6,795

$4,443,000

$(918,764)

$3,531,031Stock based  compensation

-

-

18,321

-

18,321Net loss for the year endedDecember 31, 2007

-

-

-

(1,043,638)

(1,043,638)6,794,600

6,795

4,461,321

(1,962,402)

2,505,714Stock based compensation

-

-

170,223

-

170,223Net loss for the year endedDecember 31, 2008

-

-

-

(1,213,998)

(1,213,998)Balance at  December 31, 2008

6,794,600

$6,795

$4,631,544

$(3,176,400)

$1,461,939    The Accompanying Notes are an Integral Part of the Financial Statements F-4         CALIBRUS, INC. STATEMENTS OF CASH FLOWS For The Years Ended December 31, 2008 and
2007  2008

2007Increase (decrease) in cash and cash
equivalents:Cash flows from operating
activities:Net
Loss




$(1,213,998)

$(1,043,638)Adjustments to
reconcile net loss to net cash provided (used) byoperating
activities:Depreciation
and amortization




167,235

364,368Allowance
for doubtful accounts




(11,000)

12,000Stock
based compensation expense




170,223

18,321Loss
on disposal/sale of asset




3,844

-Deferred
income tax




-

561,000Changes in assets
and liabilities:Accounts
receivable trade




3,249

240,361Prepaid
expenses




34,230

(1,232)Deposits




-

(3,187)Accounts
payable-trade




233,235

(132,175)Accrued
liabilities




(64,187)

6,590Net
cash provided(used)by operation activities




(677,169)

22,408Cash flows from investing
activities:Purchase
of fixed assets




(78,895)

(167,762)Proceeds
from sale of fixed assets




39,000

-Purchase
of intangibles




(3,500)

-Net
cash used by investing activities




(43,395)

(167,762)Cash flows from financing
activities:Repayment
of debt




(16,981)

(176,991)Net
cash used by financing activities




(16,981)

(176,991)   Net decrease in cash and cash
equivalents




(737,545)

(322,345)Cash and cash equivalents at beginning of
year




1,591,704

1,914,049Cash and cash equivalents at end of
year




$
854,159

$
1,591,704Supplemental disclosure of cash flow
information:Cash paid during the year for:Interest




