UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-K




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




For the
fiscal year ended December 31, 2008




OR


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


For the
transition period from __________ to __________




Commission
File No: 001-31590




SEARCHHELP,
INC.


(Exact
name of registrant as specified in its charter)




Delaware
              
              11-3621755(State
      or other jurisdiction of Incorporate or organization)
              
              (I.R.S.
      Employer Identification No.)6800
      Jericho Turnpike – Suite 208E, Syosset, NY
              
              11791(Address
      of principal executive offices)
              
              (Zip
      Code)




Registrant’s
telephone number, including area code:


(516)
802-0223




Securities
registered pursuant to section 12(g) of the Act:


Title of Each Class
                              
                              Name of Each Exchange on which RegisteredCommon
      Stock, $0.0001 par value
                              
                              OTCClass
      A Warrant to Purchase Common Stock
                              
                              OTCClass
      B Warrant to Purchase Common Stock
                              
                              OTC




Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.


Yes   ̈    No  x




Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.


Yes   ̈    No  x




Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past
90 days.    Yes  x    No   ̈







Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the
best of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.     ̈




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




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




Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange
Act).    Yes   ̈    No  x








APPLICABLE
ONLY TO CORPORATE ISSUERS




Number of
registrant’s shares of common stock outstanding at April 13, 2009 was
74,538,976.




Documents incorporated by
reference: None.


2


TABLE
OF CONTENTS




Part
      I.Item
      1. Business
              5Item
      1A. Risk Factors
              8Item
      1 B. Unresolved Staff Comments
              13Item
      2. Properties
              13Item
      3. Legal Proceedings
              13Item
      4. Submission of Matters to a Vote of Security Holders
              15Part
      II.Item
      5. Market for Registrant’s Common Equity, Related Stockholder Matters and
      Issuer Purchase of Equity Securities
              15Item
      6. Selected Financial Data
              18Item
      7. Management’s Discussion and Analysis of Financial Condition And Results
      of Operations
              18Item
      8. Financial Statements and Supplementary Data
              28Item
      9. Changes in and Disagreements with Accountants on Accounting And
      Financial Disclosure
              29Item
      9A (T). Controls and Procedures
              29Item
      9B. Other Information
              30Part
      III.Item
      10. Directors, Executive Officers and Corporate Governance
              30Item
      11. Executive Compensation
              35Item
      12. Security Ownership of Certain Beneficial Owners and Management and
      Related Stockholder Matters
              38Item
      13. Certain Relationships and Related Transactions, and Director
      Independence
              39Item
      14. Principal Accounting Fees and Services
              39Part
      IV.Item
      15. Exhibits, Financial Statement Schedules
              40





SPECIAL NOTE ON
FORWARD-LOOKING STATEMENTS





This
Annual Report contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements are based largely on our expectations and are subject to a number of
risks and uncertainties, many of which are beyond our control. Actual results
could differ materially from these forward-looking statements as a result of,
among other factors, risks related to the large amount of our outstanding term
loan; history of net losses and accumulated deficits; reliance on third parties
to market, sell and distribute our products; future capital requirements;
competition and technical advances; dependence on the oil services market for
pipe and well cleaners; ability to protect our patents and proprietary rights;
reliance on a small number of customers for a significant percentage of our
revenues; and other risks. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained in this Annual
Report will in fact occur.


3





EXPLANATORY
PARAGRAPH


We are
restating our December 31, 2007 Consolidated Balance Sheet, Consolidated
Statement of Operations, Consolidated Statement of Stockholders’ Deficit,
Consolidated Statement of Cash Flows and the notes to the consolidated financial
statements to reflect a modification of existing debt terms, specifically the
conversion price and the exercise price of the warrants associated with such
debt as filed on our Form 10KSB as filed on April15, 2008.  During
March 2009, the Company determined that the accounting for conversions of debt
was not accounted for correctly, and therefore filed an 8-K on March 31, 2009
that the 10KSB filed for the fiscal year ended December 31, 2007 could not be
relied upon.  The Company had not filed an amendment to that 10KSB,
but has reflected the adjustments directly to the presentation of the December
31, 2007 financials in the current 10K for the fiscal year ended December 31,
2008.  The effect of the modification resulted in additional interest
expense of $497,000 for the year ended December 31, 2007 with a corresponding
credit to additional paid in capital.  The Items of the Form 10K for
the year ended December 31, 2008 which contain a prior period adjustment
include: Part II. Item 6. Management’s Discussion and Analysis or Plan of
Operation, Part II. Item 7. Financial Information, including: Consolidated
Balance Sheet at December 31, 2007, Consolidated Statement of Operations for the
year ended December 31, 2007, Consolidated Statements of Stockholders’ Deficit
for the year ended December 31, 2007, Consolidated Statement of Cash Flows for
the year ended December 31, 2007, and Notes to Consolidated Financial Statements
as of December 31, 2007.


4


PART
I




Item
1. Description of Business




SearchHelp,
Inc. was incorporated in the State of Delaware on September 5, 2001 and
completed its initial public offering on July 23, 2003. During the fiscal year
ended December 31, 2008, the Company acquired 100% of the stock of EchoMetrix,
Inc, a wholly owned subsidiary.




Business
Summary




The
Company develops software services committed to real-time online protection and
family safety.  The Company develops and sells software products that
offer parental controls that enable parents, both in home and remotely, to
monitor and regulate their child’s computer activities.  The Company,
through the newly acquired EchoMetrix division, also offers technology to
corporations, within various verticals, to help management analyze real-time,
natural language expressions and measure sentiment and behavior in digital
content, such as blogs, forums, emails, instant messaging and soon mobile
text.




Business
Strategy and Products


SearchHelp
is in the electronic publishing business with the added benefit that all of its
content is User Generated Content (“UGC”).  To effectively achieve a
strong position in this market the Company has initiated a significant program
that will leverage its existing powerful Parental Control Software programs with
a new distribution strategy, a new management team with proven expertise in this
market and a new market intelligence software package, the “Pulse”, that once in
the marketplace will allow users to effectively manipulate its unique unfiltered
teen market data.





Sentry
Products


The
Company’s original core business was built around a series of software products
designed to monitor and protect children from inappropriate activity on the
Internet.  This web based award winning  robust software
“captures” everything a teen does on their computer, monitors for key triggers
that suggest inappropriate activity and takes a variety of actions predetermined
by the parent that range from immediate alerts (mobile text messages and
emails), to reports, logs and shutting down the computer.





As part
of the installation of this Parental Control software the parent agrees that the
Company may use all of the data that it “sees” in the aggregate without
identifying the source for other purposes.  This parental complicity
provides the Company with a data base of millions of lines of teen IM and Blog
content and in turn, provides an incredible unique insight into the unfiltered
mind of the U.S. teen audience.  The Company does not know of any
other unfiltered sources of teen data.





Pulse


The
Company’s next product (which has not generated any revenue for the fiscal years
ended 2008 and 2007) called Pulse, monitors this teen data in real time, and not
only provides instantaneous customized summaries, but it also has the ability to
contextualize all the aggregated teen content. Pulse identifies, evaluates, and
graphically displays a wide spectrum of analytic information relating to the
type, tone, grade, frequency of communications, impressions, needs, desires,
hopes, dreams and wants of this teen audience who live on the web. The core
of the Pulse platform is comprised of the Company’s proprietary unfiltered
database and the computational algorithms that parse, assess, measure, analyze
and report on the real-time digital activity.


5





The
Company’s Pulse provides marketers with a deep
and instantaneous insight into the target teen audience, providing an
understanding of what is important to them. This understanding allows the
construction of compelling and effective advertising messages. With a better
understanding of the teen customer, effective marketing strategies and tactics
can be formulated to meet the marketer's objectives.




Marketing




SearchHelp
is currently marketing all of the Parental Control programs online through a
number of web sites and landing pages.  These web sites primarily point
back to our main site www.sentryparentalcontrols.com
.. Currently we are rated as the 175,000 most visited site in the U.S on
alexa.com, we receive an average of 800 unique visits daily (unique is defined
as never visited before), the average page views from our visitors is 3.54 which
is down recently but still considered very high and a 28% bounce rate on Google
Analytics. Our U.K. distribution through www.sentryparentalcontrols.co.uk
is rated as the 18,000 most visited website in the U.K. The contents of any
website mentioned in this Report are not incorporated herein.




Currently,
we are downloading between 50 and 100 new downloads daily, with a minimal
advertising budget and of the users who install the free trial 10% become
convert to paid users; this is a combination of the three products offered on
the web (Sentry Total, Basic, and Lite).




The
Company released its new 2008 beta Version of its Sentry products during the
fourth quarter of 2007. This new version is a complete rebuild, which has been
in development since early 2007. The new product, Sentry Total Family Protection
(“Suite”) replaces the combined features set of both our Sentry At Home and
Sentry Remote products which the Company believes exceeds the feature set of all
other major competitors. We also introduced Sentry Lite, a free version of our
Sentry at Home software with far fewer features, to introduce parents to
parental control software with the intent that parents upgrade to our fee based
products once they see the value parental control software offers.





The
market sensitivity and awareness continues to be enhanced by the very real but
inflammatory stories that show up almost daily on the news and daily TV magazine
shows.  The Internet can be a very dangerous place for kids. The
Company plans a major distribution change going forward.  It plans to
focus less on distributing the product through its “Sentry” brand name and more
on utilizing brands of more established companies.  The Company will
offer its Sentry product as a White Labeled product to Companies that already
have a brand.  Our White Labeled product will have the functionality
of the Sentry product and the look and feel of the White Label Partner. We
believe this change in distribution should make it easier to increase
distribution of the Senty product with minimal cost.





In
October 2007, we signed a sales and distribution agreement with Celltec Limited
(“Celltec”) to deliver Sentry products throughout the United Kingdom and the
Republic of Ireland. We began shipping product under this agreement during the
first quarter of 2008 on a non-consignment basis. Celltec has hired Brazen, a UK
PR agency to create a national distribution and awareness campaign, which was
launched on April 14, 2008.


6





To
generate market awareness in advance of the release of the Pulse and to
establish the Company’s position as an authority in the teen knowledge market,
the Company will leverage its unique asset real time knowledge about the teen
market.




Competition




The
Company competes for business with other companies that have child-monitoring
software that includes the following: NetNanny (ContentWatch, Inc.), Cybersitter
(Solid Oak Software, Inc. (US)), CyberPatrol (SurfControl), McAfee Parental
Controls (Networks Associates Technology, Inc.), Norton Parental Controls
(Symantec Corporation), FilterPak (S4F, Inc.), Cyber Sentinel (Security Software
Systems, Inc.), and Cyber Snoop (Pearl Software, Inc.).




The
Company has to respond promptly and effectively to the challenges of
technological change, evolving standards and the Company's competitors'
innovations by continuing to enhance the Company's products and services, as
well as the Company's sales and marketing channels.





The
current market for marketing intelligence is highly competitive and evolving
rapidly.  Although we believe the Company’s core asset, the unfiltered
data base of teen IM and Internet content is unique, it is clear that the target
audience has a number of alternative sources for marketing
intelligence.  While the Company believes that the combination of its
teen data file and real-time contextual and linguistic analysis is unique, it
will compete with the existing providers of digital marketing intelligence and
related analytical products and services. The marketing intelligence industry is
a “cottage industry” with many vendors providing customized one time services
and studies.





Economic
Dependency




The
Company sells its products on line and through distributors to major retailers
throughout the United States. At December 31, 2008, one customer accounted for
100% of the accounts receivable. At December 31, 2007, two customers, each of
which accounted for more than 10% of the Company’s accounts receivable,
accounted for 97% of total accounts receivable in the aggregate.




In 2008,
one customer accounted for 56% of the Company’s sales. In 2007, the three
largest customers, each of which accounted for more than 10% of the Company’s
sales, accounted for 98% of total sales in the aggregate. In 2007, the Company,
for reasons of convenience, consistency and economy of scale, purchased its
entire inventory from one vendor. This risk is mitigated to a great extent by
the extensive availability of similar vendors at competitive prices throughout
the United States.


7




Intellectual
Property




To date,
we have filed a provisional patent for the Company’s Sentry Product and look to
file additional protection measures, such as, trademark, trade name or copyright
protection in any jurisdiction in which it operates.  We intend to
file to protect its trademarks and trade names in selected
jurisdictions.  We therefore rely on trade secret laws and
confidentiality provisions in our agreements to prevent the unauthorized
disclosure and use of our intellectual property.




Employees




As of
April 14, 2009, the Company had seven full time employees and two part time
employees.





Item
1A. Risk Factors.





IF
WE CONTINUE OUR HISTORY OF LOSSES, WE MAY BE UNABLE TO CONTINUE OUR
OPERATIONS





We
incurred net losses of $5,190,030 and of $6,761,492 for the years ended December
31, 2008 and 2007 (as restated), respectively. Since inception, we have an
accumulated deficit of $22,849,549. As a result, as of December 31, 2008, we had
a stockholders’ deficit of $3,627,571 and a working capital deficiency of
$3,802,349. We cannot be certain whether we will ever make a profit, or, if we
do, that we will be able to continue earning a significant amount of revenues or
making a profit. If we continue to lose money, our stock price could decline or
we may be forced to discontinue our operations, either of which may result in
you losing a portion or all of your investment.





WE
MAY NOT BE ABLE TO CONTINUE OUR BUSINESS AS A GOING CONCERN.





The
report of our independent auditors for the fiscal year ended December 31, 2008
was issued under the assumption that we would continue as a going concern. As
discussed in Note 1 to our financial statements for the fiscal year December 31,
2008, we have experienced operating losses over the past two years resulting in
an accumulated deficit. Our independent auditors believe, based on our financial
results as of December 31, 2008, that such results raised substantial doubts
about our ability to continue as a going concern. The financial statements
included in the Annual Report on Form 10-K do not include any adjustments to
asset values or recorded liability amounts that might be necessary in the event
we are unable to continue as a going concern. If we are in fact unable to
continue as a going concern, you may lose your entire investment.





IF
WE ARE UNABLE TO RAISE ADDITIONAL CAPITAL, OUR BUSINESS MAY FAIL OR OUR
OPERATING RESULTS AND OUR STOCK PRICE MAY BE MATERIALLY ADVERSELY
AFFECTED





The
Company's cash on hand at December 31, 2008 totaled $25,217. The Company will
need additional financing to meet its obligations and to continue its business.
The Company is exploring alternative sources of financing, including
institutional and non-institutional debt, equity, which will be highly dilutive
to the current stockholders, joint venture arrangements or a combination of any
or all of the foregoing. No arrangements have been entered into. The Company
will need to raise at least a minimum of $500,000 by May 30, 2009 in order to
continue operations and an additional $2,000,000 after that in order to enable
the Company to generate sufficient revenues to cover all of its present and
future costs and expenses.


8





If we are
not able to raise funds, we may not be able to successfully develop and market
our products and our business will most likely fail.




AS
WE RAISE ADDITIONAL CAPITAL, YOUR PERCENTAGE OWNERSHIP INTEREST IN SEARCHHELP
WILL LIKELY BE REDUCED





The
raising of additional financing would in all likelihood result in dilution or
reduction in the value of our securities. Our ability to operate is dependent
upon obtaining sufficient capital. Accordingly, we anticipate that we will, at
the appropriate time, increase our capital base, which increase may include the
sale of securities with a priority to the common stock. These sales will reduce
your percentage of ownership.





OUR INABILITY TO RETAIN AND ATTRACT
KEY PERSONNEL COULD SERIOUSLY HARM OUR BUSINESS AND ADVERSELY AFFECT OUR ABILITY
TO DEVELOP OUR PRODUCTS





We
believe that our future success will depend on the abilities and continued
service of our senior management and executive officers, particularly our Chief
Executive Officer and Chief Operating Officer and those persons involved in the
research and development of our products. If we are unable to attract additional
qualified employees, researchers and consultants, we may be unable to
successfully finalize and market our products and other future products being
developed.





OUR
SENTRY PARENTAL CONTROL SOFTWARE TECHNOLOGY AND STRATEGY MAY NOT BE
SUCCESSFUL





Our
success will depend almost entirely upon the acceptance of our products and
services by parents with children under the age of 17, elementary and middle
schools, media companies and households. Market acceptance will depend upon
several factors, particularly the determination by parents that they need and
want to monitor and protect their children while on the Internet and the
determination by schools that they want to educate and inform families about the
need for monitoring and knowing what their children do while on the Internet. A
number of factors may inhibit acceptance, including the existence of competing
products, our inability to convince families that they need to pay for the
products and services that we will offer, or failure by households and service
companies to use our products. If our products are not accepted by the market,
we may have to curtail our business operations, which could have a material
negative effect on operating results and most likely result in a lower stock
price.





THE
COMMERCIALIZATION OF OUR NEW TECHNOLOGY AND STRATEGY MAY NOT BE
SUCCESSFUL





Our
success will depend upon the acceptance of our products and services by
advertisers and marketers. Market acceptance will depend upon several factors,
particularly the determination by businesses that they need and want accurate,
relevant, real time, and objective marketing intelligence. A number of factors
may inhibit acceptance, including our inability to convince businesses that they
need to pay for the products and services that we will offer. If our products
are not accepted by the market, we may have to curtail our business operations,
which could have a material negative effect on operating results and most likely
result in a lower stock price.


9




WE
MAY NOT BE ABLE TO COMPETE SUCCESSFULLY AGAINST CURRENT AND FUTURE
COMPETITORS





We will
compete, in our current and proposed businesses, with other companies, some of
which have far greater marketing and financial resources and experience than we
do. We cannot guarantee that we will be able to penetrate our primary market and
be able to compete at a profit. In addition to established competitors, there is
ease of market entry for other companies that choose to compete with us.
Effective competition could result in price reductions, reduced margins or have
other negative implications, any of which could adversely affect our business
and chances for success. Competition is likely to increase significantly as new
companies enter the market and current competitors expand their services. Many
of these potential competitors are likely to enjoy substantial competitive
advantages, including: larger technical staffs, greater name recognition, larger
customer bases and substantially greater financial, marketing, technical and
other resources. To be competitive, we must respond promptly and effectively to
the challenges of technological change, evolving standards and competitors’
innovations by continuing to enhance our services and sales and marketing
channels. Any pricing pressures, reduced margins or loss of market share
resulting from increased competition, or our failure to compete effectively,
could seriously damage our business and chances for success.





WE
MAY NOT BE ABLE TO MANAGE OUR GROWTH EFFECTIVELY





We must
continually implement and improve our products and/or services, operations,
operating procedures and quality controls on a timely basis, as well as expand,
train, motivate and manage our work force in order to accommodate anticipated
growth and compete effectively in our market segment. Successful implementation
of our strategy also requires that we establish and manage a competent,
dedicated work force and employ additional key employees in corporate
management, product design, client service and sales. We can give no assurance
that our personnel, systems, procedures and controls will be adequate to support
our existing and future operations. If we fail to implement and improve these
operations, there could be a material, adverse effect on our business, operating
results and financial condition.





IF
WE DO NOT CONTINUALLY UPDATE OUR PRODUCTS, THEY MAY BECOME OBSOLETE AND WE MAY
NOT BE ABLE TO COMPETE WITH OTHER COMPANIES





Internet
technology, software applications and related infrastructure are rapidly
evolving. Our ability to compete depends on the continuing development of our
technologies and products. We cannot assure you that we will be able to keep
pace with technological advances or that our products will not become obsolete.
We cannot assure you that competitors will not develop related or similar
products and bring them to market before we do, or do so more successfully, or
that they will not develop technologies and products more effective than any
that we have developed or are developing. If that happens, our business,
prospects, results of operations and financial condition will be materially
adversely affected.


10





OUR
BUSINESS IS CONCENTRATED, MAKING OUR OPERATIONS SENSITIVE TO ECONOMIC
FLUCTUATIONS





Because
of our extremely limited financial resources, it is unlikely that we will be
able to further diversify our operations. Therefore, we will be subject to
economic fluctuations within our industry. If our business does not succeed, you
could lose all or part of your investment.





IF
WE DO NOT SUCCEED IN OUR EXPANSION STRATEGY, WE MAY NOT ACHIEVE THE RESULTS WE
PROJECT





Our
business strategy is designed to expand the sales of our products and services.
Our ability to implement our plan will depend primarily on the ability to
attract customers and the availability of qualified and cost-effective sales
personnel. There are no firm agreements for employment of additional marketing
personnel, and we can give you no assurance that any of our expansion plans will
be successful or that we will be able to establish additional favorable
relationships for the marketing and sales of our products and services. We also
cannot be certain when, if ever, we will be able to hire the appropriate
marketing personnel and to establish additional merchandising
relationships.




OUR
OFFICERS AND DIRECTORS HAVE LIMITED LIABILITY AGAINST LAWSUITS





SearchHelp
is a Delaware corporation. Delaware law permits the indemnification of officers
and directors against expenses incurred in successfully defending against a
claim. Delaware law also authorizes Delaware corporations to indemnify their
officers and directors against expenses and liabilities incurred because of
their being or having been an officer or director. Our organizational documents
provide for this indemnification to the fullest extent permitted by
law.





OUR
COMPANY IS A PARTY TO VARIOUS LITIGATION





We have
been engaged in various litigations (See Litigation section
below).  We could be subject to future litigations that could
materially affect our ability to operate our Business.





RISKS
RELATED TO OUR SECURITIES





ISSUANCE
OF PREFERRED STOCK COULD HURT HOLDERS OF COMMON STOCK





Our board
of directors is authorized by our charter to create and issue preferred stock.
The rights of holders of preferred stock take precedence over the rights of
holders of common stock. Between February 2007 and December 31, 2007, we
created a class of 1,526,718 Series A 7% of cumulative preferred stock, since
that date, we have sold an aggregate of 901,237 shares of Series “A” preferred
stock and may issue additional shares of our Series “A” preferred stock at any
time. The preferred stock has a preference or liquidation of $2.62. The rights
of future preferred stockholders could delay, defer or prevent a change of
control of SearchHelp, even if the holders of common stock are in favor of that
change of control, as well as enjoy preferential treatment on matters like
distributions, liquidation preferences and voting.


11





OUR
STOCK PRICE HAS BEEN VOLATILE





Our stock
price fluctuated between $0.05 and $0.25 for the year ended December 31, 2008
and between $0.08 and $0.45 for the year ended December 31, 2007. The price of
our shares may fluctuate significantly despite the absence of any apparent
reason. In addition, our stock is thinly traded, leading to even greater
volatility. You should expect this volatility to continue. The price of our
common stock may be subject to considerable fluctuations as a result of various
factors, including but not limited to:





•
      Technological innovations or commercialization of new
products by our   competitors;


•
      The release of research reports by securities
analysts;


•
      Disputes concerning patents or proprietary
rights;


•
      Financial results of other firms, particularly those
in our industry; and


•
      Economic and other external factors.




The
Company’s Common Stock does not currently have an active or liquid public
market. As a result, even if the Securities are registered, investors may find
it difficult to sell them. There can be no assurance that a liquid market for
the Securities will ever develop in the United States, or elsewhere, or that if
such a market does develop, that it will continue; or that the trading price of
the Securities will not be subject to significant price fluctuations. Investors
may also find it difficult to obtain accurate information and quotations as to
the price of the Company’s securities. Accordingly, an investment in the
Securities should only be considered by those investors who do not require
liquidity and can afford to suffer a total loss of their investment. An investor
should consider consulting with professional advisers before making such an
investment.





OUR
SHARES ARE CLASSIFIED AS “PENNY STOCK” AND BECAUSE “PENNY STOCK” RULES WILL
APPLY, YOU MAY FIND IT DIFFICULT TO SELL YOUR SHARES





A “penny
stock” is a common stock that is not listed on a national securities exchange
and trades for less than $5.00 per share. Additional disclosure is required in
connection with trades in a penny stock. These disclosure requirements may have
the effect of reducing the level of trading activity in our common stock, making
the market for the shares of common stock illiquid.





THERE
WILL BE A SIGNIFICANT NUMBER OF SHARES OF COMMON STOCK ELIGIBLE FOR FUTURE SALE
AND THIS MAY HURT THE MARKET PRICE OF THE SHARES





The
market price of our shares could decline as a result of sales, or the perception
that sales could occur, of a large number of shares available in the public
market. Such sales also might make it more difficult for us to sell equity
securities in the future at a time and at a price that we deem appropriate. At
December 31, 2008, we had a total of 71,787,304 shares of common stock
outstanding, but there were also 39,141,611 shares that could be acquired upon
the conversion or exercise of outstanding preferred stock, notes, options and
warrants. Upon the conversion or exercise of these securities, your interest in
SearchHelp will be diluted.


12




WE
HAVE NEVER PAID ANY CASH DIVIDENDS





SearchHelp
has never paid any cash dividends on its shares of common stock and there are
presently no plans being considered that would result in the payment of cash
dividends.




Item
1B. Unresolved Staff Comments.




None.




Item
2. Properties.




The
Company leases an executive office consisting of 1,868 square feet at 6800
Jericho Turnpike, Suite 208E, Syosset, New York 11791. The lease commenced on
July 31, 2006 and has a five year and two month term. The current rent is $4,401
per month ($52,812 per year) and increases approximately 3% per annum. The
Company has a security deposit with its landlord of $8,406.




A
subsidiary of the Company had a lease that expired in August 2008, for 1,404
square feet of office space at 56 Roland Street, Boston, Massachusetts. The
annual rent is $28,704.  The Company has a security deposit with its
landlord of $4,000.  The subsidiary ceased operations early in 2008
and closed the office in Boston.




Rent
expense was $61,953 and $82,279 for the years ended December 31, 2008 and 2007,
respectively.




We
believe that our facilities are adequate for our current and near-term
needs.




Item
3. Legal Proceedings.





