|  Nevada                                  |  86-0970023                 |
|---------------------------------------------------------|----------------------------------|
|  State or other jurisdiction of                    |  (I.R.S. Employer I.D. No.) |
|  incorporation or organization                     |                             |
|                                                    |                             |
|  1225 West Washington Street, Suite 213, Tempe, AZ |  85281                      |
|  (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)                                             |

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|  Large Accelerated filer ¨                                                                          |   Accelerated filer ¨ |
|---------------------------------------------------------------------------------------------------------------|--------------------------------------|
|  Non-accelerated filer    ¨ (Do not check if a smaller reporting company)  |  Smaller reporting company x    |

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| ·   | 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. |
|--------------------|---------------------------------------------------------------------------------------------|

| ·   | 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 |
|--------------------|--------------------------------------------------|

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|  ·   | 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:                                                           |
|                     |  °                                                               | Less Back Room Clean-up Expense |
|                     | °                                                                     | 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                                     |

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| ·   | 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 |
|--------------------|-------------------------------------------------------------|

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| ·   | 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 |
|--------------------|------------------------------------|

| ·   | Call Tracking |
|--------------------|---------------|

| ·   | Lead Generation |
|--------------------|-----------------|

| ·   | Save Sales on Cancellations |
|--------------------|-----------------------------|

| ·   | Online Phone Surveys |
|--------------------|----------------------|

| ·   | Real Estate Listings |
|--------------------|----------------------|

|  Outbound                                      |  Inbound                    |
|-----------------------------------------------------|----------------------------------|
|                                                |                             |
|  Cold Calls                          |  Customer Support/Help Desk |
|                                                |                             |
|  Outbound Telemarketing              |  Order Taking/Fulfillment   |
|                                                |                             |
|  Phone Surveys                            |  Answering Service          |
|                                                |                             |
|  Lead Qualifying                          |  Sales Verifications        |
|                                                |                             |
|  Direct Mail Follow up     |  Seminar Sign-up            |
|                                                |                             |
|  Fundraising                                   |                             |
|                                                |                             |
|  Political Campaigns                           |                             |
|                                                |                             |
|  Internet Sales Verifications                  |                             |
|                                                |                             |
|  Collections                                   |                             |

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| ·   | 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. |
|--------------------|---------------------------------------------------------------------------------------------|

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| Quarter Ended                 | High Bid          | Low Bid     |
|-------------------------------|-------------------|-------------|
|  December 2009      |  *           |  *     |
|  March 31, 2010          |  *           |  *     |
|  June 30, 2010      |  $1.01       |  $0.45 |
|  September 30, 2010      |  $0.75  |  $0.51 |
|  December 31, 2010  |  $0.54       |  $0.30 |

----

|    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 | 2,512,499                                                                                         | $1.08                                                                             | 2,337,501                                                                                                                                 |
| Total                                                  | 2,512,499                                                                                         | $1.08                                                                             | 2,337,501                                                                                                                                 |

----

|                                                            |   | For the Year EndedDecember 31, 2010 |            |   | For the Year EndedDecember 31, 2009 |   |
|-----------------------------------------------------------------|--------|-------------------------------------|-----------------|--------|-------------------------------------|--------|
| Revenues                                                        |   | $                                   | 3,745,876       |   |                                | $      | 4,245,144 |   |
| Cost of Revenues                                                |   |                                | 1,334,272       |   |                                |   | 1,768,922 |   |
| Research and Development                                        |   |                                | 232,327         |   |                                |   | 545,485 |   |
| General and Administrative Expenses                             |   |                                |  2,206,703 |   |                                |   |  2,337,788 |   |
| Net Loss                                                        |   |                                | (128,263        | )      |                                |   | (408,842 | ) |
| Basic and Diluted Loss per Share                                |   |                                | (0.02           | )      |                                |   | (0.06 | ) |
| Basic and Diluted Weighted Average Number of Shares Outstanding |   |                                | 6,794,600       |   |                                |   | 6,794,600 |   |
|  BALANCE SHEET DATA:                                       |   |                                |            |   |                                |   |   |   |
|                                                            |   | December 31, 2010                   |            |   | December 31, 2009                   |   |
| Total Current Assets                                            |   | $                                   | 400,642         |   |                                | $      | 847,528 |   |
| Total Assets                                                    |   |                                | 3,152,453       |   |                                |   | 1,972,900 |   |
| Total Current Liabilities                                       |   |                                | 2,093,405       |   |                                |   | 910,535 |   |
| Working Capital                                                 |   |                                | (1,692,763      | )      |                                |   | (63,007 | ) |
| Stockholders’ Equity                                      |   |                                | 1,059,048       |   |                                |   | 1,062,366 |   |

----

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| ·   | 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. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|  Name                       |  Age |  Positions     |
|----------------------------------|-----------|---------------------|
|                             |      |                |
|  Jeff W. Holmes             |  57  |  CEO, Director |
|  Greg Holmes                |  47  |  President     |
|  Kirk Blosch           |  56  |  Director      |
|  Charles House         |  70  |  Director      |
|  Christian J. Hoffmann, III |  63  |  Director      |
|  Michael Myers              |  42  |  Director      |
|  Kevin Asher           |  35  |  CFO           |
|  Tom Harker            |  37  |  CTO           |