$
4,422

$
5,891Income Taxes




$ 50

$
50   The Accompanying Notes are an Integral Part of the Financial Statements F-5     CALIBRUS, INC. NOTES TO FINANCIAL STATEMENTS  Note 1 Summary of Significant Accounting
Policies, Nature of Operations and Use of Estimates  Operations  Calibrus, Inc. (the Company) was incorporated on
October 22, 1999, in the State of Nevada.  The Companys principal business
purpose is to operate a customer contact center for a variety of clients, who
are located throughout the United States. The Company provides customer contact
support services for various companies wishing to outsource these functions.
 (See Note 2  Concentrations of Risk).  Calibrus provides Third Party Verification (TPV)
Services, Hosted Call Recording Services and Interactive Voice Response/Voice
Recognition Unit (IVR/VRU) Services to some telecom, cable and insurance
companies.  The Company has also in the past conducted outbound
sales and customer service campaigns.  Although the Company does not have
any current outbound calling campaign contracts it may again in the
future.  Third Party Verification is the confirmation of a
customers order by an independent third party.  This process protects both
the customer and the company selling their service from fraud and slamming
and/or cramming of products onto their lines.  Once a sale has been made
the customer is transferred to an independent third party verification source
such as Calibrus that will read a pre-determined script to which the customer
will answer yes or no to verify their acceptance of the service.  This
service has typically been performed for telecommunications providers.  Calibrus Hosted Call Recording service is easy to use
and cost-effective and offers a number of features necessary for a superior call
recording solution.  Calibrus Hosted Call Recording solutions are an
alternative for companies that do not wish to invest in expensive hardware,
maintenance, personnel and support of a technology based call recording
system.  Our Hosted Call Recording Features
include:  · All Inclusive Pay-As-You-Go Pricing Model by the Minute
or by the Transaction/Call · No Maintenance, Upgrade, Programming, Site/Seat
Licensing or Change Fees · Call Record & File Access 24/7 Via a Secured Website
for Easy Retrieval  · Customized Reporting Options · High Quality Recording with Redundant Systems and
Disaster Recovery · Compatible and Flexible Process can be used with
Virtually Any System · Optional Quality Control Monitoring and Evaluation
Services  IVR or Interactive Voice Response allows customers to
offer customer service or verification services without the need of a live
agent.  Calibrus automated IVR/VRU verification method provides customers
with a pre-determined script to comply with each clients unique verification
requirements.  F-6  Note
1 Summary of Significant Accounting
Policies, Nature of Operations and Use of Estimates (Continued)   Our Automated IVR/VRU Features include:  · Dual Channel Recording to Eliminate
the Loss of Interactions/Customer Statements · Very Low Implementation and Ongoing
Cost · Simple to Set Up, Implement and
Launch · Close to Real-Time Call Record and
File Retrieval and Posting · Dedicated Management and IT
Resources, 24/7 Availability · Superior Value and Cost Competitive
IVR Services  Our technology provides us with the ability to provide
fully-integrated live voice, data, and automated services and combinations of
services out of a unified platform.  Our systems processes and
functionality allow our IT staff to easily design and build systems that satisfy
clients process requirements.  Using our technology has allowed us to
develop and build customized web-based solutions incorporating call recording,
click to call and voice message broadcast functionality.  Reclassifications  Certain balances have been
reclassified  in the accompanying financial statements to conform to the
current year presentation.  Use of
Estimates  The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenue and expenses during the reporting period. Actual results could
materially differ from those estimates. Significant estimates include, but are
not limited to, calculation of the allowance for doubtful accounts, income taxes
and depreciable lives of long lived assets.  Cash and Cash
Equivalents  For financial accounting purposes, cash and cash
equivalents are considered to be all highly liquid investments purchased with an
initial maturity of three (3) months or less.  Accounts
Receivable  The Company provides for potentially uncollectible
accounts receivable by use of the allowance method.  The allowance is
provided based upon a review of the individual accounts outstanding, and the
Company's prior history of uncollectible accounts receivable.  As of
December 31, 2008 and 2007, a provision for uncollectible trade accounts
receivable has been established in the amounts of $50,000 and $61,000,
respectively. The Company does not accrue interest charges or fees on delinquent
accounts receivable. The accounts are generally unsecured.  Property and
Equipment  Property and equipment are recorded at cost.
Depreciation is provided for on the straight-line method over the estimated
useful lives of the assets.  The average lives range from three (3) to five
(5) years. Leasehold improvements are amortized on the straight-line method over
the lesser of the lease term or the useful life. Maintenance and repairs that
neither materially add to the value of the property nor appreciably prolong its
life are charged to expense as incurred.  Betterments or renewals are
capitalized when incurred. For the years ended December 31, 2008 and 2007,
depreciation expense was $157,566 and $313,824, respectively.  F-7  Note 1 Summary of Significant Accounting
Policies, Nature of Operations and Use of Estimates (Continued)  Intangible
Asset  The intangible asset is comprised of branding costs and
the Companys website. The intangible assets are being amortized on the
straight-line method over its economic life, which is estimated to be seven (7)
years.    As of December 31, 2008 the amount related to the
Companys branding  cost has been fully amortized.
 Amortization expense for the years ended December 31, 2008 and 2007 was