AmberAlertAgent Development
Company, LLC





On
February 20, 2007, SearchHelp was served with a complaint that was filed in the
Superior Court of California in San Diego County on February 8, 2007, entitled
AmberAlertAgent Development Co., LLC, a California Limited Liability Company;
Perkins, Brinson, Ho, LLC, a California Limited Liability Company; Philip Dizon,
an individual; Edward Sullivan, an individual; Gil Amelio, an individual;
Richard A. Weintraub, an individual; Carl Perkins, an individual; and Duane
Brinson, an individual v. Searchhelp, Inc., a Delaware Corporation; and Does
1-20.  The claims against the Company arise out of an Exchange
Agreement entered into between AmberAlertAgent, Inc. (“AAA”), certain of the
plaintiffs and the Company pursuant to which the Company purchased all the
issued and outstanding shares of AAA in exchange for 1.5 million shares in the
Company.  The shares in the Company acquired by the plaintiffs are
being held in escrow until plaintiffs complete the development of software, and
provided certain other services, as set forth in a Consulting Agreement between
plaintiffs and the Company.


13





On August
2, 2007, the Company and the plaintiffs signed a Settlement Agreement and Mutual
Release whereby all legal actions were dismissed. Under the terms of the
Settlement Agreement, SearchHelp placed $10,000 into escrow and released to the
plaintiffs an aggregate of 1.375 million shares of the Company's common stock
which were previously being held in escrow.  The remaining 125,000
shares which were previously held in escrow were returned to the Company and
retired.  In addition, pursuant to the Settlement Agreement,
SearchHelp and Amber Alert Agent entered into a License Agreement pursuant to
which the Company received a perpetual, royalty-free, worldwide, and
non-exclusive license to use, including to reproduce, perform, display,
distribute, and create derivative works from, certain Sentry Predator Locator
software and all related documentation.  An additional $10,000 was
placed in escrow for payment of transition services to be provided by the
plaintiffs to assist the Company in migrating the software onto the Company's
servers.  The source code for the licensed software was also placed
into escrow. All escrowed items will be released upon the successful transition
of the software. In February 2009, the Company, AmberAlertAgent Development Co.,
LLC, all of the plaintiffs and the Escrow Agent reached a settlement agreement,
and $9,500 of the funds were released to the Company and $9,500 was released to
the Plaintiffs in accordance with the Settlement Agreement. $1,000 was paid to
the escrow agent for escrow fees and the source codes were delivered to
Plaintiffs in accordance with the Settlement Agreement.





Joseph
Carrizzo





During
the first quarter of 2007, Joseph Carrizzo resigned as the Company’s President
and a director. The Company attempted to negotiate the terms of a separation
agreement with Mr. Carrizzo. On March 20, 2007, the Company received a letter
from Mr. Carrizzo in which he formally advised the Company that he was
terminating his employment as a result of the Company’s alleged material breach
of his employment agreement. The Company contends that Mr. Carrizzo voluntarily
terminated his employment with the Company.





On May
22, 2008, a settlement agreement was reached between the Company and Mr.
Carrizzo, whereby the Company has agreed to pay Mr. Carrizzo $150,000 and issue
1,275,000 of the Company’s restricted common shares in full and complete
settlement of all monetary and non-monetary claims by Mr.
Carrizzo.  Pursuant to the settlement agreement, 3,270,000 options
granted to Mr. Carrizzo were cancelled A cash payment of $10,000 was made
immediately upon execution of the settlement agreement and $5,000 per month
commencing thirty days after the initial payment is due until the full amount is
paid. If the Company raises $500,000 in additional equity financing in a single
transaction, a one time accelerated payment of $20,000 is to be made to Mr.
Carrizzo. If the Company raises an additional $500,000 in a single transaction,
an additional $20,000 accelerated payment is to be made. The common shares
payment was delivered in two stock certificates on May 28, 2008. The first
625,000 shares issued are restricted until the shares are
registered.  The second payment of 650,000 common shares are subject
to the first stipulation and have an additional legend that prohibits their
resale prior to March 1, 2009.


14





Charles
Davis





On May
23, 2008, the Company responded to a letter dated May 22, 2008 and sent a
notification to return personal and intellectual property belonging to the
Company from the former Chief Technology Officer, Charles Davis.  Mr.
Davis claims independent rights to use technology owned and developed by
SearchHelp, Inc and EchoMetrix.  The Company maintains that Mr. Davis
is in violation of his confidentiality obligations and has demanded all records,
software and data owned by SearchHelp, Inc and subsidiaries to be returned to
the Company immediately.  Mr. Davis was charged with larceny based on
a complaint filed by the Company and the case is being prosecuted by the Nassau
County District Attorney's office.





Freifeld





On
or about November 2008, the plaintiffs, Freifelds brought an action against the
Company seeking summary judgement in lieu of complaint on two debt
conversions.  The plaintiffs converted their notes and received the
Company’s stock certificates in November 2008. Subsequently, the plaintiffs
brought suit, requesting repayment of their converted notes.  The
Company has retained legal counsel and has filed pre-answer motion for summary
judgement for the Company.  The Plaintiffs have moved for summary
judgment in lieu of a complaint and we cross-moved for summary judgment. The
Court has indicated that it is going to set the matter down for an evidentiary
hearing. No date has been set.




Item
4. Submission of Matters to a Vote of Security Holders.





No
matters were submitted to a vote of security holders during the fourth quarter
of 2008.





PART
II




Item
5. Market for Common Equity and Related Stockholder Matters.




SearchHelp's
public offering was completed on July 23, 2003. A total of 2,474,000 units were
sold in the public offering. Each unit consisted of one share of Common Stock,
one Class A Warrant, exercisable for five years, to purchase one share of Common
Stock at $0.75 per share ("Class A Warrant") and one Class B Warrant,
exercisable for seven years, to purchase one share of Common Stock at $1.75 per
share ("Class B Warrant"). The Common Stock, Class A Warrants and Class B
Warrants are quoted on the OTC Bulletin Board and trade under the symbol SHLP,
SHLPW and SHLPZ respectively.





On
December 31, 2007, we extended the term to exercise the Class A Warrant from
December 31, 2007 to March 31, 2008. The exercise price of the Class A Warrant
was lowered on from $0.75 to $0.17 per share of our common stock, and we reduced
the exercise price of our Class B Warrant from $1.50 to $0.22 per share of our
common stock. All other terms and conditions of the Warrants remained the
same.


15


On
December 31, 2007, we also extended the term to exercise Placement Agents’ Class
A Warrant from December 31, 2007 to December 31, 2008. The exercise price of the
Class A Warrant was lowered from $0.985 to $0.17 per share of our common stock,
and we reduced the exercise price of our Class B Warrant from $2.285 to $0.17
per share of our common stock. All other terms and conditions of the Warrants
remained the same.





On March
25, 2008, we extended the term to exercise the Class A Warrant from March 31,
2008 to July 31, 2008. All other terms and conditions of the Warrants remained
the same and became effective on June 11, 2008 when the Company received a
Notice of Effectiveness from the Securities and Exchange Commission





On August
28, 2008, the Company extended the term to exercise the Class A Warrant from
August 31, 2008 to March 31, 2009.  All other terms and conditions of
the Warrants remained the same and became effective on October 8, 2008 when the
Company received a Notice of Effectiveness from the Securities and Exchange
Commission.





On March
26, 2009 we filed an 8-K that we intend to extend the terms to exercise the
Class A Warrant from March 31, 2009 to June 30, 2010 and to extend the term of
the Class B Warrant from December 31, 2009 to June 30, 2010. The Company will
file a Post Effective Amendment No. 4 to its Registration Statement on Form S-1
(“Post Effective Amendment”). The extended date will become effective upon the
date on which the Securities and Exchange Commission declares the Post-Effective
Amendment.




As of
April 13, 2009, the Company had outstanding 74,538,976 shares of its Common
Stock, par value $0.0001 per share, 2,469,000 Class A Warrants and 2,474,000
Class B Warrants. 5,000 of the Class A Warrants have been exercised, and none of
the Class B Warrants have been exercised. Also outstanding were a placement
agent warrant to purchase 247,400 units comprised of one share of common stock,
one Class A Warrant and one Class B Warrant.




Additionally
outstanding were various placement agent warrants to purchase a total of 569,700
shares of the Company's Common Stock at a purchase prices ranging from $0.30 per
share to $0.50 per share.





Price
Range of Common Stock





The
following table shows the high and low bid prices of the Company’s Common Stock
as quoted on the OTC Bulletin Board by quarter during each of our last two
fiscal years ended December 31, 2008 and 2007. These quotes reflect inter-dealer
prices, without retail markup, markdown or commissions and may not represent
actual transactions. The information below was obtained from those
organizations, for the respective periods.








2008
                        
                        Quarter
      Ended
                        
                        
                        Quarter
      Ended
                        
                        
                        Quarter
      Ended
                        
                        
                        Quarter
      EndedMarch
      31, 2008
                        
                        
                        June
      30, 2008
                        
                        
                        September
      30, 2008
                        
                        
                        December
      31, 2008High
                        
                        $
                        0.25
                        
                        
                        $
                        0.20
                        
                        
                        $
                        0.19
                        
                        
                        $
                        0.15Low
                        
                        $
                        0.08
                        
                        
                        $
                        0.08
                        
                        
                        $
                        0.04
                        
                        
                        $
                        0.04





2007
                        
                        Quarter
      Ended
                        
                        
                        Quarter
      Ended
                        
                        
                        Quarter
      Ended
                        
                        
                        Quarter
      EndedMarch
      31, 2007
                        
                        
                        June
      30, 2007
                        
                        
                        September
      30, 2007
                        
                        
                        December
      31, 2007High
                        
                        $
                        0.45
                        
                        
                        $
                        0.40
                        
                        
                        $
                        0.28
                        
                        
                        $
                        0.22Low
                        
                        $
                        0.23
                        
                        
                        $
                        0.22
                        
                        
                        $
                        0.13
                        
                        
                        $
                        0.08


16





The high
and low bid prices for shares of the Company’s  Common Stock on April
13, 2009 was $0.08per
share, respectively, based upon bids that represent prices quoted by
broker-dealers on the OTC Bulletin Board.




Holders




As of
April 13, 2009, there were approximately 718 holders of record of the Company's
common stock, approximately 22 holders of record of the Company's Class A
Warrants and approximately 42 holders of record of the Company's Class B
Warrants.




Dividends




Since its
organization, the Company has not paid any cash dividends on its common stock,
nor does it plan to do so in the foreseeable future.




SECURITIES
AUTHORIZED FOR ISSUANCE UNDER EQUITY COMPENSATION PLANS





The
following table provides information regarding the status of our existing equity
compensation plans at December 31, 2008.





Number
      of securities to be
                          
                          
                          Weighted-average
      exercise
                          
                          
                          Number
      of securities remainingissued
      upon exercise of
                          
                          
                          price
      of outstanding options,
                          
                          
                          available
      for future issuanceoutstanding
      options, warrants
                          
                          
                          warrants
      and rights
                          
                          
                          under
      equity compensation plansand rightsEquity
      compensation plans approved by security holders
                          
                          
                          1,050,000
                          
                          
                          $
                          0.27
                          
                          
                          
                          450,000Equity
      compensation plans notapproved
      by security holders
                          
                          
                          12,238,157
                          
                          
                          $
                          0.24
                          
                          
                          
                          0Total
                          
                          
                          13,348,157
                          
                          
                          $
                          0.24
                          
                          
                          
                          450,000


17





The
number of securities remaining available for future issuance under equity
compensation plans approved by security holders totaled 450,000 shares at
December 31, 2008.




SALES
OF UNREGISTERED SECURITIES FOR THE FOURTH QUARTER





On
October 3, 2008, the Company issued 872,825 shares of its common stock upon the
conversion of $100,000 of the Company’s 10% convertible notes and accrued
interest of $39,492.





On
October 16, 2008, the Company, through a private sale, issued 200,000 shares of
its restricted common stock as a result of a promissory note issued for
$100,000.





On
October 31 2008, the Company, through a private sale, issued 100,000 shares of
its restricted common stock as a result of a promissory note issued for
$50,000.





On
October 31, 2008, the Company, through a private sale, issued 600,000 shares of
its restricted common stock as a result of a promissory note issued for
$300,000.





On
November 18, 2008, the Company issued 1,400,000 shares of the Company’s
restricted common stock as bonuses to consultants and directors and are valued
at approximately $126,000.





On
December 4, 2008, the Company issued 119,131 shares of the Company’s restricted
common stock as payment in kind for interest due for the months of August,
September and October 2008 on the Company’s 10% convertible notes.





On
December 29, 2008, the Company issued 91,059 shares of the Company’s restricted
common stock as payment in kind for interest due for the months of November and
December 2008 on the Company’s 10% convertible notes.





The above
shares of common stock were issued pursuant to the exemption from registration
under Section 4(2) of the Securities Act.




Item
6. – Selected Financial Data




N/A




Item
7. - Management's Discussion and Analysis of Financial Condition and Results of
Operations





Readers
are cautioned that certain statements contained herein are forward-looking
statements and should be read in conjunction with our disclosures under the
heading "Forward-Looking Statements" on page 1. These statements are based
on current expectations and assumptions that are subject to risks and
uncertainties. This discussion also should be read in conjunction with the notes
to our consolidated financial statements contained in Item 8. "Financial
Statements and Supplementary Data," of this Report.


18





Background





SearchHelp,
Inc. develops software services committed to real-time online protection and
family safety.  The   Company develops and sells
software products that offer parental controls that enable parents, both in home
and remotely, to monitor and regulate their child’s computer
activities.  The Company, through the newly acquired EchoMetrix
division, also offers technology to corporations, within various verticals, to
help management analyze real-time, natural language expressions and measure
sentiment and behavior in digital content, such as blogs, forums, emails,
instant messaging and mobile text.




The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  These circumstances
raise substantial doubt about the Company's ability to continue as a going
concern.  The consolidated financial statements do not include any
adjustments that might result from the outcome of this
uncertainty.  Management's efforts have been directed towards the
development and implementation of a plan to generate sufficient revenues to
cover all of its present and future costs and expenses.  The plan
includes, among other things, implementing numerous online sales campaigns of
parental control software, and concentrating on the new EchoMetrix
division.





If
the Company does not generate sufficient revenues from the sales of its products
in an amount necessary to meet its cash needs, the Company will need additional
financing to continue to operate. As the Company increases sales from its
products and services, the Company expects to increase cash flows from
operations.





During
the fiscal year ended December 31, 2008, the Company focused on three primary
operating priorities:





·
            Product Design and
      Delivery. We continue to improve and enhance the functionality of
      our Sentry software. On February 1, 2008 the Company released the latest
      version of its Sentry Product which was completely rebuilt during 2007. We
      repackaged the new Sentry product and created additional products
      versions, each having a different price point. In addition, the
      Company launched numerous online sales campaigns for back to school
      through the end of this fiscal year.  The Company has not, up
      until this point, concentrated resources to online
      sales.





The
Company also announced its intent to commercialize its EchoMetrix
technology (the “Pulse” product) developed by the Company that it believes could
provide advertisers and marketers the ability to analyze natural language
expression and sentiment in real-time of digital content, such as blogs, emails,
and uniquely instant messaging and mobile text messaging. This automated ability
to ascertain emotional context in digital content has widespread uses and
implications in the evolving marketing and media landscape.


19


The
Company also recently announced the formation of an advisory board for the
EchoMetrix division, with six industry experts that will be instrumental to
validate the new technology, as well as assist in identifying various channels
to commercialize this product. The Company spent part of 2007 and all of fiscal
2008 developing the Echometrix Technology, (the “Pulse” product).  The
first half of 2009 will be spent signing beta users and prepare for the Pulse
which is expected to be completed early in 2009.  At that time, the
Company believes that EchoMetrix will be in a position to generate significant
revenue. The revenue model involves switching its Beta users to paid
users.  The model is a monthly per seat user model.  The
Company’s pricing model will cost between $500-$5,000 per month per computer. It
will be distributed through market research firms, advertising firms and Fortune
500 companies.





·
            Raising Awareness in the
      Marketplace. We began a concerted effort to increase advertising
      and promotion in order to foster awareness of the Sentry product line in
      the marketplace. The Company has been pursuing OEM relationships,
      infomercial and other promotional videos, increasing product give-aways,
      and increasing the level of Internet
  advertising.





·
            Addressing the Company's
      liquidity and capital needs.Since inception, the
      Company has not generated any significant cash flows from operations.
      Therefore, the Company has funded its operations by issuing notes and by
      selling common stock and preferred stock.  Management has
      determined that the Company will require additional capital in order to
      fully exploit the market for its products and services. During the fiscal
      year ended December 31, 2008, the Company raised approximately $1,423,000
      from the private placement of common stock and warrants, and issuance of
      debt. A total of $1,488,000 of the 10% short term promissory notes have
      been converted into the Company’s Common Stock.  See – Liquidity
      and Capital Resources.




Significant
and Critical Accounting Policies:




(a) Basis
of Presentation: The accompanying financial statements which accompany the
Annual Report on Form 10-K have been prepared in accordance with accounting
principles generally accepted in the United States of America. The accompanying
financial statements for the year ended December 31, 2008 and 2007 include the
accounts of the Company and its wholly owned subsidiaries. All intercompany
transactions have been eliminated in consolidation.




(b)
Revenue Recognition: The Company recognizes revenues in accordance with the SEC,
Staff Accounting Bulletin 104, “Revenue Recognition” (“SAB 104”). Under SAB 104
revenue is recognized when there is persuasive evidence of an arrangement,
delivery has occurred or services have been rendered, the sales price is
determinable and collectability is reasonably assured. Software products and
services revenue is derived via three distinct methods: direct non- consignment
sales, consignment sales and online Internet sales: (i) revenue in the form of
direct non- consignment sales of merchandise are recognized when title passes to
the customer, typically upon shipment, less an estimated reserve if return
privileges exist; (ii) revenue from consignment sales of software is recognized
when proof of sale to the end user is received; (iii) revenue from online
Internet sales is recognized upon the settlement of credit card charges,
typically within three days of the sale. There was no consignment sales in the
fiscal year ended December 31, 2008.




(c) Use
of Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from
those estimates.


20




(d) Stock
Based Compensation: Effective January 1, 2006, the Company’s Plan is accounted
for in accordance with the recognition and measurement provisions of Statement
of Financial Accounting Standards ("FAS") No. 123 (revised 2004), Share-Based
Payment ("FAS 123(R)"), which replaces FAS No. 123, Accounting for Stock-Based
Compensation, and supersedes Accounting Principles Board Opinion ("APB") No. 25,
Accounting for Stock Issued to Employees, and related interpretations. FAS 123
(R) requires compensation costs related to share-based payment transactions,
including employee stock options, to be recognized in the financial statements.
In addition, the Company adheres to the guidance set forth within Securities and
Exchange Commission ("SEC") Staff Accounting Bulletin ("SAB") No. 107, which
provides the Staff's views regarding the interaction between SFAS No. 123(R) and
certain SEC rules and regulations and provides interpretations with respect to
the valuation of share-based payments for public companies.




Prior to
January 1, 2006, the Company accounted for similar transactions in accordance
with APB No. 25 which employed the intrinsic value method of measuring
compensation cost. Accordingly, compensation expense was not recognized for
fixed stock options if the exercise price of the option equaled or exceeded the
fair value of the underlying stock at the grant date.




(e)
Software Development Costs: Research and development costs are expensed as
incurred. No research and development costs were incurred during the years ended
December 31, 2008 and 2007.




In
accordance with the provisions of SFAS No. 86, "Accounting for the costs of
computer software to be sold or otherwise marketed", software development costs
are subject to capitalization beginning when a product's technological
feasibility has been established and ending when a product is available for
release to customers. For the year ended December 31, 2008, the Company
capitalized $108,957 of software development costs. No development costs were
capitalized for the year ended December 31, 2007.  The software costs
are amortized on a straight line basis over the estimated useful life of three
years. Amortization expense for the years ended December 31, 2008 and 2007 was
$22,043 and $231,383 respectively.




In
accordance with SFAS 144 “Accounting for the Impairment or Disposal of
Long-Lived Assets”, we review long-lived assets for impairment whenever
circumstances and situations change such that there is an indication that the
carrying amounts may not be recovered.  In such circumstances, we will
estimate the future cash flows expected to result from the use of the asset and
its eventual disposition.  Future cash flows are the future cash
inflows expected to be generated by an asset less the future outflows expected
to be necessary to obtain those inflows.  If the sum of the expected
future cash flows (undiscounted and without interest charges) is less than the
carrying amount of the asset, we will recognize an impairment loss to adjust to
the fair value of the asset.  On December 31, 2007 we determined the
future sales of our Sentry Predator Locator product, net of the cost of those
sales, would not be sufficient to recover any amount of the unamortized
costs.  As a result, in the fiscal year ended December 31, 2007, we
recorded an impairment to software development costs of
$270,680.


21




(f)
Goodwill and Other Intangible Assets: Under the provisions of SFAS No. 142,
"Goodwill and Other Intangible Assets", goodwill is to be tested for impairment
at least annually at the reporting unit level. In accordance with SFAS 142, we
performed impairment tests on goodwill and purchased intangible assets from the
acquisition of ETP on June 8, 2005.  The goodwill and other intangible
assets were written off after the Company performed these impairment tests and
determined that the fair value of the goodwill and other intangible assets
exceeded its carrying value.  Fair value was determined by estimates
of future cash flows.  At December 31, 2007, we determined our
projections for cash flow from the acquired assets was insufficient to support
the goodwill and other intangible assets as assets and that an immediate
impairment write-off was in order. Pursuant to the impairment tests, goodwill
and unamortized intangibles totaling $998,580 were written off as of December
31, 2007.





Results
of Operations





Comparison
of the Results for the Years Ended December 31, 2008 and 2007
(Restated)





During
the year ended December 31, 2008, the Company had revenues of $93,371, net of
discounts, from sales of software products.  The cost of these sales
totaled $243,678.  Gross margin was a negative $150,307.  The
Company’s net loss was $5,190,030, of which $3,766,437 was the loss from
operations.





During
the year ended December 31, 2007, the Company had revenues of $84,570, net of
discounts, from sales of software products.  The cost of these sales
totaled $46,041.  Gross profit was $38,529.  The Company’s net loss
was $6,761,492, of which $3,645,038 was the loss from operations.





Revenue
for the years ended December 31, 2008 and 2007 was $93,371 and $84,570,
respectively, an increase of $8,801. The increase relates to an increase in
on-line sales. Consistent with the 2008 strategy, 32% of all sales in the fiscal
year ended December 31, 2008 were related to online sales.  Also in
the year ended December 31, 2008 sales from distributors totaled $63,144. In
prior comparable year, sales consisted of online sales of $30,131 (or 36% of
total sales), deferred revenue of $48,832 and $5,607 of sales from
distributors.





Cost of
sales for the year ended December 31, 2008 was $24,009 for direct costs of
software sales and a write off of inventory of $219,669.  This
resulted in a negative gross margin of $150,307 for fiscal year
2008.  The inventory consisted of the older products, and had no
salable value, as the Company’s focus is on-line sales. Cost of sales for the
year ended December 31, 2007 was $46,041, a gross margin of 46%. Without the
inventory write off, gross profit for the year ended December 31, 2008 was
$69,632, a gross margin of 74%.





Selling
costs decreased to $116,030 from $291,053 for the fiscal years ended December
31, 2008 and 2007, respectively.  This is directly attributable to the
Company’s focus on reducing costs in 2008.  Advertising and
promotional costs were $211,870 for the year ended December 31, 2007 compared to
$82,574 for the year ended December 31, 2008.


22





Website
costs decreased by approximately $60,000 for the year ended December 31, 2008
from the prior year primarily as a result of the Company’s capitalization of the
software development of $108,957.  Thus, the total expenditures on
website costs increased for the year ended December 31, 2008 from the prior year
ended December 31, 2007 by approximately $49,000.  This increased
spending is a direct result of the development of our Pulse product, offset by
decreased spending on the Sentry products as these products only required
maintenance in 2008.





General
and administrative expenses increased to $3,013,040 from $2,881,095 for the
years ended December 31, 2008 and 2007, respectively.  The increase of
$131,091, consists of the following changes:





·
            Compensation
      costs (which includes stock compensation, salaries, taxes and benefits)
      increased $541,254 for the fiscal year ended December 31, 2008 compared to
      the prior year ended December 31, 2007.  The increase in overall
      compensation costs is a result of decreased salaries and taxes of
      approximately $208,000, an increase in stock based compensation of
      approximately $745,000.  The decrease in salaries resulted from
      reduced full time employees from fiscal year ended December 31, 2007
      compared to December 31, 2008.  The increase in stock
      compensation is a result of the restricted shares issued in connection
      with the legal settlement (Note 15 to the Financial Statements) of
      $315,750, and additional compensation to consultants and employees in the
      form of stock and options.





·
            Professional
      fees (which includes accounting/auditing, consulting and legal fees),
      decreased $250,726 for the fiscal year ended December 31,
      2008.  This decrease is primary a result of vigorously defending
      and asserting counterclaims in legal proceedings in the fiscal year ended
      December 31, 2007.





·
            Office
      expenses (which includes rent, telephone, utilities and supplies)
      decreased $54,437 for the fiscal year ended December 31,
      2008.  The decrease is attributable to one of the leases
      expiring in August 2008, and the cost reducing strategy the Company
      enforced in the current fiscal
year.