----

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| 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,             |   | 12/31/2010 |   | $      | 194,593 |   |   | $      | 0      |         |   | $      | 0             |   |   | $                                      | 27,000 |   |                                    | $      | 0      |                   |   | $      | 0     |   |   | $ | 4,054 |   |   | $ | 225,647 |   |
| CEO                    |   | 12/31/2009 |   | $      | 204,417 |   |   | $      | 0      |         |   | $      | 0             |   |   | $                                      | 0      |   |                                    | $      | 0      |                   |   | $      | 0     |   |   | $ | 4,283 |   |   | $ | 208,700 |   |
| Greg W. Holmes,             |   | 12/31/2010 |   | $      | 131,201 |   |   | $      | 0      |         |   | $      | 0             |   |   | $                                      | 20,250 |   |                                    | $      | 0      |                   |   | $      | 0     |   |   | $ | 4,120 |   |   | $ | 155,571 |   |
| President              |   | 12/31/2009 |   | $      | 139,375 |   |   | $      | 0      |         |   | $      | 0             |   |   | $                                      | 0      |   |                                    | $      | 0      |                   |   | $      | 0     |   |   | $ | 3,790 |   |   | $ | 143,165 |   |
| Thomas Harker,              |   | 12/31/2010 |   | $      | 123,290 |   |   | $      | 0      |         |   | $      | 0             |   |   | $                                      | 7,125  |   |                                    | $      | 0      |                   |   | $      | 0     |   |   | $ | 4,123 |   |   | $ | 134,538 |   |
| CTO                    |   | 12/31/2009 |   | $      | 130,084 |   |   | $      | 0      |         |   | $      | 0             |   |   | $                                      | 0      |   |                                    | $      | 0      |                   |   | $      | 0     |   |   | $ | 3,794 |   |   | $ | 133,878 |   |
| Kevin J. Asher,             |   | 12/31/2010 |   | $      | 126,250 |   |   | $      | 0      |         |   | $      | 0             |   |   | $                                      | 13,500 |   |                                    | $      | 0      |                   |   | $      | 0     |   |   | $ | 4,120 |   |   | $ | 143,870 |   |
| CFO                    |   | 12/31/2009 |   | $      | 130,000 |   |   | $      | 0      |         |   | $      | 0             |   |   | $                                      | 0      |   |                                    | $      | 0      |                   |   | $      | 0     |   |   | $ | 4,109 |   |   | $ | 134,109 |   |

| (1)       | 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, 2010 the Company increased the number of options available for grant under the 2001 Incentive Stock Option Plan by 550,000 options.  Under the 2001 Non-Qualified Plan, the Company may grant options for up to 2,850,000 shares of common stock and has granted 1,050,000 as of March 31, 2011, 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 2,000,000 shares of common stock and has granted 1,462,499 as of March 31, 2010, 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.  All forfeited and expired options are added back into the plan and become immediately available for issuance. |
|-----------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)                                     | The amounts shown include Company-paid portion of health insurance for the fiscal years ended 2010 and 2009.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |

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|                                           |   | Stock Awards                                                                           |    | Stock Awards |                                                                                     |
|------------------------------------------------|--------|----------------------------------------------------------------------------------------|---------|--------------|------------------------------------------------------------------------------------------|
|        Name |   |     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,                                |   |                                                                                   | 20,833  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.52 |   | 12/11/2011 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| CEO                                            |   |                                                                                   | 70,000  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 12/17/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                           |   |                                                                                   | 300,000 |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 9/10/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Greg W. Holmes,                                |   |                                                                                   | 20,833  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.52 |   | 12/11/2011 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| President                                      |   |                                                                                   | 50,000  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 12/17/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                           |   |                                                                                   | 225,000 |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 9/10/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Thomas Harker,                                 |   |                                                                                   | 20,833  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.52 |   | 12/11/2011 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| CTO                                            |   |                                                                                   | 50,000  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 12/17/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                           |   |                                                                                   | 79,167  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 9/10/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Kevin J. Asher,                                |   |                                                                                   | 50,000  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 11/18/2013 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| CFO                                            |   |                                                                                   | 25,000  |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 12/17/2013 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |                                                                                   | 150,000 |         |                                                                                     |   | - |   |   |   | - |   |   | $ | 1.00 |   | 9/10/2015 |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |

| 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)   |   | 12/31/2010 |   |                            | -      |   |                  |   | -      |                 |   | $      | 13,050                                     |   |   |                                            | -      |   |                       |   | -      |      |   |   | - |   |   | $ | 13,050 |   |
|              |   | 12/31/2009 |   |                            | -      |   |                  |   | -      |                 |   | $      | 0                                          |   |   |                                            | -      |   |                       |   | -      |      |   |   | - |   |   | $ | 0 |   |
| Charles House (2) |   | 12/31/2010 |   |                            | -      |   |                  |   | -      |                 |   | $      | 13,050                                     |   |   |                                            | -      |   |                       |   | -      |      |   |   | - |   |   | $ | 13,050 |   |
|              |   | 12/31/2009 |   |                            | -      |   |                  |   | -      |                 |   | $      | 0                                          |   |   |                                            | -      |   |                       |   | -      |      |   |   | - |   |   | $ | 0 |   |
| Christian J.      |   | 12/31/2010 |   |                            | -      |   |                  |   | -      |                 |   | $      | 17,550                                     |   |   |                                            | -      |   |                       |   | -      |      |   |   | - |   |   | $ | 17,550 |   |
| Hoffmann, III (2) |   | 12/31/2009 |   |                            | -      |   |                  |   | -      |                 |   | $      | 0                                          |   |   |                                            | -      |   |                       |   | -      |      |   |   | - |   |   | $ | 0 |   |
| Michael Myers (2) |   | 12/31/2010 |   |                            | -      |   |                  |   | -      |                 |   | $      | 2,250                                      |   |   |                                            | -      |   |                       |   | -      |      |   |   | - |   |   | $ | 2,250 |   |
|              |   | 12/31/2009 |   |                            | -      |   |                  |   | -      |                 |   | $      | 0                                          |   |   |                                            | -      |   |                       |   | -      |      |   |   | - |   |   | $ | 0 |   |

| (1)          | This column represents the aggregate grant date fair value of the awards granted in 2010 and 2009, respectively. Therefore, 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  FASB ASC 718 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, expected term and forfeitures. 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.  For further information on these calculations, please refer to the notes to our financial statements, Notes 1 and 11 included in Item 8. |
|-----------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)                                                  | As of December 31, 2010, Kirk Blosch had 325,000 options outstanding, Charles House had 325,000 options outstanding, Christian J. Hoffmann, III had 375,000 options outstanding and Michael Myers had 25,000 options outstanding.  No director had any stock awards outstanding.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |

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| Employee       |   | Beginning Date |   | End Date   |   | Annual Salary |    | Renewal Term |
|----------------|--------|----------------|--------|------------|--------|---------------|---------|--------------|
| Jeff W. Holmes |   | 1/1/2005       |   | 12/31/2010 |   | $             | 220,000 |         | (3) one year extensions |
| Greg W. Holmes |   | 1/1/2005       |   | 12/31/2010 |   | $             | 150,000 |         | (3) one year extensions |
| Kevin J. Asher |   | 2/5/2008       |   | 2/4/2010   |   | $             | 130,000 |         | (2) one year extensions |
| Tom Harker     |   | 1/10/2007      |   | 1/9/2011   |   | $             | 140,000 |         | (3) one year extensions |
| Michael Brande |   | 1/10/2007      |   | 1/9/2011   |   | $             | 105,000 |         | (3) one year extensions |
| Michael Rae    |   | 1/10/2007      |   | 1/9/2011   |   | $             | 90,000  |         | (3) one year extensions |
| Kelly Robinson |   | 6/28/2004      |   | 6/28/2010  |   | $             | 90,000  |         | (2) one year extensions |

----

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|  Title of Class |  Name of Beneficial Owner                                                       |  Number of Shares Owned |  Percent of Class |
|----------------------|--------------------------------------------------------------------------------------|------------------------------|------------------------|
|                 |  Principal Shareholders                                                         |                         |                   |
| Common               | Jeff W. Holmes1225 West Washington StreetSuite 213Tempe, Arizona 85281               | 1,983,667                    | 27.23%                 |
|                 |                                                                                 |                         |                   |
| Common               | Kirk Blosch2081 S. Lakeline DriveSalt Lake City, Utah 84109                          | 1,720,334                    | 24.16%                 |
|                 |                                                                                 |                         |                   |
| Common               | Christian J. Hoffmann, III (4)1225 W. Washington StreetSuite 213Tempe, Arizona 85281 | 475,000                 | 6.60%        |
|                 |                                                                                 |                         |                   |
|                 | Directors                                                                            |                         |                   |
| Common               | Jeff W. Holmes (1)                                                                   |  -----See above-----    |                   |
| Common               | Kirk Blosch (2)                                                                      |  -----See above-----    |                   |
| Common               | Charles House (3)                                                                    | 325,000                      | 4.56%                  |
| Common               | Christian J. Hoffmann, III (4)                                                       |  -----See above-----    |                   |
| Common               | Michael Myers (5)                                                                    |   25,000           | 0.37%                  |
| Common               | All Officers and Director as a Group (five  persons)                       | 4,529,001                    | 54.19%                 |

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|    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 | 2,512,499                                                                                         | $1.08                                                                             | 2,337,501                                                                                                                                 |
| Total                                                  | 2,512,499                                                                                         | $1.08                                                                             | 2,337,501                                                                                                                                 |

----

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|                                                                                                                                                 | SEC         |                                                              |                        |
|------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|-------------------------------------------------------------------|-----------------------------|
| Exhibit                                                                                                                                              | Reference   |                                                              |                        |
| No.                                                                                                                                                  | No.         |     Title of Document                         |     Location |
|                                                                                                                                                 |        |                                                              |                        |
| 3(i)                                                                                                                                            | 3.01   | Articles of Incorporation of Calibrus                        | Incorporated byReference*   |
| 3(ii)                                                                                                                                           | 3.02   | Amendment to Articles of Incorporation Calibrus-Name Change  | Incorporated byReference*   |
| 3(iii)                                                                                                                                          | 3.03        | Bylaws of Calibrus                                           | Incorporated byReference*   |
| 4                                                                                                                                               | 4.01   | Specimen Stock Certificate                                   | Incorporated byReference*   |
| 10                                                                                                                                                   | 10.01       | Lease Agreement – Paragon                                   | Incorporated byReference*   |
| 10                                                                                                                                              | 10.02  | AT&T Services, Inc.-Agreement                            | ConfidentialityRequested    |
| 10                                                                                                                                              | 10.03  | Magnet Warrant                                               | Incorporated byReference*   |
| 10                                                                                                                                              | 10.04  | Employment Agreement-Jeff Holmes                             | Incorporated byReference*   |
| 10                                                                                                                                              | 10.05  | Employment Agreement-Greg Holmes                             | Incorporated byReference*   |
| 10                                                                                                                                              | 10.06  | Employment Agreement-Kevin Asher                             | Incorporated byReference*   |
| 10                                                                                                                                              | 10.07  | Incentive Stock Option Plan                                  | Incorporated byReference*   |
| 10                                                                                                                                              | 10.08  | Non-Qualified Stock Option Plan                              | Incorporated byReference*   |
| 10                                                                                                                                              | 10.09  | Form of Options                                              | Incorporated byReference*   |
| 10                                                                                                                                              | 10.10  | MeoMyo, LLC Development Contract                             | Incorporated byReference*   |
| 10                                                                                                                                    | 10.11       | Form of Convertible Debenture                                | This Filing                 |
| 10                                                                                                                                              | 10.12       | Form of Warrant                                                   | This Filing            |
| 14                                                                                                                                              | 14.01  | Code of Ethics                                               | Incorporated byReference*   |
| 31                                                                                                                                                   | 31.01       | CEO certification                                            | This Filing                 |
| 31                                                                                                                                                   | 31.02       | CFO certification                                            | This Filing                 |
| 32                                                                                                                                                   | 32.01       | CEO and CFO certification                                         | This Filing                 |
| _________________________                                                                                                                            |        |
|  *  Incorporated by reference from the Company's registration statement on Form 10 filed with the Commission, SEC file no. 000-53408. |        |