$9,669 and $45,864, respectively.  Advertising  We expense advertising and marketing costs as incurred.
 Advertising costs include trade show fees, online advertising, etc.
 Advertising expenses were approximately $183,000 and $154,000 for the
years ended December 31, 2008 and 2007, respectively.  Capitalized Software
Costs  The Company capitalizes software acquired from outside
vendors and amortizes it over its expected useful life of three (3) years.  Revenue Recognition  Revenue for inbound calls is recorded on a per-call or
per-minute basis in accordance with the rates established in the respective
contracts. Revenue for outbound calls is on a commission basis or an hourly
basis, with revenue being recognized as the commission is earned.  The
Company has in the past conducted and immaterial amount of outbound calling
campaigns for customers.  Commission earned on these campaigns was
recognized on a net basis in accordance with EITF 99-19. As the Companys
customers are primarily well established, creditworthy institutions, Management
believes collectability is reasonably assured at the time of performance.
 Inbound calls are defined as calls that Calibrus live agents or call
recording systems receive.  Inbound calls for the last two years have
accounted for 100% of Calibrus revenue.  Inbound calls include TPV,
IVR/VRU and Hosted Call Recording services.  They are charged on a per
minute basis or per call basis in accordance with the terms of the contract.
 Calibrus invoices its customers monthly for the number of inbound calls
handled or for the amount of time spent using our systems.  Impairment of Long-Lived
Assets  The Company reviews the carrying value of its long-lived
assets at least annually, or whenever events or changes in circumstances
indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset to future net cash flows expected to be generated by
the asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets.  Income Taxes  The Company adopted the provisions of FASB
interpretation No. 48, Accounting for Uncertainty in Income Taxes, on January 1,
2007, with no material impact on the accompanying financial statements.   F-8   Note 1 Summary of Significant Accounting
Policies, Nature of Operations and Use of Estimates (Continued)  Income Taxes
(Continued)  The Company files income tax returns in the U.S. federal
jurisdiction, and the State of Arizona.  The Company is subject to federal,
state and local income tax examinations by tax authorities for approximately the
past three years, or in some instances longer periods.  Deferred income taxes are provided on the asset and
liability method, whereby deferred tax assets are recognized for deductible
temporary differences and operating loss and tax credit carryforwards and
deferred tax liabilities are recognized for taxable temporary differences.
Temporary differences are the differences between the reported amounts of assets
and liabilities and their tax basis. 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.
 Deferred tax assets and liabilities are adjusted for the effects on the
changes in tax laws and rates of the date of enactment.  Management reviews
these items regularly in light of changes in tax laws and court rulings at both
federal and state levels.   When tax returns are filed, it is highly certain that
some positions taken would be sustained upon examination by the taxing
authorities, while others are subject to uncertainty about the merits of the
position taken or the amount of the position that would be ultimately sustained.
 The benefit of a tax position is recognized in the financial statements in
the period during which, based on all available evidence, management believes it
is more likely than not that the position will be sustained upon examination,
including the resolution of appeals or litigation processes, if any.  Tax
positions taken are not offset or aggregated with other positions.  Tax
positions that meet the more-likely-than-not recognition threshold are measured
as the largest amount of tax benefit that is more than 50 percent likely of
being realized upon settlement with the applicable taxing authority.  The
portion of the benefits associated with tax positions taken that exceeds the
amount measured is reflected as a liability for unrecognized tax benefits in the
accompanying balance sheet along with any associated interest and penalties that
would be payable to the taxing authorities upon examination.  Interests and
penalties associated with unrecognized tax benefits, if any, are classified as
additional income taxes in the statement of operations.  Fair Value  The estimated fair values for financial instruments are
determined at discrete points in time based on relevant market information.
These estimates involve uncertainties and cannot be determined with precision.
The carrying amounts of accounts receivable, accounts payable, accrued
liabilities, and notes payable approximate fair value given their short term
nature.  Research and
Development  Research and development expenses include third-party
development and programming costs, localization costs incurred to translate
software for international markets, the amortization of  purchased software code and services
content, and in-process research and development. We have determined that
technological feasibility for our software products is reached shortly before
the products are released.  Earnings per
Share  Basic earnings per share includes no dilution and is
computed by dividing income available to common shareholders by the weighted
average number of common shares outstanding for the period. Diluted earnings per
share reflect the potential dilution of securities that could share in the
earnings of an entity, using the treasury stock method.  F-9 Note 1 Summary of Significant Accounting
Policies, Nature of Operations and Use of Estimates (Continued)  Earnings per Share (Continued)  The following data shows the amounts
used in computing diluted earnings per share and the effect on income and the
weighted average number of shares of potentially dilutive common
stock. Year
Ended December 31, 2008                              
2007 _______________        
________________ Income (Loss) available to common
stockholders          $    
       