Interest
expense for the year ended December 31, 2008 and 2007 (as restated) was
$1,408,999 and $1,617,576, respectively, a decrease of $208,577. This decrease
in interest expense is a result of the Company converting $1,388,000 in the
first quarter of fiscal year 2008.  Convertible notes outstanding
totaled $668,000 and $2,156,000 at December 31, 2008 and 2007, respectively.
Included in interest expense is the recognition of amortization expense on the
beneficial conversion feature of the convertible notes and the discount related
to the value of the warrants which totaled approximately $97,000 and $717,000
for the year ended December 31, 2008 and 2007, respectively, a decrease of
$620,000. In addition, interest expense is comprised of interest incurred as a
result of the modification of warrant exercise price and debt conversion price
amounting to $1,089,000 and $497,000 in the years ending 2008 and 2007
(Restated), respectively. The decrease is offset by an increase in interest
related to the modification of debt of approximately $500,000.





Goodwill
and other intangible assets were written off after the Company performed
impairment tests, in accordance with SFAS 142, and determined that the fair
value of the goodwill and other intangible assets exceeded its carrying value.
Pursuant to the impairment tests, goodwill and unamortized intangibles totaling
$1,269,260 were written off as of December 31, 2007. No impairment charges
resulted from this evaluation for the year ended December 31,
2008.


23





Amortization
expense from deferred financing costs totaled $67,348 and $164,586 for the years
ended December 31, 2008 and 2007, respectively, a decrease of $97,238, which is
due to the fact that the amortization period ended in the third quarter of
2008.





Liquidity
and Capital Resources





The
Company's liquidity and capital needs relate primarily to working capital and
other general corporate requirements.  To date, the Company has funded
its operations with stockholder loans and by issuing notes and by the sale of
common stock.  Since inception, the Company has not generated any
significant cash flows from operations.  At December 31, 2008, the
Company had cash and cash equivalents of $25,217 and a working capital
deficiency of $3,802,349.  If the Company does not generate sufficient
revenues from the sales of its products in an amount necessary to meet its cash
needs, the Company would need additional financing to continue to operate. As
the Company increases sales from its products and services, the Company expects
to increase cash flows from operations.





Net cash
used in operating activities for the year ended December 31, 2008 was $1,179,732
compared to net cash used in operating activities for the prior comparable year
of $2,427,318, a decrease in expenditures of $1,247,586, which relates to the
greater net loss from the fiscal year ended December 31, 2007.





Net cash
used in investing activities for the years ended December 31, 2008 and 2007 was
$110,959 and $9,192, respectively.  The current fiscal year additions
were primarily attributable to software costs of $108,957 and the prior
comparable fiscal year is attributable primarily to equipment purchases of
$9,192.





Net cash
provided from financing activities was $1,311,087 and $2,311,896 for the years
ended December 31, 2008 and 2007, respectively. The decrease was a result of the
Company’s inability to sell common and preferred shares in the fiscal year ended
December 31, 2008 as compared to the $2,174,000 sale of the Company’s Series A
7% Convertible Preferred Stock and restricted common stock in the same period in
the prior year. Offsetting the decrease was the current fiscal year increase in
net proceeds from bridge loans of $605,000.





10% Convertible
Notes


During
2005 and 2006, the Company raised capital via a private placement to accredited
investors of units (“Units”) consisting of (a) a 10% convertible note in the
principal amount of $10,000 and (b) warrants to purchase 10,000 shares of common
stock, exercisable at $0.50 per share, for a purchase price of $10,000 per Unit.
The convertible notes mature in two years from the date of issue, if not
converted earlier. The Notes are convertible at any time at the option of the
holder into Common Stock at the conversion rate of $0.40 per share. As of
December 31, 2008, the Company raised a gross amount of $2,895,000 from the
offerings. As of December 31, 2008, $2,152,000 principal amount of the 10%
convertible notes was converted into common stock and $75,000 was
paid.


24





10% Promissory
Notes





Additionally,
on October 31, 2006 the Company began a private placement to accredited
investors of 10% short term promissory notes. These notes are payable the
earlier of one year from the issue date or the Company’s next qualified
financing as defined. The notes bear an interest rate of 10% per annum, payable
at the end of the term and the holders also received restricted shares of the
Company’s Common Stock equal to the face value of their note. The notes are
secured by a pledge of the Company’s common stock owned by its former Chief
Executive Officer, William Bozsnyak. As of December 31, 2008, the Company has
raised a total gross amount of $285,000, from these notes. As of December 31,
2008, a total of $285,000 of the 10% short term promissory notes have been
repaid or converted into common stock.





Preferred
Stock





In February 2007, the Company sold an
aggregate of 400,764 shares of its Series A 7% Convertible Preferred Stock and
warrants to purchase an aggregate of 1,001,910 shares of the Company’s common
stock at an exercise price of $.26 per share, receiving proceeds totaling
$1,050,000. Additionally on March 9, 2007, the Company issued an aggregate of
13,736 shares of the Series A 7% Convertible Preferred Stock and warrants to
purchase an aggregate of 34,340 shares of the Company’s common stock at an
exercise price of $.26 per share in satisfaction of short term bridge notes and
accrued interest totaling $35,988.





On May 17, 2007, the Company sold an
aggregate of 95,420 shares of the Series A 7% Convertible Preferred Stock
receiving proceeds totaling $250,000.  Additionally on June 1, 2007,
the Company sold an aggregate of 95,420 shares of the Series A 7% Convertible
Preferred Stock receiving proceeds totaling $250,000.





On July
13, 2007, the Company, through a private sale, sold an aggregate of 95,420
shares of the Series A 7% Convertible Preferred Stock and warrants to purchase
an aggregate of 954,200 shares of the Company’s common stock at an exercise
price of $.20 per share and received net proceeds of $250,000.





Warrants





On July 31, 2007, the Company, through
a private sale, sold an aggregate of 384,615 shares of the Company's restricted
common stock and warrants to purchase an aggregate of 954,200 shares of the
Company’s common stock at an exercise price of $.26 per share and received net
proceeds of $100,000.


25


On
December 10, 2007, the Company issued 140,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $17,800. On December 18, 2007,
the Company issued 50,000 shares of the Company’s restricted common stock upon
the exercise of warrants issued with the Company’s 10% convertible notes and
received net proceeds of $7,000.





During
the fiscal year ended December 31, 2008, the Company issued 2,871,400
warrants in connection with sales of its restricted common
stock. For the year ended December 31, 2008, 3080,276 of
warrants were exercised for total proceeds of approximately
$114,000.





Short Term Bridge Notes
Payable





On October 4, 2007, the Company issued
a short term promissory note in the principal amount of $150,000. This note was
payable on June 30, 2008 and bears an interest rate equal to the prime rate plus
three percent, 6.25% and 10.25% per annum at December 31, 2008 and 2007,
respectively.  As of December 31, 2008, $150,000 is
outstanding.





On
November 7, 2007 the Company began a private placement to accredited investors
of 10% short term promissory notes. These notes are payable the earlier of
August 15, 2008 or when the Company raises $1,000,000 in its next qualified
financing as defined. The notes bear interest at a rate of 10% per annum,
payable at the end of the term. The principal amounts of the notes are
convertible into the Company’s common stock by the holder, at any time prior to
the repayment of the principal, at the rate of $0.15 per share. As of December
31, 2008, the Company has raised a total gross amount of $300,000, from these
notes.  As of December 31, 2008, $300,000 of these short term
promissory notes are outstanding.





During
2008, the Company began separate private placements to accredited investors of
10% short term promissory notes. These notes have maturity dates ranging from a
period of three months to twelve months, bear interest at a rate of 10% per
annum, payable at the end of the term.  The Company raised a total of
$990,000 from these promissory notes and issued 1,835,000 restricted shares of
the Company’s common stock to the note holders. The principal amounts of the
notes are convertible into the Company’s common stock by the holder, at any time
prior to the repayment of the principal, at rates ranging from $0.14 to $0.20
per share. As of December 31, 2008, the Company has repaid $150,000 of these
notes. As of December 31, 2008, a total of $840,000 of these short term
promissory notes are outstanding.





As of
December 31, 2008, the Company short term bridge notes payable principal balance
amounted to $1,290,000, $710,000 of which was in default for non payment at year
end.





The above
shares of common stock were issued pursuant to the exemption from registration
under Section 4 (2) of the Securities Act.





While the
Company has raised capital from equity and debt transactions as mentioned above,
we are dependent on improved operating results and raising additional funds over
the next twelve month period. There are no assurances that we will be able to
raise additional funding. In the event that we are unable to generate sufficient
cash flow or receive proceeds from offerings of debt or equity securities, the
Company may be forced to curtail or cease its activities.


26




Research
and Development




Research
and development costs are generally expensed as incurred. In accordance with the
provisions of SFAS No. 86, "Accounting for the costs of computer software to be
sold or otherwise marketed," software development costs are subject to
capitalization beginning when a product's technological feasibility has been
established and ending when a product is available for release to customers. For
the year ended December 31, 2008, the Company capitalized $108,957 of software
development costs. No development costs were capitalized for the year ended
December 31, 2007.  The software costs are amortized on a straight
line basis over the estimated useful life of three years. Amortization expense
for the years ended December 31, 2008 and 2007 was $22,043 and $231,383
respectively.




In accordance with SFAS 144 “Accounting
for the Impairment or Disposal of Long-Lived Assets”, we review long-lived
assets for impairment whenever circumstances and situations change such that
there is an indication that the carrying amounts may not be
recovered.  In such circumstances, we will estimate the future cash
flows expected to result from the use of the asset and its eventual
disposition.  Future cash flows are the future cash inflows expected
to be generated by an asset less the future outflows expected to be necessary to
obtain those inflows.  If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, we will recognize an impairment loss to adjust to the fair value of
the asset.  On December 31, 2007 we determined the future sales of our
Sentry Predator Locator product, net of the cost of those sales, would not be
sufficient to recover any amount of the unamortized costs.  As a
result, we recorded an impairment to software development costs of
$270,680.




The Company continually strives to
enhance and improve the functionality of its software products.  As
such all new programming must be tested, even if it is only a small component of
a larger existing element of the software, before being released to the public.
Testing is an ongoing process and generally occurs in three areas. First,
upgrades and enhancements are done on a continual basis to prolong the lifecycle
of the products and as new enhancements and upgrades are completed, each item
must be tested for performance and function. Testing is also performed to assure
that new components do not adversely affect existing software. Finally, as with
all software, testing must assure compatibility with all third party software,
new operating systems and new hardware platforms.





Recent
Accounting Pronouncements Affecting the Company:




On
October 10, 2008 the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 157-3, Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active. This FASB Staff Position (FSP) clarifies
the application of FASB Statement No. 157, Fair Value Measurements, in a market
that is not active and provides an example to illustrate key considerations in
determining the fair value of a financial asset when the market for that
financial asset is not active. Statement 157 was issued in September 2006, and
is effective for financial assets and financial liabilities for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. The Company adopted SFAS 157-3 and
determined that it had minimal impact, if any, as of December 31, 2008 and for
the year then ended. The Company will continue to evaluate the impact, if any,
of SFAS 157-3 on our financial statements.
  On
September 16, 2008, the FASB issued final Staff Position (FSP) No. EITF 03-6-1,
“Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities,” to address the question of whether instruments
granted in share-based payment transactions are participating securities prior
to vesting. The FSP determines that unvested share-based payment awards that
contain rights to dividend payments should be included in earnings per share
calculations. The guidance will be effective for fiscal years beginning after
December 15, 2008. The Company is currently evaluating the requirements of (FSP)
No. EITF 03-6-1, as well as the impact of the adoption on our consolidated
financial statements.


In
May 2008, the Financial Accounting Standards Board (“FASB”) issued FASB
Staff Position (“FSP”) APB 14-1, Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement). FSP APB 14-1 clarifies that convertible debt instruments that may
be settled in cash upon either mandatory or optional conversion (including
partial cash settlement) are not addressed by paragraph 12 of APB Opinion
No. 14, Accounting for Convertible Debt and Debt issued with Stock Purchase
Warrants. Additionally, FSP APB 14-1 specifies that issuers of such instruments
should separately account for the liability and equity components in a manner
that will reflect the entity’s nonconvertible debt borrowing rate when interest
cost is recognized in subsequent periods. FSP APB 14-1 is effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. We will adopt FSP APB 14-1
beginning in the first quarter of fiscal 2010, and this standard must be applied
on a retrospective basis. We are evaluating the impact the adoption of FSP APB
14-1 will have on our consolidated financial position and results of
operations.


27





In
May 2008, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 162, The Hierarchy of Generally Accepted Accounting
Principles. This standard is intended to improve financial reporting by
identifying a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with generally accepted accounting principles in the United States
for non-governmental entities. SFAS No. 162 is effective 60 days following
approval by the U.S. Securities and Exchange Commission (“SEC”) of the Public
Company Accounting Oversight Board’s amendments to AU Section 411, The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles. We do not expect SFAS No. 162 to have a material impact on the
preparation of our consolidated financial statements.





In
March 2008, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 161, "Disclosures about
Derivative Instruments and Hedging Activities, an amendment of FASB Statement
No. 133" ("SFAS 161"). SFAS 161 requires enhanced disclosures
regarding an entity's derivative and hedging activities. These enhanced
disclosures include information regarding how and why an entity uses derivative
instruments; how derivative instruments and related hedge items are accounted
for under SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities", and its related interpretations; and how derivative instruments and
related hedge items affect an entity's financial position, financial performance
and cash flows. SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008. The
adoption of SFAS 161 will not have a material impact on our financial
position, results of operations or liquidity since we currently do not enter
into derivatives or other hedging instruments.





Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date are
not expected to have a material impact on the financial statements upon
adoption.




ITEM
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


28




INDEX




Page
      No.FINANCIAL
      STATEMENTS:Report
      of Independent Registered Public Accounting Firm
                            
                            F-1Consolidated
      Balance Sheets as at December 31, 2008 and 2007 (restated)
                            
                            F-2 - F-3Consolidated
      Statements of OperationsFor
      the Years Ended December 31, 2008 and 2007 (restated)
                            
                            F-4Consolidated
      Statement of Stockholders' DeficitFor
      the Years ended December 31, 2008 and 2007 (restated)
                            
                            F-5Consolidated
      Statements of Cash FlowsFor
      the Years Ended December 31, 2008 and 2007 (restated)
                            
                            F-6 - F-7Notes
      to Consolidated Financial Statements
                            
                            F-8 - F-28





Report of Independent
Registered Public Accounting Firm




To the
Board of Directors and Shareholders of SearchHelp, Inc.


Syosset,
New York




We have
audited the accompanying consolidated balance sheets of SearchHelp, Inc. and
Subsidiaries as of December 31, 2008 and 2007 (as restated), and the related
consolidated statements of operations, stockholders' deficit, and cash flows for
the years ended December 31, 2008 and December 31, 2007 (as restated). These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on the consolidated
financial statements based on our audits.




We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. The Company is not
required to have, nor were we engaged to perform, an audit of its internal
controls over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall presentation of the financial statements. We believe that our audits
provide a reasonable basis for our opinion.




In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of SearchHelp, Inc. and
Subsidiaries at December 31, 2008 and December 31, 2007 (as restated), and the
results of their operations and their cash flows for the year ended December 31,
2008 and December 31, 2007 (as restated) in conformity with accounting
principles generally accepted in the United States of America.




The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has suffered recurring losses
from operations and has negative working capital and a net capital deficiency
that raise substantial doubt about its ability to continue as a going concern.
Management's plans in regard to these matters are also described in Note 1.
These consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.




The financial statements for
the year ended December 31, 2007 have been restated (see Note 2).




/s/ Sherb
& Company LLP




New York,
New York


April 14,
2009




F-1


SEARCHHELP,
INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS




ASSETS





December
      31,
                  
                  
                  December
      31,2008
                  
                  
                  2007(Restated)Current
      assets:Cash
                  
                  $
                  25,217
                  
                  
                  $
                  4,821Accounts
      receivable less allowance for doubtful accounts of $250 and $99,303,
      respectively
                  
                  
                  1,891
                  
                  
                  
                  89,049Inventories
                  
                  
                  -
                  
                  
                  
                  248,148Prepaid
      expenses
                  
                  
                  18,780
                  
                  
                  
                  5,409Total
      current assets
                  
                  
                  45,888
                  
                  
                  
                  347,427Property
      and equipment - net
                  
                  
                  130,953
                  
                  
                  
                  155,726Other
      assets:Capitalized
      software costs, less amortization of $22,043 and $0,
      respectively
                  
                  
                  86,914
                  
                  
                  
                  -Deferred
      finance costs, less amortization of $330,339 and $262,991,
      respectively
                  
                  
                  10,000
                  
                  
                  
                  67,348Security
      deposit
                  
                  
                  13,454
                  
                  
                  
                  13,454Intangible
      assets, less amortization of $28,970 and $0, respectively
                  
                  
                  9,657
                  
                  
                  
                  -Total
      other assets
                  
                  
                  120,025
                  
                  
                  
                  80,802Total
      assets
                  
                  $
                  296,866
                  
                  
                  $
                  583,955





See notes
to consolidated financial statements


F-2


SEARCHHELP,
INC. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS (Continued)





LIABILITIES AND
STOCKHOLDERS' DEFICIT





December
      31,
                          
                          
                          December
      31,2008
                          
                          
                          2007(Restated)Current
      liabilities:Note
      payable - bank
                          
                          $
                          49,007
                          
                          
                          $
                          54,697Current
      portion of long term debt and capital leases
                          
                          
                          57,101
                          
                          
                          
                          42,788Current
      portion of 10% convertible notes payable  - net of discount of
      $0 and $96,567, respectively
                          
                          
                          668,000
                          
                          
                          
                          2,059,433Short
      term bridge notes payable, net of discount of $59,279 and $0,
      respectively
                          
                          
                          1,230,721
                          
                          
                          
                          475,000Due
      to executive stockholders
                          
                          
                          887,755
                          
                          
                          
                          397,877Due
      to affiliates
                          
                          
                          47,671
                          
                          
                          
                          47,907Accounts
      payable
                          
                          
                          538,158
                          
                          
                          
                          627,162Accrued
      expenses
                          
                          
                          369,824
                          
                          
                          
                          114,525Total
      current liabilities
                          
                          
                          3,848,237
                          
                          
                          
                          3,819,389Other
      liabilities:Obligations
      under capital lease, net of current portion
                          
                          
                          59,325
                          
                          
                          
                          95,600Note
      payable - equipment, net of current portion
                          
                          
                          7,377
                          
                          
                          
                          12,405Deferred
      rent
                          
                          
                          9,498
                          
                          
                          
                          9,778Total
      liabilities
                          
                          
                          3,924,437
                          
                          
                          
                          3,937,172Stockholders'
      deficitPreferred
      stock - $.0001 par value,  authorized  - 25,000,000
      shares; issued and outstanding - 901,237
                          
                          
                          90
                          
                          
                          
                          90Common
      stock - $.0001 par value,  authorized  - 250,000,000
      shares; issued and outstanding -71,787,304 and 45,139,182, shares,
      respectively
                          
                          
                          7,178
                          
                          
                          
                          4,517Additional
      paid-in capital
                          
                          
                          19,214,710
                          
                          
                          
                          14,301,695Accumulated
      deficit
                          
                          
                          (22,849,549
                          )
                          
                          
                          (17,659,519
                          )Total
      stockholders'  deficit
                          
                          
                          (3,627,571
                          )
                          
                          
                          (3,353,217
                          )Total
      liabilities and stockholders' deficit
                          
                          $
                          296,866
                          
                          
                          $
                          583,955





See notes
to consolidated financial statements


F-3


SEARCHHELP,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS





For the Years Ended December
      31,2008
                                            
                                            
                                            2007(Restated)Revenues
                                            
                                            $
                                            93,371
                                            
                                            
                                            $
                                            84,570Cost
      of Sales
                                            
                                            
                                            24,009
                                            
                                            
                                            
                                            46,041Write
      off of inventory
                                            
                                            
                                            219,669
                                            
                                            
                                            
                                            -243,678
                                            
                                            
                                            
                                            46,041Gross
      (Loss) Profit
                                            
                                            
                                            (150,307
                                            )
                                            
                                            
                                            38,529Operating
      expenses:Selling
                                            
                                            
                                            116,030
                                            
                                            
                                            
                                            291,053Web
      site costs
                                            
                                            
                                            121,123
                                            
                                            
                                            
                                            181,217General
      and administrative
                                            
                                            
                                            3,013,034
                                            
                                            
                                            
                                            2,881,095Depreciation
      and amortization
                                            
                                            
                                            365,943
                                            
                                            
                                            
                                            330,202Total
      operating expenses
                                            
                                            
                                            3,616,130
                                            
                                            
                                            
                                            3,683,567Loss
      from operations
                                            
                                            
                                            (3,766,437
                                            )
                                            
                                            
                                            (3,645,038
                                            )Other
      Expenses (Income)Interest
                                            
                                            
                                            1,408,999
                                            
                                            
                                            
                                            1,617,576Interest
      - related party
                                            
                                            
                                            10,639
                                            
                                            
                                            
                                            44,620Other
      (income) loss
                                            
                                            
                                            (63,393
                                            )
                                            
                                            
                                            20,412Amortization
      of deferred financing costs
                                            
                                            
                                            67,348
                                            
                                            
                                            
                                            164,586Write
      off of asset for impairment
                                            
                                            
                                            -
                                            
                                            
                                            
                                            1,269,260Total
      other expenses (income)
                                            
                                            
                                            1,423,593
                                            
                                            
                                            
                                            3,116,454Net
      loss
                                            
                                            
                                            (5,190,030
                                            )
                                            
                                            
                                            (6,761,492
                                            )Deemed
      preferred stock dividend
                                            
                                            
                                            -
                                            
                                            
                                            
                                            1,571,731Net
      loss applicable to common stockholders
                                            
                                            $
                                            (5,190,030
                                            )
                                            
                                            $
                                            (8,333,223
                                            )Per
      share dataLoss
      per share - basic and diluted
                                            
                                            $
                                            (0.08
                                            )
                                            
                                            $
                                            (0.21
                                            )Weighted
      average number of shares outstanding basic and diluted
                                            
                                            
                                            65,171,825
                                            
                                            
                                            
                                            39,202,017





See notes to consolidated financial
statements


F-4


SEARCHHELP,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF STOCKHOLDERS' DEFICIT


FOR THE
YEARS ENDED DECEMBER 31, 2008 AND 2007 (Restated)




Additional
                                      
                                      
                                      
                                      
                                      
                                      TotalPreferred Stock
                                      
                                      
                                      Common Stock
                                      
                                      
                                      Paid-In
                                      
                                      
                                      Accumulated
                                      
                                      
                                      Stockholders'Shares
                                      
                                      
                                      Amount
                                      
                                      
                                      Shares
                                      
                                      
                                      Amount
                                      
                                      
                                      Capital
                                      
                                      
                                      Deficit
                                      
                                      
                                      DeficitBalance
      at December 31, 2006
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      38,152,636
                                      
                                      
                                      
                                      3,815
                                      
                                      
                                      
                                      9,443,982
                                      
                                      
                                      
                                      (10,898,027
                                      )
                                      
                                      
                                      (1,450,230
                                      )Common
      stock issued in connection with bridge loans
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      10,000
                                      
                                      
                                      
                                      1
                                      
                                      
                                      
                                      3,869
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      3,870Common
      stock issued in connection with conversion of notes
payable
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      4,582,206
                                      
                                      
                                      
                                      458
                                      
                                      
                                      
                                      663,542
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      664,000Common
      stock issued as interest on debt
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      747,983
                                      
                                      
                                      
                                      78
                                      
                                      
                                      
                                      181,396
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      181,474Net
      proceeds from sale of securities
                                      
                                      
                                      796,180
                                      
                                      
                                      
                                      79
                                      
                                      
                                      
                                      384,615
                                      
                                      
                                      
                                      38
                                      
                                      
                                      
                                      2,184,883
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      2,185,000Fair
      value of warrants issued for services
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      140,270
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      140,270Common
      stock issued in connection with exercise of warrants
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      190,000
                                      
                                      
                                      
                                      19
                                      
                                      
                                      
                                      24,781
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      24,800Common
      stock issued for satisfaction of loans
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,196,742
                                      
                                      
                                      
                                      120
                                      
                                      
                                      
                                      275,131
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      275,251Preferred
      stock issued for satisfaction of loans
                                      
                                      
                                      105,057
                                      
                                      
                                      
                                      11
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      275,238
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      275,249Retirement
      of treasury stock
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      (125,000
                                      )
                                      
                                      
                                      (12
                                      )
                                      
                                      
                                      (9,988
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (10,000
                                      )Fair
      value of options issued for services
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      208,824
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      208,824Option
      expense
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      412,767
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      412,767Interest
      related to modification of exercise price of warrants
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      65,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      65,000Interest
      related to modification of conversion price of debt
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      432,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      432,000Net
      loss
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      (6,761,492
                                      )
                                      
                                      
                                      (6,761,492
                                      )Balance
      at December 31, 2007 (Restated)
                                      
                                      
                                      901,237
                                      
                                      
                                      
                                      90
                                      
                                      
                                      
                                      45,139,182
                                      
                                      
                                      
                                      4,517
                                      
                                      
                                      
                                      14,301,695
                                      
                                      
                                      
                                      (17,659,519
                                      )
                                      
                                      
                                      (3,353,217
                                      )Net
      proceeds from sale of securities
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      2,271,429
                                      
                                      
                                      
                                      227
                                      
                                      
                                      
                                      317,773
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      318,000Common
      stock issued in connection with exercise of warrants
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      3,080,276
                                      
                                      
                                      
                                      308
                                      
                                      
                                      
                                      233,913
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      234,221Common
      stock issued in connection with conversion of notes
payable
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      14,163,550
                                      
                                      
                                      
                                      1,416
                                      
                                      
                                      
                                      1,511,584
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,513,000Common
      stock issued as interest on debt
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      742,867
                                      