----

|   | Calibrus, Inc. |                |   |
|--------|----------------|---------------------|--------|
|   |           |                |   |   |
|   | By:            | /s/ Jeff W. Holmes  |   | Date: April 13, 2011 |
|   |           | Jeff W. Holmes, CEO |   |   |
|   |           |                |   |   |

|   | By:    | /s/ Kevin J. Asher  |   | Date: April 13, 2011 |
|--------|--------|---------------------|--------|----------------------|
|   |   | Kevin J. Asher, CFO |   |                 |
|   |   |                |   |                 |

| Signature                   |   | Title               |   | Date           |
|-----------------------------|--------|---------------------|--------|----------------|
|                        |   |                |   |           |
| /s/ Jeff W. Holmes          |   | Director, CEO  |   | April 13, 2011 |
| Jeff W. Holmes              |   |                |   |           |
|                        |   |                |   |           |
| /s/ Kirk Blosch             |   | Director            |   | April 13, 2011 |
| Kirk Blosch                 |   |                |   |           |
|                        |   |                |   |           |
| /s/ Christian Hoffmann, III |   | Director            |   | April 13, 2011 |
| Christian Hoffmann, III     |   |                |   |           |
|                        |   |                |   |           |
| /s/ Charles House           |   | Director            |   | April 13, 2011 |
| Charles House               |   |                |   |           |
|                        |   |                |   |           |
| /s/ Michael Myers           |   | Director            |   | April 13, 2011 |
| Michael Myers               |   |                |   |           |

----

----

| ASSETS                                                                                 |    |
|----------------------------------------------------------------------------------------|---------|
|                                                                                   |    |   | 2010 |   |   | 2009 |   |
| Current Assets                                                                         |    |   |   |   |   |   |   |
|    Cash and cash equivalents                                            |    | $ | 21,519 |   |   | $ | 174,428 |   |
|    Accounts receivable - trade, net                                     |    |   | 372,990 |   |   |   | 580,487 |   |
|    Prepaid expenses                                                     |    |   |   | 6,133 |   |   |   | 92,613 |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| Total Current Assets                                                                   | 400,642 |   |   |   | 847,528 |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| Property and equipment, net                                                            |    |   | 47,357 |   |   |   | 80,008 |   |
| Software development                                                                   |    |   | 2,675,062 |   |   |   | 1,014,328 |   |
| Deposits                                                                               |    |   |   | 29,392 |   |   |   | 29,869 |   |
| Intangible assets, net                                                                 |    |   |   | - |   |   |   | 1,167 |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| Total Assets                                                                           |    | $ | 3,152,453 |   |   | $ | 1,972,900 |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| Current Liabilities                                                                    |    |   |   |   |   |   |   |   |   |
|    Convertible notes payable, net of discount - current portion         |    | $ | 605,000 |   |   | $ | 371,474 |   |
|    Convertible related party notes payable - current portion            |    |   | 405,000 |   |   |   | - |   |
|    Due to factor                                                        |    |   |   | 132,729 |   |   |   | - |   |
|    Accounts payable - trade                                             |    |   | 684,570 |   |   |   | 254,678 |   |
|    Accrued liabilities                                                  |    |   |   | 266,106 |   |   |   | 284,383 |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| Total Current Liabilities                                                              |    |   | 2,093,405 |   |   |   | 910,535 |   |
|                                                                                   |    |   |   |   |   |   |   |   |
| Total Liabilities                                                                      |    |   | 2,093,405 |   |   |   | 910,535 |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| Stockholders' Equity                                                                   |    |   |   |   |   |   |   |   |   |
|    Preferred 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 |   |   |   | 6,795 |   |
|    Additional paid-in capital                                           |    |   | 4,765,758 |   |   |   | 4,640,812 |   |
|    Accumulated deficit                                                  |    |   | (3,713,505 | ) |   |   | (3,585,242 | ) |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| Total Stockholders' Equity                                                             |    |   | 1,059,048 |   |   |   | 1,062,365 |   |
|                                                                                   |    |   |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                                             |    | $ | 3,152,453 |   |   | $ | 1,972,900 |   |

----

|                                        |   | 2010   |      |   | 2009   |   |
|---------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                        |   |   |      |   |   |   |
| Revenues                                    |   | $      | 3,745,876 |   |   | $      | 4,245,144 |   |
|                                        |   |   |      |   |   |   |   |   |
| Cost of revenues                            |   |   | 1,334,272 |   |   |   | 1,768,922 |   |
|                                        |   |   |      |   |   |   |   |   |
| Gross profit                                |   |   | 2,411,604 |   |   |   | 2,476,222 |   |
|                                        |   |   |      |   |   |   |   |   |
| General and administrative expenses         |   |   | 2,206,703 |   |   |   | 2,337,788 |   |
| Research and development                    |   |   | 232,327   |   |   |   | 545,485 |   |
|                                        |   |   |      |   |   |   |   |   |
| Loss from Operations                        |   |   | (27,426   | )      |   |   | (407,051 | ) |
|                                        |   |   |      |   |   |   |   |   |
| Other Income (Expense):                     |   |   |      |   |   |   |   |   |
|    Interest income           |   |   | 591       |   |   |   | 2,649 |   |
|    Interest expense          |   |   | (101,428  | )      |   |   | (4,440 | ) |
|                                        |   |   |      |   |   |   |   |   |
|                                        |   |   | (100,837  | )      |   |   | (1,791 | ) |
|                                        |   |   |      |   |   |   |   |   |
| Loss before income taxes                    |   |   | (128,263  | )      |   |   | (408,842 | ) |
|                                        |   |   |      |   |   |   |   |   |
| Income tax benefit (expense) - deferred     |   |   | -         |   |   |   | - |   |
|                                        |   |   |      |   |   |   |   |   |
| Net Loss                                    |   | $      | (128,263  | )      |   | $      | (408,842 | ) |
|                                        |   |   |      |   |   |   |   |   |
| Loss per Common Share:                      |   |   |      |   |   |   |   |   |
|    Basic and Diluted         |   | $      | (0.02     | )      |   | $      | (0.06 | ) |
|                                        |   |   |      |   |   |   |   |   |
|                                        |   |   |      |   |   |   |   |   |
| Weighted Average Common Shares Outstanding: |   |   |      |   |   |   |   |   |
|    Basic and Diluted         |   |   | 6,794,600 |   |   |   | 6,794,600 |   |