(1,213,998)          $     
         (1,043,638) _______________        
________________ Weighted average number of common shares used in basic earnings per
share.                                           
     
6,794,600                           
6,794,600 Effect of dilutive securities: Stock
options                                                                                      
-                                         
- Stock
warrants                                                                                    
-                                         
- _______________        
________________ Weighted average number of common shares and dilutive potential common stock used in diluted earnings per
share.                                                              
6,794,600                            
6,794,600  ===============        
================ All dilutive common stock equivalents are reflected in
our earnings per share calculations. Anti-dilutive common stock equivalents are
not included in our earnings per share calculations.  For year ended
December 31, 2008 the Company had outstanding options to purchase 1,685,832
shares of common stock at a per share weighted average exercise price of $1.33.
 For the year ended December 31, 2007 the Company had outstanding options
to purchase 1,574,999 shares of common stock at a per share weighted average
exercise price of $1.48.  Neither  amounts were included in the
earnings per share calculation as they were anti-dilutive.  In addition,
the Company did not include warrants to purchase 691,104 shares of common stock
at a price of $1.00 per share in the earnings per share calculation as they were
anti-dilutive.  Stock-Based
Compensation The Company has stock-based compensation plans.
Effective January 1, 2006, the Company adopted the fair value recognition
provisions of Statement of Financial Accounting Standards No. 123 (revised
2004), "Share-Based Payment" ("SFAS 123R"), using the modified prospective
transition method. Under this transition method, stock-based compensation
expense for the years ended December 31, 2008 and 2007 includes compensation
expense for all stock-based compensation awards granted in prior years if not
fully vested as of December 31, 2005, based on the grant date fair value
estimated in accordance with the original provision of Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-based Compensation" ("SFAS
123"). Stock-based compensation expense for all stock-based compensation awards
granted after January 1, 2006 is based on the grant date fair value estimated in
accordance with the provisions of SFAS 123R. The value of the compensation cost
is amortized on a straight-line basis over the requisite service periods of the
award (the option vesting term).  F-10 Note 1 Summary of Significant Accounting
Policies, Nature of Operations and Use of Estimates (Continued)  Stock-Based Compensation (Continued)  The Company estimates fair value using the Black-Scholes
valuation model. Assumptions used to estimate compensation expense are
determined as follows:  Expected term is determined using an
average of the contractual term and vesting period of the award; Expected volatility of award
grants made under the Company's plans is measured using the
historical daily
changes in the market price of similar industry indices, which are publicly
traded, over the
expected term of the award;  Risk-free interest rate is equivalent to the implied
yield on zero-coupon U.S. Treasury bonds with a remaining maturity equal to the
expected term of the awards; and, · Forfeitures are based on the history of cancellations of
awards granted by the Company and   management's analysis of potential
forfeitures.  Pending Accounting Pronouncements In December 2007, the FASB
issued SFAS No. 141 (revised 2007), Business Combinations, or SFAS
No. 141R, which replaces SFAS No. 141. The statement retains the purchase
method of accounting for acquisitions, but requires a number of changes,
including changes in the way assets and liabilities are recognized in the
purchase accounting. It also changes the recognition of assets acquired and
liabilities assumed arising from contingencies, requires the capitalization of
in-process research and development at fair value, and requires the expensing of
acquisition-related costs as incurred. SFAS No. 141R is effective for
financial statements issued for fiscal years beginning after December 15,
2008 and will apply prospectively to business combinations completed on or after
that date. The Company does not expect SFAS No. 141R will have a material impact
on its financial statements. In December 2007, the FASB
issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial
Statements, or SFAS No. 160. SFAS No. 160 clarifies that a
noncontrolling or minority interest in a subsidiary is considered an ownership
interest and, accordingly, requires all entities to report such interests in
subsidiaries as equity in the consolidated financial statements. SFAS
No. 160 is effective for fiscal years beginning after December 15,
2008. The Company does not expect SFAS No. 160 will have a material impact on
its financial statements. In March 2008, the FASB issued
SFAS No. 161, Disclosures about Derivative Instruments and Hedging
Activities, or SFAS No. 161. SFAS No. 161 is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entitys financial position, financial performance, and cash
flows. It is effective for financial statements issued for fiscal years and
interim periods beginning after November 15, 2008, with early application
encouraged. The Company does not expect SFAS No. 161 will have a material impact
on its financial statements.  F-11  Note
1 Summary of Significant Accounting
Policies, Nature of Operations and Use of Estimates (Continued)  Pending Accounting Pronouncements
(Continued)  In April 2008, the FASB issued FSP 142-3, Determination
of the Useful Life of Intangible Assets (FSP 142-3). FSP 142-3 amends the
factors that should be considered in developing renewal or extension assumptions
used to determine the useful life of a recognized intangible asset under SFAS
No. 142, Goodwill and Other Intangible Assets. FSP 142-3 is effective for  fiscal years beginning after
December 15, 2008. The Company is currently assessing the impact of FSP 142-3 on
its financial position and results of operations.  In May 2008, the FASB issued SFAS No. 162, The
Hierarchy of Generally Accepted Accounting Principles (SFAS 162). SFAS 162
identifies the sources of accounting principles and the framework for selecting
the principles used in the preparation of financial statements. SFAS 162 is
effective 60 days following the SECs approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, The Meaning of Present Fairly in
Conformity with Generally Accepted Accounting Principles. The implementation of
this standard will not have a material impact on our financial position and
results of operations.  Note 2 Concentrations of
Risk  During the year ended December 31,
2008, the Company rendered a substantial portion of its services to its two
largest customers representing 54% and 25% of total revenues.  As of
December 31, 2008, the amounts due from these customers were $464,984 and
$199,956, respectively. During the year ended December 31,
2007, the Company rendered a substantial portion of its services to its two
largest customers representing 61% and 22% of total revenues.  As of
December 31, 2007, the amounts due from these customers were $499,114 and
$173,222, respectively. The Company maintains cash and cash
equivalents at various financial institutions. Deposits not to exceed $250,000
at each financial institution are insured by the Federal Deposit Insurance
Corporation.  At December 31, 2008 and 2007, the Company had uninsured cash
and cash equivalents in the approximate amounts of $641,000 and $1,404,000,
respectively. Note 3 Property and
Equipment  Property and equipment as of December 31, 2008 and 2007
consist of the following:  2008