                                      
                                      
                                      70
                                      
                                      
                                      
                                      96,692
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      96,762Fair
      value of common stock issued for services
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      330,000
                                      
                                      
                                      
                                      33
                                      
                                      
                                      
                                      57,267
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      57,300Warrants
      issued for services
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      116,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      116,000Common
      stock issued for compensation
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      2,650,000
                                      
                                      
                                      
                                      265
                                      
                                      
                                      
                                      288,235
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      288,500Common
      stock issued for purchase of Company
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      300,000
                                      
                                      
                                      
                                      30
                                      
                                      
                                      
                                      38,970
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      39,000Common
      stock issued in connection with legal settlement
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,275,000
                                      
                                      
                                      
                                      127
                                      
                                      
                                      
                                      165,623
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      165,750Restricted
      stock issued in connection with bridge notes payable
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,835,000
                                      
                                      
                                      
                                      184
                                      
                                      
                                      
                                      173,328
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      173,512Warrant
      issued in connection with bridge notes payable
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      67,733
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      67,733Beneficial
      conversion feature issued in connection with bridge notes
      payable
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      69,504
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      69,504Interest
      related to modification of exercise price of warrants
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      75,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      75,000Interest
      related to modification of conversion price of debt
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,014,811
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      1,014,811Compensation
      related to modification of exercise price of warrants
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      117,000
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      117,000Option
      expense
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      569,583
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      569,583Net
      Loss
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      
                                      (5,190,030
                                      )
                                      
                                      
                                      (5,190,030
                                      )Balance
      at December 31, 2008
                                      
                                      
                                      901,237
                                      
                                      
                                      $
                                      90
                                      
                                      
                                      
                                      71,787,304
                                      
                                      
                                      $
                                      7,178
                                      
                                      
                                      $
                                      19,214,710
                                      
                                      
                                      $
                                      (22,849,549
                                      )
                                      
                                      $
                                      (3,627,571
                                      )





See notes
to consolidated financial statements




F-5




SEARCHHELP,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS




For the Years Ended December
      31,2008
                            
                            
                            2007(Restated)Cash
      flows from operating activities:Net
      loss
                            
                            $
                            (5,190,030
                            )
                            
                            $
                            (6,761,492
                            )Adjustments
      to reconcile net loss to net cash used
      in operating activities:Write
      off of inventory
                            
                            
                            219,669
                            
                            
                            
                            -Write
      off of asset for impairment
                            
                            
                            -
                            
                            
                            
                            1,269,260Deferred
      revenue
                            
                            
                            -
                            
                            
                            
                            (48,832
                            )Stock
      and options issued for services
                            
                            
                            173,300
                            
                            
                            
                            140,270Stock
      issued for debt service
                            
                            
                            96,300
                            
                            
                            
                            181,474Stock
      issued for legal settlement
                            
                            
                            165,750
                            
                            
                            
                            -Compensatory
      element of stock options
                            
                            
                            1,049,068
                            
                            
                            
                            621,591Depreciation
                            
                            
                            63,460
                            
                            
                            
                            33,886Amortization
      of deferred financing costs
                            
                            
                            67,348
                            
                            
                            
                            164,586Amortization
      of software development costs
                            
                            
                            22,043
                            
                            
                            
                            231,382Amortization
      of intangible assets
                            
                            
                            28,970
                            
                            
                            
                            64,933Amortization
      of discount related to issuance of restricted stock
                            
                            
                            135,825
                            
                            
                            
                            -Amortization
      of beneficial conversion feature
                            
                            
                            105,337
                            
                            
                            
                            347,726Amortization
      of discount related to issuance of warrants
                            
                            
                            106,875
                            
                            
                            
                            444,544Interest
      and compensation expense as a result of modificationof
      warrant exercise price
                            
                            
                            192,000
                            
                            
                            
                            65,000Interest
      expense as a result of conversion price reduction
                            
                            
                            1,014,811
                            
                            
                            
                            432,000Increase
      (decrease) in cash flows as a result ofchanges
      in asset and liability account balances:Accounts
      receivable
                            
                            
                            186,211
                            
                            
                            
                            114,129Allowance
      for doubtful accounts
                            
                            
                            (99,053
                            )
                            
                            
                            46,908Inventories
                            
                            
                            28,479
                            
                            
                            
                            (57,511
                            )Prepaid
      expenses and other assets
                            
                            
                            (13,371
                            )
                            
                            
                            12,490Deferred
      rent
                            
                            
                            (280
                            )
                            
                            
                            1,340Due
      to stockholders
                            
                            
                            301,264
                            
                            
                            
                            -Accounts
      payable and accrued expenses
                            
                            
                            166,292
                            
                            
                            
                            268,998Total
      adjustments
                            
                            
                            4,010,298
                            
                            
                            
                            4,334,174Net
      cash used in operating activities
                            
                            
                            (1,179,732
                            )
                            
                            
                            (2,427,318
                            )Cash
      flows from investing activities:Cash
      received from acquisition of Echometrix
                            
                            
                            373
                            
                            
                            
                            -Equipment
      purchases
                            
                            
                            (2,375
                            )
                            
                            
                            (9,192
                            )Capitalized
      software costs
                            
                            
                            (108,957
                            )
                            
                            
                            -Net
      cash used in investing activities
                            
                            
                            (110,959
                            )
                            
                            
                            (9,192
                            )





See notes
to consolidated financial statements




F-6




SEARCHHELP,
INC. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS (Continued)





For
      the Years Ended December 31,2008
                        
                        
                        2007(Restated)Cash
      flows from financing activities:Net
      borrowings from stockholders
                        
                        
                        117,629
                        
                        
                        
                        52,886Payment
      of due to affiliates
                        
                        
                        -
                        
                        
                        
                        (11,750
                        )Proceeds
      from warrants exercised in relation to convertible notes
      payable
                        
                        
                        114,686
                        
                        
                        
                        -Payments
      of convertible notes payable
                        
                        
                        -
                        
                        
                        
                        -Repayments
      of convertible notes payable
                        
                        
                        -
                        
                        
                        
                        (75,000
                        )Proceeds
      from bridge notes payable
                        
                        
                        990,000
                        
                        
                        
                        460,000Payments
      of bridge notes payable
                        
                        
                        (150,000
                        )
                        
                        
                        (225,000
                        )Payments
      of note payable - equipment
                        
                        
                        (4,690
                        )
                        
                        
                        (3,394
                        )Payments
      under capital lease
                        
                        
                        (58,848
                        )
                        
                        
                        (18,646
                        )Payments
      of notes payable - bank
                        
                        
                        (5,690
                        )
                        
                        
                        -Proceeds
      from sale of securities
                        
                        
                        318,000
                        
                        
                        
                        2,174,800Payments
      for deferred financing costs
                        
                        
                        (10,000
                        )
                        
                        
                        (32,000
                        )Retirement
      of treasury stock
                        
                        
                        -
                        
                        
                        
                        (10,000
                        )Net
      cash provided by financing activities
                        
                        
                        1,311,087
                        
                        
                        
                        2,311,896Net
      increase (decrease) in cash
                        
                        
                        20,396
                        
                        
                        
                        (124,614
                        )Cash
      at beginning of year
                        
                        
                        4,821
                        
                        
                        
                        129,435Cash
      at end of year
                        
                        $
                        25,217
                        
                        
                        $
                        4,821Supplemental
      Disclosure of cash flow information:Cash
      payment made during the period - Interest
                        
                        $
                        6,635
                        
                        
                        $
                        136,369Supplemental
      Schedules of Noncash  Investingand
      Financing Activities:Bridge
      notes converted into preferred stock
                        
                        $
                        -
                        
                        
                        $
                        35,000Stockholder
      loans converted to common stock/preferred stock
                        
                        $
                        -
                        
                        
                        $
                        550,500Computer
      equipment under capital lease
                        
                        $
                        36,311
                        
                        
                        $
                        71,914Stock
      issued for acquisition of Company
                        
                        $
                        39,000
                        
                        
                        $
                        -Common
      stock and options issued for services
                        
                        $
                        57,300
                        
                        
                        $
                        140,270Convertible
      notes converted to common stock
                        
                        $
                        1,513,000
                        
                        
                        $
                        664,000Debt
      discount related to restricted stock issued inconnection
      to bridge loans
                        
                        $
                        173,512
                        
                        
                        $
                        -Debt
      discount realted to warrants granted in connection to bridge
      loans
                        
                        $
                        67,733
                        
                        
                        $
                        -Debt
      discount of beneficial conversion featurein
      relation to bridge loans
                        
                        $
                        69,504
                        
                        
                        $
                        3,870





See notes
to consolidated financial statements


F-7


SEARCHHELP,
INC. AND SUBSIDIARIES


NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS


December
31, 2008 and 2007 (Restated)





NOTE 1 -
DESCRIPTION OF BUSINESS AND GOING CONCERN





SearchHelp,
Inc. develops software services committed to real-time online protection and
family safety.  The   Company develops and sells
software products that offer parental controls that enable parents, both in home
and remotely, to monitor and regulate their child’s computer
activities.  The Company, through the newly acquired EchoMetrix
division, also offers technology to corporations, within various verticals, to
help management analyze real-time, natural language express and measure
sentiment and behavior in digital content, such as blogs, forums, emails,
instant messaging and mobile text.




The
accompanying consolidated financial statements have been prepared assuming that
the Company will continue as a going concern.  As reflected in the
financial statements, the Company incurred net losses of $5,190,030 and
$6,761,492 for the years ended December 31, 2008 and 2007 (restated),
respectively.  In addition, the Company had negative working capital
of $3,802,349 and an accumulated deficit of $22,849,549 at December 31,
2008.





These
circumstances raise substantial doubt about the Company's ability to continue as
a going concern.  The consolidated financial statements do not include
any adjustments that might result from the outcome of this
uncertainty.  Management's efforts have been directed towards the
development and implementation of a plan to generate sufficient revenues to
cover all of its present and future costs and expenses.  The plan
includes, among other things, implementing numerous online sales campaigns of
parental control software, and concentrating on the new EchoMetrix
division.  The Company has spent part of 2007 and all of 2008
developing the EchoMetrix Technology.  The remainder of 2008 will be
spent signing beta users and prepare for EchoMetrix version 2.0 which is
expected to be completed early in 2009.





If the
Company does not generate sufficient revenues from the sales of its products in
an amount necessary to meet its cash needs, the Company will need additional
financing to continue to operate. As the Company increases sales from its
products and services, the Company expects to increase cash flows from
operations. The Company has been successful in raising financing from equity and
debt transactions. During 2008, the Company raised approximately $848,000 from
the private placement of common stock and warrants, and issuance of debt, and a
total of $1,488,000 of the 10% short term promissory notes have been converted
into common stock. During 2007, the Company raised $2,174,800 from the private
placement of common stock, 7% convertible preferred stock and warrants, and an
additional $460,000 principal amount of 10% short term promissory
notes.




The
accompanying consolidated financial statements have been prepared, in accordance
with accounting principles generally accepted in the United States (“U.S. GAAP”)
and pursuant to the rules and regulations of the Securities and Exchange
Commission (the “SEC”).  The accompanying consolidated financial
statements include the accounts of the Company and its wholly owned
subsidiaries. All intercompany transactions have been eliminated in
consolidation.








NOTE 2
–PRIOR PERIOD ADJUSTMENT:





In the
fourth Quarter 2007 and first Quarter 2008, the Company amended the conversion
provisions, and warrant exercising price under its 10% convertible notes by
significantly reducing the conversion price of the debt and warrant exercise
price with the conversion price reduction being contingent upon the concurrent
exercising of the warrant to purchases the Company’s common stock. The Company
did not record the interest expense and increase to additional paid in capital
associated with the accounting for the modification in accordance with U.S.
generally accepted accounting principles.




The
following adjustments are a result of an accounting change by the Company to
properly reflect the accounting for the modification of the conversion price of
the Company’s convertible notes, and the reduction in the related warrant
exercise pursuant to FAS 123 ( R).




The
Company recorded as of December 31, 2007, an increase to additional paid in
capital and net loss by $497,000, thus having no effect on the balance sheet in
2007.  The effect on the first quarter ended March 31, 2008 was an
debit to interest expense of $985,500 and the corresponding credit was to
additional paid in capital.


F-8


NOTE
      3 - SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES:




(a) Basis
of Presentation:





SearchHelp,
Inc. is organized as a single reporting unit and believes that it operates as a
single business.References in this report
to “SearchHelp”, the “Company”, “we”, “us” or “our” refers to SearchHelp Inc.
and its consolidated subsidiaries. All intercompany transactions have been
eliminated in consolidation.




(b)
Revenue Recognition:




The
Company recognizes revenues in accordance with the SEC, Staff Accounting
Bulletin 104, “Revenue Recognition” (“SAB 104”). Under SAB 104 revenue is
recognized when there is persuasive evidence of an arrangement, delivery has
occurred or services have been rendered, the sales price is determinable and
collectability is reasonably assured. Software products and services revenue is
derived via three distinct methods: direct non- consignment sales, consignment
sales and online Internet sales: (i) revenue in the form of direct non-
consignment sales of merchandise are recognized when title passes to the
customer, typically upon shipment, less an estimated reserve if return
privileges exist; (ii) revenue from consignment sales of software is recognized
when proof of sale to the end user is received; (iii) revenue from online
Internet sales is recognized upon the settlement of credit card charges,
typically within three days of the sale.  There were n consignment
sales recognized in the fiscal year ended December 31, 2008.




(c) Use
of Estimates:




The
preparation of financial statements in conformity with U.S. GAAP requires
management to make estimates and assumptions that affect certain reported
amounts and disclosures. Accordingly, actual results could differ from those
estimates.




(d)
Earnings Per Share:





The
Company utilizes Statement of Financial Accounting Standards No. 128, "Earnings
Per Share". Basic earnings per share is calculated on the weighted effect of all
common shares issued and outstanding, and is calculated by dividing net income
available to common stockholders by the weighted average shares outstanding
during the period. Diluted earnings per share, which is calculated by dividing
net income available to common stockholders by the weighted average number of
common shares used in the basic earnings per share calculation, plus the number
of common shares that would be issued assuming conversion of all potentially
dilutive securities outstanding, is not presented separately as it is
anti-dilutive. Such securities, shown below, presented on a common share
equivalent basis and outstanding as of December 31, 2008 and 2007 have been
excluded from the per share computations:


December
      31,2008
                    
                    
                    20072004
      Stock Plan Options
                    
                    
                    1,050,000
                    
                    
                    
                    1,450,000Non
      ISO Stock Options
                    
                    
                    12,388,157
                    
                    
                    
                    8,283,157Convertible
      Preferred Stock
                    
                    
                    9,012,370
                    
                    
                    
                    9,012,370Convertible
      Notes Payable
                    
                    
                    6,680,000
                    
                    
                    
                    14,373,333Warrants
                    
                    
                    12,546,084
                    
                    
                    
                    13,616,684




(e) Stock
Based Compensation:




Effective
January 1, 2006, the Company’s 2004 Stock Plan and options granted outside of
the Plan are accounted for in accordance with the recognition and measurement
provisions of Statement of Financial Accounting Standards ("FAS") No. 123
(revised 2004), Share-Based Payment ("FAS 123(R)"), which replaces FAS No. 123,
Accounting for Stock-Based Compensation, and supersedes Accounting Principles
Board Opinion ("APB") No. 25, Accounting for Stock Issued to Employees, and
related interpretations. FAS 123 (R) requires compensation costs related to
share-based payment transactions, including employee stock options, to be
recognized in the financial statements. In addition, the Company adheres to the
guidance set forth within Securities and Exchange Commission ("SEC") Staff
Accounting Bulletin ("SAB") No. 107, which provides the Staff's views regarding
the interaction between SFAS No. 123(R) and certain SEC rules and regulations
and provides interpretations with respect to the valuation of share-based
payments for public companies.


F-9




(f)
Advertising Costs:




The
Company expenses ordinary advertising and promotion costs as incurred.
Advertising and promotion costs were $82,574 and $211,870 for the years ended
December 31, 2008 and 2007, respectively.




(g)
Software Development Costs:




Research
and development costs are expensed as incurred. No research and development
costs were incurred during the years ended December 31, 2008 and
2007.




In
accordance with the provisions of SFAS No. 86, "Accounting for the costs of
computer software to be sold or otherwise marketed", software development costs
are subject to capitalization beginning when a product's technological
feasibility has been established and ending when a product is available for
release to customers. For the year ended December 31, 2008, the Company
capitalized $108,957 of software development costs. No development costs were
capitalized for the year ended December 31, 2007.  The software costs
are amortized on a straight line basis over the estimated useful life of three
years. Amortization expense for the years ended December 31, 2008 and 2007 was
$22,043 and $231,383 respectively.




(h)
Long-Lived Assets




In
accordance with SFAS 144 “Accounting for the Impairment or Disposal of
Long-Lived Assets”, we review long-lived assets for impairment whenever
circumstances and situations change such that there is an indication that the
carrying amounts may not be recovered.  In such circumstances, we will
estimate the future cash flows expected to result from the use of the asset and
its eventual disposition.  Future cash flows are the future cash
inflows expected to be generated by an asset less the future outflows expected
to be necessary to obtain those inflows.  If the sum of the expected
future cash flows (undiscounted and without interest charges) is less than the
carrying amount of the asset, we will recognize an impairment loss to adjust to
the fair value of the asset.  On December 31, 2007 we determined the
future sales of our Sentry Predator Locator product, net of the cost of those
sales, would not be sufficient to recover any amount of the unamortized
costs.  As a result, we recorded an impairment to software development
costs of $1,269,260 for the fiscal year ended December 31, 2007.




(i) Cash
Equivalents:




For
purposes of the consolidated statements of cash flows, the Company considers all
highly liquid investments with a remaining maturity of three months or less,
when purchased, to be cash equivalents.




(j)
Accounts Receivable and Allowance for Doubtful Accounts




Accounts
receivable are stated at the amount the Company expects to collect. The Company
provides an allowance for doubtful accounts equal to the estimated uncollectible
amounts. The Company’s estimate is based on historical collection experience and
a review of the current status of trade accounts receivable. It is reasonably
possible that the Company’s estimate of the allowance for doubtful accounts will
change. Accounts receivable are presented net of an allowance for doubtful
accounts of $250 and $99,303 at December 31, 2008, and 2007,
respectively.




(k) Fair
Value of Financial Instruments:




The
Company’s financial instruments are cash and cash equivalents, accounts
receivable, accounts payable, accrued expenses, notes payable, due to executive
stockholders and obligations under capital leases. The carrying amounts of
accounts receivable, inventories, and accounts payable and accrued expenses
approximates fair value due to the short term nature of these financial
instruments. The carrying value of due to executive stockholders reflects fair
value as the terms reflect market conditions at each balance sheet date. The
recorded values of notes payable and obligations under capital leases
approximate their fair values, as interest approximates market
rates.




(l)
Concentration of Credit Risk:




Financial
instruments that potentially subject the Company to concentrations of credit
risk consist principally of cash and accounts receivable. The Company from time
to time may maintain cash balances, which exceed the Federal Depository
Insurance Coverage limit. The Company performs periodic reviews of the relative
credit rating of its bank to lower its risk. Concentrations of credit risk with
respect to accounts receivable are limited because a number of geographically
diverse customers make up the Company’s customer base, thus spreading the trade
credit risk.




(m)
Inventories:




The
Company's inventory consists entirely of finished, packaged software products
and is valued at lower of cost or market price. Cost is determined on a
first-in, first-out (“FIFO”) basis.  All inventory was written off in
the fiscal year ended December 31, 2008 and a loss on the write off of $219,669
is included in the statement of operations in the cost of sales line
item.


F-10




(n)
Shipping and Handling Costs:




The
Company’s shipping and handling costs are included in cost of sales for all
periods presented. Shipping and handling costs were $7,715 and $18,611 for the
years ending December 31, 2008, and December 31, 2007,
respectively.




(o)
Property and Equipment and Depreciation:




Property
and equipment are recorded at cost. Expenditures for major additions and
improvements are capitalized and minor replacements, maintenance, and repairs
are charged to expense as incurred. When property and equipment are disposed of,
the cost and accumulated depreciation are removed from the accounts and any
resulting gain or loss is included in the results of operations for the
respective period. Depreciation is provided for over the estimated useful lives
of the related asset using the straight-line method. The estimated useful lives
for significant property and equipment categories are as follows:


Furniture and fixtures
              
              5 yearsData processing equipment
              
              3 to 5 yearsTelecommunication equipment
              
              5 yearsPurchased software
              
              3 years




(p) Goodwill Intangible Assets
and Amortization:




Under the
provisions of SFAS No. 142, "Goodwill and Other Intangible Assets", goodwill is
to be tested for impairment at least annually at the reporting unit level. In
accordance with SFAS 142, we performed impairment tests on goodwill and
purchased intangible assets from the acquisition of ETP on June 8,
2005.  The goodwill and other intangible assets were written off after
the Company performed these impairment tests and determined that the fair value
of the goodwill and other intangible assets exceeded its carrying
value.  Fair value was determined by estimates of future cash
flows.  At December 31, 2007, we determined our projections for cash
flow from the acquired assets was insufficient to support the goodwill and other
intangible assets as assets and that an immediate impairment write-off was in
order. Pursuant to the impairment tests, goodwill and unamortized intangibles
totaling $998,580 were written off as of December 31, 2007. No impairment
charges resulted from this evaluation for the year ended December 31,
2008.




In April
of 2008, the Company purchased all of the stock of EchoMetrix Inc., in exchange
for 300,000 shares of the Company’s common stock.  The acquisition
resulted in $373 of cash, and the difference between the purchase price and the
net assets acquired was recorded as an intangible asset, approximately $38,627.
The Company is amortizing the intangible over a twelve month
period.  Intangible assets subject to amortization are amortized on a
straight-line basis over their estimated useful lives. The amortization expense
for the years ended December 31, 2008 and 2007 was $28,970 and $64,933
respectively.




(q)
Deferred Financing Costs:




The
Company incurred financing costs related to its borrowings. Such costs are
deferred and amortized generally by the straight-line method over the life of
the underlying borrowings. In case the amount is repaid before maturity, the
related unamortized amount is written off in the statement of operations. The
Company amortized $67,403 and $164,586 of deferred financing costs for the years
ended December 31, 2008 and 2007, respectively.




(r)
Recently Issued Accounting Pronouncements Affecting The Company:





On
October 10, 2008, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 157-3, Determining the Fair Value of a Financial Asset When the
Market for That Asset Is Not Active. This FASB Staff Position (FSP) clarifies
the application of FASB Statement No. 157, Fair Value Measurements, in a market
that is not active and provides an example to illustrate key considerations in
determining the fair value of a financial asset when the market for that
financial asset is not active. Statement 157 was issued in September 2006, and
is effective for financial assets and financial liabilities for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years. The Company adopted SFAS 157-3 and
determined that it had minimal impact, if any, as of December 31, 2008 and for
the year then ended. The Company will continue to evaluate the impact, if any,
of SFAS 157-3 on our financial statements.




On
September 16, 2008, the FASB issued final Staff Position (FSP) No. EITF 03-6-1,
“Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities,” to address the question of whether instruments
granted in share-based payment transactions are participating securities prior
to vesting. The FSP determines that unvested share-based payment awards that
contain rights to dividend payments should be included in earnings per share
calculations. The guidance will be effective for fiscal years beginning after
December 15, 2008. The Company is currently evaluating the requirements of (FSP)
No. EITF 03-6-1, as well as the impact of the adoption on our consolidated
financial statements.


F-11


In
May 2008, the Financial Accounting Standards Board (“FASB”) issued FASB
Staff Position (“FSP”) APB 14-1, Accounting for Convertible Debt Instruments
That May Be Settled in Cash upon Conversion (Including Partial Cash
Settlement). FSP APB 14-1 clarifies that convertible debt instruments that may
be settled in cash upon either mandatory or optional conversion (including
partial cash settlement) are not addressed by paragraph 12 of APB Opinion
No. 14, Accounting for Convertible Debt and Debt issued with Stock Purchase
Warrants. Additionally, FSP APB 14-1 specifies that issuers of such instruments
should separately account for the liability and equity components in a manner
that will reflect the entity’s nonconvertible debt borrowing rate when interest
cost is recognized in subsequent periods. FSP APB 14-1 is effective for
financial statements issued for fiscal years beginning after December 15,
2008, and interim periods within those fiscal years. We will adopt FSP APB 14-1
beginning in the first quarter of fiscal 2010, and this standard must be applied
on a retrospective basis. We are evaluating the impact the adoption of FSP APB
14-1 will have on our consolidated financial position and results of
operations.





In
May 2008, the FASB issued Statement of Financial Accounting Standards
(“SFAS”) No. 162, The Hierarchy of Generally Accepted Accounting
Principles. This standard is intended to improve financial reporting by
identifying a consistent framework, or hierarchy, for selecting accounting
principles to be used in preparing financial statements that are presented in
conformity with generally accepted accounting principles in the United States
for non-governmental entities. SFAS No. 162 is effective 60 days following
approval by the U.S. Securities and Exchange Commission (“SEC”) of the Public
Company Accounting Oversight Board’s amendments to AU Section 411, The
Meaning of Present Fairly in Conformity with Generally Accepted Accounting
Principles. We do not expect SFAS No. 162 to have a material impact on the
preparation of our consolidated financial statements.