----

|                                          |   |         |      |   |   |   |   | Additional |   |   |        |   |   | Total         |       |
|-----------------------------------------------|--------|--------------|-----------|--------|--------|--------|--------|------------|--------|--------|-------------|--------|--------|---------------|------------|
|                                          |   | Common Stock |      |   |   |   |   | Paid-In    |   |   | Accumulated |   |   | Stockholders' |       |
|                                          |   | Shares       |      |   | Amount |   |   | Capital    |   |   | Deficit     |   |   | Equity        |       |
|                                          |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |
| Balance at December 31, 2008                  |   |         | 6,794,600 |   |   | $      | 6,795  |       |   | $      | 4,631,544   |   |   | $             | (3,176,400 | ) |   | $ | 1,461,939 |   |
|                                          |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
| Warrants issued with convertible              |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
|    debt at relative fair value |   |         | -         |   |   |   | -      |       |   |   | 9,268       |   |   |          | -          |   |   |   | 9,268 |   |
|                                          |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
| Net loss for the year ended                   |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
|    December 31, 2009           |   |         | -         |   |   |   | -      |       |   |   | -           |   |   |          | (408,842   | ) |   |   | (408,842 | ) |
|                                          |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
| Balance at December 31, 2009                  |   |         | 6,794,600 |   |   |   | 6,795  |       |   |   | 4,640,812   |   |   |          | (3,585,242 | ) |   |   | 1,062,365 |   |
|                                          |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
| Warrants issued for services                  |   |         | -         |   |   |   | -      |       |   |   | 426         |   |   |          | -          |   |   |   | 426 |   |
|                                          |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
| Stock based compensation                      |   |         | -         |   |   |   | -      |       |   |   | 124,520     |   |   |          | -          |   |   |   | 124,520 |   |
|                                          |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
| Net loss for the year ended                   |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
|    December 31, 2010           |   |         | -         |   |   |   | -      |       |   |   | -           |   |   |          | (128,263   | ) |   |   | (128,263 | ) |
|                                          |   |         |      |   |   |   |   |       |   |   |        |   |   |          |       |   |   |   |   |   |
| Balance at December 31, 2010                  |   |         | 6,794,600 |   |   | $      | 6,795  |       |   | $      | 4,765,758   |   |   | $             | (3,713,505 | ) |   | $ | 1,059,048 |   |

----

|                                                             |                                             |   | 2010     |       |   | 2009   |     |
|------------------------------------------------------------------|--------------------------------------------------|--------|----------|------------|--------|--------|----------|
|                                                             |                                             |   |     |       |   |   |     |
| Increase (decrease) in cash and cash equivalents:                |                                             |   |     |       |   |   |
|                                                             |                                             |   |     |       |   |   |     |
| Cash flows from operating activities:                            |                                             |   |     |       |   |   |
|                                                             | Net Loss                                         |   | $        | (128,263   | )      |   | $        | (408,842 | ) |
|                                                             |                                             |   |     |       |   |   |     |   |   |
| Adjustments to reconcile net loss to net cash (used) provided by |                                             |   |     |       |   |
|      operating activities:              |                                             |   |     |       |   |   |     |   |
|                                                             | Depreciation and amortization                    |   |     | 132,388    |   |   |     | 117,502 |   |
|                                                             | Warrants issued for services                     |   |     | 426        |   |   |     | - |   |
|                                                             | Stock based compensation expense                 |   |     | 124,520    |   |   |     | - |   |
|                                                             | Amortization of debt discount                    |   |     | 8,526      |   |   |     | 742 |   |
|      Changes in assets and liabilities: |                                             |   |     |       |   |   |     |   |
|                                                             | Accounts receivable - trade                      |   |     | 207,497    |   |   |     | 218,824 |   |
|                                                             | Prepaid expenses                                 |   |     | 86,480     |   |   |     | 31,579 |   |
|                                                             | Deposits                                         |   |     | 477        |   |   |     | 4,513 |   |
|                                                             | Accounts payable - trade                         |   |     | 429,892    |   |   |     | (46,719 | ) |
|                                                             | Accrued liabilities                              |   |     | (18,277    | )      |   |     | 67,141 |   |
|                                                             | Net cash provided (used) by operating activities |   |     | 843,666    |   |   |     | (15,260 | ) |
|                                                             |                                             |   |     |       |   |   |     |   |   |
| Cash flows from investing activities:                            |                                             |   |     |       |   |   |     |   |
|                                                             | Purchase of fixed assets                         |   |     | (22,140    | )      |   |     | (30,143 | ) |
|                                                             | Capitalized software development                 |   |     | (1,737,164 | )      |   |     | (1,014,328 | ) |
|                                                             | Net cash used by investing activities            |   |     | (1,759,304 | )      |   |     | (1,044,471 | ) |
|                                                             |                                             |   |     |       |   |   |     |   |   |
| Cash flows from financing activities:                            |                                             |   |     |       |   |   |     |   |
|                                                             | Proceeds from issuance of debt                   |   |     | 630,000    |   |   |     | 380,000 |   |
|                                                             | Proceeds from factoring line                     |   |     | 403,025    |   |   |     | - |   |
|                                                             | Repayments of factoring line                     |   |     | (270,296   | )      |   |     | - |   |
|                                                             | Net cash provided by financing activities        |   |     | 762,729    |   |   |     | 380,000 |   |
|                                                             |                                             |   |     |       |   |   |     |   |   |
| Net decrease in cash and cash equivalents                        |                                             |   | (152,909 | )          |   |   | (679,731 | ) |
|                                                             |                                             |   |     |       |   |   |     |   |   |
| Cash and cash equivalents at beginning of year                   |                                             |   | 174,428  |       |   |   | 854,159  |   |
|                                                             |                                             |   |     |       |   |   |     |   |   |
| Cash and cash equivalents at end of year                         |                                             | $      | 21,519   |       |   | $      | 174,428  |   |
|                                                             |                                             |   |     |       |   |   |     |   |   |
| Supplemental disclosure of cash flow information:                |                                             |   |     |       |   |   |     |   |
|                                                             |                                             |   |     |       |   |   |     |   |   |
| Cash paid during the year for:                                   |                                             |   |     |       |   |   |     |   |
|    Interest                                       |                                             |   | $        | -          |   |   | $        | - |   |
|    Income taxes                                   |                                             | $      | 50       |       |   | $      | 50       |   |