2007Computer hardware


$
2,102,086

$
2,065,072Furniture and fixtures


229,728

229,728Leashold improvements


153,555

165,377Software costs


1,178,575

1,178,5753,663,944

3,638,752Less: accumulated depreciation


(3,498,523)

(3,351,816)$
165,421

$
286,936    F-12 Note 4 Intangible Asset  At December 31, 2008 and 2007, the intangible asset
consists of:  2008

2007Branding costs



$321,343

$321,343Website development



17,540

14,040Less: accumulated
amortization



(335,770)

(326,101)$
3,113

$
9,282  Amortization expense for the years ended December 31,
2008 and 2007 was $9,669 and $45,864, respectively.  On an annual basis, the Company reviews the valuation of
its intangible assets. As part of this review, the Company estimates the net
realizable value of its intangible assets and assesses whether the unamortized
balance can be recovered through expected future cash flows over the remaining
life of the asset. As of December 31, 2008, the Companys intangible asset
related to branding costs is fully amortized.  Note 5 Notes Payable  As of December 31, 2008 and 2007 notes payable were
comprised of the following:  2008

2007  Note payable to Biltmore Bank of Arizona,
interest at prime plus1.5%, (8.75% at December 31, 2007), principal
payments of $3,111 plus interest due monthly, due in full June, 2008;
collateralized by equipment.





-

$
16,981-

16,981Less: current portion





-

(16,981)$    
-

$      -   F-13  Note 5 Notes Payable
(Continued)  In addition, as of December 31, 2007, the Company had an
available $600,000 line of credit at Biltmore Bank of Arizona. Interest only
payments at the rate of prime plus 1.5% (8.75 % at December 31, 2007) are due
monthly. Principal is due in full on June 1, 2008. The line of credit was
cancelled in June 2008.  Note 6 Accrued Liabilities Accrued Liabilities  Accrued liabilities as of December 31, 2008 and
2007 consist of:2008

2007Payroll
and related taxes





$115,080

$162,085Deferred
rent





33,118

49,555Accrued
vacation





42,538

40,981Other
accrued expenses





26,506

28,808$
217,242

$
281,429    Note 7 Income Taxes  At December 31, 2008 and 2007, deferred tax assets
(liabilities) consist of the following: 2008

2007Current portion:Operating
loss carryforwards





$
1,067,829

$
627,549Allowance
for doubtful
accounts





19,498

23,796Accrued
vacation





(12,915)