In March
2008, the Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards ("SFAS") No. 161, "Disclosures about
Derivative Instruments and Hedging Activities, an amendment of FASB Statement
No. 133" ("SFAS 161"). SFAS 161 requires enhanced disclosures
regarding an entity's derivative and hedging activities. These enhanced
disclosures include information regarding how and why an entity uses derivative
instruments; how derivative instruments and related hedge items are accounted
for under SFAS 133, "Accounting for Derivative Instruments and Hedging
Activities", and its related interpretations; and how derivative instruments and
related hedge items affect an entity's financial position, financial performance
and cash flows. SFAS 161 is effective for financial statements issued for
fiscal years and interim periods beginning after November 15, 2008. The
adoption of SFAS 161 will not have a material impact on our financial
position, results of operations or liquidity since we currently do not enter
into derivatives or other hedging instruments.





Other
accounting standards that have been issued or proposed by the FASB or other
standards-setting bodies that do not require adoption until a future date are
not expected to have a material impact on the financial statements upon
adoption.





NOTE 4 -
EMPLOYEE STOCK COMPENSATION





The
Company’s 2004 Stock Plan (the “Plan”), which is stockholder approved, permits
the grant of share options and shares to its employees for up to 1,500,000
shares of Common Stock as stock compensation.  All stock options under
the Plan are granted at the fair market value of the Common Stock at the grant
date. Employee stock options generally vest ratably over a three-year period and
generally expire 5 years from the grant date.  Additionally, the
Company grants options and shares to its employees outside the
Plan.





Accounting
for Employee Awards:


Effective
January 1, 2006, the Company’s Plan and options granted outside of the Plan are
accounted for in accordance with the recognition and measurement provisions of
Statement of Financial Accounting Standards ("FAS") No. 123 (revised 2004),
Share-Based Payment ("FAS 123(R)"), which replaces FAS No. 123, Accounting for
Stock-Based Compensation, and supersedes Accounting Principles Board Opinion
("APB") No. 25, Accounting for Stock Issued to Employees, and related
interpretations. FAS 123 (R) requires compensation costs related to share-based
payment transactions, including employee stock options, to be recognized in the
financial statements. In addition, the Company adheres to the guidance set forth
within SEC Staff Accounting Bulletin ("SAB") No. 107, which provides the Staff's
views regarding the interaction between FAS No. 123(R) and certain SEC rules and
regulations and provides interpretations with respect to the valuation of
share-based payments for public companies.





In
adopting FAS 123(R), the Company applied the modified prospective approach to
transition. Under the modified prospective approach, the provisions of FAS
123(R) are to be applied to new awards and to outstanding awards modified,
repurchased, or cancelled after the required effective date. Additionally,
compensation cost for the portion of awards for which the requisite service has
not been rendered that are outstanding as of the required effective date shall
be recognized as the requisite service is rendered on or after the required
effective date. The compensation cost for that portion of awards shall be based
on the grant-date fair value of those awards as calculated for either
recognition or pro-forma disclosures under FAS 123.




F-12




As a
result of the adoption of FAS 123(R), the Company's results for the years ended
December 31, 2008 and 2007 include share-based compensation expense totaling
approximately $288,374 and $334,767, respectively, which have been included
in the general and administrative expenses line item.  No income tax
benefit has been recognized in the income statement for share-based compensation
arrangements as the Company has provided a 100% valuation allowance on its’ net
deferred tax asset.





Stock
option compensation expense is the estimated fair value of options granted
amortized on a straight-line basis over the requisite service period for the
entire portion of the award. The Company has not adjusted the expense by
estimated forfeitures, as required by FAS 123(R) for employee options, since the
forfeiture rate based upon historical data was determined to be
immaterial.





The fair
value of options at the date of grant is estimated using the Black-Scholes
option pricing model. During the years ended December 31, 2008 and 2007, the
assumptions made in calculating the fair values of options are as
follows:





For the Years Ended December
                        31,2008
                      
                      
                      2007Expected
      term (in years)
                      
                      
                      5
                      
                      
                      
                      5Expected
      volatilty
                      
                      
                      87.73%-99.89
                      %
                      
                      
                      86.26%-91.99
                      %Expected dividend yield
                      
                      
                      0
                      %
                      
                      
                      0
                      %Risk-free interest rate
                      
                      
                      3.47%-4.95
                      %
                      
                      
                      3.83%-5.26
                      %





Accounting for Non-employee Awards:


The Company
previously accounted for options granted to its non-employee consultants using
the fair value cost in accordance with FAS 123 and EITF No.
96-18.  The adoption of FAS 123(R) and SAB 107 as of January 1, 2006,
had no material impact on the accounting for non-employee awards.  The
Company continues to utilize the additional guidance set forth in EITF Issue No.
96-18, “Accounting for Equity Instruments That Are Issued to Other Than
Employees” (“EITF 96-18”).





Stock
compensation expense related to non-employee options was approximately $193,333
and $78,000 for the years ended December 31, 2008 and 2007,
respectively.  These amounts are included in the Consolidated
Statements of Operations within the general and administrative expenses line
item.





There
were 4,500,000 and 2,280,000 non-employee stock options granted in the
years ended December 31, 2008 and 2007, respectively.





The
following table represents our stock options granted, exercised, and forfeited
during 2008.





Weighted
                                        
                                        
                                        WeightedAverage
                                        
                                        
                                        AverageExercise
                                        
                                        
                                        Remaining
                                        
                                        
                                        AggregateNumber
                                        
                                        
                                        Price
                                        
                                        
                                        Contractual
                                        
                                        
                                        IntrinsicStock Options
                                        
                                        of Shares
                                        
                                        
                                        per Share
                                        
                                        
                                        Term
                                        
                                        
                                        ValueOutstanding
      at December 31, 2006
                                        
                                        
                                        9,720,000
                                        
                                        
                                        $
                                        0.32
                                        
                                        
                                        
                                        
                                        
                                        $
                                        0Granted
                                        
                                        
                                        1,013,157
                                        
                                        
                                        
                                        0.31Exercised
                                        
                                        
                                        -
                                        
                                        
                                        
                                        -Forfeited/expired
                                        
                                        
                                        (1,000,000
                                        )
                                        
                                        
                                        0.30Outstanding
      at December 31, 2007
                                        
                                        
                                        9,733,157
                                        
                                        
                                        $
                                        0.36
                                        
                                        
                                        
                                        2.6661
                                        
                                        
                                        $
                                        0Granted
                                        
                                        
                                        7,275,000
                                        
                                        
                                        
                                        0.15ExercisedForfeited/expired
                                        
                                        
                                        (3,570,000
                                        )
                                        
                                        
                                        0.31Outstanding
      at December 31, 2008
                                        
                                        
                                        13,438,157
                                        
                                        
                                        $
                                        0.24
                                        
                                        
                                        
                                        2.4235
                                        
                                        
                                        $
                                        0Exercisable
      at December 31, 2008
                                        
                                        
                                        11,493,026
                                        
                                        
                                        $
                                        0.26
                                        
                                        
                                        
                                        2.1453
                                        
                                        
                                        $
                                        0




F-13




As of
December 31, 2008, there was $422,349 of unrecognized compensation cost,
net of estimated forfeitures, related to nonvested stock options, which is
expected to be recognized over a weighted average period of approximately 2.0
years.





NOTE
      5 -   PROPERTY AND
EQUIPMENT





The
following is a summary of property and equipment, at cost less accumulated
depreciation, at December 31:





2008
                      
                      
                      2007Furniture
      and fixtures
                      
                      $
                      3,780
                      
                      
                      $
                      3,780Data
      processing equipment
                      
                      
                      212,730
                      
                      
                      
                      177,823Telecommunication
      equipment
                      
                      
                      21,262
                      
                      
                      
                      21,262Purchased
      software
                      
                      
                      2,395
                      
                      
                      
                      2,395240,167
                      
                      
                      
                      205,260Less:
      accumulated depreciation
                      
                      
                      (109,214
                      )
                      
                      
                      (49,534
                      )$
                      130,953
                      
                      
                      $
                      155,726





Depreciation
charged to operations amounted to $63,129 and $33,886 for the years ended
December 31, 2008 and 2007, respectively. Property and equipment include gross
assets acquired under capital leases of $195,325 and $159,013 at December 31,
2008 and 2007, respectively. Capital leases are included as a component of data
processing equipment. Amortization of assets under capital leases is included in
depreciation expense.





NOTE
6 -   NOTES PAYABLE - BANK





The
Company has a $50,000 revolving line of credit and a $5,000 overdraft privilege
with a bank.  At December 31, 2008 and 2007, $49,007 and $49,697 of
the line has been utilized. At December 31, 2008 and 2007, $0 and $5,000 of the
overdraft privilege has also been utilized. Interest on borrowings is charged at
2.25% above the bank's prevailing prime rate (7.25 % at December 31, 2008 and
9.50% at December 31, 2007). Interest of $1,139 and $3,250 was charged to
operations for the years ended December 31, 2008 and 2007, respectively. The
debt is guaranteed personally by the former CEO of the Company and is
collateralized by marketable securities owned by him which had a fair market
value of approximately $35,000 at December 31, 2008.





NOTE 7
-   NOTE PAYABLE - EQUIPMENT





On July
12, 2006, the Company entered into a secured loan agreement with GE Commercial
Finance for the purchase of $21,262 of communications equipment related to the
Company’s corporate office space. This loan has a five-year term with monthly
payments of $433 including interest at the rate of 8.15% per annum and is
secured by the equipment purchased. The outstanding balance at December 31, 2008
and 2007 was $12,406 and $16,407 respectively, of which $4,341 and $4,002 is
included in current liabilities. Future principal payments under the secured
loan payable as of December 31, 2008 for each of the next three years are
$4,341, $4,708 and $3,357, respectively.





NOTE 8 -
OBLIGATIONS UNDER CAPITAL LEASE





On July
17, 2006 the Company entered into an equipment lease agreement with Citicorp
Vendor Finance for the purchase of $87,098 of computer equipment related to the
Company’s products. The lease has a five-year term and a $1 purchase option. The
Company is accounting for this obligation as a capital lease. Assets and
liabilities under capital leases are recorded at the lower of the present value
of the minimum lease payments or the fair market value of the
asset.  The assets are depreciated over the lower of their related
lease terms or their estimated useful lives.





On
September 16, 2007 the Company entered into an equipment lease agreement with GE
Capital for the purchase of $71,914 of computer equipment. The lease has a
three-year term and a $1 purchase option. The Company is accounting for this
obligation as a capital lease. Assets and liabilities under capital leases are
recorded at the lower of the present value of the minimum lease payments or the
fair market value of the asset.  The assets are depreciated over the
lower of their related lease terms or their estimated useful lives.




F-14




On
February 28, 2008 the Company entered into an equipment lease agreement with GE
Capital for the purchase of $36,312 of computer equipment. The lease has a
three-year term and a $1 purchase option. The Company is accounting for this
obligation as a capital lease. Assets and liabilities under capital leases are
recorded at the lower of the present value of the minimum lease payments or the
fair market value of the asset.  The assets are depreciated over the
lower of their related lease terms or their estimated useful lives.





Depreciation
for assets under capital leases for the years ended December 31, 2008 and 2007
amounted to $51,478 and  $23,413, respectively, and is included in
depreciation expense.





The
following is a summary of assets held under capital leases at December 31, 2008
and 2007:





December 31, 2008
                  
                  
                  December 31, 2007Data
      processing equipment, server and routers
                  
                  $
                  195,325
                  
                  
                  $
                  159,013Less:
      Accumulated depreciation
                  
                  
                  ( 82,875
                  )
                  
                  
                  ( 31,397
                  )$
                  112,450
                  
                  
                  $
                  127,616





The
minimum future lease payments under the capital lease as of December 31, 2008
for each of the next three years and in the aggregate are:





Year ending
                  
                  AmountDecember
      31, 2009
                  
                  $
                  65,077December
      31, 2010
                  
                  
                  58,148December
      31, 2011
                  
                  
                  15,889Total
      minimum lease payments
                  
                  
                  139,114Less:
      Amount representing interest
                  
                  
                  (27,029
                  )Present
      value of net minimum lease payments
                  
                  
                  112,085Less:
      current portion
                  
                  
                  (52,760
                  )Long
      term portion
                  
                  $
                  59,325





In
January 2009, the Company prepaid the Citicorp Vendor Finance lease for servers
for $50,000 in lieu of the remaining payments totaling $75,260.





NOTE
9 -   10% CONVERTIBLE NOTES
PAYABLE





During
2005 and 2006, the Company raised capital via a private placement to accredited
investors of units (“Units”), each Unit consisting of (a) a 10% convertible note
with the original principal amount of $10,000 and (b) warrants to purchase
10,000 shares of common stock, exercisable at $0.50 per share, for $10,000 per
Unit. The convertible notes mature in two years from the date of issue, if not
converted earlier. As of December 31, 2008 all of the 10% convertible notes
outstanding were in default.  The default provision requires an
additional 2% interest per annum until the loans are repaid or converted. The 2%
default penalty totaled $21,402 and is included in interest expense on the
consolidated statement of operations and in accrued expenses on the consolidated
balance sheet as of December 31, 2008. The Notes are convertible at any time at
the option of the holder into Common Stock at the conversion rate of $0.40 per
share. The Company raised a gross amount of $2,895,000 from the
offerings.  The Company allocated the proceeds received between the
debt and the warrant based upon their relative fair values.  The
resulting discount is accreted over a two year period, the life of the note,
using the effective interest method.  If the debt is converted earlier
than the maturity date, the unamortized amount will be charged to operations at
that time. When comparing the fair value of the notes to the note value there
was a beneficial conversion feature. This amount was recorded as a discount to
the notes and is accreted over the two year life of the note using the effective
interest method.  For the years ended December 31, 2008 and 2007, an
aggregate of $ 96,567 and $347,726 was charged to interest expense for the
effective interest method, respectively.





As stated
in Note 2, the Company modified certain terms of the notes, including a lower
conversion price and a lower exercise price on the warrants.  As a
result of this modification, the Company recorded an additional $497,000 for the
year ended December 31, 2007 in interest expense and a corresponding credit to
additional paid in capital.  The modification of the notes in the
fiscal quarter ended March 31, 2008 resulted in additional interest expense of
$985,000 with a credit to additional paid in capital.  The
modification of notes in the fourth quarter of fiscal year 2008 resulted in
additional interest expense of $104,311 with the offset recorded to additional
paid in capital.




F-15




As
reflected on the balance sheets at December 31, 2008 and 2007, the note value,
net of discount, was $668,000 and $2,059,433 respectively. As of December 31,
2008, $2,152,000 principal amount of notes were converted into common stock and
$75,000 of principal was paid.





As of
December 31, 2008 the notes are classified as current due to the fact that they
are in default for the non payment by the maturity date.





NOTE 10 – SHORT TERM BRIDGE
NOTES PAYABLE




On
October 31, 2006 the Company began a private placement to accredited investors
of 10% short term promissory notes. These notes are payable the earlier of one
year from the issue date or when the Company raises a certain minimum amount in
its next qualified financing as defined. The notes bear an interest rate of 10%
per annum, payable on maturity and the holders received restricted shares of the
Company’s common stock equal to the face value of their note. Additionally,
these notes are secured by a pledge of the Company’s common stock owned by its
former Chief Executive Officer.




As of
December 31, 2007, the Company has raised a gross amount of $285,000 from these
promissory notes and issued 285,000 restricted shares of the Company’s common
stock to the note holders. These shares were valued at the fair market value on
the date of each note, less an approximate 10% discount (to give effect to the
lack of liquidity for such shares), for an aggregate total of $85,095 which was
recorded as a discount to the notes with a corresponding credit to common stock
and additional paid in capital.  This discount is accreted over the
one year life of the note using the straight line method.  If the debt
is repaid earlier than the maturity date, the unamortized amount will be charged
to operations at that time. As of December 31, 2008, a total of $285,000 of the
10% short term promissory notes have been repaid or converted into common stock.





On
October 4, 2007, the Company issued a short term promissory note in the
principal amount of $150,000. This note was payable on June 30, 2008 and bears
an interest rate equal to the prime rate plus three percent, 10.25% per annum at
December 31, 2007 and is payable at the end of the term.  This note is
in default at December 31, 2008.




On
November 7, 2007 the Company began a private placement to accredited investors
of 10% short term promissory notes. These notes are payable the earlier of
August 15, 2008 or when the Company raises $1,000,000 in its next qualified
financing as defined. The notes bear interest at a rate of 10% per annum,
payable at the end of the term. The principal amounts of the notes are
convertible into the Company’s common stock by the holder, at any time prior to
the repayment of the principal, at the rate of $0.15 per share. As of December
31, 2007, the Company raised a total gross amount of $300,000, from these
notes.  As of December 31, 2008, the total of $300,000 is outstanding
and currently in default for non payment of principal on maturity
date.




During
2008, the Company began separate private placements to accredited investors of
10% short term promissory notes. These notes have maturity dates ranging from a
period of three months to twelve months, bear interest at a rate of 10% per
annum, payable at the end of the term.  The Company raised a total of
$990,000 from these promissory notes and issued 1,835,000 restricted shares of
the Company’s common stock to the note holders. The principal amounts of the
notes are convertible into the Company’s common stock by the holder, at any time
prior to the repayment of the principal, at rates ranging from $0.14 to $0.20
per share. These shares were valued at the fair market value on the date of each
note. As a result of the issuance of these convertible notes and related
restricted shares and warrants, the Company recorded a total discount of
$310,749 with a corresponding credit to common stock and additional paid in
capital. The discount is accreted over the term of the note using the straight
line method. In 2008, the Company amortized a total of $251,470 of the discount.
As of December 31, 2008, the Company has repaid $150,000 of these notes. As of
December 31, 2008, a total of $840,000 of these short term promissory notes are
currently outstanding.









F-16




NOTE
11 - DUE TO EXECUTIVE STOCKHOLDERS AND AFFILIATES




(a)       Due
to stockholders




At
December 31, 2008 and 2007, the Company was indebted to its former CEO, William
Bozsnyak, in the amounts of $163,718 and $45,719, respectively, for working
capital advances made to the Company.  On August 31, 2007, Mr.
Bozsnyak converted $550,500 of working capital loans into 1,196,742 restricted
shares of the Company’s common stock and 105,057 shares of the Company’s
Convertible Series A Preferred Stock. Subsequent to Board acceptance and
approval, on September 7, 2007 the Company issued the respective shares and an
entry was made to reduce loans payable to stockholder for $550,500 with a
corresponding credit to common stock, preferred stock and additional paid in
capital.




For the
years ended December 31, 2008 and 2007, interest expense was charged in the
amounts of $10,639 and $44,620, respectively.  The interest rate used
in this calculation is the same interest rate paid to the Company’s short term
lender under the revolving line of credit described in Note 5, 7.25% at December
31, 2008 and 9.50% at December 31, 2007. At December 31, 2007 and 2006, $163,092
and $152,453 in accrued interest was due to Mr. Bozsnyak,
respectively.




The
Company also owed Mr. Bozsnyak $1,297 and $7,987 as of December 31, 2008 and
2007, respectively, for travel expenses and online advertising incurred on
behalf of the Company. Additionally, at December 31, 2007, Brian O’Connor, a
stockholder and director, is owed $419, respectively, for travel expenses
incurred on behalf of the Company.




At
December 31, 2008 and 2007, $463,271 and $170,683, respectively, was owed for
unpaid salaries and accrued vacation to Mr. Bozsnyak, Mr. Caruso, Mr. Supinsky
and Mr. O’Connor. A total of $88,997 and $16,250 was owed to Mr. Bozsnyak
at December 31, 2008 and 2007, respectively as equity compensation per his
employment agreement.




At
December 31, 2008 and 2007, the Company owed $14,000 and $4,366, respectively,
to the chairman of the audit and compensation committees, who is a
shareholder.




(b)    Due
to affiliates




The
President of ETP has a minority interest in three affiliated
companies.  Based upon cash flow needs, there are loans made to and/or
from one of these affiliates as well as from the President of ETP directly. As
of December 31, 2008 and 2007, the Company owed one of these affiliates $47,671
and $47,907, respectively.




NOTE 12
–    ECONOMIC DEPENDENCY




The
Company sells its products on line and through distributors to major retailers
throughout the United States. At December 31, 2008, one customer accounted for
100% of the accounts receivable. At December 31, 2007, two customers, each of
which accounted for more than 10% of the Company’s accounts receivable,
accounted for 97% of total accounts receivable in the aggregate.




In 2008,
one customer accounted for 56% of the Company’s sales. In 2007, the three
largest customers, each of which accounted for more than 10% of the Company’s
sales, accounted for 98% of total sales in the aggregate. In 2007 the Company,
for reasons of convenience, consistency and economy of scale, purchased its
entire inventory from one vendor. This risk is mitigated to a great extent by
the extensive availability of similar vendors at competitive prices throughout
the United States.





NOTE
13- INCOME
TAXES





The tax
effect of the temporary differences that give rise to deferred tax assets are
presented below:





Year
      EndedDecember
      31,2008
                      
                      
                      2007(Restated)Deferred
      Tax Assets:Net
      Operating Losses
                      
                      $
                      5,820,000
                      
                      
                      $
                      4,976,000Option
      Expense
                      
                      
                      990,000
                      
                      
                      
                      513,000Accounts
      Receivable
                      
                      
                      -
                      
                      
                      
                      38,000Inventory
      Write Down
                      
                      
                      86,000
                      
                      
                      
                      -Valuation
      Allowances
                      
                      
                      (6,896,000
                      )
                      
                      
                      (5,527,000
                      )Net
      Deferred Tax Asset
                      
                      $
                      -
                      
                      
                      $
                      -




F-17




At
December 31, 2008 and 2007, a 100% valuation allowance was recorded to reduce
the Company’s net deferred tax asset to $0.  The Company could not
determine that it was more likely than not that the deferred tax asset resulting
from net operating loss carryforwards would be realized.





The
Company has generated net operating loss carryforwards aggregating approximately
$14,900,000 at December 31, 2008 for federal and state income tax
purposes.  These carryforwards are available to offset future taxable
income and expire at various dates through 2028.





A
reconciliation of the difference between the expected tax rate using the
statutory federal tax rate (34%) and the Company’s effective tax rate is as
follows:


2008
                                        
                                        
                                        2007(Restated)U.S
      federal income tax at statutory rate
                                        
                                        $
                                        (1,765,000
                                        )
                                        
                                        $
                                        (2,299,000
                                        )State
      income tax, net of federal income tax benefit
                                        
                                        
                                        (260,000
                                        )
                                        
                                        
                                        (338,000
                                        )Impairment
      of intangible assets
                                        
                                        
                                        -
                                        
                                        
                                        
                                        389,000Non
      cash interest
                                        
                                        
                                        551,000
                                        
                                        
                                        
                                        438,000Beneficial
      conversion feature
                                        
                                        
                                        41,000
                                        
                                        
                                        
                                        136,000Other
      permanent differenced
                                        
                                        
                                        65,000
                                        
                                        
                                        
                                        55,000Valuation
      tax asset allowance
                                        
                                        
                                        1,368,000
                                        
                                        
                                        
                                        1,619,000Effective
      tax rate
                                        
                                        $
                                        -
                                        
                                        
                                        $
                                        -




NOTE 14
-    EQUITY TRANSACTIONS





On
January 12, 2007, the Company issued 44,960 shares of the Company's restricted
common stock as payment in kind for interest due for the month of December 2006
on the Company’s 10% convertible notes.





On
February 7, 2007 and February 8, 2007, the Company, through a private sale, sold
an aggregate of 209,924 shares of its Series A 7% Convertible Preferred Stock
and warrants to purchase an aggregate of 524,810 shares of the Company’s common
stock at an exercise price of $.26 per share and received net proceeds of
$550,000.  Each share of Series A 7% Convertible Preferred Stock can
be converted, at any time, into ten shares of the Company’s common stock. The
exercise price of the warrants approximates the net cost of the common stock
received after conversion. The fair value of the warrants of $183,684 was
determined using the Black-Scholes option-pricing model and is considered a
deemed dividend on the Series A Preferred Stock. Due to the cumulative deficit,
dividends of $183,684 were recorded against additional paid-in
capital.





On
February 9, 2007, the Company issued 10,000 restricted shares of the Company’s
common stock in connection with its short term promissory
notes.  These shares were valued at the fair market value of $0.43,
less an approximate 10% discount (to give effect to the lack of liquidity for
such shares) or at $0.39 per share.  A total of $3,870 was recorded as
a discount to the note and is accreted over the one year life of the note. If
the debt is retired earlier than the maturity date, the unamortized amount will
be charged to operations at that time.





On
February 12, 2007, the Company issued 42,409 shares of the Company's restricted
common stock as payment in kind for interest due for the month of January 2007
on the Company’s 10% convertible notes.





On
February 20, 2007, the Company, through a private sale, sold an aggregate of
190,840 shares of Series A 7% Convertible Preferred Stock and warrants to
purchase an aggregate of 477,100 shares of the Company’s common stock at an
exercise price of $.26 per share and received net proceeds of $500,000. Each
share of Series A 7% Convertible Preferred Stock can be converted, at any time,
into ten shares of the Company’s common stock. The exercise price of the
warrants approximates the net cost of the common stock received after
conversion. The fair value of the warrants of $147,901 was determined using the
Black-Scholes option-pricing model and is considered a deemed dividend on the
Series A Preferred Stock. Due to the cumulative deficit, dividends of $147,901
were recorded against additional paid-in capital.





On March
5, 2007, the Company issued 50,000 shares of the Company's restricted common
stock upon the conversion of $20,000 principal amount of the Company’s 10%
convertible notes.




F-18




On March
8, 2007, the Company issued 29,929 shares of the Company's restricted common
stock as payment in kind for interest due for the month of February 2007 on the
Company’s 10% convertible notes.