----

----

----

| ·   | 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 |
|--------------------|-------------------------------------------------------------|

----

----

----

| ·   | 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 |
|--------------------|--------------------------------------------------|

----

----

----

----

----

----

----

----

----

----

----

----

|                                               |   | Year Ended December 31, |      |
|----------------------------------------------------|--------|-------------------------|-----------|
|                                               |   | 2010                    |      |   | 2009 |   |
|                                               |   |                    |      |   |   |   |
|                                               |   |                    |      |   |   |   |
| Loss available to common stockholders              |   | $                       | (128,263  | ) |   | $ | (408,842 | ) |
|                                               |   |                    |      |   |   |   |   |   |
| 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 comon stock used in         |   |                    |      |   |   |   |   |   |
| diluted earnings per share                         |   |                    | 6,794,600 |   |   |   | 6,794,600 |   |

| ·   | 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. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

|                           |   | 2010   |       |   | 2009   |   |
|--------------------------------|--------|--------|------------|--------|--------|--------|
|                           |   |   |       |   |   |   |
| Computer hardware              |   | $      | 2,120,537  |   |   | $      | 2,115,043 |   |
| Furniture and fixtures         |   |   | 243,785    |   |   |   | 229,728 |   |
| Leashold improvements          |   |   | 156,144    |   |   |   | 153,555 |   |
| Software costs                 |   |   | 1,195,761  |   |   |   | 1,195,761 |   |
|                           |   |   | 3,716,227  |   |   |   | 3,694,087 |   |
| Less: accumulated depreciation |   |   | (3,668,870 | )      |   |   | (3,614,079 | ) |
|                           |   |   |       |   |   |   |   |   |
|                           |   | $      | 47,357     |   |   | $      | 80,008 |   |

----

----

----

|                           |   | 2010   |      |   | 2009   |   |
|--------------------------------|--------|--------|-----------|--------|--------|--------|
|                           |   |   |      |   |   |   |
| JabberMonkey development       |   | $      | 2,751,492 |   |   | $      | 1,014,328 |   |
| Less: accumulated amortization |   |   | (76,430   | )      |   |   | - |   |
|                           |   |   |      |   |   |   |   |   |
|                           |   |   |      |   |   |   |   |   |
|                           |   | $      | 2,675,062 |   |   | $      | 1,014,328 |   |

----

----

|                           |   | 2009   |     |   | 2009   |   |
|--------------------------------|--------|--------|----------|--------|--------|--------|
|                           |   |   |     |   |   |   |
| Branding costs                 |   | $      | 321,343  |   |   | $      | 321,343 |   |
| Website development            |   |   | 17,540   |   |   |   | 17,540 |   |
| Less: accumulated amortization |   |   | (338,883 | )      |   |   | (337,716 | ) |
|                           |   |   |     |   |   |   |   |   |
|                           |   |   |     |   |   |   |   |   |
|                           |   | $      | -        |   |   | $      | 1,167 |   |

----

----

----

----

----

|                                                                  |   | 2010   |       |   | 2009   |   |
|-----------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                                  |   |   |       |   |   |   |
| Various notes payable to convertible debenture holders, interest rate |   |   |       |   |   |   |
| of 12% accrued monthly, principal and accrued interest due            |   |   |       |   |   |   |
| November 16, 2010, unsecured.                                         |   | $      | 250,000    |   |   | $      | 250,000 |   |
|                                                                  |   |   |       |   |   |   |   |   |
| Various notes payable to convertible debenture holders, interest rate |   |   |       |   |   |   |   |   |
| of 12% accrued monthly, principal and accrued interest due            |   |   |       |   |   |   |   |   |
| December 31, 2010, unsecured.                                         |   |   | 130,000    |   |   |   | 130,000 |   |
|                                                                  |   |   |       |   |   |   |   |   |
| Various notes payable to convertible debenture holders, interest rate |   |   |       |   |   |   |   |   |
| of 12% accrued monthly, principal and accrued interest due            |   |   |       |   |   |   |   |   |
| March 31, 2011, unsecured.                                            |   |   | 370,000    |   |   |   | - |   |
|                                                                  |   |   |       |   |   |   |   |   |
| Various notes payable to convertible debenture holders, interest rate |   |   |       |   |   |   |   |   |
| of 12% accrued monthly, principal and accrued interest due            |   |   |       |   |   |   |   |   |
| June 30, 2011, unsecured.                                             |   |   | 115,000    |   |   |   | - |   |
|                                                                  |   |   |       |   |   |   |   |   |
| Various notes payable to convertible debenture holders, interest rate |   |   |       |   |   |   |   |   |
| of 12% accrued monthly, principal and accrued interest due            |   |   |       |   |   |   |   |   |
| July 31, 2011, unsecured.                                             |   |   | 135,000    |   |   |   | - |   |
|                                                                  |   |   |       |   |   |   |   |   |
| Various notes payable to convertible debenture holders, interest rate |   |   |       |   |   |   |   |   |
| of 12% accrued monthly, principal and accrued interest due            |   |   |       |   |   |   |   |   |
| November 30, 2011, unsecured.                                         |   |   | 10,000     |   |   |   | - |   |
|                                                                  |   |   |       |   |   |   |   |   |
| Less: discount                                                        |   |   | -          |   |   |   | (8,526 | ) |
|                                                                  |   |   |       |   |   |   |   |   |
| Less: current portion                                                 |   |   | (1,010,000 | )      |   |   | (371,474 | ) |
|                                                                  |   |   |       |   |   |   |   |   |
|                                                                  |   | $      | -          |   |   | $      | - |   |