15,987Deferred
rent expense





16,588

(19,332)1,091,000

648,000Less:
valuation allowance





(1,091,000)

(648,000)Deferred tax asset-current portion





$ -

$ -Long-term portion:Depreciation
and amortization





$
28,000

$
60,000Less:
valuation allowance





(28,000)

(60,000)Deferred tax asset-long term portion





$ -

$ -  F-14 Note 7 Income Taxes
(Continued)  Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, uncertainties exist that
some portion or all of the deferred tax assets will be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment. As of December 31, 2008, the Company has net
federal operating loss carryforwards of approximately $2,738,000. The net
operating loss carry forwards may be applied against future  taxable income. The net operating
loss carryforwards expire through December 31, 2023 for federal income tax
purposes and December 31, 2013 for state income tax purposes. During the year ended December 31, 2008, the Company
determined that it was more likely than not that some portion or all of the
deferred tax assets will not be realized.  The Company has established a
valuation allowance as of December 31, 2008 in the approximate amount of
$1,119,000. The valuation allowance is equal to the full amount of the deferred
tax asset due to the uncertainty of the utilization of operating losses in
future periods.  The income tax provision differs from the amount of
income tax determined by applying the U.S. federal and state
statutory income tax rates to pretax income from continuing operations
for the years ended December 31, 2008 and 2007 due to the following:  2008

2007Federal Tax Benefit (Expense) at Statutory
Rates




$
361,000

$
130,000State Tax Benefit (Expense) at Statutory
Rates




53,000

20,000Meals and Entertainment




(3,000)

(3,000)Valuation Allowance Adjustment




(411,000)

(708,000)Net Deferred Tax Benefit (Expense)




$ -

$
(561,000)  Note 8 Commitments and
Contingencies  Operating Leases  The Company leased office space in
Tempe, Arizona, under two five (5) year operating lease agreements expiring in
2010, at a combined current rate of approximately $59,000 per month.
 During the year ended December 31, 2008 the company cancelled one of its
operating leases.  As a result of this cancellation the Company incurred a
onetime termination fee in the amount of $193,688.  The termination charge
is included in rent expense for the period ended December 31, 2008.  The
remaining office location has a current rate of approximately $30,000 per month. The Company leases office equipment
under various operating lease agreements expiring through June 2011, at rates
ranging from $269 to $754 per month. Total rent expense under the
aforementioned operating leases was approximately $1,017,750  and $712,021
for the years ended December 31, 2008 and 2007, respectively. F-1 Note 8 Commitments and Contingencies
(Continued) A schedule of future minimum lease payments is as
follows: Year EndingDecember 31,




Amount2009




$373,5672010




313,3512011




3,768$690,686   Employment Agreements  Calibrus has employment contracts with all officers and
key employees of the Company.  All of our employment agreements contain
language assigning all inventions over to Calibrus and non-compete agreements.
 Additionally, upon termination, if not for cause and Calibrus is cash flow
and earnings positive, our officers and key employees will receive up to three
months salary as severance. On a change of control of Calibrus, which results in
termination of the officer or key employee and Calibrus is cash flow positive
and has a positive earnings per share at the time of the change of control, the
officer or key employee will receive a three months salary as severance based on
the officers or employees current salary.  Employment contracts are
entered into for two, three or four year periods with automatic two, three or
four one year extensions depending on the officer or key employee.  A
summary of the officers employment contract are below:  Employee