On March
9, 2007, the Company issued an aggregate of 13,736 shares of its Series A 7%
Convertible Preferred Stock and warrants to purchase an aggregate of 34,340
shares of the Company’s common stock at an exercise price of $.26 per share in
satisfaction of short term bridge notes and accrued interest totaling $35,988.
Each share of Series A 7% Convertible Preferred Stock can be converted, at any
time, into ten shares of the Company’s common stock. The exercise price of the
warrants approximates the net cost of the common stock received after
conversion. The fair value of the warrants of $8,928 was determined using the
Black-Scholes option-pricing model and is considered a deemed dividend on the
Series A Preferred Stock. Due to the cumulative deficit, dividends of $8,928
were recorded against additional paid-in capital.





On April
4, 2007, the Company issued 36,310 shares of the Company's restricted common
stock as payment in kind for interest due for the month of March 2007 on the
Company’s 10% convertible notes.





On May 4,
2007, the Company issued 41,317 shares of the Company's restricted common stock
as payment in kind for interest due for the month of April 2007 on the Company’s
10% convertible notes.





On May
17, 2007, the Company, through a private sale, sold an aggregate of 95,420
shares of Series A 7% Convertible Preferred Stock and received net proceeds of
$250,000.  Each share of Series A 7% Convertible Preferred Stock can
be converted, at any time, into ten shares of the Company’s common
stock.





On June
1, 2007, the Company, through a private sale, sold an aggregate of 95,420 shares
of Series A 7% Convertible Preferred Stock and received net proceeds of
$250,000.  Each share of Series A 7% Convertible Preferred Stock can
be converted, at any time, into ten shares of the Company’s common
stock.





On June
5, 2007, the Company issued 53,401 shares of the Company's restricted common
stock as payment in kind for interest due for the month of May 2007 on the
Company’s 10% convertible notes.





On July
5, 2007, the Company issued 62,820 shares of the Company's restricted common
stock as payment in kind for interest due for the month of June 2007 on the
Company’s 10% convertible notes.





On July
13, 2007, the Company, through a private sale, sold an aggregate of 95,420
shares of Series A 7% Convertible Preferred Stock and warrants to purchase an
aggregate of 954,200 shares of the Company’s common stock at an exercise price
of $.20 per share and received net proceeds of $250,000. Each share of Series A
7% Convertible Preferred Stock can be converted, at any time, into ten shares of
the Company’s common stock. The fair value of the warrants of $200,382 was
determined using the Black-Scholes option-pricing model and is considered a
deemed dividend on the Series A Preferred Stock. Due to the cumulative deficit,
dividends of $200,382 were recorded against additional paid-in
capital.





On July
31, 2007, the Company, through a private sale, sold an aggregate of 384,615
shares of the Company's restricted common stock and warrants to purchase an
aggregate of 384,615 shares of the Company’s common stock at an exercise price
of $.26 per share and received net proceeds of $100,000. The exercise price of
the warrants approximates the net cost of the common stock
received.





On August
5, 2007, the Company issued 80,977 shares of the Company's restricted common
stock as payment in kind for interest due for the month of July 2007 on the
Company’s 10% convertible notes.





On August
25, 2007, the Company retired 125,000 shares of the Company's common stock for
$10,000 as part of the Settlement Agreement and Mutual Release with
AmberAlertAgent Development Co., LLC (see Note 15 below).





On
September 5, 2007, the Company issued 79,958 shares of the Company's restricted
common stock as payment in kind for interest due for the month of August 2007 on
the Company’s 10% convertible notes.





On
September 7, 2007, the Company issued 1,196,742 restricted common
shares and 105,057 shares of Series A 7% Convertible Preferred Stock to the
CEO in satisfaction of loans made to the Company of $550,500. Each share of
Series A 7% Convertible Preferred Stock can be converted, at any time, into ten
shares of the Company’s common stock.  An entry was made to reduce
loans payable to shareholder for $550,500 with a corresponding credit to common
stock, preferred stock and additional paid in capital.




F-19




On
September 11, 2007, the Company, through a private sale, sold an aggregate of
95,420 shares of Series A 7% Convertible Preferred Stock and warrants to
purchase an aggregate of 954,200 shares of the Company’s common stock at an
exercise price of $.20 per share and received net proceeds of $250,000. Each
share of Series A 7% Convertible Preferred Stock can be converted, at any time,
into ten shares of the Company’s common stock.  The fair value of the
warrants of $152,672 was determined using the Black-Scholes option-pricing model
and is considered a deemed dividend on the Series A Preferred Stock. Due to the
cumulative deficit, dividends of $152,672 were recorded against additional
paid-in capital.





On
October 5, 2007, the Company issued 74,825 shares of the Company’s restricted
common stock as payment in kind for interest due for the month of September 2007
on the Company’s 10% convertible notes.





On
November 7, 2007 the Company began a private placement to accredited investors
of 10% short term promissory notes. These notes are payable the earlier of
August 15, 2008 or when the Company raises $1,000,000 in its next qualified
financing as defined. The notes bear interest at a rate of 10% per annum,
payable at the end of the term. The principal amounts of the notes are
convertible into the Company’s common stock by the holder, at any time prior to
the repayment of the principal, at the rate of $0.15 per share. As of December
31, 2007, the Company has raised a total gross amount of $300,000, from these
notes.





On
November 8, 2007, the Company issued 66,667 shares of the Company’s restricted
common stock upon the conversion of $10,000 of the Company’s 10% convertible
notes.





On
December 5, 2007, the Company issued 102,978 shares of the Company’s restricted
common stock as payment in kind for interest due for the month of October 2007
on the Company’s 10% convertible notes.





On
December 10, 2007, the Company issued 140,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $17,800.





On
December 12, 2007, the Company issued 2,397,563 shares of the Company’s
restricted common stock upon the conversion of $330,000 of the Company’s 10%
convertible notes.





On
December 14, 2007, the Company issued 812,500 shares of the Company’s restricted
common stock upon the conversion of $130,000 of the Company’s 10% convertible
notes.





On
December 18, 2007, the Company issued 357,143 shares of the Company’s restricted
common stock upon the conversion of $50,000 of the Company’s 10% convertible
notes.





On
December 18, 2007, the Company issued 50,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $7,000.





On
December 27, 2007, the Company issued 187,500 shares of the Company’s restricted
common stock upon the conversion of $30,000 of the Company’s 10% convertible
notes.





On
December 28, 2007, the Company issued 398,333 shares of the Company’s restricted
common stock upon the conversion of $44,000 of the Company’s 10% convertible
notes.





On
December 31, 2007, the Company issued 98,099 shares of the Company’s restricted
common stock as payment in kind for interest due for the month of November 2007
on the Company’s 10% convertible notes.





On
December 31, 2007, the Company issued 312,500 shares of the Company’s restricted
common stock upon the conversion of $50,000 of the Company’s 10% convertible
notes.





On
January 3, 2008, the Company issued 277,778 shares of the Company’s restricted
common stock upon the conversion of $25,000 of the Company’s 10% convertible
notes.





On
January 3, 2008, the Company issued 25,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $2,250.





On
January 3, 2008, the Company issued 1,250,000 shares of the Company’s restricted
common stock as bonuses to employees and directors and are valued at
$162,500.





On
January 3, 2008, the Company issued 150,000 shares of the Company’s restricted
common stock to a marketing and promotions company for services to be rendered
in 2008.  These shares were valued at the fair market value of $0.21,
less an approximate 10% discount (to give effect to the lack of liquidity for
such shares) or at $0.19 per share.  A total of $28,500 was charged to
operations with a corresponding credit to additional paid in
capital.




F-20




On
January 8, 2008, the Company issued 180,000 shares of the Company’s restricted
common stock for consulting and marketing services rendered for $0.16 per share.
$28,800 was charged to operations with a corresponding credit to additional paid
in capital.





On
January 8, 2008, the Company issued 666,666 shares of the Company’s restricted
common stock upon the conversion of $100,000 of the Company’s 10% convertible
notes.





On
January 8, 2008, the Company issued 105,811 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $8,466.





On
January 10, 2008, the Company issued 25,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $3,000.





On
January 11, 2008, the Company issued 7,646,668 shares of the Company’s
restricted common stock upon the conversion of $692,000 of the Company’s 10%
convertible notes.





On
January 11, 2008, the Company issued 692,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $55,360.





On
January 15, 2008, the Company issued 208,333 shares of the Company’s restricted
common stock upon the conversion of $25,000 of the Company’s 10% convertible
notes.





On
January 15, 2008, the Company issued 25,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $2,000.





On
January 17, 2008, the Company issued 83,333 shares of the Company’s restricted
common stock upon the conversion of $12,500 of the Company’s 10% convertible
notes.





On
January 17, 2008, the Company issued 12,500 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $1,000.





On
January 23, 2008, the Company issued 276,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $24,000.





On
January 28, 2008, the Company issued 80,000 shares of the Company’s restricted
common stock upon the conversion of $12,000 of the Company’s 10% convertible
notes.





On
January 28, 2008, the Company issued 12,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $960.





On
January 31, 2008, the Company issued 83,333 shares of the Company’s restricted
common stock upon the conversion of $12,500 of the Company’s 10% convertible
notes.





On
January 31, 2008, the Company issued 12,500 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $1,000.





On
February 1, 2008, the Company issued 357,143 shares of the Company’s restricted
common stock upon the conversion of $50,000 of the Company’s 10% convertible
notes.





On
February 1, 2008, the Company issued 50,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $4,000.





On
February 5, 2008, the Company issued 83,333 shares of the Company’s restricted
common stock upon the conversion of $10,000 of the Company’s 10% convertible
notes.





On
February 5, 2008, the Company issued 175,000 shares of restricted common stock
in connection with the issuance of promissory notes amounting to
$175,000.




F-21




On
February 12, 2008, the Company issued 71,429 shares of the Company’s restricted
common stock upon the conversion of $10,000 of the Company’s 10% convertible
notes.





On
February 13, 2008, the Company issued 1,158,334 shares of the Company’s
restricted common stock upon the conversion of $139,000 of the Company’s 10%
convertible notes.





On
February 14, 2008, the Company issued 416,667 shares of the Company’s restricted
common stock upon the conversion of $50,000 of the Company’s 10% convertible
notes.





On
February 14, 2008, the Company issued 50,000 shares of the Company’s restricted
common stock upon the exercise of warrants issued with the Company’s 10%
convertible notes and received net proceeds of $6,000.





On
February 19, 2008, the Company issued 276,190 shares of the Company’s restricted
common stock upon the conversion of $40,000 of the Company’s 10% convertible
notes.





On
February 20, 2008, the Company issued 41,667 shares of the Company’s restricted
common stock upon the conversion of $5,000 of the Company’s 10% convertible
notes.





On
February 21, 2008, the Company issued 41,667 shares of the Company’s restricted
common stock upon the conversion of $5,000 of the Company’s 10% convertible
notes.





On
February 28, 2008, the Company, through a private sale, sold 714,286 shares of
its common stock at an exercise price of $.14 per share and received net
proceeds of $100,000.





On March
10, 2008, the Company, through a private sale, sold 128,571 shares of its common
stock at an exercise price of $.14 per share and received net proceeds of
$18,000.





On March
14, 2008, the Company, through a private sale, sold an aggregate of 714,286
shares of its common stock at an exercise price of $.14 per share and received
net proceeds of $100,000.





On March
20, 2008, the Company issued 416,667 shares of the Company’s restricted common
stock upon the conversion of $50,000 of the Company’s 10% convertible
notes.





On March
24, 2008, the Company issued 375,000 shares of the Company’s restricted common
stock upon the conversion of $45,000 of the Company’s 10% convertible
notes.





On March
26, 2008, the Company issued 416,667 shares of the Company’s restricted common
stock upon the conversion of $50,000 of the Company’s 10% convertible
notes.





On March
31, 2008, the Company issued 83,333 shares of the Company’s restricted common
stock upon the conversion of $10,000 of the Company’s 10% convertible
notes.





On April
10, 2008, the Company issued 1,753,847 shares of its common stock pursuant to a
cashless warrant exercise, recording a $120,000 charge to stock compensation
expense. Due to the fact that upon exercise of the warrant, the price was
reduced from $0.47 to $0.01, the Company recorded an additional $117,000 to
record this modification.





On April
17, 2008, the Company issued 50,000 shares of its restricted common stock in
connection with the issuance of $50,000 promissory note.





On May
12, 2008, the Company, through a private sale, sold 142,857 shares of its
restricted common stock at a price of $.14 per share and received net proceeds
of $20,000.





On May
14, 2008, the Company issued 300,000 shares of its common stock as part of the
purchase of Echometrix, Inc. (See Note 3) and recorded the net purchase price as
an intangible asset.





On May
20, 2008, the Company, through a private sale, sold 500,000 shares of its
restricted common stock at a price of $.14 per share and received net proceeds
of $70,000.





On May
28, 2008, the Company, issued 1,275,000 shares of its restricted common stock as
part of a legal settlement (See Note 15) and recorded a corresponding charge to
the statement of operations of $165,750.




F-22




On June
9, 2008, the Company, through a private sale, sold 71,429 shares of its
restricted common stock at a price of $.14 per share and received net proceeds
of $10,000.





On June
17, 2008, the Company issued 238,675 shares of the Company’s common stock upon
the conversion of $25,000 of the Company’s 10% convertible notes and accrued
interest of approximately $6,000.





On June
30 2008, the Company, through a private sale, sold 41,429 shares of its
restricted common stock at a price of $.14 per share and received net proceeds
of $5,800.





On July
11, 2008, the Company issued 70,000 shares of its restricted common stock in
connection with the issuance of a $35,000 promissory note.





On July
25, 2008, the Company issued 400,000 shares of its restricted common stock in
connection with the issuance of a $200,000 promissory note.





On
September 4, 2008, the Company through a private sale, issued 240,000 shares of
its restricted common stock as a result of a promissory note issued for
$80,000.





On
September 30, 2008, the Company issued 357,583 shares of the Company’s common
stock upon the conversion of $45,000 of the Company’s 10% convertible notes and
accrued interest of $596.





On
October 3, 2008, the Company issued 872,825 shares of its common stock upon the
conversion of $100,000 of the Company’s 10% convertible notes and accrued
interest of $39,492.





On
October 16, 2008, the Company, through a private sale, issued 200,000 shares of
its restricted common stock as a result of a promissory note issued for
$100,000.





On
October 31 2008, the Company, through a private sale, issued 100,000 shares of
its restricted common stock as a result of a promissory note issued for
$50,000.





On
October 31, 2008, the Company, through a private sale, issued 600,000 shares of
its restricted common stock as a result of a promissory note issued for
$300,000.





On
November 18, 2008, the Company issued 1,400,000 shares of the Company’s
restricted common stock as compensation to consultants and directors and are
valued at approximately $126,000.





As of
December 31, 2008 the Company issued 742,867 shares of the Company’s restricted
common stock as payment in kind for interest due from December 2007 through
December 2008 on the Company’s 10% convertible notes.





Warrants:


During
2003, as part of its initial sale of its securities to the public, the Company
sold Class A warrants, exercisable for five years, to acquire 2,474,000 common
shares at $0.75 per share and Class B warrants, exercisable for seven years, to
acquire 2,474,000 common shares at $1.75 per share.  As additional
compensation to the placement agent who placed the Company’s securities, the
agent and its designees received rights to acquire 247,000 units of the
Company’s securities for $0.985 each for five years.  Each unit is
comprised of one share of common stock, a warrant to acquire one share of common
stock at $0.985 and another warrant to acquire a common share at $2.285 per
share.  Warrants to acquire 172,800 shares of the Company’s common
stock at $0.30 per share were issued to a placement agent exercisable for
five years as part of his compensation for his services in the Company’s private
placement of its securities in 2004.





On
December 31, 2007, we extended the term to exercise the Class A Warrant from
December 31, 2007 to March 31, 2008. The exercise price of the Class A Warrant
was lowered on from $0.75 to $0.17 per share of our common stock, and we reduced
the exercise price of our Class B Warrant from $1.50 to $0.22 per share of our
common stock. All other terms and conditions of the Warrants remained the
same.




On
December 31, 2007, we also extended the term to exercise Placement Agents’ Class
A Warrant from December 31, 2007 to December 31, 2008. The exercise price of the
Class A Warrant was lowered from $0.985 to $0.17 per share of our common stock,
and we reduced the exercise price of our Class B Warrant from $2.285 to $0.17
per share of our common stock. All other terms and conditions of the Warrants
remained the same.




F-23




On March
25, 2008, we extended the term to exercise the Class A Warrant from March 31,
2008 to July 31, 2008. All other terms and conditions of the Warrants remained
the same and became effective on June 11, 2008 when the Company received a
Notice of Effectiveness from the Securities and Exchange Commission





On August
28, 2008, the Company extended the term to exercise the Class A Warrant from
August 31, 2008 to March 31, 2009.  All other terms and conditions of
the Warrants remained the same and became effective on October 8, 2008 when the
Company received a Notice of Effectiveness from the Securities and Exchange
Commission.





On March
26, 2009 the Company filed an 8-K stating that it intends to extend the terms to
exercise the Class A Warrant from March 31, 2009 to June 30, 2010 and to extend
the term of the Class B Warrant from December 31, 2009 to June 30, 2010. The
Company will file a Post Effective Amendment No. 4 to its Registration Statement
on Form S-1 (“Post Effective Amendment”). The extended date will become
effective upon the date on which the Securities and Exchange Commission declares
the Post-Effective Amendment.





During
2005 and 2006, the Company raised capital via a private placement to accredited
investors of units (“Units”), each Unit consisting of (a) a 10% convertible note
with the original principal amount of $10,000 and (b) warrants to purchase
10,000 shares of common stock, exercisable at $0.50 per share, for $10,000 per
Unit.





On
January 29, 2007, warrants were issued to a consultant to acquire 900,000 shares
of the Company’s common stock at  $0.47 per share, exercisable for
five years, as part of the compensation and further incentive for the consultant
to devote  his best efforts to the performance of services specified
under a 3-year consulting agreement dated January 29, 2007.  The
warrants vest in three equal amounts of 300,000 warrants on each of the
following dates January 29, 2008, January 29, 2009 and January 29, 2010 provided
that the consultant is still retained by the Company. These shares were valued
at  $216,000, the fair value of warrant at the date of issue. This
amount is being accreted over the vesting period of the  warrants
using the straight line method.  For the years ended December 31, 2008
and 2007, a total of $72,000 and $66,000, respectively, was charged to
operations with a corresponding credit to additional paid in
capital.





In April
2008, the Company lowered the exercise price of 900,000 shares from $0.47 to
$0.01 and the options were exercised on a cashless basis.  As a result
of the price modification, the Company recorded compensation expense amounting
to $117,000.  Upon exercise, the Company recorded $9,000 to
compensation expense and a corresponding credit to common stock and additional
paid in capital.





On
January 29, 2007, warrants were issued to a consultant to acquire 1,000,000
shares of the Company’s common stock at $0.47 per share, exercisable for five
years, as further incentive for the consultant to devote his best efforts
to the performance of services specified under a 3-year consulting agreement
dated January 29, 2007. The warrants vest when the consultant has achieved
$2,000,000 in net direct and indirect sales, as defined, in any one calendar
year provided that the consultant is still retained by the Company. The fair
value of warrant will be charged to operations with a corresponding credit to
additional paid in capital on the date the sales target is achieved. In April
2008, 853,847 shares of common stock were issued on a cashless basis resulting
in a $111,000 charge to compensation and a corresponding credit to common stock
and additional paid in capital.





On
February 16, 2007, a warrant was issued to a placement agent to acquire 224,000
common shares at $0.50 per share exercisable for three years as part of the
compensation for services rendered in the Company’s private placement of its 10%
convertible notes. A total of $51,520, the fair value of warrant at the date of
issue, was capitalized as deferred financing costs with a corresponding credit
to additional paid in capital.  This amount is being accreted over the
remaining life of the notes associated with the placement agent using the
straight line method.





On
February 16, 2007, a warrant was issued to a placement agent to acquire 87,500
common shares at $0.36 per share exercisable for three years as part of the
compensation for services rendered in the Company’s private placement of its 10%
short term promissory notes. A total of $22,750, the fair value of warrant at
the date of issue, was capitalized as deferred financing costs with a
corresponding credit to additional paid in capital.  This amount is
being accreted over the remaining life of the notes associated with the
placement agent using the straight line method.





For the
year ended December 31, 2007, 190,000 warrants were exercised. On December 10,
2007, the Company issued 140,000 shares of the Company’s restricted common stock
upon the exercise of warrants issued with the Company’s 10% convertible notes
and received net proceeds of $17,800. On December 18, 2007, the Company issued
50,000 shares of the Company’s restricted common stock upon the exercise of
warrants issued with the Company’s 10% convertible notes and received net
proceeds of $7,000.




F-24




On August
15, 2008, a warrant was issued to a consultant to acquire 400,000 common shares
at $0.15 per share exercisable for three years as part of the compensation for
consulting services rendered. A total of $44,000 (the fair value of the warrant
on the date of issue) was recorded as consulting expense.





During
the fiscal year ended December 31, 2008, the Company issued 2,871,400 warrants
in connection with sales of its restricted common stock.  All warrants
have a three year term and are exercisable at a range of $0.14 to $0.35 per
share.





For the
year ended December 31, 2008, 3,080,276 of warrants were exercised for total
proceeds of approximately $114,000.





NOTE
15 - COMMITMENTS AND CONTINGENCIES.





(a)              Legal
Proceedings





AmberAlertAgent Development
Company, LLC





On
February 20, 2007, SearchHelp was served with a complaint that was filed in the
Superior Court of California in San Diego County on February 8, 2007, entitled
AmberAlertAgent Development Co., LLC, a California Limited Liability Company;
Perkins, Brinson, Ho, LLC, a California Limited Liability Company; Philip Dizon,
an individual; Edward Sullivan, an individual; Gil Amelio, an individual;
Richard A. Weintraub, an individual; Carl Perkins, an individual; and Duane
Brinson, an individual v. Searchhelp, Inc., a Delaware Corporation; and Does
1-20.  The claims against the Company arise out of an Exchange
Agreement entered into between AmberAlertAgent, Inc. (“AAA”), certain of the
plaintiffs and the Company pursuant to which the Company purchased all the
issued and outstanding shares of AAA in exchange for 1.5 million shares in the
Company.  The shares in the Company acquired by the plaintiffs are
being held in escrow until plaintiffs complete the development of software, and
provided certain other services, as set forth in a Consulting Agreement between
plaintiffs and the Company.





On August 2, 2007, the Company and the
plaintiffs signed a Settlement Agreement and Mutual Release whereby all legal
actions were dismissed. Under the terms of the Settlement Agreement, SearchHelp
placed $10,000 into escrow and released to the plaintiffs an aggregate of 1.375
million shares of the Company's common stock which were previously being held in
escrow.  The remaining 125,000 shares which were previously held in
escrow were returned to the Company and retired.  In addition,
pursuant to the Settlement Agreement, SearchHelp and Amber Alert Agent entered
into a License Agreement pursuant to which the Company received a perpetual,
royalty-free, worldwide, and non-exclusive license to use, including to
reproduce, perform, display, distribute, and create derivative works from,
certain Sentry Predator Locator software and all related
documentation.  An additional $10,000 was placed in escrow for payment
of transition services to be provided by the plaintiffs to assist the Company in
migrating the software onto the Company's servers.  The source code
for the licensed software was also placed into escrow. All escrowed items will
be released upon the successful transition of the software.  In
February 2009, the Company, AmberAlertAgent Development Co., LLC, all of the
plaintiffs and the Escrow Agent reached a settlement agreement, and $9,500 of
the funds were released to the Company and $9,500 was released to the Plaintiffs
in accordance with the Settlement Agreement. $1,000 was paid to the escrow agent
for escrow fees and the source codes were delivered to Plaintiffs in accordance
with the Settlement Agreement.





Joseph
Carrizzo





During the first quarter of 2007,
Joseph Carrizzo resigned as the Company’s President and a director. The Company
attempted to negotiate the terms of a separation agreement with Mr. Carrizzo. On
March 20, 2007, the Company received a letter from Mr. Carrizzo in which he
formally advised the Company that he was terminating his employment as a result
of the Company’s alleged material breach of his employment agreement. The
Company contends that Mr. Carrizzo voluntarily terminated his employment with
the Company.





On May
22, 2008, a settlement agreement was reached between the Company and Mr.
Carrizzo, whereby the Company has agreed to pay Mr. Carrizzo $150,000 and issue
1,275,000 of the Company’s restricted common shares in full and complete
settlement of all monetary and non-monetary claims by Mr.
Carrizzo.  Mr. Carrizzo turned in and the Company terminated 3,270,000
options as part of the settlement. A cash payment of $10,000 was made
immediately upon execution of the settlement agreement and $5,000 per month
commencing thirty days after the initial payment is due until the full amount is
paid. If the Company raises $500,000 in additional equity financing in a single
transaction, a one time accelerated payment of $20,000 is to be made to Mr.
Carrizzo. If the Company raises an additional $500,000 in a single transaction,
an additional $20,000 accelerated payment is to be made. . The common shares
payment was delivered in two stock certificates on May 28, 2008. The first
625,000 shares issued are restricted until such time as when the Company files a
registration statement that is declared effective by the SEC.  The
second payment of 650,000 common shares are subject to the first stipulation and
have an additional legend that prohibits their resale prior to March 1,
2009.





F-25




Charles
Davis





On
May 23, 2008, the Company responded to a letter dated May 22, 2008 and sent a
notification to return personal and intellectual property belonging to the
Company from the former Chief Technology Officer, Charles Davis.  Mr.
Davis claims independent rights to use technology owned and developed by
SearchHelp, Inc and Echometrix.  The Company maintains that Mr. Davis
is in violation of his confidentiality obligations and has demanded all records,
software and data owned by SearchHelp, Inc and subsidiaries to be returned to
the Company immediately.  Mr. Davis was charged with larceny based on
a complaint filed by the Company and the case is being prosecuted by the Nassau
County District Attorney's office.