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|                      |   | 2010   |    |   | 2009   |   |
|---------------------------|--------|--------|---------|--------|--------|--------|
|                      |   |   |    |   |   |   |
| Payroll and related taxes |   | $      | 65,618  |   |   | $      | 87,301 |   |
| Deferred rent             |   |   | 607     |   |   |   | 15,054 |   |
| Accrued vacation          |   |   | 72,475  |   |   |   | 49,763 |   |
| Accrued interest          |   |   | 96,600  |   |   |   | 3,699 |   |
| Other accrued expenses    |   |   | 30,806  |   |   |   | 128,566 |   |
|                      |   |   |    |   |   |   |   |   |
|                      |   | $      | 266,106 |   |   | $      | 284,383 |   |

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|                                 |   | 2010   |       |   | 2009   |   |
|--------------------------------------|--------|--------|------------|--------|--------|--------|
| Current portion:                     |   |   |       |   |   |   |
| Operating loss carryforwards         |   | $      | 2,282,000  |   |   | $      | 1,607,000 |   |
| Allowance for doubtful accounts      |   |   | 19,000     |   |   |   | 19,000 |   |
| Accrued vacation                     |   |   | 28,000     |   |   |   | (6,000 | ) |
| Deferred rent expense                |   |   | -          |   |   |   | 19,000 |   |
| Software development                 |   |   | (1,043,000 | )      |   |   | (396,000 | ) |
|                                 |   |   | 1,286,000  |   |   |   | 1,243,000 |   |
| Less: valuation allowance            |   |   | (1,286,000 | )      |   |   | (1,243,000 | ) |
|                                 |   |   |       |   |   |   |   |   |
| Deferred tax asset-current portion   |   | $      | -          |   |   | $      | - |   |
|                                 |   |   |       |   |   |   |   |   |
| Long-term portion:                   |   |   |       |   |   |   |   |   |
| Depreciation and amortization        |   | $      | 31,000     |   |   | $      | 24,000 |   |
| Less: valuation allowance            |   |   | (31,000    | )      |   |   | (24,000 | ) |
|                                 |   |   |       |   |   |   |   |   |
| Deferred tax asset-long term portion |   | $      | -          |   |   | $      | - |   |

| Expiration Date |   | Federal NOL Carryforwards |      | Expiration Date |       | State NOL Carryforwards |   |
|-----------------|--------|---------------------------|-----------|-----------------|------------|-------------------------|--------|
| 12/31/2021      |   | $                         | 734,000   |            | 12/31/2012 |                    | $      | 436,000 |   |
| 12/31/2022      |   |                      | 443,000   |            | 12/31/2013 |                    |   | 1,120,000 |   |
| 12/31/2023      |   |                      | -         |            | 12/31/2014 |                    |   | 1,428,000 |   |
| 12/31/2024      |   |                      | -         |            | 12/31/2015 |                    |   | 1,730,000 |   |
| 12/31/2025      |   |                      | -         |            |       |                    | $      | 4,714,000 |   |
| 12/31/2026      |   |                      | -         |            |       |                    |   |   |   |
| 12/31/2027      |   |                      | 436,000   |            |       |                    |   |   |   |
| 12/31/2028      |   |                      | 1,120,000 |            |       |                    |   |   |   |
| 12/31/2029      |   |                      | 1,428,000 |            |       |                    |   |   |   |
| 12/31/2030      |   |                      | 1,730,000 |            |       |                    |   |   |   |
|            |   | $                         | 5,891,000 |            |       |                    |   |   |   |

|                                             |   | 2010   |    |   | 2009   |   |
|--------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                             |   |   |    |   |   |   |
| Federal Tax Benefit (Expense) at Statutory Rates |   | $      | 45,000  |   |   | $      | 133,000 |   |
| State Tax Benefit (Expense) at Statutory Rates   |   |   | 8,000   |   |   |   | 20,000 |   |
| Meals and Entertainment                          |   |   | (4,000  | )      |   |   | (4,000 | ) |
| Valuation Allowance Adjustment                   |   |   | (49,000 | )      |   |   | (149,000 | ) |
|                                             |   |   |    |   |   |   |   |   |
| Net Deferred Tax Benefit (Expense)               |   | $      | -       |   |   | $      | - |   |

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| Year Ending  |   |   |    |
|--------------|--------|--------|---------|
| December 31, |   | Amount |    |
| 2011         |   |   | 142,524 |   |
| 2012         |   |   | 140,578 |   |
| 2013         |   |   | 142,400 |   |
| 2014         |   |   | 144,221 |   |
| 2015         |   |   | 121,450 |   |
|         |   |   |    |   |
|         |   | $      | 691,173 |   |

| Employee       |   | Beginning Date |   | End Date   |   | Annual Salary |    | Renewal Term |
|----------------|--------|----------------|--------|------------|--------|---------------|---------|--------------|
| Jeff W. Holmes |   | 1/1/2005       |   | 12/31/2010 |   | $             | 220,000 |         | (3) one year extensions |
| Greg W. Holmes |   | 1/1/2005       |   | 12/31/2010 |   | $             | 150,000 |         | (3) one year extensions |
| Kevin J. Asher |   | 2/5/2008       |   | 2/4/2010   |   | $             | 130,000 |         | (2) one year extensions |
| Tom Harker     |   | 1/10/2007      |   | 1/9/2011   |   | $             | 140,000 |         | (3) one year extensions |
| Michael Brande |   | 1/10/2007      |   | 1/9/2011   |   | $             | 105,000 |         | (3) one year extensions |
| Michael Rae    |   | 1/10/2007      |   | 1/9/2011   |   | $             | 90,000  |         | (3) one year extensions |
| Kelly Robinson |   | 6/28/2004      |   | 6/28/2010  |   | $             | 90,000  |         | (2) one year extensions |