Beginning
Date

End Date

Annual
Salary

Renewal
TermJeff W. Holmes

1/1/2005

12/31/2009

$
220,000

(4) one year
extensions  Greg W. Holmes

1/1/2005

12/31/2009

$
150,000

(4) one year extensionsKevin J. Asher

2/5/2008

2/4/2010

$
130,000

(2) one year extensionsTom Harker

1/10/2007

1/9/2011

$
140,000

(3) one year extensionsMichael Brande

1/10/2007

1/9/2011

$
105,000

(3) one year extensionsMichael Rae

1/10/2007

1/9/2011

$ 90,000

(3) one year extensionsJim Stockert

9/26/2005

9/25/2009

$
80,000

(4) one year extensionsKelly Robinson

6/28/2004

6/28/2008

$
90,000

(4) one year
extensions   Indemnification Agreements  The Company has agreed to indemnify its officers and
directors for certain events or occurrences arising as a result of the officer
or director serving in such capacity. The term of the indemnification period is
for the officers or directors lifetime. The maximum potential amount of future
payments the Company could be required to make under these indemnification
agreements is unlimited. As a result of no current or expected litigation, the
Company believes the estimated fair value of these indemnification agreements is
minimal and has no liabilities recorded for these agreements as of
December 31, 2008 and 2007.  F-16 Note 9 Stockholders
Equity  Warrants  As of December 31, 2008, the Company had 691,104
warrants to purchase common stock outstanding. All of the warrants are
convertible into one share of common stock at a price of $1.00 per share. The
warrants carry an exercise term of seven (7) years. All of the warrants are
vested and exercisable as of December 31, 2008. The following table summarizes
warrant activity:  Number of
Warrants

Weighted Average Exercise
Price

Weighted Average Remaining
Contractual Term

Aggregate Intrinsic
ValueOutstanding at December  31,
2006



691,104

$ 1.00Granted



-

-Exercised



-

-Forfeited



-

-Outstanding at December 31, 2007



691,104

1.00Granted



-

-Exercised



-

-Forfeited



-

-Outstanding at December 31, 2008



691,104

$ 1.00

0.63

$ -Exercisable at December 31, 2008



691,104

$ 1.00

0.63

$ -  The fair value of each warrant
granted is estimated on the grant date by using the Black-Scholes option pricing
model with the following weighted average assumptions:  Prior YearsExpected Volatitlity



0%Risk-free interest rate



2.25%Expected dividends



-Expected life



7 yearsFair value



$ -  Options As of December 31, 2008 and 2007,
the Company has adopted two Stock Options Plans, the 2001 Non-Qualified Stock
Option Plan and the 2001 Incentive Stock Option Plan. During the year ended
December 31, 2007 the Company increased the number of options available for
grant under the 2001 Non-Qualified Stock Option Plan and Incentive Stock Option
Plan by 1,425,000 and 725,000 options, respectively.  Under the 2001
Non-Qualified Plan, the Company may grant options for up to 2,850,000 shares of
common stock. The maximum term of the options is five years, and they vest at
various times according to the Option Agreements. Under the 2001 Incentive Stock
Option Plan, the Company may grant options for up to 1,450,000 shares of  common stock. The maximum term of
the options is five years and they vest at various times according to the Option
Agreements. The following is a table of activity
for all options granted under these Plans, as well as 65,000 options granted
outside the Plan which have expired as of December 31, 2008: F-17 Note 9 StockholdersEquity
(Continued)  Options (Continued) Number of Options

Weighted
Average
Exercise Price

Weighted Average Remaining
Contractual Term (in years)

Aggregate Intrinsic
ValueOptions outstanding at December 31,
2006



1,539,999

$ 1.42Granted



135,000

1.52Exercised



-

-Forfeited



(100,000)

1.00Options outstanding at December 31,
2007



1,574,999

1.48Granted



615,000

1.00Exercised



-

-Forfeited



(504,167)

1.41Options outstanding at December 31,
2008



1,685,832

$ 1.33

3.06

$ -Options exercisable at December 31,
2008



1,685,832

$ 1.33

3.06

$ -  The total fair value of the options
vested during the year ended December 31, 2008 was $170,223.  A summary of the status of the
Entitys non-vested options as of December 31, 2008 and changes during the year
ended December 31, 2008 is presented below:  Options

Weighted-Average Grant-Date
Fair ValueNon-vested at January 1, 2008




-

$ -Granted




615,000

0.28Vested




(615,000)

0.28Forfeited




-

-Non-vested at December 31, 2008




-

$ -  F-18 Note 9 StockholdersEquity
(Continued)  Options (Continued) The fair value of each option granted is estimated on
the grant date by using the Black-Scholes option-pricing model with the
following weighted average assumptions:  2008

2007Expected Volatility



27.4 - 28.8%

15.00%Risk-free interest rate



1.26 - 2.08%

5.03%Expected dividends



-

-Expected life



5 years

5
years  Value per option



$0.28

$0.07                                  F-19