Freifeld





On
or about November 2008, the plaintiffs, Freifelds brought an action against the
Company seeking summary judgement in lieu of complaint on two debt
conversions.  The plaintiffs converted their notes and received the
Company’s stock certificates in November 2008. Subsequently, the plaintiffs
brought suit, requesting repayment of their converted notes.  The
Company has retained legal counsel and has filed pre-answer motion for summary
judgement for the Company.  The Plaintiffs have moved for summary
judgment in lieu of a complaint and we cross-moved for summary judgment. The
Court has indicated that it is going to set the matter down for an evidentiary
hearing. No date has been set. As of April 14, 2009, management has determined
that the possibility that summary judgement for the plaintiffs is
remote.





(b)              Leases





The
Company signed a new operating lease beginning July 31, 2006 for its corporate
office space located in Syosset, New York.  The lease has a term of
five years and two months and expires on September 30, 2011.  The
following is a schedule by year of future minimum rental payments required under
the lease agreement:





Year ending
                                    
                                    AmountDecember
      31, 2009
                                    
                                    $
                                    55,182December
      31, 2010
                                    
                                    $
                                    56,917December
      31, 2011
                                    
                                    $
                                    43,768





Rent
expense was $61,953 and $82,279 for the years ended December 31, 2008 and 2007,
respectively.





NOTE
16 - SUBSEQUENT EVENTS





On
February 10, 2009, William Bozsnyak resigned as the Chief Executive Officer and
Chairman of SearchHelp, Inc. (the “Company”).  Mr. Bozsnyak will
continue to serve as a member of the Company’s Board of Directors and will
become the Company’s Secretary.





On
February 10, 2009 (the “Separation Agreement Effective Date”), in connection
with Mr. Bozsnyak’s resignation as Chief Executive Officer and Chairman of the
Company, the Company entered into a separation agreement with Mr. Bozsnyak (the
“Separation Agreement”).  Pursuant to the Separation Agreement, Mr.
Bozsnyak will remain a director of the Company. In addition, Mr. Bozsnyak will
become the Secretary of the Company until March 31, 2010, subject to termination
by Mr. Bozsnyak upon 30 days’ written notice. Pursuant to the Separation
Agreement, the Company acknowledged that it owes Mr. Bozsnyak an aggregate of
$616,046.52 for accrued salary, principal and interest on personal loans, and
options, and the Company agreed to pay the amounts due to Mr. Bozsnyak in
accordance with the schedule set forth therein, including $10,000 upon execution
of the Separation Agreement, $10,000 within ten days of execution of the
Separation Agreement, and $8,000 per month commencing the week of March 6, 2009
and continuing for a period not to exceed three years, which may be accelerated
under certain conditions as set forth therein. Mr. Bozsnyak has also agreed to
convert the remaining monies owed into common stock at a conversion rate of
$0.14 per share. The Company also agreed to grant Mr. Bozsnyak options to
purchase shares of the Company’s common stock in the amount of $20,833 per month
until December 31, 2009 at an exercise price equal to the ninety day volume
weighted average price, to allow Mr. Bozsnyak to name an additional Board member
for a period of three years from the Separation Agreement Effective Date (or
until the Company generates a net annual profit in excess of $4 million, and
subject to the unanimous approval of the Board of Directors), and to reimburse
Mr. Bozsnyak for health insurance expenses in the amount of up to $2,500 per
month for a period of 36 months, if Mr. Bozsnyak requires health insurance.
Pursuant to the Separation Agreement, Mr. Bozsnyak will retain 1,895,556 vested
options for a period of three years from the Separation Agreement Effective
Date; all other unvested options were cancelled.




F-26




On
February 10, 2009, Jeffrey Greene was appointed to serve as the Company’s Chief
Executive Officer. Mr. Greene, 61 has spent the last 30 years as a CEO/COO
starting, restarting and rehabilitating businesses in banking, technology,
entertainment and most recently the wireless space.  Greene started down
this path after serving as the Chairman of Citicorp Information Management
Services, which was one of the largest resellers of marketing intelligence to
the packaged goods industry.  He later became the President of Island
Trading Company the owner of 74 entertainment properties including Island
Records.  As President of the Pharmacy Fund he raised over $2 Billion in
the securitized asset back market while reselling pharmaceutical information to
the key manufacturers.





On
February 10, 2009, the Company entered into an employment agreement with Mr.
Greene (the “Greene Employment Agreement”), pursuant to which Mr. Greene will
serve as the Company’s Chief Executive Officer and on the Company’s Board of
Directors, effective upon the resignation of the prior Chief Executive Officer,
which resignation occurred on February 10, 2009 (the “Greene Effective Date”).
The Greene Employment Agreement has a term of three years, subject to earlier
termination as provided therein, and may be extended beyond the initial three
year term by mutual agreement of the Company and Mr. Greene (the “Greene Term”).
Pursuant to the Greene Employment Agreement, Mr. Greene will receive a base
salary of $240,000, which may be increased up to $300,000 during the first year
of the Greene Term if certain milestones are achieved.  Commencing one
year from the Greene Effective Date, all salary increases or bonus payments will
be in the sole discretion of the Company’s Board of Directors. Pursuant to the
Greene Employment Agreement, the Company agreed to grant Mr. Greene a) one
million five hundred thousand options, vesting over a three year period from the
effective date on a cashless basis (if still employed) at an exercise price
equal to the thirty day volume weighted average price set on the effective date;
b) three million five hundred thousand warrants to purchase the Company’s common
stock at an exercise price of ten cents expiring February 10, 2014; and
c)  four million performance based stock options, which will vest
based on the achievement of certain milestones.





The
Greene Employment Agreement may be terminated by the Company for Good Cause (as
defined therein), in which event Mr. Greene shall have no right to any further
base salary or other benefits or bonus, and Mr. Greene shall forfeit all
non-vested options, warrants and stock, and any warrant, option, or cash bonus
granted within 180 days.  If the Company terminates the Greene
Employment Agreement (other than for Good Cause), Mr. Greene shall be entitled
to a severance payment equal to one month’s salary during year one of the Term,
two months’ salary during year two of the Term, and three months’ salary during
year three of the Term.





The
Greene Employment Agreement may also be terminated by Mr. Greene, in the event
of a Material Breach (as defined therein, including the termination by the
Company for reasons other than Good Cause) by the Company. If Mr. Greene
terminates the Greene Employment Agreement as a result of a Material Breach by
the Company, the Company shall continue to provide Mr. Greene with his base
salary and benefits for a period of three months. If Mr. Greene terminates the
Greene Employment Agreement for a reason other than a Material Breach by the
Company, Mr. Greene shall forfeit any warrant, option, or cash bonus granted
within 180 days.





On
February 9, 2009, Peter Sealey was appointed to the Company’s Board of
Directors and will serve as its Chairman.





On
February 9, 2009, the Company entered into an agreement with Mr. Sealey (the
“Sealey Agreement”), pursuant to which Mr. Sealey will serve as the Company’s
Non-Executive Chairman, effective upon the resignation of the prior chairman
(which resignation occurred February 10, 2009) (the “Sealey Agreement Date”).
The Sealey Agreement has a one year term, subject to earlier termination as
provided therein, and may be extended upon a proxy shareholder approval, or if
an annual shareholder meeting and/or meeting do not occur, by mutual agreement
between Mr. Sealey and the Board of Directors. Pursuant to the Sealey Agreement,
the Company agreed to grant Mr. Sealey, on the Sealey Agreement Date, 500,000
fully vested five year warrants to purchase shares of the Company’s common stock
at an exercise price that is the lesser of $0.10 or the 30 day volume average
weighted average price. The Warrants may be exercised on a cashless basis so
long as Mr. Sealey serves as the Company’s Non-Executive
Chairman.  The Company also agreed to grant Mr. Sealey 2,500,000
performance based stock options which shall vest based upon the achievement of
certain milestones.





The
Company may terminate the Sealey Agreement for Good Cause (as defined therein),
in which event Mr. Sealey shall forfeit any non-vested options, warrants, or
stock and any warrant, option or cash bonus received within 180 days. The Sealey
Agreement may also be terminated by Mr. Sealey, in the event of a Material
Breach (as defined therein, including the termination by the Company for reasons
other than Good Cause) by the Company. If Mr. Sealey terminates the Sealey
Agreement for a reason other than a Material Breach by the Company, Mr. Sealey
shall forfeit any warrant, option, or cash bonus granted within 180
days.





F-27





Equity





On
January 6, 2009 the Company issued 775,000 shares of the Company’s restricted
common stock as bonuses to employees and directors and are valued at
approximately $109,000.





On
January 7, 2009, the Company, through a private sale, issued 200,000 shares of
its restricted common stock as a result of a promissory note issued for
$50,000.





On
January 15, 2009, the Company, through a private sale, issued 200,000 shares of
its restricted common stock as a result of a promissory note issued for
$50,000.





On
February 1, 2009, the Company, through a private sale, issued 50,000 shares of
its restricted common stock as a result of a promissory note issued for
$50,000.





On
February 2, 2009, the Company, through a private sale, issued 100,000 shares of
its restricted common stock as a result of a promissory note issued for
$50,000.





On
February 2, 2009, the Company, through a private sale, issued 250,000 shares of
its restricted common stock as a result of a promissory note issued for
$125,000.





On
February 19, 2009, the Company, through a private sale, issued 25,000 shares of
its restricted common stock as a result of a promissory note issued for
$25,000.





On March
5, 2009, the Company, through a private sale issued 1,000,000 shares of its
restricted common stock as a result of promissory notes issued for
$500,000.


F-28


Item
9. Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure.




None




Item
9A(T). Controls and Procedures





Internal Controls




Evaluation of our Disclosure
Controls and Internal Controls


Under the
supervision and with the participation of our senior management, including our
chief executive and financial officer, we conducted an evaluation of the
effectiveness of the design and operation of our disclosure controls and
procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the
period covered by this annual report (the “Evaluation Date”). The disclosure
controls and procedures are intended to insure that the information relating to
us, including our consolidated subsidiaries, required to be disclosed in our
Securities and Exchange Commission (“SEC”) reports (i) is recorded, processed,
summarized and reported within the time periods specified in SEC rules and
forms, and (ii) is accumulated and communicated to our management, including our
chief executive officer and chief financial officer, as appropriate to allow
timely decisions regarding required disclosure. Our
management has concluded that based on their evaluation that our internal
control over financial reporting was not effective as of December 31,
2008.
  Management's Annual Report on
Internal Controls and Procedures.
 
 Our
internal control over financial reporting is a process designed to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes of accounting
principles generally accepted in the United States. Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can
provide only reasonable assurance of achieving their control objectives. In
evaluating the effectiveness of our internal control over financial reporting,
our management used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission (“COSO”) in Internal Control –
Integrated Framework.
  Based
upon our assessment and the COSO criteria, management concluded that our
internal control over financial reporting was not effective as of December 31,
2008 due to a material weakness. A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial reporting, such
that there is a reasonable possibility that a material misstatement of our
annual or interim financial statements will not be prevented or detected on a
timely basis.
  More
specifically, the material weakness relates to a lack of sufficient personnel
with appropriate knowledge, experience and training in U.S. GAAP resulting in a
lack of sufficient analysis and documentation of the application of U.S. GAAP to
transactions, including but not limited to accounting for modification of
debt.
  Due to
our small size, limited financial resources, and turnover of our Chief Financial
Officer, who has been the only individual involved in our accounting and
financial reporting, there has been no segregation of duties within the
accounting function. This lack of segregation of duties represents a material
weakness.
  In
efforts to address this material weakness, we are planning to add additional
personnel to the internal accounting operation.
  This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Securities and Exchange
Commission that permit us to provide only management’s report in this annual
report.
  Changes in Internal
Controls.  There were no significant changes in our internal
controls over financial reporting that occurred during the year ended December
31, 2008, that have materially affected, or are reasonably like to materially
affect, our internal controls over financial reporting.




29




The
Company's management does not expect that the Company's disclosure controls or
the Company's internal controls will prevent all errors and all fraud. A control
system, no matter how well conceived and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met.
Further, the design of a control system must reflect the fact that there are
constraints, and the benefits of controls must be considered relative to their
costs. Because of the inherent limitations in all control systems, no evaluation
of controls can provide absolute assurance that all control issues and instances
of fraud, if any, have been detected. Because of the inherent limitations in a
cost effective control system, misstatements due to error or fraud may occur and
may not be detected.




Item
9B. Other Information.




Not
Applicable.




PART
III




Item
10. Directors, Executive Officers, Promoters, Control Persons and Corporate
Governance; Compliance With Section 16(a) of the Exchange Act.




The
Company has a seven-member board of directors. The identity of each of our
directors and executive officers and their principal occupations for the past
five years are as follows.




YearName
                
                Age
                
                Position
                
                Began ServiceWilliam
      Bozsnyak (1)
                
                48
                
                Former
      Chairman and  Chief Executive Officer
                
                2001Peter
      Sealey (1)
                
                60
                
                Chairman
      of the Board
                
                2009Jeffrey
      Greene (1)
                
                62
                
                Chief
      Executive Officer
                
                2009Erica
      Zalbert
                
                34
                
                Chief
      Financial Officer
                
                2008Brian
      O’Connor (2)
                
                62
                
                Director
                
                2005Frank
      Chester
                
                60
                
                Director
                
                2009Randy
      S. Zelin
                
                45
                
                Director
                
                2007




William
Bozsnyak, 48, is the founder, chief executive officer and chairman of the board
of SearchHelp. After a successful career in the financial services industry, Mr.
Bozsnyak created a local Internet portal in 1998 which focused on meeting the
advertising needs of small businesses that were not being met on a national
level. In addition to his current duties, Mr. Bozsnyak has served SearchHelp in
several capacities since its inception in January 2001 including treasurer,
chief financial officer and vice president. Prior to forming SearchHelp, Mr.
Bozsnyak began his career with J.P. Morgan Securities Inc. in 1982 and rose to
become a vice president in its Institutional Fixed Income Sales Department. In
1993, he left Morgan to join UBS Securities Inc. as vice president of its Global
Fixed Income Department. In this role, he was responsible for the sale of U.S.
fixed income securities to major institutional U.S. firms. Mr. Bozsnyak
graduated in 1982 from the New York Institute of Technology with a Bachelor’s in
Business Administration and a minor in Finance. Effective February 10, 2009, Mr.
Bozsnyak continues to serve on the Company’s  board of directors and
as the Company’s Secretary.




30




Peter
Sealey, 66, is the Chairman of the board of SearchHelp effective February 10,
2009, and is the CEO and founder of The Sausalito Group, Inc., a diversified
management consulting firm based in Sausalito, CA and offering capabilities in
business and marketing strategy, brand identity, market research, advertising
services, business development, and expert witness testimony.  Peter held
numerous positions at the Coca-Cola Company and became its first CMO in 1990. In
addition, Mr. Sealey has served as a management consultant for numerous leading
firms including VeriSign, The General Motors Corporation, The Coca-Cola Company,
Sony New Technologies, Inc., the Anheuser-Busch Company, Visa U.S.A., United
Parcel Service, ImproveNet, Johnson & Johnson, Hewlett-Packard, The Eastman
Kodak Company, and Nokia. He serves, or has served, on the Boards of Advisors of
Intent MediaWorks, FaceBook.com, Veoh Networks, Log Savvy, Inc., DiStreams,
Inc., HomeGain.com, Space.com, AgentWare, Learning Framework, NetOyster, Zinio
& eVoice.com. He is a special partner in DigaComm Ventures,
LLC.




Jeffrey
Greene, 62, is the Chief Executive Officer of SearchHelp effective February 10,
2009.  Prior to joining SearchHelp, Mr. Greene spent the last 30 years
as a CEO/COO starting, restarting and rehabilitating businesses in banking,
technology, entertainment and most recently the wireless industry space. 
Greene served as the Chairman of Citicorp Information Management Services, which
was one of the largest resellers of marketing intelligence to the packaged goods
industry.  He later became the President of Island Trading Company, the
owner of 74 entertainment properties including Island Records.  As
President of the Pharmacy Fund, a major  “factor” of third party
pharmacy receivables, he raised over $2 Billion in the securitized asset backed
securities market while reselling pharmaceutical information to the key
manufacturers.




Erica
Zalbert, 34, became the Chief Financial Officer of SearchHelp, Inc. in May 2008.
Prior to joining the Company, Ms. Zalbert, was employed with Cambridge Who's Who
Publishing, Inc., as Controller. Ms. Zalbert established its accounting
department from the ground up, overseeing the internal accounting of all merged
who's who entities, consolidated their financial reporting, captured daily and
weekly revenues, managed the payroll process, and implemented a Microsoft-based
Solomon accounting system. Ms. Zalbert's professional career in finance and
accounting began when she joined PricewaterhouseCoopers as an Associate in 1998,
and leaving in 2003.During her tenure, she conducted audits for a diversified
clientele in the manufacturing, distribution, retail, telecommunications,
advertising, mortgage banking, education, and not-for profit sectors. From 2003
to 2006, Ms. Zalbert held the position of Vice President of Financial Reporting
for Newtek Business Services (NASDAQ: NEWT). Her responsibilities included
reviewing financials for the parent company and 60+ subsidiaries, inter-company
analysis, and SEC and regulatory reports. Ms. Zalbert maintained stock
compensation schedules, segment accounting and auditing schedules, and performed
FIN 46 analysis. She revamped the department, transitioning the records of 25
Newtek companies from a consulting firm to in-house staff, implementing MAS 500
accounting software and FRX reporting software. Ms. Zalbert earned a BBA in
Accounting from Hofstra University and is a Certified Public
Accountant.




31




Brian
O’Connor, 62, is a director of SearchHelp, and the former Chief Operating
Officer.  From 1998 until joining SearchHelp in June 2005, Mr.
O’Connor was President of ETP and founder of Worldwide Commerce Exchange and
Ann’s Boston Brownie Company. Mr. O’Connor was formerly the vice president for
North American and Asia Pacific Sales for Polaroid Corporation from 1989 to
1998. In this capacity, he was responsible for sales and marketing of Polaroid’s
U.S. business, generating over $1.1 billion in sales with over 900 employees.
While at Polaroid, he also established an international consumer sales group in
Asia, Japan, South America, Africa and the Middle East for Polaroid component
products.  Mr. O’Connor currently serves on the board of directors of
the Dana Farber Cancer Institute and the Jimmy Fund Advisory Council. Formerly,
he served on the board of directors of the Carroll School for Dyslexic Children
and The New England Sports Museum.  Mr. O’Connor resigned from his
position as Chief Operating Officer in December 2008, but retains his position
as a director.




Frank
Chester, 60, was a member of the New York Stock exchange for twenty four
years, with experience on the floor for almost forty years. During his years as
a member, he owned a seat for fifteen years until the exchange became a public
entity. When the exchange became public the seat was exchanged for stock
and cash. Mr. Chester helped to start two brokerage firms become active members
on the floor. Mr. Chester graduated from Villanova University in 1970 with a
Bachelor of Science in Business Administration. He has been a guest on such
television programs as CNBC, Fox Business, and Bloomberg radio.




Randy S.
Zelin, 45, is a director of SearchHelp. An experienced attorney in private
practice and a former Nassau County, NY Assistant District Attorney, Mr. Zelin
concentrates in the areas of criminal defense and securities litigation. From
June 2000 to present, Mr. Zelin serves as President of Randy Scott Zelin, P.C.,
a law firm in Westbury, New York. He is a graduate of Hofstra University (B.A.
1984) and the Touro College Jacob D. Fuchsberg Law Center (J.D. 1987). He is of
counsel to Pryor & Mandelup, LLP, a distinguished bankruptcy,
reorganization, and civil practice, where he maintains his office. Mr. Zelin is
admitted to practice in New York, New Jersey, and in the U.S. District Courts
for the Southern, Eastern, and Northern Districts of New York, and the U.S.
Court of Appeals for the Second Circuit. Mr. Zelin is a member of the Nassau
County Bar Association and the National Association of Criminal Defense Lawyers.
He has lectured at continuing legal education programs on criminal law and
procedure and has taught as a guest instructor in various local law schools’
trial advocacy programs as well as for the National Institute for Trial
Advocacy. He also appears regularly on CNN Headline news to discuss noteworthy
trials and criminal justice issues.




Each
director holds office until the next annual stockholders meeting or until a
successor is duly elected or appointed.  Officers are appointed to
their positions, and continue in such positions, at the discretion of the
directors.




(1)
            Effective
      February 10, 2009, the Company and Mr. Bozsnyak entered into a Separation
      Agreement pursuant to which he resigned as the Chairman of the Board and
      as Chief Executive Officer.  He will retain his position as
      Secretary and as a director of SearchHelp.  In connection with
      Mr. Bozsnyak’s resignation, Mr. Sealey was appointed the Chairman of the
      Board of SearchHelp and Mr. Greene became the Chief Executive Officer of
      SearchHelp.




32




(2)
            Effective
      December 15, 2008, Mr. Brian O’Connor resigned as the Company’s Chief
      Operating Officer.  He will retain his position as a director of
      SearchHelp.




Audit
Committee




On April
2, 2003 the Board of Directors established an Audit Committee, which consists of
one director, who must be an independent director, as defined in the Charter for
the Audit Committee. The Audit Committee consisted of David Barnes, as Chairman,
until his resignation on March 26, 2009.  Members of the Committee are
appointed by the Board of Directors and serve one-year terms. Members may be
removed by the Board of Directors at any time with or without cause. Upon the
removal or resignation of a member, the Board of Directors may appoint a
successor to serve the remainder of the unexpired term. The Audit Committee will
meet at least four times annually with the independent auditors and more
frequently as circumstances dictate.




The
purpose of the Audit Committee is to assist the Board of Directors in fulfilling
its oversight responsibilities with respect to:


·
            the
      integrity of the financial reports and other financial information
      provided by us to the public or any governmental
  body;


·
            our
      compliance with legal and regulatory
  requirements


·
            our
      systems of internal controls regarding finance, accounting and legal
      compliance;


·
            the
      qualifications and independence of our independent
    auditors;


·
            the
      performance of our internal audit function and independent
      auditors;


·
            our
      auditing, accounting, and financial reporting processes generally;
      and


·
            the
      performance of such other functions as the Board of Directors may assign
      from time to time.





The Audit
Committee has the authority to:




·
            make
      recommendations to the Board of Directors regarding the appointment or
      replacement of independent public
accountants;




·
            confer
      with our independent public accountants regarding the scope, method and
      results of the audit of our books and
accounts;




·
            review
      our financial reporting process and the management recommendations made by
      our independent public accountants;




·
            recommend
      and implement any desired changes to our audit procedures;
    and




·
            perform
      such other duties as the Board of Directors may from time to time
      direct.




Audit Committee Financial
Expert




The
Company does not have a financial expert, as defined in paragraph (d) (2)(5)(ii)
of Item 407 of Regulation S-K.




33




Code of
Ethics




Our board
of directors adopted a Code of Ethics that covers all executive officers of our
company and its subsidiaries. The Code of Ethics requires that senior management
avoid conflicts of interest; maintain the confidentiality of information
relating to our company; engage in transactions in shares of our common stock
only in compliance with applicable laws and regulations and the requirements set
forth in the Code of Ethics; and comply with other requirements which are
intended to ensure that such officers conduct business in an honest and ethical
manner and otherwise act with integrity and in the best interest of our
company.




All our
executive officers are required to affirm in writing that they have reviewed and
understand the Code of Ethics.




Any
amendment of our Code of Ethics or waiver thereof applicable to any of our
principal executive officer, principal financial officer and controller,
principal accounting officer or persons performing similar functions will be
disclosed on our website within 5 days of the date of such amendment or waiver.
In the case of a waiver, the nature of the waiver, the name of the person to
whom the waiver was granted and the date of the waiver will also be disclosed. A
copy of our Code of Ethics is incorporated by reference to the Company’s form
10-KSB filed with the Securities and Exchange Commission on March 16, 2004.




Indebtedness of Executive
Officers and Directors




No
executive officer, director or any member of these individuals’ immediate
families or any corporation or organization with whom any of these individuals
is an affiliate is or has been indebted to us since the beginning of our last
fiscal year.




Family
Relationships




There are
no family relationships among our executive officers and directors.




Legal
Proceedings




During
the past five years, no officer or director of the Company has:


·
            been
      convicted in or is currently subject to a pending a criminal
      proceeding;


·
            been
      a party to a civil proceeding of a judicial or administrative body of
      competent jurisdiction and as a result of such proceeding was or is
      subject to a judgment, decree or final order enjoining future violations
      of, or prohibiting or mandating activities subject to any Federal or state
      securities or banking laws including, without limitation, in any way
      limiting involvement in any business activity, or finding any violation
      with respect to such law; nor


·
            has
      any bankruptcy petition been filed by or against the business of which
      such person was an executive officer or a general partner, whether at the
      time of the bankruptcy or for the two years prior
  thereto.




Section 16(a) Beneficial
Ownership Reporting Compliance


Section
16(a) of the Securities Exchange Act of 1934, as amended, requires all of
SearchHelp’s officers and directors, and persons who own more than ten percent
of a registered class of SearchHelp’s equity securities, to file reports of
ownership and changes in ownership of equity securities of SearchHelp with the
SEC and any applicable stock exchange. Officers, directors and greater than ten
percent stockholders are required by SEC regulation to furnish SearchHelp with
copies of all Section 16(a) forms that they file. Based solely upon a review of
Forms 3, 4, and 5 furnished to SearchHelp during 2008 SearchHelp believes that
none of its officers, directors and greater than 10% beneficial owners failed to
file timely such Forms on a timely basis during the most recent fiscal year
except that Erica Zalbert and Randy Zelin each filed a Form 3 late. David
Barnes, William Bozsnyak and Randy Zelin each filed a Form 4
late.