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|                             |   |      |    |   |             |   |   | Weighted Average |   |   | Aggregate |   |
|----------------------------------|--------|-----------|---------|--------|------------------|--------|--------|------------------|--------|--------|-----------|--------|
|                             |   | Number of |    |   | Weighted Average |   |   | Remaining        |   |   | Intrinsic |   |
|                             |   | Warrants  |    |   | Exercise Price   |   |   | Contractual Term |   |   | Value     |   |
| Outstanding at December 31, 2009 |   |      | 190,000 |   |             | $      | 1.95   |             |   |   |      |   |   |   |
| Granted                          |   |      | 324,500 |   |             |   | 1.95   |             |   |   |      |   |   |   |
| Exercised                        |   |      | -       |   |             |   | -      |             |   |   |      |   |   |   |
| Forfeited                        |   |      | -       |   |             |   | -      |             |   |   |      |   |   |   |
|                             |   |      |    |   |             |   |   |             |   |   |      |   |   |   |
| Outstanding at December 31, 2010 |   |      | 514,500 |   |             | $      | 1.95   |             |   |   | 2.21      |   |   | $ | - |   |
|                             |   |      |    |   |             |   |   |             |   |   |      |   |   |   |   |   |
| Exercisable at December 31, 2010 |   |      | 9,500   |   |             | $      | 1.95   |             |   |   | 2.27      |   |   | $ | - |   |

|                       |   | 2010    |            |   | 2009    |   |
|----------------------------|--------|---------|-----------------|--------|---------|--------|
|  Expected Volatitlity |   |    | 40.17% - 29.11% |   |    |   | 41.05% - 40.59% |   |
| Risk-free interest rate    |   |    | 0.89%           |   |    |   | .78% - 1.14% |   |
| Expected dividends         |   |    | -               |   |    |   | - |   |
| Expected life              |   | 2 years |            |   | 2 years |   |
| Fair value                 |   | $       | 0.05            |   |    | $      | 0.05 |   |

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|                                 |   |     |    |   | Weighted-Average |   |
|--------------------------------------|--------|----------|---------|--------|------------------|--------|
|                                 |   |     |    |   | Grant-Date       |   |
|                                 |   | Warrants |    |   | Fair Value       |   |
| Non-exercisable at January 1, 2009   |   |     | -       |   |             | $      | - |   |
|                                 |   |     |    |   |             |   |   |   |
| Granted                              |   |     | 190,000 |   |             |   | 0.05 |   |
|                                 |   |     |    |   |             |   |   |   |
| Exercisable                          |   |     | -       |   |             |   | - |   |
|                                 |   |     |    |   |             |   |   |   |
| Forfeited                            |   |     | -       |   |             |   | - |   |
|                                 |   |     |    |   |             |   |   |   |
| Non-exercisable at December 31, 2009 |   |     | 190,000 |   |             |   | 0.05 |   |
|                                 |   |     |    |   |             |   |   |   |
| Granted                              |   |     | 324,500 |   |             |   | 0.05 |   |
|                                 |   |     |    |   |             |   |   |   |
| Exercisable                          |   |     | (9,500  | )      |             |   | 0.05 |   |
|                                 |   |     |    |   |             |   |   |   |
| Forfeited                            |   |     | -       |   |             |   | - |   |
|                                 |   |     |    |   |             |   |   |   |
| Non-exercisable at December 31, 2010 |   |     | 505,000 |   |             | $      | 0.05 |   |

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|                                     |   |      |      |   |           |   | Weighted        |   |      |
|------------------------------------------|--------|-----------|-----------|--------|----------------|--------|-----------------|--------|-----------|
|                                     |   |      |      |   |           |   | Average         |   |      |
|                                     |   |      |      |   | Weighted       |   | Remaining       |   | Aggregate |
|                                     |   | Number of |      |   | Average        |   | Contractual     |   | Intrinsic |
|                                     |   | Options   |      |   | Exercise Price |   | Term (in years) |   | Value     |
|                                     |   |      |      |   |           |   |            |   |      |
| Options outstanding at December 31, 2008 |   |      | 1,685,832 |   |           | $      | 1.33            |   |      |   |   |
|                                     |   |      |      |   |           |   |            |   |      |   |   |
|    Granted                |   |      | -         |   |           |   | -               |   |      |   |   |
|    Exercised              |   |      | -         |   |           |   | -               |   |      |   |   |
|    Forfeited              |   |      | (302,500  | )      |           |   | 1.51            |   |      |   |   |
|                                     |   |      |      |   |           |   |            |   |      |   |   |
| Options outstanding at December 31, 2009 |   |      | 1,383,332 |   |           |   | 1.29            |   |      |   |   |
|                                     |   |      |      |   |           |   |            |   |      |   |   |
|    Granted                |   |      | 1,494,167 |   |           |   | 1.00            |   |      |   |   |
|    Exercised              |   |      | -         |   |           |   | -               |   |      |   |   |
|    Forfeited              |   |      | (365,000  | )      |           |   | 1.52            |   |      |   |   |
|                                     |   |      |      |   |           |   |            |   |      |   |   |
| Options outstanding at December 31, 2010 |   |      | 2,512,499 |   |           | $      | 1.08            |   | 3.70      |   |  $              - |
|                                     |   |      |      |   |           |   |            |   |      |   |   |
| Options exercisable at December 31, 2010 |   |      | 2,462,499 |   |           | $      | 1.09            |   | 3.68      |   |  $              - |

|                    |   | 2010      |   |
|-------------------------|--------|-----------|--------|
| Expected Volatility     |   |      | 37.68  | % |
| Risk-free interest rate |   |      | 0.88   | % |
| Expected dividends      |   |      | -      |   |
| Expected life           |   | 2.5 years |   |
| Value per option        |   | $         | 0.09   |   |

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