34




Item
11. Executive Compensation





Each of
our named executive officers has entered into a three year employment agreement
with SearchHelp.
Pursuant to the respective employment agreement, each executive officer receives
an annual base salary, a non-ISO option grant, paid health insurance and three
to five weeks of vacation annually.  The employment agreements require
the named executive officers to maintain the confidentiality of SearchHelp
information and subject them to non-competition and non-solicitation
restrictions during their employment.





The
following table shows the compensation earned by each of the named executive
officers for the years ended December 31, 2008 and 2007.




SUMMARY
      COMPENSATION TABLEName
      and Principal
                                                                                        
                                                                                        Year
                                                                                        
                                                                                        
                                                                                        Salary
      (1)
                                                                                        
                                                                                        
                                                                                        Bonuses
                                                                                        
                                                                                        
                                                                                        Option
      Grants (2)
                                                                                        
                                                                                        
                                                                                        All
      Other
                                                                                        
                                                                                        
                                                                                        TotalPosition
                                                                                        
                                                                                        
                                                                                        
                                                                                        
                                                                                        ($)
                                                                                        
                                                                                        
                                                                                        ($)
                                                                                        
                                                                                        
                                                                                        ($)
                                                                                        
                                                                                        
                                                                                        Compensation
      (3)
                                                                                        
                                                                                        
                                                                                        ($)($)(a)
                                                                                        
                                                                                        (b)
                                                                                        
                                                                                        
                                                                                        (c)
                                                                                        
                                                                                        
                                                                                        (d)
                                                                                        
                                                                                        
                                                                                        (e)
                                                                                        
                                                                                        
                                                                                        (f)
                                                                                        
                                                                                        
                                                                                        (g)William
      J. Bozsnyak, Former
                                                                                        
                                                                                        2008
                                                                                        
                                                                                        
                                                                                        $
                                                                                        150,000
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        100,000
                                                                                        
                                                                                        
                                                                                        $
                                                                                        250,000Chairman
      and Chief Executive
                                                                                        
                                                                                        2007
                                                                                        
                                                                                        
                                                                                        $
                                                                                        150,000
                                                                                        (6)
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        59,856
                                                                                        (4)
                                                                                        
                                                                                        
                                                                                        100,000
                                                                                        
                                                                                        
                                                                                        $
                                                                                        309,856Erica
      Zalbert, Chief Financial
                                                                                        
                                                                                        2008
                                                                                        
                                                                                        
                                                                                        $
                                                                                        66,000
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        $
                                                                                        66,000Officer(5)
                                                                                        
                                                                                        2007
                                                                                        
                                                                                        
                                                                                        
                                                                                        n/a
                                                                                        
                                                                                        
                                                                                        
                                                                                        n/a
                                                                                        
                                                                                        
                                                                                        
                                                                                        n/a
                                                                                        
                                                                                        
                                                                                        
                                                                                        n/a
                                                                                        
                                                                                        
                                                                                        
                                                                                        n/aBrian
      P. O’Connor, Chief
                                                                                        
                                                                                        2008
                                                                                        
                                                                                        
                                                                                        $
                                                                                        139,615
                                                                                        (9)
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        $
                                                                                        139,615Operating
      Officer
                                                                                        
                                                                                        2007
                                                                                        
                                                                                        
                                                                                        $
                                                                                        138,600
                                                                                        (6)
                                                                                        
                                                                                        
                                                                                        -
                                                                                        
                                                                                        
                                                                                        
                                                                                        59,722
                                                                                        (7)
                                                                                        
                                                                                        
                                                                                        6,000
                                                                                        
                                                                                        
                                                                                        $
                                                                                        204,322





(1)          
Salary represents base salary earned in 2008 and 2007.





(2)          
Represents the amount recognized by SearchHelp for financial statement reporting
purposes in accordance with FAS 123R





(3)       
Includes $100,000 to Mr. Bozsnyak paid quarterly in options to purchase our
common stock (see 8 below).The named executive officers’ other compensation
included a $12,000 vehicle allowance (through June 2007) for Mr. O’Connor
..





(4)          
Represents the amount recognized by SearchHelp for financial statement reporting
purposes in accordance with FAS 123R for 1,000,000 options granted to Mr.
Bozsnyak on May 1, 2005, pursuant to his employment agreement.





(5)          
Ms. Zalbert commenced employment with SearchHelp as our Chief Financial Officer
in May 2008.  Her compensation amounts reflect her compensation for
the period during which she served in this position.


35





(6)          
Includes the receipt of options on August 1, 2007 in lieu of cash.





(7)         Represents
the amount recognized by SearchHelp for financial statement reporting purposes
in accordance with FAS 123R for 900,000 options granted to Mr. O’Connor on June
8, 2005, pursuant to his employment agreement.





(8)       
On January 29, 2007, we amended the terms of Mr. Bozsnyak's employment
agreement.  Under the terms of the amendment, (i) the term of the
employment agreement was extended until December 31, 2009, (ii) beginning on
January 1, 2007, Mr. Bozsnyak's base salary was increased to $250,000 per annum,
of which $150,000 is payable in cash and, until such time as we have cash flow
in excess of $1 million for two consecutive quarters, $100,000 shall be paid
quarterly in options to purchase our common stock (iii) in the event we acquire
another company, Mr. Bozsnyak will receive a number of options to purchase our
shares, as the Board shall determine to be sufficient to compensate Mr. Bozsnyak
for his efforts in connection with such transaction, at the then current market
value and (iv) continued compensation under the terms of Mr. Bozsnyak for a
period of five years after a change of control.





(9)     Includes
compensation through his resignation as Chief Operating Officer on December 15,
2008.





The
following table shows outstanding option awards held by each of the named
executive officers as of December 31, 2008.


36


OUTSTANDING
      OPTION AWARDS (1)Name
                                                  
                                                  Total
                                                    Outstanding
                                                    Option
                                                    Award
                                                    (#)
                                                  
                                                  
                                                  Number
      of Securities
                                                    Underlying Exercisable
                                                    but
      Unexercised Options
                                                    (#)
                                                  
                                                  
                                                  Number
      of
                                                    Securities
                                                    Underlying
                                                    Unexercised
                                                    Unearned
                                                    Options
                                                    (#)
                                                  
                                                  
                                                  Option
                                                    Exercise
                                                    Price
                                                    ($)
                                                  
                                                  
                                                  Option
                                                    Expiration
                                                    Date(a)
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  
                                                  (b)
                                                  
                                                  
                                                  (c)
                                                  
                                                  
                                                  (d)William
      J.
                                                  
                                                  
                                                  1,000,000
                                                  (2)
                                                  
                                                  
                                                  1,000,000
                                                  
                                                  
                                                  
                                                  -
                                                  
                                                  
                                                  $
                                                  0.45
                                                  
                                                  
                                                  4/30/2010Bozsnyak,  Former
                                                    Chairman
      and Chief
                                                    Executive
      Officer
                                                  
                                                  
                                                  140,000
                                                    60,000
                                                    62,500
                                                    113,636
                                                    123,077
                                                    282,707
                                                    113,636
                                                  (5)
                                                    (5)
                                                    (4)
                                                    (4)
                                                    (5)
                                                  
                                                  
                                                  105,000
                                                    60,000
                                                    62,500
                                                    113,636
                                                    123,077
                                                    282,707
                                                    113,636
                                                  
                                                  
                                                  
                                                  35,000
                                                    -
                                                    62,500
                                                    113,636
                                                    123,077
                                                    282,707
                                                    113,686
                                                  
                                                  
                                                  $
                                                    $
                                                    $
                                                    $
                                                    $
                                                    $
                                                    $
                                                  0.27
                                                    0.77
                                                    0.40
                                                    0.22
                                                    0.27
                                                    0.20
                                                    0.22
                                                  
                                                  
                                                  4/20/2010
                                                    5/20/2009
                                                    4/27/2012
                                                    7/21/2012
                                                    7/30/2012
                                                    7/30/2012
                                                    10/15/2012Erica
      Zalbert, Chief
                                                    Financial
      Officer
                                                  
                                                  
                                                  0
                                                  
                                                  
                                                  
                                                  0
                                                  
                                                  
                                                  
                                                  0
                                                  
                                                  
                                                  
                                                  n/a
                                                  
                                                  
                                                  n/aBrian
      P. O’Connor,
                                                    Director
                                                  
                                                  
                                                  1,000,000
                                                    102,564
                                                    215,037
                                                  (3)
                                                    (4)
                                                    (4)
                                                  
                                                  
                                                  1,000,000
                                                    102,564
                                                    215,037
                                                  
                                                  
                                                  
                                                  -
                                                    -
                                                    -
                                                  
                                                  
                                                  $
                                                    $
                                                    $
                                                  0.49
                                                    0.27
                                                    0.20
                                                  
                                                  
                                                  6/7/2010
                                                    7/30/2012
                                                    7/30/2012





(1)
              No
      options were exercised in 2008 by any named executive
      officers.(2)
              Option
      granted May 1, 2005 pursuant to Mr. Bozsnyak’s employment agreement that
      vests based on continued employment through May 1, 2007, subject to
      earlier vesting upon certain
circumstances.


(3)
            Award
      granted June 8, 2005 pursuant to Mr. O’Connor’s employment agreement that
      vests based on continued employment through June 8, 2007, subject to
      earlier vesting upon certain
circumstances.


(4)
            Options
      granted on August 1, 2007 in lieu of cash payment of accrued
      salaries.


(5)
            Quarterly
      option granted pursuant to Mr. Bozsnyak’s employment agreement (see
      Summary Compensation Table, (11)
above)




2004
Stock Plan




The
Company’s 2004 Stock Plan (the “Plan”), which is shareholder approved, permits
the grant of share options and shares to its employees for up to 1,500,000
shares of Common Stock as stock compensation.  All stock options under
the 2004 Stock Plan are granted at the fair market value of the Common Stock at
the grant date. Employee stock options vest ratably over a three-year period and
generally expire 5 years from the grant date.  Additionally, the
Company grants options and shares to its employees outside the Plan under the
same general terms.




Director
Compensation





Directors
who are employees of the Company do not receive any fees for their service on
the Board. We use a combination of cash and equity-based incentive compensation
to attract and retain qualified candidates to serve on our Board. Our
non-employee directors receive annual equity compensation in the form of
restricted shares of the Company's common stock or options to purchase shares of
the Company's common stock.


37





DIRECTOR
      COMPENSATION TABLEName
                            
                            
                            
                            
                            Fees
      Earned
                              or
      Paid in
                              Cash
                              ($)
                            
                            
                            Stock
      and
                              Option
                              Awards
                              ($)
                            
                            
                            Total
                              ($)Randy
      S. Zelin (2)
                            
                            
                            2008
                            
                            
                            $
                            0
                            
                            
                            $
                            50,500
                            (3)
                            
                            $
                            50,5002007
                            
                            
                            
                            -
                            
                            
                            
                            -
                            
                            
                            
                            -




(1)
            No
      options were exercised in 2007 by any
directors.


(2)
            Mr.
      Zelin joined the Board in 2007.


(3)
            Represents
      amounts recognized by SearchHelp for financial statement reporting
      purposes of 450,000 shares of restricted common
  stock.




Item
12. -Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters





The
following table sets forth certain information, as of April 13, 2009, with
respect to the beneficial ownership of our Common Stock by each: (i) holder of
more than five percent (5%) of the outstanding shares of our Common Stock; (ii)
our executive officers and directors; and (iii) all our executive officers and
directors as a group.  The Company's issued and outstanding voting
securities at the close of business on April 13, 2009, consisted of 74,538,976
shares of Common Stock.  Unless otherwise indicated, the address of
each of the named persons is care of SearchHelp, Inc., 6800 Jericho Turnpike,
Suite 208E, Syosset, New York 11791.





Name
      and Address
                      
                      Shares
      Benefically
                      
                      
                      Percentage
      BeneficiallyOwnedWilliam
      Bozsnyak (2)
                      
                      
                      10,010,250
                      
                      
                      
                      13.43
                      %Lewis
      Asset Management Fund &
                      
                      
                      9,838,800
                      
                      
                      
                      13.20
                      %LAM
      Opportunity FundBrian
      O’Connor (3)
                      
                      
                      3,134,268
                      
                      
                      
                      4.20
                      %Randy
      S. Zelin
                      
                      
                      450,000
                      
                      
                      
                      *Erica
      Zalbert
                      
                      
                      200,000
                      
                      
                      
                      *All
      directors and executive officers  as a group (4
      persons)
                      
                      
                      13,794,518
                      
                      
                      
                      18.51
                      %





* less
than one percent





(1)           Unless
otherwise indicated, we believe that all persons named in the table have sole
voting and investment power with respect to all shares of the Company's common
stock beneficially owned by them. A person is deemed to be the beneficial owner
of securities which may be acquired by such person within 60 days from the date
on which beneficial ownership is to be determined, upon the exercise of options,
warrants or convertible securities.  Each beneficial owner's
percentage ownership is determined by assuming that options, warrants and
convertible securities that are held by such person (but not those held by any
other person) and which are exercisable within such 60 day period, have been
exercised.


38





(2)           Consists
of8,114,694 shares
of common stock and options to acquire 1,895,556 shares of common stock. Also
includes 3,300,000 shares of common stock held by Mr. Bozsnyak’s
wife.





(3)
            Consists
      of1,816,667
      shares of common stock and options to acquire 1,307,601 shares of common
      stock.  Also includes 1,150,000 shares of common stock held by
      Mr. O’Connor’s wife.




Item
13. Certain Relationships and Related Transactions, and Director
Independence




Due to
stockholders




At
December 31, 2008 and 2007, the Company was indebted to its former CEO, William
Bozsnyak, in the amounts of $163,718 and $45,719, respectively, for working
capital advances made to the Company.  On August 31, 2007, Mr.
Bozsnyak converted $550,500 of working capital loans into 1,196,742 restricted
shares of the Company’s common stock and 105,057 shares of the Company’s
Convertible Series A Preferred Stock. For the years ended December 31, 2008 and
2007, interest expense was charged in the amounts of $10,639 and $44,620,
respectively.  The interest rate used in this calculation is the same
interest rate paid to the Company’s short term lender under the revolving line
of credit described in Note 5, 7.25% at December 31, 2008 and 9.50% at December
31, 2007. At December 31, 2008 and 2007, $163,092 and $152,453 in accrued
interest was due to Mr. Bozsnyak, respectively.




The
Company also owed Mr. Bozsnyak $1,297 and $7,987 as of December 31, 2008 and
2007, respectively, for travel expenses and online advertising incurred on
behalf of the Company.




Due to
affiliates




The
President of ETP has a minority interest in three affiliated
companies.  Based upon cash flow needs, there are loans made to and/or
from one of these affiliates as well as from the President of ETP directly. As
of December 31, 2008 and 2007, the Company owed one of these affiliates $47,671
and $47,907, respectively.




Director
Independence


None of
the  directors  of the Company
are  directors  of
other  companies  with
securities  registered  pursuant to section 12 of the
Exchange Act or subject to the  requirements of section 15(d) of such
act or any company  registered  under the Investment Company
Act of 1940.




Item
14. Principal Accountant Fees and Services





Audit
      Fees:
              Year
      ended December 31, 2008 - $  50,000Year
      ended December 31, 2007 -
$  45,000




Fees
billed for audit of year end consolidated financial statements and annual
reports.




Audit-Related Fees:
              Year
      ended December 31, 2008 - $  28,500Year
      ended December 31, 2007 -
$  33,000




39


Fees
billed for quarterly review of unaudited consolidated financial statements and
interim reports





Tax Fees:
                        Year
      ended December 31, 2008 - NONEYear
      ended December 31, 2007 - NONEAll
      Other Fees:
                        Year
      ended December 31, 2008 - NONEYear
      ended December 31, 2007 -
NONE




Audit
Committee Pre-Approval Policies and Procedures




We currently do not have an audit
committee.




Item
15. Exhibits





Exhibit No.
                  
                  Description
      of Exhibit3(i)(a)
                  
                  Certificate
      of Incorporation of the Company*3(i)(b)
                  
                  Certificate
      of Amendment effective April 26, 2005 (Incorporated herein by reference to
      Form 8-K filed May 2, 2005)3(ii)
                  
                  By-laws
      of the Company*3(iii)
                  
                  Form
      of Certificate Designations, Voting Powers, Preferences, Limitations,
      Restrictions, and Relative Rights of Series A 7% Convertible Preferred
      Stock, $0.0001 par value.
                    (Incorporated
      herein by reference to Form 8-K filed February 13,
2007)3(iv)
                  
                  Amended
      By-Laws of the Company (Incorporated
      herein by reference to Form 8-K filed March 4,
  2009)4.1
                  
                  Specimen
      Common Stock Certificate of the Company*4.2
                  
                  Specimen
      Class A Warrant Certificate of the Company*4.3
                  
                  Specimen
      Class B Warrant Certificate of the Company*5
                  
                  Opinion
      re: Legality (Incorporated herein by reference to Post-Effective Amendment
      No. 4 to our Form SB-2 filed with the Securities and Exchange Commission
      on May 10, 2004 -File No. 33-97687).10.3
                  
                  Warrant  Agreement,  dated  January
      22,  2003,  between the Company
      and  American  Stock Transfer and Trust
      Company*10.4
                  
                  Placement  Agent  Registration  Rights  Agreement,  dated
      January 22, 2003,  between the Company and Robert M. Cohen &
      Co, Inc.*10.5
                  
                  Form
      of Placement Agent Warrant*10.6
                  
                  Company
      2004 Stock Plan, dated January 1, 2004. **10.7
                  
                  Participation  Agreement,  dated
      February 3, 2004, between the Company and Environmental Commercial
      Technology Corp. **10.8
                  
                  Letter  Agreement,
      dated  February  3,  2004,
      between  the  Company  and  BioNeutral
      Laboratories Corporation USA. **10.9
                  
                  Letter  Agreement,
      dated  February  3,  2004,
      between  the  Company  and  BioNeutral
      Laboratories Corporation (Worldwide) Limited. **10.10
                  
                  Settlement  Agreement,  dated
      October 20, 2005, between SearchHelp,  Inc. and BioNeutral
      Laboratories Corporation USA.  (filed
  herewith)10.11
                  
                  Registration  Rights  Agreement,  dated
      November 7, 2003, by and between the Company and S.G. Martin Securities
      LLC.**10.12
                  
                  Software  Purchase
      and Service  Agreement,  dated as of August 15,
      2003,  by and between the Company and Edocusign, Inc.
      **


40





10.13
                                
                                Employment
      Agreement, dated April 26, 2005, between the Company and Joseph Carrizzo
                                  (Incorporated
      herein by reference to Form 8-K filed April 28, 2005)10.14
                                
                                Securities  Purchase  Agreement
      by and among the Shareholders of E-Top-Pics, Inc. and the Company dated as
      of April  26,  2005.
                                  (Incorporated  herein
      by reference to Form 8-K filed June 14, 2005)10.15
                                
                                Employment  Agreement,  dated
      May 1, 2005,  between
      the  Company  and  William Bozsnyak
                                  (Incorporated
      herein by reference to Form 8-K filed May 3, 2005)10.16
                                
                                Employment  Agreement,  dated
      May
      1,  2005,  between  the  Company  and  Brian  O’Connor
      (Incorporated herein by reference to Form 8-K filed June 14,
      2005)10.17
                                
                                Accounts
      Receivable  Purchase  Agreement,  dated
      September 15, 2005, between E-Top-Pics, Inc.
      and  Commercial  Capital  Lending,  LLC  (Incorporated  herein
      by reference to Form 8-K filed September 21, 2005)10.18
                                
                                Secured  Guaranty,  dated
      September 15,
      2005,  between  SearchHelp,  Inc. and
      Commercial
      Capital  Lending,  LLC
                                  (Incorporated  herein
      by reference  to Form 8-K filed  September 21,
      2005)10.19
                                
                                Supply  Agreement,  dated
      September 27,
      2005,  between  E-Top-Pics,  Inc. and Fuji
      Photo Film U.S.A., Inc.
                                  (Incorporated
      herein by reference to Form 8-K filed October 3, 2005)10.20
                                
                                Exchange
      Agreement dated as of November 2, 2005, among SearchHelp, Inc.,
      AmberAlertAgent, Inc.  (“AAA”)  and
      the  stockholders  of AAA
                                  (incorporated
      herein by reference to 8-K  filed November 10,
    2005)10.21
                                
                                Consulting  Agreement,  dated
      November 2, 2005, among
      SearchHelp,  Inc.,  AmberAlertAgent
      Development  Company,  LLC,  and  certain  principals  of  AmberAlertAgent
      Development Company, LLC. ***10.22
                                
                                Employment
      agreement, dated April 24, 2006 between the Company and John Caruso
                                  (Incorporated
      herein by reference to Form 8-K filed May 8, 2006)10.23
                                
                                Lease
      Agreement, dated June 1, 2006, between the Company and RA 6800 Jericho
      Turnpike LLC
                                  (Incorporated
      herein by reference to Form 8-K filed June 12, 2006)10.24
                                
                                Settlement
      Agreement, dated July 14, 2006 between the Company and BioNeutral
      Laboratories Corporation USA
                                  (Incorporated
      herein by reference to Form 8-K filed July 20, 2006)10.25
                                
                                Amendment
      to Employment  Agreement,  dated January 29,
      2007,  between the  Company  and
      William  Bozsnyak ****10.26
                                
                                Series
      A Preferred Stock Purchase Agreement dated February 7, 2007 by and between
      the Registrant and Edward Kaplan.
                                  (Incorporated
      herein by reference to Form 8-K filed February 13,
2007)10.27
                                
                                Series
      A Preferred Stock Purchase Agreement dated February 8, 2007 by and between
      the Registrant and The LAM Opportunity Fund, LTD.
                                  (Incorporated
      herein by reference to Form 8-K filed February 13,
2007)10.28
                                
                                Series
      A Preferred Stock Purchase Agreement dated February 8, 2007 by and between
      the Registrant and Lewis Opportunity Fund, LP.
                                  (Incorporated
      herein by reference to Form 8-K filed February 13,
2007)10.29
                                
                                Series
      A Preferred Stock Purchase Agreement dated February 20, 2007 by and
      between the Registrant and The LAM Opportunity Fund, LTD.
                                  (incorporated
      herein by reference to Form 8-K filed February 26,
2007)10.30
                                
                                Series
      A Preferred Stock Purchase Agreement dated February 20, 2007 by and
      between the Registrant and Lewis Opportunity Fund, LP.
                                  (Incorporated
      herein by reference to Form 8-K filed February 26,
2007)10.31
                                
                                Series
      A Preferred Stock Purchase Agreement dated March 9, 2007 by and between
      the Registrant and Michael Zuhoski.
                                  (Incorporated
      herein by reference to Form 8-K filed June 6, 2007)10.32
                                
                                Series
      A Preferred Stock Purchase Agreement dated March 9, 2007 by and between
      the Registrant and Diane Supinsky.
                                  (Incorporated
      herein by reference to Form 8-K filed June 6, 2007)10.33
                                
                                Series
      A Preferred Stock Purchase Agreement dated May 16, 2007 by and between
      theRegistrant
      and Lewis Opportunity Fund, LP.(Incorporated
      herein by reference to Form 8-K filed June 6, 2007)10.34
                                
                                Series
      A Preferred Stock Purchase Agreement dated May 16, 2007 by and between the
      Registrant and The LAM Opportunity Fund, LTD.(incorporated
      herein by reference to Form 8-K filed June 6,
  2007)


41





10.35
                    
                    Series
      A Preferred Stock Purchase Agreement dated June 1, 2007 by and between the
      Registrant and Lewis Opportunity Fund, LP.
                      (Incorporated
      herein by reference to Form 8-K filed June 6, 2007)10.36
                    
                    Separation
      Agreement between the Company and Mr. William Bozsnyak dated February 10,
      2009.10.37
                    
                    Employment
      agreement, dated February 10, 2009 between the Company and Jeffrey
      Greene.10.38
                    
                    Employment
      agreement, dated February 10, 2009 between the Company and Peter
      Sealey.14
                    
                    Code
      of Ethics of the Company.**21
                    
                    List
      of
Subsidiaries***





*
                Incorporated
      herein by reference to the Company’s Form SB-2 filed with the Securities
      and Exchange Commission (File No. 33-97687).**
                Incorporated
      herein by reference to the Company’s Form 10-KSB filed with the Securities
      and Exchange Commission on March 16, 2004.***
                Incorporated
      herein by reference to the Company’s Form 10-KSB filed with the Securities
      and Exchange Commission on April 17, 2006****
                Incorporated
      herein by reference to the Company’s Form 10-KSB filed with the Securities
      and Exchange Commission on April 11,
2007


42




SIGNATURES




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




SearchHelp,
Inc.





(Registrant)





By:
              /s/ Jeffrey GreeneJeffrey
      Greene, Chief Executive OfficerDate:
      April 14, 2009By:
              /s/Erica ZalbertErica
      Zalbert, Chief Financial OfficerDate:
      April 14, 2009




Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.





Name
                          Title
                          Date/s/
      William BozsnyakWilliam Bozsnyak
                          Director
                          April
      14, 2009/s/
      Peter SealeyPeter Sealey
                          Chairman
                          April
      14, 2009s/
      Frank ChesterFrank
      Chester
                          Director
                          April
      14, 2009/s/
      Randy S. ZelinRandy S. Zelin
                          Director
                          April
      14, 2009/s/
      Brian O'ConnorBrian O'Connor
                          Director
                          April
      14,
2009


43